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While the promise of artificial intelligence (AI) is pervasive, many companies struggle with AI implementation challenges. This article presents results from a survey of 2,525 decision-makers with AI experience in China, Germany, India, the United Kingdom, and the United States—as well as interviews with 16 AI implementation experts—in order to understand the challenges companies face when implementing AI. The study covers technological, organizational, and cultural factors and identifies key challenges and solutions for AI implementation. This article develops a diagnostic framework to help executives navigate AI challenges as companies gain momentum, manage organization-wide complexities, and curate a network of partners, algorithms, and data sources to create value through AI. [ABSTRACT FROM AUTHOR]

While agile represents a crucial element of digital transformation, there is limited empirical evidence on how agile is actually implemented. This article presents a longitudinal case study of the agile implementation journey of a large product manufacturer over two years. It shows how the firm was able to achieve a large-scale agile implementation through a mix of top-down and bottom-up approaches. This process entailed continuous adaptations of agile to the firm's circumstances and needs, including ongoing articulations and re-articulations of agile to incorporate local ideas and address emerging challenges. This article also presents a framework for guiding managers undertaking an organization-wide agile implementation. [ABSTRACT FROM AUTHOR]

Product innovation increasingly involves both human designers (engineers, developers, lead users, creative geniuses, and other innovators) and machine designers (algorithmically organized software tools that autonomously collect and interpret data to make innovative design decisions). This article provides practical guidance about how firms can leverage different forms of machine designers in tandem with human designers to fundamentally change the way they engage in product innovation. It describes how successful companies have managed to optimally orchestrate the capabilities of human and machine designers to create both effective and ethical product innovations that were previously unthinkable. [ABSTRACT FROM AUTHOR]

Artificial intelligence increasingly attracts attention and investments. However, appropriating value from this general-purpose technology (GPT) can be difficult. To understand these challenges, this article analyzes why IBM failed to generate significant profits from IBM Watson Health despite its promising starting points. The findings suggest that, considering the characteristics of GPT, an overly closed approach for taking it to market contributed to the failure. Furthermore, conditions such as the immaturity and the complexity of the application field intensified the challenges. This study suggests that using a strong appropriability regime in open innovation can enhance the appropriation of value from a GPT. [ABSTRACT FROM AUTHOR]

Vigilant organizations excel at seeing looming threats and embryonic opportunities sooner than rivals, which prepares them to act faster when needed. Four drivers distinguish vigilant from vulnerable organizations, which can be used to design a roadmap to improve organizational acuity and preparedness. The fulcrum of these changes rests with the leadership team by demonstrating a strong commitment to vigilance at all levels, and reinforcing this by making targeted investments in foresight capabilities. These strategic moves also need to be supported by corresponding changes in the strategy-making process and by ensuring accountability and coordination of vigilance activities throughout the enterprise. [ABSTRACT FROM AUTHOR]

Shared beliefs on digital readiness among management and employees are a precursor to successfully guide and implement organizational change. There is, however, little examination of how digital knowledge and skills are distributed among managers and employees, or whether their perceptions of digital readiness systematically differ. The findings of a survey of the banking industry reveal that, while there are similar perceptions of attitude and empowerment toward change, perceptions of individual readiness, competences, and innovation barriers differ significantly. This research advances the framework of change readiness toward digital readiness with theoretical as well as practical implications for digital transformation management. [ABSTRACT FROM AUTHOR]

To achieve faster organic growth, firms need to change their prevailing narrative about innovation from growth denying to growth enabling. This requires changing the system through which the work of innovation gets done. This article describes the work systems model of organizational change and shows how a leadership team can select the most influential elements of the system to make a desired narrative a reality. Four elements of the work system are especially effective at encouraging a growth-affirming narrative: leadership commitment to innovation talent, prudent risk-taking, customer-centric innovation, and aligning metrics and incentives. [ABSTRACT FROM AUTHOR]

To stay ahead of the competition, firms must continuously learn from their customers and swiftly adopt those lessons to improve their products. A unit at Ubisoft, a leading game publisher headquartered in Paris, has established a three-pronged approach to drive product innovation based on three practices: data-driven exploration, data-augmented ideation, and data-informed validation. By establishing processes and capabilities for these practices and blending them in a portfolio approach to product design, they maximize the value generation potential of the data at their disposal. Product development in a variety of industries can benefit from the lessons of these data-oriented innovation practices. [ABSTRACT FROM AUTHOR]

