The Innovative Engineer

THE INNOVATIVE

ENGINEER - On Practice, Problems, and Potential -

Astrid Heidemann Lassen & Bjørge Timenes Laugen

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The Innovative Engineer - On Practice, Problems, and Potential Astrid Heidemann Lassen & Bjørge Timenes Laugen

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ISBN: 978-87-91831-46-1 Published by: Center for Industrial Production Aalborg University Published with support from the Lottery Funds of the Ministry of Science, Innovation and Higher Education 1st edition Š Astrid Heidemann Lassen, 2011

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FROM THE AUTHOR… Over time, managers across the world have come to excel in established production processes to such a degree that these no longer represent a significant competitive advantage. The new challenge for companies that want to stand out from the crowd is to manage the innovation process. This entails understanding how to utilize the ability to change, creating new competitive advantages by offering new and better products and services, recognizing the possibilities in applying new processes, and spotting opportunities in new markets.

Innovation is important on several levels. For the company, innovation is not only about creating new sales opportunities, but also about strengthening the internal knowledge base that can form the basis of future innovations. Innovation contributes to increasing the general level of productivity in businesses, and thereby in society as a whole.

Today, innovation is thus considered one of the most important drivers of growth and prosperity in the global as well as the national economy. All companies are forced to consider it to ensure their continued survival.

An example of the new innovation strategy-based competition is Procter & Gamble of the USA, one of the world’s largest suppliers of consumer goods. Procter & Gamble has set the goal that in two years, products that do not exist today will account for 20% of the company’s revenue.

Despite the considerable interest in the innovation process, we have yet to master it. ”The Innovative Engineer” study was conceived from a desire to better understand the role Danish engineers play in companies’ innovation capability. This is based in a conviction that engineers and their competences in for example technology, manufacturing, and management play a central role in the development of Danish business, including the innovation capability that will ensure continued growth in Denmark.

Special thanks should be directed to the respondents who spent time completing the distributed questionnaires that form the basis of the report.

Without their effort, it would not have been possible to establish a nuanced picture of the experiences engineers in a variety of job situations have with innovation work. Their perceptions of the factors that support and inhibit innovation point to future focus areas for strengthening innovation.

Astrid Heidemann Lassen Associate Professor of Innovation Management Center for Industrial Production, Aalborg University

The Danish Society of Engineers (IDA) has been a valuable partner in connection with this study. Funding from the Lottery Funds of the Danish Agency for Science, Technology, and Innovation made the publication of the study possible.

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CONTENTS FROM THE AUTHOR…

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EXCERPTS FROM THE CONCLUSIONS OF THE BOOK

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1. ’ THE INNOVATIVE ENGINEER’

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1.1. The concept ’Innovation’

2. METHODS AND DATA 2.1. The questionnaire 2.2. Response rate 2.3. Qualitative interviews

3. CHARACTERIZATION OF INNOVATION IN DANISH ENGINEERING COMPANIES 3.1. Engineers’ experience with innovation experience with innovation 3.2. Product innovation is most common 3.3. Company size and age 3.4. Learning points

4. THE INNOVATIVE COMPANY 4.1. Innovation does not appear out of the blue 4.2. Collaboration in innovative projects 4.3. Combination of internal and external resources 4.4. Learning points

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12 12 13 13

14 15 15 18 19

20 21 22 26 27

5. SIGNIFICANT FACTORS FOR THE INNOVATION PROCESS 28 5.1. Management and teamwork drive innovation 5.2. Learning points

6. FACTORS THAT INHIBIT AND PROMOTE THE INNOVATION OPPORTUNITIES OF ENGINEERS

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6.1.Management and teamwork drive innovation 6.2. Innovation requires willingness to experiment, time, and internal collaboration 6.3. New approach necessary for radical innovation 6.4. Learning points

32 34 36 36

7. THE INNOVATIVE COMPETENCES OF ENGINEERS

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7.1. The innovation desires and skills of engineers 7.2. Communication patterns 7.3. Learning points

8. CONCLUSION 8.1. The future of innovation among Danish engineers

39 42 43

44 44

BIBLIOGRAPHY

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9. APPENDIX

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9.1. Further information on method and data

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28 29

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EXCERPTS FROM THE CONCLUSIONS OF THE BOOK 5 % of Danish engineers have experience with large and very complex innovation projects

I nnovation does not emerge out of the blue, serendipitously or by having the freedom to develop on its own, but instead out of very deliberate choices made by the company.

A deeper involvement of sales/marketing and service functions could contribute important market information that would make it easier to position new products and technologies in the market.

C ollaboration is one of Denmark’s strong suits.

M anagers stress that openness and market proximity are extremely important for innovation capability, but practice in Danish engineering companies indicates that this only takes place to a limited degree.

D anish engineering companies have a traditional approach to which parties to involve in their innovation processes. Thus, innovation is regarded as an internal process, possibly inspired by customers.

D anish engineers indicate awareness of the need for a long-term focus in order to be innovative.

I t is difficult to create an understanding of the need for radical innovation in the organization.

T he ability to manage and implement radical innovation in Danish engineering companies should be brought into focus in order to ensure optimal utilization of the innovation skills that engineers can bring to bear on the creation of the idea and concept.

A n important top management role is to allow space for group-based management by providing guidance instead of focusing on detailed management.

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’THE INNOVATIVE ENGINEER’ T

he aim of this book, The Innovative Engineer, is to provide practicians and academics that have an interest in advancing the innovation opportunities of Danish engineers with inspiration and useful results for their further work.

In each chapter, a number of learning points are extracted that specify profitable future focus areas for supporting innovative engineers. These learning points lead to a number of recommendations for specific actions that would strengthen innovation in Danish engineering companies. Recommendations are given for actions that companies, educational institutions, and political actors can take regarding individuals, companies, and framework conditions.

