Management Control and Creativity E-Book

Sophie Bollinger

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 226

Veröffentlichungsjahr: 2023

Beschreibung

Innovation is an essential growth lever for organizations. Like any strategic element, it must be managed to ensure the right decision is made at the right time. When we talk about management, we naturally also consider management control. However, using management tools can be a danger to developing creativity - an essential element of innovation. This book examines the interdependencies between management control and creativity. By comparing two organizational contexts, we highlight the vital role of organizations as generators of creativity. We also underline the acceptance of an imbalance between the elements in tension, which can lead to the questioning and fostering of innovation; and the role of senior management as mediators between organizations and local actors.

Leseprobe

Table of Contents

Cover

Table of Contents

Title Page

Copyright Page

Foreword

F.1. The environment, a structural and cyclical change

F.2. Control, an omnipresent need in organizations

F.3. Being creative in a highly controlled environment?

F.4. What is the future for work on control, innovation and creativity?

F.5. A word about the author and her background

Preface

Introduction

I.1. Innovation, a way to remain competitive

I.2. The management of innovation, a delicate balance between control and creativity

I.3. Objective and organization of the work

1 Managing Innovation Processes, a Tension Between Control and Creativity

1.1. Innovation

1.2. Management tools for innovation?

2 Management Tools of Innovation Processes

2.1. The role of management tools in the management of innovation processes, a reality at two levels

2.2. A quantitative analysis of the use of formal tools and informal practices

3 Balance Between Formal Controls and Informal Practices

3.1. A qualitative analysis of the management of innovation processes

3.2. Management under construction

4 Management Control in a Specific Environment, the Case of the Social and Solidarity Economy

4.1. The context of social economy organizations and their management

4.2. Organizational innovation as a key to resolving tensions

4.3. A new way of managing?

Conclusion

References

Index

Other titles from iSTE in Innovation, Entrepreneurship and Management

End User License Agreement

List of Tables

Chapter 1

Table 1.1 Typologies of innovation process management practices.

Chapter 2

Table 2.1 Description of the sample

Table 2.2 Typology of respondents to the questionnaire

Table 2.3 Different types of questions proposed in the questionnaire

Table 2.4 Management control tools and informal practices

Chapter 3

Table 3.1 Presentation of the three cases studied

Table 3.2 Summary of data collected

Chapter 4

Table 4.1 Characteristics of the organizations studied

Table 4.2 The main expectations of the different actors

Table 4.3 Stages of the process and motivation of DEs

Table 4.4 Summary of participation in the working group

Table 4.5 Summary of interviewees

List of Illustrations

Chapter 1

Figure 1.1. Funnel or pipeline innovation process

Figure 1.2. Creation and innovation process

Figure 1.3. Typology of control

Chapter 2

Figure 2.1. Adaptation of the iceberg metaphor to innovation process managemen...

Chapter 4

Figure 4.1A. Architecture of the implemented tool

Figure 4.1B. Architecture of the implemented tool

Figure 4.2. Steps in the tool building process

Conclusion

Figure C.1. Elements of the organizational context to be taken into account for the management of innovation processes

Guide

Cover

Table of Contents

Title Page

Copyright Page

Foreword

Preface

Introduction

Begin Reading

Conclusion

References

Index

Other titles from iSTE in Innovation, Entrepreneurship and Management

End User License Agreement

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Smart Innovation Set

coordinated by

Dimitri Uzunidis

Volume 41

Management Control and Creativity

Challenges of Managing Innovation Processes

Sophie Bollinger

First published 2023 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc.

Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address:

ISTE Ltd27-37 St George’s RoadLondon SW19 4EUUK

www.iste.co.uk

John Wiley & Sons, Inc.111 River StreetHoboken, NJ 07030USA

www.wiley.com

© ISTE Ltd 2023The rights of Sophie Bollinger to be identified as the author of this work have been asserted by her in accordance with the Copyright, Designs and Patents Act 1988.

Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author(s), contributor(s) or editor(s) and do not necessarily reflect the views of ISTE Group.