This article develops a framework for driving innovation under highly ambiguous conditions. An analysis of the most novel medicines of the past 20 years shows that a very large group of small companies created more breakthroughs, at considerably less overall cost, than a much smaller group of very large companies. This article's findings present the first large-scale empirical validation of the theoretical literature predicting the superiority of decentralized parallel searches in ambiguous environments. Accordingly, companies that attempt to "de-risk" the innovation portfolio by narrowing their search efforts to minimize failures run the risk of filtering out the next breakthrough. [ABSTRACT FROM AUTHOR]

Design thinking is gaining widespread attention in the practitioner and academic literature. Successful implementation has been documented, and its value shown in empirical studies. There is little examination, however, of how design thinking practices fit with other approaches from which firms might choose to frame and solve problems such as agile, lean startup, scientific method, Six Sigma, critical thinking, and systems thinking. By digging into the basic capabilities underlying design thinking, academic researchers might better understand problem framing and solving in general and provide insight for practitioners as to where alternative approaches might be applied. [ABSTRACT FROM AUTHOR]

The advent of design thinking as a tool for innovation has led to its adoption in a range of organizations. While proponents of design thinking continue to focus on the principles and practices of their method, little is known on the organizational conditions required for design thinking to attain a long-term impact. This article explores seven empirical case studies to identify the conditions required in organizations seeking to integrate design. It identifies four conditions—strategic vision, facilities, cultural capital, and directives—and examines their relationships. [ABSTRACT FROM AUTHOR]

Facing imminent disruption, many large, established firms have embraced innovation as a way to develop new growth businesses. To succeed in the face of disruptive change requires established firms to master three distinct disciplines: ideation, to generate potential new business ideas; incubation, to validate these ideas in the market; and scaling, to reallocate the assets and capabilities needed to grow the new business. This article illustrates how two successful firms (Amazon and IBM) have developed approaches that address all three disciplines. [ABSTRACT FROM AUTHOR]

Our Call for Papers focused on breaking established patterns and models and showcasing management innovation in a world in which Volatility, Uncertainty, Complexity, and Ambiguity (VUCA) reign. VUCA is both an outcome of disruptive innovation and a driver of it; and frequently VUCA is used as an excuse to avoid planning and action. While research has pursued the four elements independently, interaction and integration have been lacking. This article introduces three papers and offers 15 challenges as well as implicit and explicit recommendations to manage in the unpredictable and challenging VUCA world. [ABSTRACT FROM AUTHOR]

Emerging market companies create new management practices for an environment characterized by increased volatility, uncertainty, complexity, and ambiguity (VUCA). This article shows how Haier developed a platform of management practices called Rendanheyi to transform itself from a conventional hierarchical manufacturing firm to a highly responsive online-based entrepreneurial company. It demonstrates how the organizational, competitive, institutional, and technological contexts mattered for the development of Rendanheyi, showing how context-dependent management innovations are created to allow emerging market firms such as Haier to deal with a high VUCA world and creating an extended process model of management innovation that managers can readily apply. [ABSTRACT FROM AUTHOR]

What happens when firms in an oligopolistic industry find themselves lagging behind in a potentially dominant technology? If R&D costs are significant and catch-up is key, technology laggards must turn to each other and open up their innovation processes in order to survive. This article uses a real options framework to explain the motives of bitter rivals to engage in collaborative relationships in order to catch up with industry leaders in specific technologies. It shows that ex ante, their interests converge and this lays the foundation of “catch-up alliances”: competitors open up to catch up. However, they often bring vastly different resources to the alliance and, in the process of cooperation, what they learn may cause their interests to diverge. Furthermore, some participants may discount a technology trajectory on the basis of what they learn, and terminate efforts in that area. Therefore, the “road not taken” may be a valuable outcome of the open innovation alliance. This article uses the case of a global alliance in hybrid electric drivetrain automotive technology as the study context, and it analyzes the implications for managers facing similar decisions. [ABSTRACT FROM AUTHOR]

