Managing digital innovation in established industrial companies

Moschko, Lukas; Piller, Frank Thomas (Thesis advisor); Blazevic, Vera (Thesis advisor)

Aachen (2022)
Dissertation / PhD Thesis

Dissertation, Rheinisch-Westfälische Technische Hochschule Aachen, 2022

Abstract

Essay I: Paradoxes of implementing digital manufacturing systems: A longitudinal study of digital innovation projects for disruptive change Digital manufacturing technologies provide many innovation opportunities for established firms. They foster data-driven operational excellence but also enable new business models by either integrating physical and digital assets into innovative offerings or by using digital manufacturing capabilities for strategic differentiation. Nevertheless, many of these innovation projects fail to seize their initial ambitions and result, if at all, in rather incremental efficiency optimizations of an existing manufacturing system. To understand the causes behind these failures we conducted a qualitative longitudinal study based on a collaborative research project with eight companies and additional expert interviews. Applying a paradox lens, we identify three tensional knots which show multiple interrelated tensions of digital innovation management projects in incumbent manufacturing firms: 1) amalgamating physical and digital assets, 2) innovating in an existing modus operandi and 3) integrating internal and external stakeholders. These tensions result in the simultaneous occurrence of dynamic and conflicting forces that diverge digital innovation projects in manufacturing away from their high ambitions. Our findings explain why digitizing established manufacturing systems is a non-trivial effort. Helping manufacturing managers become aware of these paradoxes will allow them to systematically address the interrelated tensions in their innovation efforts to better seize disruptive change. Essay II: Managing digital transformation of industrial incumbents: Driving digital innovation activities by leveraging innovation-oriented leadership through internal and external collaboration Industrial incumbents aim to foster their competitive position by applying digital technologies in their innovation activities, either through process optimizations or via business model innovations. While firms agree on the importance of digital transformation, they often struggle with implementing effective measures to tackle it. We show the important role of innovation-oriented leadership, as a type transformational leadership style, in driving internal and external collaborations, which proves essential to increase the digitization contribution to innovation activities. We surveyed top managers of established industrial companies to provide empirical evidence that innovation-oriented leadership does not have a direct influence on the digitization contribution to business activities, but is fully mediated by internal and external collaboration. Based on supplemental objective data, we show additionally that a high digitization contribution in business model innovation has a beneficial effect on the sales performance. Essay III: Data sovereignty as organisational competence for digital innovation management of industrial incumbents For industrial incumbents, the development of digital innovations represents a particular challenge, as it requires new competencies. Especially, the use of data, which includes e.g. data collection, storage, processing, analysis and exchange with relevant stakeholders, for a company’s value creation and capture currently appears to pose difficulties. In an explorative study based on expert interviews, we therefore investigate why and how data sovereignty should be developed as an organisational competence and which connections to digital innovation management exist or should be taken into account. Using strategy-as-practice theory, we were able to show in an integrated approach that this requires, among other things, a collaboration of interdisciplinary actors as well as consistent practices for handling data, the possibility of flexible and agile project management and reducing existing reservations about data and their use. In addition, we were able to explore numerous interrelationships between organisational data sovereignty and digital innovation management, since, on the one hand, the sovereign handling of data is a hitherto underestimated competence for the development of digital innovations and, on the other hand, some characteristics of digital innovation management entail effects on organisational data sovereignty. Our research thus helps companies to create conditions for a better exploitation of data in their value creation and their digital innovation management.