Library of Congress Control Number: 2023940542

British Library Cataloguing-in-Publication DataA CIP record for this book is available from the British LibraryISBN 978-1-78630-819-1

Foreword

We live in a period of rapid change where companies must innovate at an increasingly fast pace to differentiate themselves. However, these clichés no longer fully reflect the realities of today. While it is true that the speed of innovation and exploitation cycles have accelerated, the situation in which organizations find themselves differs from previous periods both structurally and cyclically:

From a structural perspective, the methods for developing innovations have become more widespread, professionalized and open to others. As a result, organizations have begun to value the creativity of their employees more. New performance criteria are emerged, contrasting with older norms such as the ability to execute and develop innovation with the utmost secrecy. Innovation management, and more broadly change management, has adapted to a more volatile, uncertain, complex and ambiguous world.

From a cyclic perspective, the COVID-19 pandemic came later than most of the work presented in this book, and it has given greater freedom of action to managers and teams in charge of producing innovations. Indeed, innovation was necessary, and organizations had to react quickly to changes in the environment and sudden shifts in demand. This newfound freedom has made it possible to take initiatives and risks, as the need to do so ignores the old routines.

Faced with this increase in creativity, possibilities and opportunities, some organizations are thinking about implementing new forms of control to limit abuse without curbing the creativity of employees.

The author proposes an exploration of the theories and tools available to managers to achieve this balance between rigor and creativity.

F.1. The environment, a structural and cyclical change

VUCA is a popular term in management that summarizes in one expression the situation a manager is confronted with. This acronym, which stands for “Volatility, Uncertainty, Complexity, Ambiguity”, has become in some companies a synonym for “difficult to manage” or “chaotic”.

The concept was introduced in 1987 in a military context to describe confusing situations, such as the end of the Cold War, which mixed political and military aspects. Since then, the term has spread to other domains that require leadership in challenging situations. The Cynefin model shares similarities with this approach and is discussed in the book Pro en management co-written by the author.

This acronym also captures the situation in which managers of innovative projects find themselves. They find themselves defending a project that needs time to materialize, in a changing environment, against other competing projects, and skeptical managers who question the changing needs of consumers. The work summarized in Chapters 1 and 2 presents innovation process management models that help managers to develop their understanding of these environmental changes.

F.2. Control, an omnipresent need in organizations

Henry Ford pushed the limits of control very far in his factories. In particular, he set up a specific control unit whose activity was to control the workers not only at work but also outside of it! Ford believed that workers who did not drink, gamble, or fight and led a normal family life worked better and were more productive. Thus, workers who lived an exemplary life received a better salary. This system did not satisfy the workers, who felt constantly watched and pressured. The balance between control and freedom, and between private and professional life, is still an issue. In an organization, control means checking whether everything is done by the adopted plan and the instructions that have been given. Monitoring is necessary to find out whether plans are being carried out according to what has been recommended and whether they are being executed properly. It also allows for the identification of deviations from the plan so that corrective actions can be taken. However, the control must be balanced. Chapter 3 is dedicated to the formal and informal methods of control that need to be combined in a clever way within each organization.

F.3. Being creative in a highly controlled environment?

IBM’s control system has been widely copied by other companies. Most of IBM’s success comes from a fairly rigid system and codes followed by the employees. Yet, when the company developed its first computer, engineers and scientists in the R&D unit were allowed to collaborate with people outside the company to obtain knowledge that was not held in-house. The very tight schedule that the company imposed on them required them to resort to solutions that already existed and had been invented by others. It was also a real reason to look for skills outside the company’s borders in order to move as quickly as possible, but other arguments were often put forward. For example, creativity would not be possible within a very controlled environment, and that is why IBM allowed engineers to contact partners and temporarily leave the corporate environment. This is a way to give a group of employees more freedom without changing the dominant corporate culture or creating jealousy. However, the creative freedom of the engineers, the objectives of the leaders and the vision of the managers in charge of control are not always compatible. This problem is found in all organizations, regardless of the size of the company (SME or multinational), the sector of activity or the control tools used. In Chapter 4, Sophie Bollinger proposes to explore an often-neglected sector, the social and solidarity economy. In this sector, the notions of control and innovation are at the center of distinct tensions in the study and reveal problems and solutions that can inspire companies in all sectors.