In an era of fast-paced technological change, innovation has become a business imperative. But it is not easy to make experimentation and risk-taking an integral part of an organization's business practice. This article describes a model for motivating innovation based on probability theory and experimental evidence. This research indicates that corporate leaders should create a culture that tolerates early failure and rewards long-term performance, and employees from the CEO down must be given incentives to innovate. These lessons are broadly applicable in fields beyond business, such as scientific research and the academic world. [ABSTRACT FROM AUTHOR]

This article develops a framework, including a 2 × 2 matrix, to help guide firms in deciding when to design their products to be integral, modular-in-production, modular-in-use with a focus on selling "cartridges," or modular-in-use with a focus on promoting numerous apps. Three key factors are as follows: the level of user heterogeneity, the disparity across components in frequency of updating, and the modularity/integrality penalty. [ABSTRACT FROM AUTHOR]

Companies developing complex products face a crucial dilemma: the benefits of research and development (R&D) outsourcing such as lower costs, access to specialist knowledge, or shorter development lead times often have negative consequences for competence development due to the loss of opportunities for learning by doing. Having experienced the problems of outsourcing R&D, Fiat developed a novel organizational solution that offers new insights as to how firms can organize R&D to protect against innovation competence loss in R&D outsourcing. [ABSTRACT FROM AUTHOR]

"Organizational agility" is often treated as an immutable quality, implying that firms need to be in a constant state of transformation. However, this ignores that such transformations, while often essential, come at a cost. They are not always necessary, and may not even be possible. This article explores agility at a more fundamental level and relates it more specifically to dynamic capabilities. It demonstrates that it is first essential to understand deep uncertainty, which is ubiquitous in the innovation economy. Uncertainty is very different from risk, which can be managed using traditional tools and approaches. Strong dynamic capabilities are necessary for fostering the organizational agility necessary to address deep uncertainty, such as that generated by innovation and the associated dynamic competition. This article explores the mechanisms by which managers may calibrate the required level of organizational agility, deliver it cost effectively, and relate it to strategy. [ABSTRACT FROM AUTHOR]

Innovation is essential for family firms to remain competitive. One means to enhance the success of innovation within family firms is to assess readiness prior to beginning the innovation process. This article introduces the Readiness for Innovation in Family Firms (RIFF) framework, which provides a diagnostic assessment and identifies multiple factors associated with innovation readiness. By applying the RIFF framework, managers of family firms can focus on specific factors that prepare the firm to engage in the innovation adoption process, increasing success. [ABSTRACT FROM AUTHOR]

Innovation in family firms is often driven by family assets, valuable resources that are particularly prevalent in family firms. For example, they have particularly strong networks that can be deployed in an innovation context. These family assets can over time atrophy and stifle rather than stimulate innovation performance. However, family firms can fight this process by institutionalizing innovation within the family and the firm by means of family and corporate governance and through incentivizing key individuals in the innovation process. [ABSTRACT FROM AUTHOR]

Family business socio-emotional preferences are often Janus-faced. Some strive to create a strong business they can pass on to offspring by building innovation-promoting resources such as human, relational, and financial capital. Other family firms cater to family desires for unqualified nepotism, altruism towards undeserving kin, and appropriation of firm assets to fulfill parochial desires that erode these resources. This article explores how such preferences, together with their impact on resources and the innovation demands of their markets, shape the approach to innovation. [ABSTRACT FROM AUTHOR]

This article presents an integrated, contingency perspective on family firm innovation called Family-Driven Innovation (FDI). The framework highlights the need for consistency between a family firm's strategic innovation decisions and its idiosyncrasies to achieve and sustain competitive advantage through innovation. This article also offers some directions for future research on FDI and serves as an introduction to this special section on family firms. [ABSTRACT FROM AUTHOR]

Two related trends characterize the recent past: value propositions are migrating from the physical to the informational, and value creation is shifting from firms to consumers. These two trends meet in the phenomenon of "consumer-generated intellectual property" (CGIP). This article addresses the question: "How should firms manage the intellectual property that their customers create?" It explores how CGIP presents important dilemmas for managers and argues that consumers' "intellectual property" should not be leveraged at the expense of their "emotional property." It integrates these perspectives into a diagnostic framework and discusses eight strategies for firms to manage CGIP. [ABSTRACT FROM AUTHOR]

