Highlights of DRUID PDW on "Individual Perspectives on Open Innovation"

DRUID Society Conference 2014
Professional Development Workshops (PDW)

Living on the Edge: Individual Perspectives on Open Innovation

PDW program: http://bit.ly/1w7ESYM
June 16, starting at 9:00 (just before the main conference)
Copenhagen Business School, Denmark

The Stella Polaris Network represented by:
Marcel Bogers, University of Southern Denmark**
Ana Luiza de Araújo Burcharth, Aarhus University**

Russel Coff, University of Wisconsin-Madison

Helle Alsted Søndergaard, Aarhus University**
Alex Pedrosa, University of Southern Denmark**

Lars Frederiksen, Aarhus University**

This PDW brings together scholars to discuss and develop research ideas related to the individual level of analysis of open innovation. So far open innovation is predominantly studied from the organizational level of analysis. The PDW is designed to both inform and enable interaction among scholars. It combines the insights of a keynote speaker with the input of expert facilitators, the moderator and the audience. The aim of the workshop is to advance the state-of-the-art in this domain by encouraging participants to propose, discuss and reflect on possible theoretical and empirical directions for future innovation studies anchored in individuals. It is individuals who are the ones actually involved in knowledge creation, acquisition and exploitation across increasingly dynamic organizational boundaries.

* The Stella Polaris Network comprises researchers from Denmark and Germany.
** Member of the Stella Polaris Network

Marcel Bogers and Ana Luiza de Araújo Burcharth offered a brief introduction on the topic and the PDW. See here for the slides.

In the keynote, Prof. Russel Coff discussed how the four C's framework for evaluating alliance opportunities could be usefully applied in the context of open innovation research. The four C's framework where: 1) Complementarity (complementary resources); 2) Congruent goals (common goals), 3) Compatibility (in terms of culture and organization) and 4) Change (how will other three C's change over the course of an alliance).

Following this broad introduction, Russ then focused on topics more closely related to human capital. He proposed four promising areas of dialogue between human capital and open innovation research, accordingly:
1) Match: who is a fit for open innovation?;
2) Investment specificity;
3) Rent and incentives;
4) Mobility and boundaries: how durable are open innovation ties?

Firstly, Russ mentioned the importance of matching employees’ skills and competences to the profile of the organization by showing a humorous video. The mapping of the necessary skills and competences for openness may be a first step for research in this field.

Secondly, he pointed to the problem of firm-specific human capital investment, which may be an issue in open contexts where employees spend a large proportion of their time with external partners and may therefore lack incentives to make firm-specific investments. This issue likely raises challenges in employee reluctance, rent appropriation and holdup hazards. It has been an important concern in the human capital literature, which suggests the following possible solutions to protect employees: 1) Governance and trust so that firm won't renege; 2) Diversification so skills are redeployable; 3) Firm-specific compensation adds to wages.

Thirdly, he raised the question of the appropriate incentive mechanisms. In other words, how to motivate employees to interact with external partners throughout their innovative activities? Four potential mechanisms were highlighted: 1) high-powered incentives: employees require a share of the value created; 2) low-powered incentives: employees settle for normal wage; 3) enjoyment factor: employees work for less than normal wage; 4) community service: employees donate their time as community norms suggest.

Fourthly, Russ saw the mobility of employees as another potential relevant theme in open innovation. There might be a higher risk of losing employees that span the company’s boundaries. This may not necessarily be problematic, but may deserve attention. Some related questions he raised in this regard were: who is a firm? Where do people fit in? Which stakeholders are considered within the firm?

The roundtable and plenary discussion revolved around the following themes:

1) What is open innovation? Is it the same at the organizational level and at the individual level?
What does openness mean at the individual level? What problems does it solve? Much of the discussion throughout the session focused on the definitions of the concept and the delimitations of the phenomenon, as the audience displayed a great deal of skepticism and criticism to it.

2) What are the costs related to openness? The participants agreed on the need to better understand the individual-level conflicts related to open innovation, such as stress, work overload, work loyalty, job satisfaction, and higher mobility. In this regard, using cases of success and failure to explain heterogeneity was mentioned as a fruitful avenue for future research.

3) What can be learned from other fields? The Human Capital literature brings more sophisticated vocabulary to innovation literature that is dominated by a structuralist approach since Nelson and Winter (1982). It was debated the need to enter agency to the innovation field.