In the following chapters, the results of the study, “The Innovative Engineer”, will be presented and analyzed.

Emphasis will be placed on characterizing the experiences of engineers with innovation, which conditions engineers find to promote and inhibit innovation, and how well engineers feel prepared to innovate. The results are presented under the following three main themes:

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How innovative are Danish engineering companies?

What characterizes the innovative engineering company?

Which conditions promote and inhibit the innovation work of engineers?

1.1. THE CONCEPT ’INNOVATION’ The concept of ”innovation” encompasses the understanding of how opportunities arise, are shaped, and made use of. Innovation is a broad concept and an initial discussion is necessary to establish a framework for understanding the results of “The Innovative Engineer”.

destruction, which define innovation as the introduction of new elements or a new combination of old elements in companies (Schumpeter, 1934).

The process of realizing a new idea or developing new elements for commercial use is in focus, rather than the new idea itself.

Taking a closer look at the concept of innovation reveals that innovation is practiced, studied, and deliberated in a multitude of contexts. There is general agreement that innovation represents the way forward for companies in an increasingly globalized and competitive world. A central point is therefore how innovation can best be developed, managed, and implemented in companies.

This practice-oriented approach is also evident in Roger’s (1983) commonly applied definition of innovation as “any idea, practice or material artifact perceived to be new or different by the relevant unit of adoption”. This typically involves the generation, development, and implementation of an idea (for example Amabile, 1988; Dougherty and Hardy, 1996; Kanter, 1988; Klein and Sorra, 1996).

A concrete and practically applicable definition of innovation is not easy to find, which is illustrated by countless examples in the literature (Garcia and Calantone, 2002). When studying and measuring experiences with innovation, it is therefore essential to be aware that innovation can be manifested in a variety of ways.

Based on a similar understanding of innovation, O’Reilly and Flatt (1989) concluded that innovation is the result of the integration of two components: (a) creativity and (b) implementation of the actual change. This means that, in order to strengthen innovation in companies, mechanisms for both idea generation and converting ideas to reality must be developed. Innovation is thus the observable result of the interaction of these mechanisms.

This study takes its point of departure in Schumpeter’s thoughts on creative

An underlying element of the concept of innovation is that innovation is evaluated based on the degree of newness in the context in which the innovation is implemented. The definitions above allow for innovation to take place through introduction of new products, products with a new level of quality, new manufacturing processes, utilization of new markets or new sources of supply, introduction of new service systems, and organizational and industrial change (West and Farr, 1990). With this broad definition, innovation becomes a pressing issue for any competitive company.

In most lines of business, developing new products and/or services, introducing new process technologies and new forms of organization, and seeking out new markets is necessary just to survive. Often, several aspects of the company must be renewed simultaneously in connection with a single innovation. The innovation process must therefore consider and include change in several areas to form a cohesive basis for innovation.

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1.1.1. DIFFERENTIATED UNDERSTANDING OF INNOVATION

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n the search for a useful definition of innovation, comprehensive research has shown that such a definition should differentiate between rare radical innovations and the more common incremental innovations (Henderson and Clark, 2000). These two perspectives entail fundamentally different approaches to innovation: Fundamental renewal and change, or continuous improvement.

Incremental innovation is mainly based on exploitation of existing knowledge (Bessant, 2003), through which relatively small changes to existing products are introduced, the potential of existing designs is utilized, and the company’s dominance in a market is reinforced (Baden-Fuller and Pitt, 1996). In a long-term perspective, these incremental innovations can result in more fundamental changes to the company, but their main aim is a short-term improvement through the company improving on what it already does. The process behind these innovations is often well structured and linear, allowing for controlled management and strategic planning.

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Conversely, radical innovation is based on exploration of new knowledge and new opportunities.

These innovations often open up entirely new markets and potential implementations (Hamel, 2000).

Due to their mutable nature, radical innovations entail a far higher level of risk and uncertainty on a number of parameters, such as development timeline, funding needs, market potential, etc. The process behind the development of these innovations is therefore often discontinuous and nonlinear (Damanpour, 1996; Carrero et al. 2000), which means that the business model must be developed in parallel with the innovation itself, making a predefined plan impossible (Leifer et al., 2000).

Despite, or perhaps because of, the necessity of a more uncontrollable development process this type of innovation has the potential for clear differentiation from competitors, first-mover advantages, and considerable competitive advantage.

dynamics suggest that companies should understand how to vary between the two forms. For example, the introduction of a radical innovation is often followed by a long period of improvement and refinement, during which performance is pushed, unnecessary features are removed, and the innovation is optimized. In this manner, companies can reap the benefits of both the ability to improve and the ability to innovate radically.

While companies should distinguish between these two perspectives, they should not elect to focus on either incremental innovation or radical innovation.

Rather, theories on innovation

The following chapters will deal with both radical and incremental innovation. The scale shown above will be used to distinguish between the two types.

A common scale from radical to incremental innovation is: ”new to the world, new to the market, new to the company, new to the individual” (Garcia and Calantone, 2002). The first two categories cover radical innovation in Schumpeter’s sense of the concept, while the two last include more ”common” innovations such as incremental innovations or changes in the company. The categorization used in this study is shown in Figure 1.

New to the world

Radical innovation

New to the market New to the company

Incremental innovation

New to the individual Figure 1: Incremental and radical innovation

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METHODS AND DATA

The results of the study are based on an internet questionnaire distributed to 3000 members of the Danish Society of Engineers (IDA). This section describes the methods and data behind the study. The appendix contains additional information on the demographics of respondents and the validity and reliability of the study.

