New model helps companies become innovative
New research from Halmstad University indicates that two interlinked factors might be crucial for the success of a company: embedded innovation – also known as the process of embeddedness or integration – and dynamics of innovation – also known as the process of balancing between exploration and exploitation.
”Traditionally, you might think of two companies within the same line of business as competitors, but my research contradicts that.”
Michal Lysek
Michal Lysek, Doctor of Innovation Sciences, has conducted his research as an externally employed doctoral student at the company HMS Industrial Networks, where he has analysed the company’s innovation processes:
“My research focuses on two things: examining HMS from a metaphorical perspective, where the company is seen as part of an ecosystem; and studying the dynamics of innovation as a process over time.”
Embedded innovation – the company as part of an ecosystem
One way to look at companies’ relations to each other is through the metaphor of organisms and ecosystems, where companies and their customers, partners and competitors, co-exist within an environment, and try to prosper together, for instance through innovation.
“HMS integrate with their customers on a deep level, often resulting in long-time friendships based on certain core values. I call this kind of integration embeddedness – involving different actors, activities and events of importance”, Michal Lysek explains, and continues:
“Companies can also become embedded with other companies, not just their customers. Traditionally, you might think of two companies within the same line of business as competitors, but my research contradicts that. Through embedded innovation, they help each other create more value for their customers than they are able to do alone.”
Balance between exploration and exploitation
The other part of Michal Lysek’s research is concerned with the balance between the two phases of innovation: exploration and exploitation. During the period of exploration, the company focuses on exploring new ideas through the creation of new solutions, new inventions, new technologies, or new products or services, for instance by venturing into new market segments. During the period of exploitation, the company focuses on exploiting new ideas via commercialisation and turning them into commercial successes – consequently also into innovations. Successful businesses are able to balance between these two phases.
“I have developed a model that can help companies to balance between exploration and exploitation. And while it is vital not to venture too far outside the existing area of business – staying close to the company’s core – companies still need to enter new market segments to survive long-term. Most importantly, by integrating embedded innovation into the dynamics of innovation, while balancing between exploration and exploitation”, says Michal Lysek.
Text: Christa Amnell
Photo: Pexels.com
Read more
Read the article in Swedish: Ny modell hjälper företag bli innovativa
External link.