F.4. What is the future for work on control, innovation and creativity?

In her work, Bollinger questions the “meaning” of innovation. In the background, she raises the question of the societal value of innovations. After bullshit jobs, are we seeing the development of bullshit innovations? Can the search for a better combination of creativity methods and control practices reduce the development and dissemination of these innovations, which are more harmful than truly value-creating in the long term? This reflection leads the author to study historical sectors that are far from the notion of an innovation process while being hostile to the concept of control. Thus, she studies non-profit organizations, whose practices she compares to those of more traditional economic activities.

F.5. A word about the author and her background

This book is the result of Bollinger’s thesis work. Her course of study has allowed her to combine a remarkable academic career that has led her to become a teacher-researcher in the Faculty of Economics and Management at the University of Strasbourg. Her research is conducted at the BETA laboratory, UMR CNRS Inrae, in the fields of control applied to innovation and creativity in various organizational contexts.

BETA is a research laboratory that celebrated its 50th anniversary in 2022. The researchers in this laboratory distinguished themselves early on by their research approach, which combines economics and management sciences, theory and applied practice. They were among the first to work on the notions of communities, evolutionary economics and management or routines. In line with the researchers of this laboratory, Bollinger draws on principles established in several disciplines related to management, including economics, and more broadly the disciplines that have examined the notion of creativity, in order to provide rigorous work that is at the cutting edge of knowledge in the field and that is interested in the real practices of companies.

She teaches the results obtained from her work as well as innovation management and control in the Faculty of Economics and Management at the undergraduate and graduate levels, and to seasoned professionals in Master of Business Administration.

Thierry BURGER-HELMCHENUniversity of StrasbourgUniversity of LorraineCNRS, BETA

Preface

This book is the result of my doctoral work. My thesis, entitled “Conjuguer contrôle de gestion et créativité, une question de pratiques et de contextes organisationnels” (Combining management control and creativity, a question of practices and organizational contexts), was defended on 18 November 2019. It was prepared under the supervision of Thierry Burger-Helmchen at the BETA laboratory of the University of Strasbourg.

This research work was awarded the Honoris Causa – Special Edition “Promotion of Research in Innovation Studies” by the Innovation Research Network with ISTE Editions, “Smart Innovation”. I sincerely thank the network for their interest in my work and their help in disseminating it.

This research would not have been possible without the guidance and support of Thierry Burger-Helmchen. My deepest thanks for his support, availability, and attentiveness as well as his wise and rigorous advice throughout this work.

I would also like to thank the PwC office in Strasbourg, especially Etienne Henry and Nicole Bornert, who supported me from the very beginning.

Lastly, I would like to express my gratitude to my family: Anna and Damien, Anne and Jacques, Lucile, Gauthier and Arielle, who support me every day in my activities.

July 2023

Introduction

I.1. Innovation, a way to remain competitive

In the current economic context, innovation has become a significant element in the strategies of companies and in many cases has enabled them to maintain their competitiveness, market share and growth (Porter and Ketels 2003). Thus, the development of a competitive advantage and the maintenance of performance are increasingly linked to innovation (Drucker 1985; Cohendet 1997; Bouchard and Bos 2006; Hamel and Pavillet 2012).

Innovation represents a stimulating process that pushes firms to surpass themselves and launch new products or services as quickly as possible (Chanal and Mothe 2005; Meyssonnier 2015). For Dumoulin and Simon (2005), innovation is a means of prospering by avoiding direct confrontation with dominant market players by developing a competitive advantage that represents a factor of firm survival (Schumpeter 1942; Amabile et al. 1996; Christensen 1997; Shalley et al. 2004; Anderson et al. 2014). Christensen went further by considering innovation as a factor in the survival of companies:

Why do the smartest companies fail? Because they don’t innovate enough, or badly. (Christensen 1997, p. 265)

In this context, innovation has become an integral part of business development and an essential lever for growth (Johannessen et al. 2001). It is considered a fundamental element of entrepreneurship and an element of success (Nonaka and Takeuchi 1995).