Not at all 12

Figure 2: Likert scale

To a lesser To some degree degree

To a considerable degree

Completely Don’t know

2.1. THE QUESTIONNAIRE

2.2. RESPONSE RATE

2.3. QUALITATIVE INTERVIEWS

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The questionnaire consists of 24 main questions that require several answers, as well as 8 questions about the background of the respondent. The 24 main questions address three main themes: 1) “Characteristics of a development project”, 2) “The organization – conditions and environment”, and 3) “Your experiences with creative work”. Through these three themes, the questionnaire seeks to collect information about the types of innovation respondents have experience with, how the organizational arena influences innovation capability, and the innovation skills, desires, and opportunities of the individual engineer.

A cause of the high response rate may be the large general interest in innovation today. Another reason could be that the questionnaire represented an opportunity for respondents to reflect on their own work in relation to innovation, making it a welcome break from everyday work for many engineers.

he questionnaire was developed based on a number of qualitative interviews with individuals in Danish engineering companies. These interviews gave rise to a number of questions, of which the most prominent were included in the questionnaires.

ut of the 3000 questionnaires sent out, 803 were returned with applicable responses. 15 individuals responded with qualitative answers to why they lacked experience with innovation. These were also counted among the responded questionnaires.

In addition, 90 individuals replied that they were not able to or did not wish to participate in the study.

The actual response rate is therefore calculated as 27 %. This response rate was considerable when taking into account the internet-based nature of the questionnaire, which often results in a lower response rate due to the lack of personal commitment.

fter the completion of the quantitative element of the study and analysis of the results, a number of qualitative interviews with Danish managers were carried out. This was especially important because it allowed the study to integrate information about the changes facing companies during the financial crisis. During the interviews, the results of the questionnaire were presented and their relevance, generalizability and meaning were discussed with the interviewees. The qualitative interviews confirmed the relevance of the study and provided inputs to interpreting the results and their consequences.

Quotes from the qualitative interviews appear throughout the book.

The majority of the questions asked are closed questions with the option of qualitative elaboration. A Likert scale from 1 to 5 was used, with a sixth option “Don’t know”. An example of this scale is shown below.

A considerable number of the respondents made use of the opportunity to elaborate qualitatively on their responses. This has given the study added nuance and depth, as personal comments and observations can now be taken into account when interpreting the results.

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CHARACTERISTICS OF INNOVATION I DANISH COMPANIES This first part of the analysis will aim to create a preliminary understanding of the degree of experience Danish engineers have with innovation. This section will aim to answer the following questions: • Which types of innovation are engineers involved in?

• How old and large are companies that are involved in innovation?

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Experience with innovation 100

Product Process Technology

80 60 39

40

29

33

20

New to me

24 12

3 7 5 0

34 14 3

New for the company

New for the market

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New for the world

Figure 3: Experience with innovation

3.1. ENGINEERS’ EXPERIENCE WITH INNOVATION

3.2. PRODUCT INNOVATION IS MOST COMMON

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nitially, the study investigated how many engineers have experience with innovation. A total of 803 respondents replied to the questionnaire.

Of the 803 respondents, 64 % (511 respondents) stated that they have experience with innovation; while 36 % (291 respondents) answered that they do not have experience with innovation. These results are higher than those found by Christensen et al.’s (2006) study of the general level of experience with innovation in Danish companies, which points to the special role of engineering companies as innovators in the Danish business community.

The further analysis presented in this book is based on the responses of the 511 respondents who had experience with innovation.

n order to better understand Danish engineers’ experiences with innovation and gain a clearer picture of the distribution above, it is necessary to evaluate the types of innovation respondents are involved in. The questionnaire therefore asked about the characteristics of the latest innovative project that respondents were involved in.

As mentioned earlier, the categories “new to me”, “new to the company”, “new to the market”, and “new to the world” are applied to describe incremental and radical innovation.

The respondents’ own evaluation of the novelty of the innovations they have been involved in reveals a more nuanced picture of engineers’ experience with innovation.

Of the 511 respondents who gave an affirmative answer to having

experience with innovation, 80 % answered that they have been involved in a product development project. 61 % indicated that they have been a part of a production process development project and 69 % answered that they had been involved in a technology development project.

Product development is thus by far the most dominant form of innovation among Danish engineers.

In comparison, studies by Christensen et al. (2006) show that 43 % of all Danish companies with more than 20 employees developed new products in the years 19982000, while 46 % of this group of companies developed new products between 1995 and 1997. This indicates that engineers have an aboveaverage involvement in innovation.

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On the product side, we are heavily focused on new to the market innovations. But new to the market also means new to the world, as we only have global customers. Our decision-making process for products mandates that our products must be exceptionally new on the user level. That is, they must add something exceptional either functionally or emotionally.

CEO, Gabriel A/S

It should be stressed that the three areas of innovation mentioned in the questionnaire (product, process, and technology) are not mutually exclusive, as some projects may involve innovation of product, process, and/or technology.

A more detailed review of the types of innovation reveals that 34 % of respondents have participated in a radically new product development project that was new to the market, and 14 % have participated in a product development project that was new to the world. Note that these categories are not mutually exclusive.

Thus, they cannot be summed up to yield an overall percentage of respondents who have experience with radical product development projects.

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In addition, the results show that 24 % of respondents have participated in the development of technologies that are new to the market and 7 % have participated in the development of technology that is new to the world.

At first glance, it may seem surprising that engineers have greater experience working with radically new products than they have with radically new technologies, as engineers are often regarded as the primary drivers of technological progress. We interpret this result as an indication that Danish engineers understand that the development of a single technological platform can lead to the development of a number of products based on that platform, meaning that development of radically new technologies is not necessary to carry out as often as product development.

