La mujer como tentación: la derrota del héroe

This dissertation provides a thorough review of management control modes and management control mechanisms that can be used in the front end of innovation (see Chapter 2.1). This review may broaden management’s current understanding of different control mechanisms and their applicability in different organizational contexts. Moreover, the empirical results of this dissertation help management to define appropriate management control for the front end of innovation. The empirical findings reveal how certain control mechanisms are associated with front end performance and how market uncertainty or technology uncertainty moderate this relationship. The managerial implications can be summarized as following.

When the goal is short-term-oriented to pursue superior product concepts:

• First, managers are advised to define a systematic and formal process for the front end. This includes a definition of the reporting system, decision-making structure and a process model including work activities. However, be aware that not all process models are alike, and tailor a process model that is suitable to the context of the organization. In addition, management is advised to make sure that front end projects are really conducted in accordance with the defined procedures. The potential decrease in individual creativity caused by the formalization is well compensated for by improved innovativeness, i.e. the ability to put the created ideas into practice in the organization. In the case of

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847

E.g. Koen et al. 2001

high market uncertainty, a formal approach is important. The positive influence on performance especially derives from the improved capability of coordinating diverse activities conducted in different parts of the organization (e.g. in the R&D function, sales and marketing function). Informal communication should be used to complement the control influence of process formalization; the use of only informal communication for control purposes is not adequate. See Chapter 6.1.2 for a more detailed discussion.

• Second, managers should build and share a compelling strategic vision that is well understood and internalized among employees. This brings the necessary consensus, aligns diverse activities and helps to achieve a critical mass of effort to enable better product concepts. See Chapter 6.1.2 for a more detailed discussion.

• Third, managers are advised to take care of the internal task motivation of front end group members. Task motivation cannot be given, but management should create an environment from which internal task motivation emerges. Motivated employees are capable of exerting self-control in work tasks, i.e. taking more responsibility for the direction of work activities and the ways in which the work is carried out. Motivated front end group members are the source of superior product concepts. See Chapter 6.1.2 for a more detailed discussion.

When the goal is long-term-oriented to pursue strategic renewal:

• First, managers are advised to put special emphasis on human resource allocation considerations in front end projects aiming at strategic renewal. These kinds of front end initiatives are the most challenging and require special skills from front end group leaders and group members. Management should make sure that the front end group is cross-functional and has the necessary expertise and competence for the given task. The leader of the front end group has a critical role in terms of front end performance. Capability through natural tendencies and acquired skills for creative thinking and reshaping and branching ideas in order to find the right direction for front end efforts is important. See Chapter 6.2.2 for a more detailed discussion.

• Second, managers are advised to put an emphasis on task definition and the definition of strategic goals for front end projects. It is management’s job to frame the task for front end groups in order to focus development efforts. Moreover, managers are advised to set challenging strategic goals for front end projects. Through task definition and strategic goal-setting, management provides a common direction and challenging targets for development activities while decisions on more operative-level matters can be left up to the front end group. This is not an easy task from management’s point of view, but still the time devoted to this activity is well compensated for by improved front end performance. See Chapter 6.2.2 for a more detailed discussion. • Third, again the internal task motivation of front end group members is even

more important in front end projects aiming at strategic renewal. This is due to the more challenging execution and transformation of embryonic ideas into product concepts. Obstacles and even organizational resistance against new product ideas requires highly motivated front end group members to create successful end results. Managers are advised to develop new means and to remove obstacles to motivate front end group members. See Chapter 6.2.2 for a more detailed discussion.

• Fourth, in the case of high technology uncertainty, two control mechanisms have a negative influence on strategic renewal. One is front end process formalization. In the case of high technology uncertainty (e.g. front end projects applying totally new technology), practitioners are advised to loosen formalized processes and allow more freedom or even a different approach on how activities are carried out. The second mechanism is outcome-based rewarding. Tying rewarding only to the outcome achieved in the case of high technology uncertainty, leads to ‘playing it safe’ and the selection of more reliable, less risky alternatives, thus decreasing the potential for strategic renewal. See Chapter 6.3 for a more detailed discussion.

Many companies apply a similar defined approach to the front end of innovation regardless of the targets (short-term or long-term performance) set for the front end projects. In general, management is advised to take a more active role in controlling the front end of innovation since none of the investigated control mechanisms had a

negative influence on performance in any situation with one exception, i.e. front end process formalization and outcome-based rewarding in the case of high technology uncertainty when strategic renewal was pursued. Management can well focus on controlling inputs, using formalized process structures to run front end projects, challenging employees with a compelling strategic vision, and nourishing the intrinsic task motivation of front end groups, since these factors contribute to front end performance. Management can use participative planning and trust in informal communication without fear of this negatively influencing performance. Management can also use outcome-based rewarding if it is in line with the normal rewarding system without hampering front end performance. Long-term, front end projects aiming at strategic renewal and including high technology uncertainty are a special case that requires management’s attention and sensitivity to tailor a less formal front end process and rewarding system which supports risk taking and long-term aspirations.

The situation where both market uncertainty and technology uncertainty are high is challenging from the viewpoint of front end process formalization. Front end process formalization enables a decrease in market uncertainty through the improvement of coordination, but it could prevent free-wheeling and hinder the development of risky technological choices, lowering the potential for strategic renewal. In this case, management could make a conscious decision on which type of performance, a short- term-oriented and clearly defined superior product concept or more long-term and future-oriented strategic renewal, is more appropriate to pursue and adjust the process characteristics accordingly.