Innovating in networks with partners that have diverse knowledge is challenging. The challenges stem from the fact that the commonly used knowledge protection mechanisms often are neither available nor suitable in early stage exploratory collaborations. This article focuses on how company participants in heterogeneous industry networks share private knowledge while protecting firm-specific appropriation. We go beyond the prevailing strategic choice perspectives to discuss interactive revealing practices that sustain joint opportunity creation in the fragile phase of early network formation. [ABSTRACT FROM AUTHOR]

Crowdsourcing for innovation is typically conducted as an "innovation challenge." Despite the popularity of innovation challenges, there appears to be a growing consensus that innovation challenges do not succeed at generating solutions with competitive advantage potential. This article presents three ways in which managers can assure that their innovation challenges are fruitful: foster different crowd roles to encourage contribution diversity; offer knowledge integration instructions and dual incentives; and offer explicit instructions for sharing different types of knowledge. [ABSTRACT FROM AUTHOR]

Given recent developments in information technology and intellectual property (IP) legislation, technology firms may benefit from an integrated IP strategy that combines patenting with strategic disclosure. This article presents a series of cases that introduce various aspects of strategic disclosure and provide a framework for how and when such practices may be merited as part of an integrated IP strategy. To help CEOs decide on the economics and efficiency of the practice, practical guidelines are provided for when it might be a useful complement to the firm's other IP management practices. [ABSTRACT FROM AUTHOR]

This article deals with the intellectual property (IP) disassembly problem, which is an increasingly important problem in various contexts. The IP disassembly (IPD) problem is defined as the problem of finding a contractual arrangement for allocation of IP rights and licenses that allows for separating and disintegrating a company, business unit, project entity, resource set, or IP unit in order to enable a transaction, organizational transfer, or dissolution of it. Based on a comparative case study of corporate transactions of Saab Automobile and Volvo Car Corporation this article conceptualizes and characterizes the problem and then develops an IPD framework for managing it. [ABSTRACT FROM AUTHOR]

In many organizations, the R&D, strategy, and legal functions are poorly integrated. As a consequence, firms miss opportunities to create and exploit the value of intellectual property. Functional silos are one reason for the lack of integration. More important, however, is the lack of a common framework and even language that would allow engineers, lawyers, and business executives to manage IP assets better. This article provides such a framework. There is no one best way to manage IP and many managers overestimate the attractiveness of using IP to exert market power. Rather, the value of the various means to protect and benefit from IP depends on firm strategy, the competitive landscape, and the rapidly changing contours of intellectual property law. [ABSTRACT FROM AUTHOR]

Pharmaceutical drug development costs have risen rapidly over the past twenty years. Yet, the number of new molecular entities being approved has not increased. Most of these costs can be traced to work on compounds that are abandoned before getting to market. As pharmaceutical companies scale back their work in light of deteriorating R&D productivity, significant unmet medical needs remain unaddressed. More extensive external licensing of the IP associated with abandoned compounds could spur recovery and/or redeployment of abandoned compounds to address at least some of these unmet medical needs. The example of Cubicin is offered as an illustration of these more open approaches. This article inductively develops a simple framework to guide companies in the decision of whether and when to license out unused internal IP. [ABSTRACT FROM AUTHOR]

Companies increasingly organize innovation activities within innovation ecosystems. This study illustrates the central role of the IP-model that an orchestrator develops for the innovation ecosystem partners. The governance of IP is instrumental for the success of innovation ecosystems as it determines the value appropriation potential for the ecosystem partners and positively influences the success of innovation ecosystems. The insights are based on a case study of IMEC, a public research institute in nano-electronics. IMEC has an IP-based orchestration model for innovation ecosystems through multi-party research collaborations between public and private firms. [ABSTRACT FROM AUTHOR]

Co-creation is a rapidly emerging area of research. However, there is a lack of understanding as to how organizations use co-creation to build relationships and generate value. How does participation emerge and what outcomes does it deliver? To generate insight into the co-creation process, we created an online brand community. Our findings show that people participate in a community because it offers them the chance to find fulfillment, to express their creativity, and to socialize. The findings have significant implications for marketing, branding, and research professionals because the research shows that managers have to see participants as integral to the brand. [ABSTRACT FROM AUTHOR]

The maritime industry is widely seen as less permeable to innovation than other industries. However, the industry is now recognizing that demands for increased environment protection can only be achieved by more innovation.This study demonstrates that environmental innovation has played a significant role in changing the industry's innovation paradigm. It has also been transformed over time. [ABSTRACT FROM AUTHOR]