Furthermore, 12 % of respondents answered that they had been involved in a project that led to production processes that were radically new to the market, while 3 % answered that they had participated in process innovation projects that were new to the world.

It is not surprising that engineers are primarily involved in product and technology development products, as Danish companies in general expect new products to make up a larger percentage of revenue in the future (DI’s Innovationsundersøgelse, 2006).

Furthermore, process innovations are often more incremental in nature, while technology and especially product development projects are more radical. Thus, the results show that the subset in the study ought to be fairly representative of Danish engineers’ involvement in innovation.

The most innovative projects include radical innovation of product, process, and technology. 5 respondents (1 %) stated that they had been involved in this very complex type of radical innovation involving all three aspects. 22 respondents (4 pct.) answered that they have been involved in the this type of innovation that is new to the market.

If these two categories are combined, a total of 27 respondents have been involved in this very complex type of radical innovation.

This number shows that 5 % of the Danish engineers surveyed have experience with large, complex innovation projects that have a uniquely great potential to create competitive advantage.

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Number of employees in surveyed companies 60%

Radical Incremental

40% 20% 0% 0-10

11-50

51-100

101-300

301-

-20% Figure 4: Number of employees in surveyed companies

3.3. COMPANY SIZE AND AGE

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he size and age of the companies in which respondents are employed was also investigated. An often cited assumption about the innovativeness of companies holds that large companies have the resources to innovate, but are limited by rigid, bureaucratic organizational structures and therefore have difficulties realizing their innovative potential. Conversely, newly started companies are assumed to have flexible structures, but lack resources.

nies with more than 300 employees.

The remaining respondents are fairly evenly distributed among the other categories of size and age.

Figures 4 and 5 show that the majority of respondents work in large, established companies. 59 % of respondents are employed in companies that are more than 30 years old, and 55 % work in compa-

There is no notable connection between the type of innovation and the size and age of the company. As Figures 4 and 5 also indicate, the patterns of the distribution between radical and incremental projects in the

The size of companies in which engineers are employed showed an expected distribution with the majority working in large companies.

The age of companies follows the same distribution, with the majority being mature, established companies.

various categories of company size and age are as expected. An overview of the distribution shows that especially small, newly started companies and very large, established companies are able to work with radical innovation.

This result gives food for thought when it comes to the medium-sized companies that have moved past the start-up phase. The study results show that these companies are primarily focused on incremental innovation. As the majority of Danish companies are medium-sized, it should be considered how this type of company can be supported in working with radical innovation in order to create a more balanced innovation process.

Age of surveyed companies 60%

Radical Incremental

40% 20% 0% 0-10

11-50

51-100

101-300

301-

-20% Figure 5: Age of surveyed companies

3.4. LEARNING POINTS

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n this chapter, The Innovative Engineer study has illustrated the following points on the innovative capability of Danish engineers: • Danish engineers are highly involved in innovation projects that create and implement processes that are new to the companies they work in.

• Danish engineers are highly involved in innovation projects that create products that are new to the markets they are introduced in.

• 5 % of Danish engineers have experience with very large and complex projects that involve innovation of several different types (product,

process, and technology) and which have an especially large potential to create competitive advantage.

• The size and age of the companies Danish engineers work in does not appear critical to the ability and possibilities to be innovative. However, medium-sized companies should be supported in their work with radical innovation.

These points provide an understanding of the Danish engineer as a critical source of innovation. It is thus necessary to focus on ways to create the best possible conditions for utilizing the competences held by engineers.

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THE INNOVATIVE COMPANY The previous chapter showed that innovativeness is not limited to companies of a certain size or age. This chapter will take a closer look at how the innovative company can be characterized. The following questions will be discussed: • What characterizes the innovative company?

• What characterizes the innovation process in engineering companies?

Through these questions, we will attempt to investigate the current context of engineers’ work with innovation.

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Drivers of initiation of innovation project 5

4

3

2

1

0 Strategy

Idea

Market oppertunity

Figure 6: Drivers of initiation of innovation project

4.1. INNOVATION DOES NOT APPEAR OUT OF THE BLUE

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actors such as freedom, informality, and low levels of control are often found to be beneficial to innovation (Burns and Stalker, 1961; Hage and Aiken, 1970; Zaltman et al., 1973).

This might lead to a deduction that innovation flourishes in undisturbed circumstances and is difficult to integrate in the strategic thinking of the company. However, the innovative companies in this study clearly show that this is not entirely the case in Danish engineering companies.

One of the most conspicuous factors in the development of innovation appears to be an overall strategy for development in the company. This strongly indicates that innovation does not appear out of the blue, serendipitously or by having the freedom to develop on its own, but is instead based on deliberate choices made by the company.

As Figure 6 above shows, the driver of the initiation of innovation projects is often a deliberate strategy of development. This is in agreement with for example West and Anderson (1996) and West (2002), who found that effective management of innovative

projects required that the company had clearly considered how to approach the task.

Qualitative interviews with managers in Danish engineering companies show that a central element in innovation strategy is the ability of management to adjust the strategy in the course of the innovation process as new information becomes available.

The ability to adjust strategy is based in both competences and resources in the form of time and energy. An obvious issue with the adjustment of strategy is of course achieving a balance between persistence in following through on previous decisions and changing direction if necessary. A central theme in innovation management research is the difficulties associated with designing formal control systems to support innovation work. Two factors in particular make this difficult.

Firstly, innovation in itself is unpredictably and requires flexibility and adaptiveness. The fact that innovation requires creative, non-routine solutions complicates the design of a priori programmed actions and systems for innovation. Furthermore, the use of formal control mechanisms has been

shown in several studies to reduce creativity and other actions necessary for the development of innovation (for example Amabile, Hennessey, and Grossman, 1986).