In order to achieve innovation, creativity is a necessary condition, and managing it is an essential step for organizations (Cohendet et al. 2013). Creativity and innovation are two distinct concepts with potentially different origins (Anderson et al. 2014). While creativity is about the generation of new ideas, innovation is about the implementation of creative ideas (Chang and Birckett 2004; Anderson et al. 2014).

Being creative and generating new ideas are the first steps in developing innovation. This is made possible by the creativity of employees and is necessary throughout the innovation process. The generation of new ideas, often called exploratory innovation (Benner and Tushman 2003), allows companies to develop new skills and explore new opportunities and technologies in order to satisfy new customers and existing markets. This exploratory innovation is made possible by the creativity of employees.

However, being creative and generating new ideas are not enough. Indeed, “to be creative, an idea must also be appropriate – useful and actionable”, according to Amabile, in his seminal article “How to Kill Creativity” (1998). Creativity should influence the way a company runs its business, by improving a product or making a process more efficient. Finally, creativity leads to innovation if it meets the needs of consumers. For Frigo and Litman (2007), “It is not enough for the firm to be creative. The intention behind the innovation needs to be focused on the creation of new offerings that answer to needs that customers cannot get met elsewhere”.

Innovation refers to the implementation of a new idea as one moves through the creative process to the operational innovation stage. During this stage, the proposals made during the creative phase are structured and channeled through multiple iterations to ensure that the new idea is transformed into value for the company and becomes a form of routine (Obstfeld 2012).

Creativity and control are antinomic by definition and sources of tension. In the management science literature, we find two opposing trends on the subject. The first trend favors the use of management control tools to manage innovation, and the second trend warns against the use of management control tools to manage innovation.

In the face of divergences and tensions in the literature, and in the absence of consensus on the type of management to adopt, it is relevant to look in more detail at the question of the management of innovation processes.

I.2. The management of innovation, a delicate balance between control and creativity

The first question to ask is as follows: do we really need to manage innovation processes? A member of the general management of a technological research center specializing in agri-food said to us: “Indicators kill creativity”. The system of control and the system of creativity seem to be antinomic.

In addition to these tensions between control and creativity, other specificities also come into play and must be taken into account in the way of managing this process. For example, the nature of the innovation developed, the overall strategy of the company, the values, personality and skills of the project leaders, the expectations of the funders or even the field of activity of the organization. These parameters are an integral part of the project and condition its success. They must not be neglected during the development and evolution of the tool to ensure that it is relevant, accepted and used.

The monitoring tool would no longer be an appendix to a project, but it would become a full-fledged element of it by becoming a strategic and operational support to the innovation process.

According to Plantz et al. (1997) and Kaplan (2001), performance measures are effective tools for communicating the identity, missions and strategies of an organization. Waggoner et al. (1999), Henri (2006) and Townley et al. (2003) define performance measurement tools as examples of the shared values within an organization. These tools are used to communicate within and outside the organization. Studies have shown that these tools induce organizational change and that organizations become what they measure (Grimes 2010).

The construction of a tool and the choice of indicators then become complex, as finding a balance between the different parameters of control, creativity and project specificities, organization or stakeholders is necessary. However, they are still necessary due to the influence and support that management tools can have in the innovation process.

Such tools have yet to be invented, and it seems that applying general recipes or duplicating a relevant tool from one structure to another is not the appropriate solution. Instead, adapting the tool to each project is more judicious.

The success of an innovation depends on how people will manage its development (Cooper 1979a, 1979b; De Brentani 1991; Di Benedetto 1996; Balachandra and Friar 1997; Griffin 1997; Ernst 2002).