Existing frameworks on growth do not distinguish between the managerial challenges of different growth contexts; they place considerable emphasis on the overall quality of companies' portfolios of strategic units, but less on how different units should be managed according to the growth context they are in. The managerial challenges of generating growth in low-growth contexts are very different from those of managing growth in high-growth contexts. This article introduces a matrix framework that incorporates four growth scenarios, which firm-units can map themselves on to, and then outlines the major barriers they face in each of these scenarios as well as the actions needed to overcome them. The results are based on longitudinal research on crossnational samples of small, medium, and large organizations. [ABSTRACT FROM AUTHOR]

Crowdsourcing is typically associated with the incorporation of company-external stakeholders such as customers in the value creating process. This article proposes a framework for a company-internal application of crowdsourcing methods. It presents a set of five goals companies can pursue employing internal crowdsourcing. The practical approach of an Austrian medium-sized technology company is described in detail, including insights on software design and appropriate procedures. [ABSTRACT FROM AUTHOR]

Front-end activities largely influence the outcomes of new product development processes, because it is here that firms create new ideas, give them direction, and set them in motion. We show that the front end can be understood as comprising three core activities: idea/concept development, idea/concept alignment, and idea/ concept legitimization, which allow firms to create corroborated product definitions. This article provides important implications for managers interested in front-end management. It devotes specific attention to the differences between incremental and radical front-end development and to the front end in the light of increasingly open innovation processes. [ABSTRACT FROM AUTHOR]

Every executive has heard about the importance of Lean as a means of eliminating waste and "fat." However, when operations are novel and complex--as in product development, research, information technology, and many other kinds of projects--cutting out the "fat" turns out to be much more challenging. To understand Lean in an environment characterized by extreme novelty and complexity, we drew on our experiences with a number of processes, and in particular Lockheed Martin's Lean implementation for the F-22 fighter aircraft. Our findings lead to a path that executives and managers can follow to become Lean without compromising innovation. [ABSTRACT FROM AUTHOR]

The only way to achieve real growth is to develop offerings so innovative that they create new categories or subcategories making competitors irrelevant because they lack a "must have" feature or benefit-to win the brand relevance competition. The alternative, engaging in "my brand is better than your brand" brand preference competition, virtually never works because of market inertia. This article, based in part on hundreds of case studies, shows how to identify the "must haves" and discusses barriers to competitors such as going beyond functional benefits, finding shared interests with customers, ongoing innovation, superior execution, scaling the concept, becoming an exemplar, and branding the innovation. [ABSTRACT FROM AUTHOR]

The article considers the management of intellectual property and patents in strategic planning by high technology industries companies. It is noted that many electronics products such as smartphones involve hundreds of different individual patents. The resulting complexity and expense of licensing rights and fees is discussed. Innovation management when a product is based both on a company's own invention and intellectual property of other firms is examined. Integrated and non-integrated organizational models for innovation management are considered. Patent management strategies are examined.

To meet the demands of globalization, companies need to continually and rapidly access, absorb, and integrate ideas for innovation from around the world. Yet few innovation footprints are capable of meeting this challenge. This article introduces a model for “agile innovation” that differentiates between the need for a permanent presence in a location and the ability to access knowledge from a distance, by aligning different modes of access and integration against different types of knowledge. Adopting an agile innovation model will give companies the ability to better manage their global innovation footprint, leading to greater efficiency and effectiveness. [ABSTRACT FROM AUTHOR]

Clusters of Innovation (COI) do not exist in isolation. The most successful are often those that most effectively exploit global linkages to other innovation clusters. In fact, COI demonstrate a special affinity for connections with resources and partners in like clusters. This article illustrates how the innovation patterns in a COI can be enhanced through international connections by specifically focusing on the dynamics of the relationship between clusters of innovation. It also presents a framework to analyze regional and global innovation clusters and networks and analyzes the Israel/Silicon Valley Super-COI as a case study of situating the cluster a global context. [ABSTRACT FROM AUTHOR]

The article discusses approaches to new product development, recommending a combination of open innovation and the stage-gate model. The open stage-gate method is said to facilitate the import and export of technologies and information, while enhancing the ability of gatekeepers to monitor the status of a firm's business model and core competencies. An example is provided using a firm involved in the oil and gas industry. The results of a series of structured interviews with engineers, managers and senior executives are presented, and a comparison of existing new product development protocols with the open stage-gate model is provided.