Strategic management of innovation projects must therefore include: • Focus on several different scenarios rather than a fixed strategy from the beginning • Changes in strategy as knowledge increases • Availability of competences and time • Clear overall goals, but freedom in how to achieve them • Positive attention • Focus on quality It is thus regarded as vital to use a strategic management approach rather than a strategic planning approach when attempting to spot future opportunities.

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We have very good experiences with involving as many disciplines as possible – also early in the project. Not so much for the sake of innovation, but more to ensure that the project is completed painlessly.

Technology Manager, RTX Telecom

4.2. COLLABORATION IN INNOVATIVE PROJECTS The results of the study also point to the importance of the innovative idea itself, while spotting a market opportunity was found to be a more secondary driver of the initiation of innovation projects. As defined earlier, innovation only adds value to the extent it creates an effect through implementation. Market opportunities are therefore a fundamental prerequisite of successful innovation. The results shown in Figure 6 are therefore interesting, as companies seem to have such great confidence in their strategy and innovativeness that market opportunities do not need to be present when an innovation project is started, but instead can be developed in the course of the innovation process.

In the following, the elements of strategic considerations that are characteristic of innovative companies will be reviewed.

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n order to understand how innovation emerges in Danish engineering companies, the study investigated the composition of participants in innovation projects. The composition will give a clearer picture of the drivers behind innovation projects.

Collaboration is used to mean both internal cooperation between departments in a company and collaboration with external actors.

4.2.1. INTERNAL COLLABORATION IN INNOVATION PROJECTS

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igure 7 shows that the study found that, in general, internal participation in innovation projects was highly interdisciplinary.

The R&D department is often most involved in innovation projects, while the service function is least involved.

Manufacturing and sales/marketing

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are also involved to a lesser degree. The importance of the R&D department in innovation projects is indisputable and unsurprising.

The lower level of involvement of the sales/marketing and service functions may indicate that many engineering companies base their innovation activities on technology push rather than market pull. This result is congruent with the lesser degree to which innovation projects in these companies are driven by identified market opportunities. This may be cause for concern in the light of academic knowledge of the importance that user and market inputs have for the creation of relevant innovations that become commercial successes.

There are grounds for assuming that a deeper involvement of sales/marketing and service could contribute important market information, leading to better positioning of new products and technology in the market. Too heavy a focus on technology push runs the risk of developing good products or technologies that only have a limited market or exceed the actual needs of customers.

Of course, it would have been far better if market opportunities drove all projects. But it’s not always like that in engineering companies. I think that perhaps the strategy is a formulation of a technological idea that one wishes to realize, and the market is investigated afterwards.

Technology Manager, RTX Telecom

Internal participation in innovation projects 5

4

3

2

1

0 R&D

Idea

Sale/Marketing

Service

Figure 7: Internal participation in innovation projects

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External participation in innovation projects 4

3

2

1

0 Supplier

Customers

Competitors

Partners

Research centres

Figure 8: External participation in innovation projects

4.2.2. EXTERNAL COLLABORATION IN INNOVATION PROJECTS

P

roximity to the market and the ability to successfully implement innovations cannot be evaluated based only on an analysis of internal participants. Many innovation projects also include various external participants.

This aspect of Danish engineering companies has also been investigated with regards to suppliers, customers, competitors, partners, and research institutions.

Figure 8 shows that the choice of collaborative partners is primarily oriented toward customers and suppliers, which are also the company’s primary external sources of new ideas and innovation. The importance of customers and suppliers for innovation is well known and these external collaborations can be important communicators of market knowledge and technical solutions.

Competitors and research centers/ universities are generally only involved to a lesser degree in innovation in the companies. However, several respondents expressed a desire to increase collaboration with universities in particular.

Collaboration with universities and research centers can have a large impact, especially on technologically

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advanced radical innovation projects.

Easier access to new technology is one of the prerequisites for strengthening innovation in the future, but also improved access to researchers and research projects is necessary. Access to skilled employees and creating links between technology and innovation are crucial for improving company access to new technology. Other studies of innovation in Denmark, for example Drejer et al. (2004), showed similar results.

The results of �The Innovative Engineer� suggest that universities and research centers only participate directly in innovation projects to a very little extent. Companies depend on access to external knowledge and competences to create new knowledge and methods in the various steps of the innovation process. In particular, collaboration with knowledge institutions can be a source of learning for companies that regard themselves as too small to carry out their own research. At this point, it should be remarked that several of the interviews pointed out the difficulty of finding out how to contact relevant researchers at universities.

If we are to cope with the innovation challenges of the future, it is obvious

to question how companies can reap greater benefits from collaboration with research centers and thereby support a higher degree of radical innovation.

Figures 7 and 8 also show that external actors participate in innovation projects to a lesser extent than internal actors. This may indicate that many companies regard innovation as more of an internal process than one that takes place in collaboration with a number of external actors.

Qualitative interviews with managers highlight openness and proximity to the market as highly important for innovativeness.

However, the results of the study indicate that despite this understanding, openness and closeness to the market are limited in connection with innovation. This is an obvious area for improvement in Danish engineering companies.

There is thus a need for increased collaboration between companies and actors or institutions that can provide access to new knowledge and technology in the innovation area.

One of our strong suits in Denmark is collaboration – probably not with direct competitors, but there can be many kinds of competitor. I believe collaboration is very important for our competitiveness.

Technology Manager, RTX Telecom Through collaboration with the university, you get a much more productive dialogue and thereby fertile ground for innovation.