I.3. Objective and organization of the work

At the heart of corporate strategy, discussions on the management of creative and innovative activities naturally occur among entrepreneurs, project managers and financial managers. This particularly concerns managing efficiency within their innovation process, the different stages of the process, the balance between control and creativity, and the specific indicators and processes that could be implemented to manage innovative activities. The challenge for these actors is to not kill creativity by relying solely on standard financial criteria (Christensen et al. 2008). By considering innovation as a creative process (Barreyre 1980) from ideation to implementation of the solution, we propose to question the management of this process.

In this book, we examine the interdependencies between control and creativity and the role of the organizational context. To do so, we adopt three perspectives: descriptive, analytical and exploratory:

The typology of managing innovation processes. In

Chapter 1

, we define the main concepts: innovation, the innovation process and the management of innovation processes. Then, we will review the relationships between management tools and the innovation process. In

Chapter 2

, we describe the tools used to manage innovation processes and meet with the actors involved in innovation and management control in organizations to gather their management practices and tools.

The balance between formal controls and informal practices. The management of the innovation is accomplished not only through formal management control tools but also through informal practices. In

Chapter 3

, we study the search for balance or accepted imbalance in organizations with the analysis of three cases.

Management control in a specific environment. The case of the social and solidarity economy (SSE).

Chapter 4

proposes to broaden our study by exploring different sectors of activity where management control is also in tension. We examine the case of the SSE where management control is in tension with the need to innovate and strong human and social values.

Figure I.1 shows the organization of the structure.

Figure I.1.Organization of the book

1Managing Innovation Processes, a Tension Between Control and Creativity

In this chapter, we frame the subject. First, we define the main concepts of our research: innovation, innovation process and management of innovation processes. Then, we will review the literature with an overview of the relationships between management tools and the innovation process.

1.1. Innovation

Innovation is polymorphic and has many facets. There are many definitions and typologies in the scientific literature. The definitions of innovation vary according to the context in which they are used.

The notion of innovation was introduced by Schumpeter (1911), who defines it as the ability to develop new combinations of the firm’s resources, their relationship to the market and the use that society makes of them. According to the author, it must be conceived as destructive and creative, both movements generating uncertainty. The author distinguished innovation from invention by its economic and social processes. Invention represents a solution to a problem or a technical process. It only becomes innovation when it is introduced on the market. This definition offers a broad vision of the different possible formats of innovation.

Later, Zaltman et al. (1973) define innovation as “any idea, method or material object perceived as new at its unit of adoption”. In this definition, we find the notions of product and process innovations as well as the character of relative novelty.

Other authors do not see innovation as a relative novelty but as something entirely new. This is the position initially adopted by Van de Ven. This author has evolved his position, going from the representation of an innovation as a radical novelty in his early work to a relative novelty later on. According to de Ven (1986), innovation can be technical or administrative and is based on a new idea that challenges the established order or is perceived as such by the actors concerned.

Drucker (1985) also shares this view. Indeed, his definition is as follows:

The conception and realization of something new, as yet unknown and non-existent, in such a way as to establish new economic contributions from the combination of old, already known and existing elements, giving them a new economic dimension. Innovation then constitutes the link that transforms a set of elements, each of which has a marginal efficiency, into a powerful integrated system.

Pearson (1991) provides a complementary vision by defining the two characteristics of the innovator’s situation. The first is the uncertainty related to the final result, and the second is the uncertainty as to the means to be used to achieve the objective. In both cases, there is a lack of information either about the choices related to a solution that does not yet exist, or about the organization’s rules of operation that allow the solution to be adopted.

Through the Oslo Manual (2005), the Organization for Economic Cooperation and Development (OECD) defines innovation as “the implementation by a company, for the first time, of a new or significantly improved product (good or service) or (production) process, a new marketing method or a new organizational method in the practices of a company, the organization of the workplace or relations with the outside world” (OECD 2005, p. 54).

While organizational or process innovations can certainly be levers of performance, the multifactorial nature of the levers that lead to change, the adoption curves and their effect on the organization make them more challenging to access for observation and evaluation (Dubouloz 2014).