The article discusses how the automobile manufacturer Fiat developed innovative engine technologies during the 1990s, despite a business cycle downturn. It focuses on the innovation management strategy implemented by chief executive officer Gian Carlo Michellone, which is termed the open innovation paradigm. The success of this approach is described, and recommendations on how the open innovation paradigm could be applied to other businesses are presented. It is noted that the success of the open innovation paradigm is dependent on the support of senior executive leadership during adverse economic conditions. INSETS: BOX 1: CRF's Traditional Closed Innovation Model;BOX 2: The Success of Mr. Michellone's Open Innovation Model...;BOX 3: The Partnership with Beghelli and the Early Uniair...;BOX 4: Year 2005--New Challenges, New Management

The article focuses on virtual co-creation projects and the role of consumers in new product development. The influence of customers' personalities, motivations, and expectations on their decisions to participate in virtual co-creation projects is discussed. The interaction of consumers and organizations during virtual co-creation is explored through social exchange theory. A framework for virtual co-creation research is noted. The effects of extrinsic and intrinsic motivation on participants' expectations for outcomes associated with a project are mentioned. The characteristics of reward-oriented, curiosity-driven, need-driven participants are noted.

The article refers to the Longitude Prizes of the 18th century and focuses on the innovation management concept called a tournament for ideas. The incentive mechanism in tournaments or contests that generate innovation and revolutionary or evolutionary ideas is discussed. The design of tournaments from an economic theory perspective such as prize structure is mentioned. A decision tree which includes the major points in the design of tournaments for ideas is discussed. Examples are given of platform and network concepts in market ecosystems that produce an exchange of ideas.

The article focuses on the Innovation-form or I-form organization and the knowledge-based theory of the firm. An overview of the evolution of business and organizational models in the economic eras of standardization, market segmentation, and market exploration, the emergence of the innovation era and the I-form organization in the 1970s, the examples of entrepreneurial collaboration at Syndicom and Blade.org which are collaborative communities of firms, the governance structure of I-form organizations, and collaborative knowledge sharing are discussed.

The article discusses the management of technological innovations in business, which has become a key item for the Chief Information Officers (CIOs) of many firms. The question of whether outsourcing information technology (IT) is incompatible with innovation is addressed. Many large organizations have a decade or more of experience in large-scale IT outsourcing relationships. The goal is to achieve high-quality IT services at low cost. However, a world-class strategic partner will also lead to innovation and added value. Ways in which innovation can be cultivated are discussed.

The article focuses on value creation, which is defined by customer use, and a service-logic approach to innovation. Value propositions are created through an interaction of buyers and producers where the unrecognized needs of consumers become the potential market. Tangible products or services represent the complex relationship in a value-creating process of customer demand, production capabilities, and market exploitation, which then results in value realization. A study, based on value-in-use and value-in-exchange criteria, found two emerging patterns in service-logic innovation. The effect of this approach on the consumer roles of user, payer, and buyer, the reconfiguration of value constellations, smart offerings, Mobility Car-Sharing, business travel, and Google are mentioned.

The article refers to service innovation myopia, which does not consider value creation from the perspective of both client and provider, and focuses on value creation in client-provider relationships. Three business models are discussed: services with working competitive markets; incremental service innovation with value-added offerings; and radical service innovation for the production of novel offerings. Innovation strategies for companies such as Dell, Google, and MySQL include value capture, exchange and relationships structure, and creation logic. A service co-creation framework, client-provider interaction modes, examples of congruent value creation, client-driven collaboration, provider-driven innovation, and the resource-based theory of the firm are mentioned.

The article explains the concept of service blueprinting, a technique for service innovation which focuses on the consumer experience. Service blueprinting provides a visual of the service process which can identify stages in new product or service development relative to the customer's perspective, organizational structure, and opportunities for design improvement or co-creation with the end user. Evolution of the blueprinting approach, five components of service blueprints, steps in building a blueprint, tips for teaching this technique in a workshop, and value creation are mentioned. Examples include Yellow Transportation, ARAMARK, Marie Stopes International Global Partnership, and the San Francisco Giants baseball team.