Technology Manager, RTX Telecom External pressure is often really good at moving things forward. We experienced a certain external pressure from the market some years ago, when the market changed somehow. That gave us a fantastic ability to reduce costs very quickly. It’s the same with product and process innovation.

CEO, Gabriel A/S

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External participation in innovation projects 5

4

3

2

1

0 Own development Competences of employees

Extern Network

Relationship Competition on to customers the market

Figure 9: Internal vs. external innovation partners

4.3. COMBINATION OF INTERNAL AND EXTERNAL RESOURCES

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nternal and external collaboration are in no way mutually exclusive.

However, different types of collaboration often draw on the same resources, leading to a need for prioritization. We have therefore also investigated the relation between internal and external collaboration, and how the two are prioritized in Danish engineering companies.

and competition in the market are considered of great importance. The difference in importance between these three factors is insignificant.

As seen in Figure 9, the study shows that the respondents view their own competences and those of colleagues as most crucial to the innovativeness of their company. This is unsurprising, considering that engineers hold considerable development competences and have central roles in various development projects.

Recent research has focused heavily on �open innovation�, which emphasizes the importance that being able to draw on external knowledge has for the innovativeness of companies (Lassen et al., 2008; Laugen et al., 2009). The responses in the study indicate that Danish engineering companies have a very traditional approach to which parties to involve in the innovation process. Innovation appears to be primarily considered an internal process, perhaps inspired by relationships with customers.

The relationship with external networks is considered to be of least importance. Internal development and research, relationships with customers,

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As mentioned earlier, it is relevant to question whether companies and employees are making sufficient use of the competences and resources present in external networks.

We engineers often regard our own competences as extremely important for the innovativeness of a company. That can hardly surprise anyone.

Technology Manager, RTX Telecom

4.4. LEARNING POINTS • Throughout this chapter, we have reviewed a number of characteristics of innovative engineering companies and identified strengths and weaknesses in the way these companies act in regard to innovation. We have seen that: • Danish engineers are able to work deliberately with innovation and have a widespread understanding of the importance of an innovation strategy.

• The innovation strategy includes deliberate prioritization of development. Deliberate prioritization involves both resources specific to development and positive support and visibility of new initiatives.

• Management of innovative initiatives in Danish companies consists of strategic readiness rather than a fixed plan.

• Internal ideas and the internal innovation strategy are the primary drivers of innovative initiatives in Danish companies rather than spotting an untapped market opportunity. This may be problematic, as a lack of market knowledge and/ or a lack of responsiveness to market opportunities reduce the possibility of making the most effective use of innovation.

innovation) has a high priority for managers in Danish engineering companies, but is executed to a lesser degree. This indicates an awareness of the importance of opening the innovation process, but also a lack of ability to practice this.

• Collaboration with research institutions is perceived as valuable, but only takes place to a limited degree.

• Internal collaboration in innovation projects is primarily driven by R&D and manufacturing departments, while sales, service, and marketing departments are less involved.

This tendency is also an obvious future focus area if companies are to improve their ability to integrate market knowledge in innovation projects.

• External collaboration in connection with innovation projects (open

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SIGNIFICANT FACTORS FOR THE INNOVATION PROCESS

The next part of the study takes a closer look at the innovation process and aims to identify that factors that are critical for the initiation, completion, and results of innovative projects.

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Significant factors for the innovation process

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Figure 10: Factors of significance for innovation projects

5.1. MANAGEMENT AND TEAMWORK DRIVE INNOVATION

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he innovation process in Danish engineering companies was investigated through an evaluation of the importance of five factors for the initiation, execution, and implementation of innovation projects. These factors are management involvement, time, financial resources, project teams, and physical surroundings.

Figure 10 shows that management involvement is viewed as the most significant factor, while the physical surroundings are thought to be least significant. Access to time, financial resources, and project teams have some significance.

Respondents perceive project teams to be of the greatest significance in

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the execution phase. However, the difference in the perceived importance of factors such as time, financial resources, and management involvement is quite small. Physical surroundings are also thought to be least significant in this phase.

The project team is also regarded as most significant for the final result of the project, but again only slightly more significant than management involvement, time, and financial resources. Physical surroundings are again considered least important.

The perceived significance of access to time, money, and suitable physical surroundings is fairly constant through the three phases. The greatest variation

is found in the significance of management and project teams. Therefore, these two factors will be examined closer.

Visible management commitment is often regarded as crucial for ensuring the success of an innovation process (Kanter, 1983; Caffyn, 1999; Simon et al.., 2003; Mikkelsen, 2005). This commitment may take the form of control, prioritization, protection, resource allocation, active involvement, etc.

A closer look at the study results reveals that management involvement is important in the initiation phase, but less important in the later phases.

Interviews with managers confirm this observation and point to a clear

5.2. LEARNING POINTS link between the tendency for reduced management involvement in the course of the project and confidence in employee competences and delegation of responsibility to project teams. In the qualitative interviews, prioritization and resource allocation were viewed as clear signs of management commitment. However, managers regarded the following as the most important types of commitment: • Positive attention • Allowing freedom to be independent rather than detailed management The study also indicates that project teams in later phases assume the importance management support has in the start and thereby perhaps also some of the roles management has in the early phases of the project.

This suggests that the actual management of innovation projects is best carried out by project teams.

This means that an important role for top management is to give room for group-based management to take place. Top management thus functions as overall guides. Positive attention from top management was found to support innovation.

The importance of teams for the execution of innovation projects has also been thoroughly debated in the literature (for example Burningham and West, 1995; Drach-Zahavy and Somech, 2001). Radical innovation projects in particular benefit from being managed and carried out by an autonomous team with independent access to and responsibility for resources.

A reason that companies can benefit from making use of project teams is that this form of organization provides the high degree of flexibility necessary to react quickly and effectively to changes in the market, technology or customer needs (Zaccaro, Rittman, and Marks, 2001).

However, it is still unclear how managers create and manage effective innovation teams (Cohen and Bailey, 1997; Zaccaro et al., 2011) and how managers create and maintain favorable circumstances for high performance in innovation teams (Hackman, 1990, 2002).

This study indicates that innovation teams create dynamism and ownership. This ensures that the individuals in the group are continuously oriented toward innovation, that a broad understanding of innovation is created across the organization, and that a feeling of common responsibility for the task is created. The work process in autonomous groups also supports parallel and flexible development processes. Specific steps to support autonomous groups might be: • Delegation of responsibility to the group level • Rewards in the form of time allocated to the group rather than financial rewards for the individual • Broad support in the organization Our study suggests that Danish engineering companies use teams to carry out innovation projects to a high degree, which is congruent with what the literature presents as best practice.

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his chapter has created an understanding of the significance of a number of factors in connection with the initiation, execution, and implementation of innovative projects.

We are thus able to conclude that: • Management involvement and attention is the most significant factor for giving the project a good start in the initiation phase. Management prioritization creates legitimacy for the project in the organization and provides a visible and positive setting for the project employees.

• In the execution phase, a well-functioning project team has the greatest significance for the project. Project teams assume the importance that management support held from the start, and thereby perhaps also some of the roles that management held in the initial phases of the project.

• The project team is also regarded as most significant for the final result of the project.

• The generally high significance of project teams for the results of innovation projects indicates that it would be beneficial to develop project management as a competence in Danish engineers, as this could increase the chances of achieving positive results in innovation projects.

As management, I believe you can tone down your support over the course of the project if you’re capable of creating some sort of momentum in the beginning.

CEO, Gabriel A/S We handle the indisputably best projects we carry out by pulling people away from their usual settings and placing them in the same room. It’s something we try to practice as much as possible.

Technology Manager, RTX Telecom 29

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INHIBITING AND ENABLING INNOVATION AMONGST ENGINEERS This chapter deals with the circumstances that affect innovative initiatives in either a positive or negative way. This will lead to knowledge of the circumstances under which Danish engineers thrive and have the opportunity to use their innovation skills, as well as an awareness of the areas that must be prioritized in order to support these skills.

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6.1. MANAGEMENT AND TEAMWORK DRIVE INNOVATION

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e have evaluated the possible inhibitory effect that a number of factors may have on innovativeness.

These factors are financial, technological, and market related in nature.

Figure 11 depicts the responses from the study, which show that respondents find that factors related to the availability of resources inhibit innovativeness, especially the costs associated with the development of the innovation, long payoff times, and the risks of investing in innovation. The demands of daily operations are also perceived as restraining new thoughts and creations.

A possible interpretation of this result is that respondents feel pressured to perform in the short term, which inhibits the development of innova-

The factors that are perceived as inhibiting innovation the least are the technological knowledge of the respondents, the growth ambitions respondents have on behalf of their companies, and the benefits of networks. This is a very positive result, as it indicates a large potential in the form of knowledge, growth ambitions, and the ability to utilize and learn from networks. These elements are crucial for Denmark’s overall ability to continue to develop.

tion with a more long-term focus. This indicates that Danish engineers are aware of the need for long-term focus in order to be innovative.

The qualitative interviews validated the presence of such awareness. The interviewees pointed out that continuous pressure from daily operations for a prolonged period of time has had fundamental consequences for company culture. Gradually, a culture emerges that does not appreciate innovation and therefore does not develop the skills to work effectively with that area.

Furthermore, it is quite interesting that respondents do not perceive cost control as significantly restraining for innovation. In other words, the respondents feel that if they have access to the resources for working innovatively, they also have the ability to manage these resources rationally.

In the long run, this will have wideranging consequences for the ability of the company to create and utilize innovation.

Factors that inhibit idea development 5

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Daily operations are pretty hampering for innovation, because if one has to execute 5 orders, there isn’t room for very many new thoughts. It’s very challenging for a dynamic organization.

CEO, GomSpace

We’re extremely pressed just finding enough engineers for the projects that are currently generating a profit. In my opinion, one of the things that has really inhibited our innovation culture in the past three years is that we’ve been instructed to focus 100 % on daily operations. It really inhibits an innovation culture that you simply don’t have time for anything except completing your project.

Technology Manager, RTX Telecom

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Factors that promote innovativeness 5 4 3 2 1

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Figure 12: Factors that promote innovativeness

6.2. INNOVATION REQUIRES WILLINGNESS TO EXPERIMENT, TIME, AND INTERNAL COLLABORATION

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n addition, we have investigated the influence of 10 different factors that may promote innovation and contribute to creating a creative and inspiring environment in an organization.

The results show general consensus around the positive influence of all 10 factors on innovativeness and idea generation. Creative employees and management support are considered the factors that promote innovation the most, followed by willingness to experiment, time to work on new ideas, and internal collaboration.

factors for innovation. These results show that Danish engineers desire to bring their skills into play to an even greater degree when it comes to innovation.

It is not surprising that factors such as creative employees, experimentation, and internal collaboration are represented among the most important

This part of the analysis also highlights the importance of management as a crucial factor for the promotion of innovation. The literature argues that

We have previously concluded that management support is particularly important in the initiation phase of innovative projects, and that the importance of such support declines over the course of the project, as project teams assume responsibility for prioritizations and decisions.

innovation should have management support and commitment, but that management should avoid playing too active a role in innovation projects.

Centralization of decisions and activities could delay a development process and lead to professional arguments being set aside in favor of other rationales. We assume that respondents are again pointing out the importance of management accept and prioritization.

The importance of management support in promoting innovation, combined with the conclusion that engineers have difficulties finding time for innovation in daily operations, clearly illustrates the role of manage-

I recognize the distribution, but I don’t think we’re very good at experimenting. If by experimenting you mean a probe-andlearn approach and constantly starting something – we don’t do that. It might advance us, but it’s not the way things are now.

CEO, Gabriel A/S We don’t actually have incentive programs for that type of thing.

We tried it at one point. We held an idea competition where one could be rewarded for having good ideas. But based on our experience it’s not something that’s become very successful.

Technology Manager, RTX Telecom Organizationally, the company is arranged so that you can always share a good idea if you have one. No one here in the company doesn’t know where to go if they have a good idea.

We’ve had a few products that resulted from an employee idea.

CEO, GomSpace ment. Management must understand innovation processes better, make the innovation strategy visible, specify ideas and efforts, and prioritize the resources for this. In other words, a strong and competent management effort focused on innovation is one of the factors that strongly promote successful innovation.

Material rewards are regarded as less important. The relatively low importance of rewards in promoting innovation is supported by many qualitative observations in innovation projects. Rewards in the form of money and other material goods are often regarded as basic necessities that only have limited ability to motivate

employees and only for short periods of time.

Furthermore, O’Reilly (1989) and O’Reilly and Chatman (1996) found that this type of reward actually reduces team creativity, while freedom and responsibility increase creativity. This result points to a strong, direct relationship between some forms of team management, such as participation, shared responsibility, and freedom, and team creativity.

Satisfaction and sustained motivation are thus created by the chance to participate in exciting projects, having responsibility for important tasks, and self-realization through one’s work.

Our analysis suggests that Danish engineers find great satisfaction in the work they perform and that additional rewards have little effect on their ability to innovate.

Salary and the physical work environment must of course be at an acceptable level in order to not be demotivating. If these rewards had been insufficient in Danish engineering companies, we might have expected them to play a more important in promoting innovation. The study therefore suggests that the level of compensation among respondents on average can be regarded as suitable to their tasks and expectations.

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6.3. NEW APPROACH NECESSARY FOR RADICAL INNOVATION

6.4. LEARNING POINTS

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e have also attempted to elaborate on what Danish engineers find most challenging about developing more complex radical innovations. Radical innovation is typically more difficult to implement that incremental innovation, but also has the potential to ensure significant competitive advantages (Christensen, 1997).

As mentioned previously, only a small number of studies of radical innovation have been carried out in Denmark. These are often limited to the question of how much radical innovation Danish companies can be said to carry out. The results of this study show that 14 % of engineers have been involved in the development of radical product innovation.

We therefore find it important to elaborate on this snapshot of the extent of radical innovation by providing an understanding of what engineers find most challenging when executing this type of innovation.

Respondents find several factors difficult in regard to radical innovation. As Figure 13 below shows, creating an understanding in the organization of the need for radical innovation is perceived as most difficult, followed by actually executing radical initiatives as the second-

most difficult. Generating radical ideas was considered least difficult of the four factors studied.

This may indicate that Danish engineers find it fairly easy to develop ideas and suggestions for radical innovation projects.

Instead, the main challenges arise in the interaction between the individual developer and the organization in regard to establishing an understanding of the need for new ideas and executing and implementing the radical initiative.

No matter how a company attempts to reduce risk, the execution and implementation of radical innovation will always be more risky than incremental innovation, as radical innovations are associated with a need to develop new knowledge, unknown market demand, etc.

Initially, we defined innovation in relation to effect created through implementation rather than the novelty of the idea itself. Therefore, this result shows something very important, namely that it is necessary to focus on the ability to manage and implement radical innovation in Danish engineering companies. Otherwise, companies will not be able to reap all the benefits of the innovation skills that enable engineers to generate ideas and concepts for radical innovations.

hroughout this chapter, we have discussed the factors that Danish engineers perceive as inhibiting and promoting innovation and we have reviewed how radical innovation in particular demands an approach different from that of incremental innovation projects. We have concluded that: • Danish engineers experience factors related to resources as restraining to their innovativeness. Financial factors (too high financial risk, too high cost, and lack of financing options) are the most important inhibitors of innovation. This includes both costs associated with the development of the innovation, the prospect of long payoff times, and the risks of investing in innovation.

• The demands of daily operations were highlighted by both the qualitative and quantitative parts of the study as especially hampering for the ability to generate new ideas.

Danish engineers feel pressured to perform in the short term, which has negative consequences for the development of innovation with a more long-term focus. This observation highlights the importance of management’s role in innovation.

A continuous management prioritization of more long-term projects is necessary in order to utilize the innovative competences of Danish engineers.

Many radical innovations provide a return on investment maybe 1 out of 10 times… So you need to fail maybe 9 times before you can make money on the last one. It’s very hard for management to approve of the fact that you have to miss 9 times to make money on number 10 … Even though you probably make a lot of money from the 10th attempt.

Technology Manager, RTX Telecom 36

• Among the factors that promote innovation the most, Danish engineers emphasized creative employees, the ability to experiment and opportunities for doing so, and wellfunctioning internal collaboration across the organization.

• An investigation of the specific circumstances of radical innova-

tion reveals that Danish engineers find it most difficult to create an understanding in the organization of the need for radical innovation.

This is linked to the importance of management prioritization and the development of management tools that follow other approaches to time and resource distribution than wellknown development projects.

Most difficult aspects of radical innovation efforts 5

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Get radically new ideas

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Figure 13: Most difficult aspects of radical innovation efforts

The challenges we’re struggling with right now are around development and completion of our radical initiatives. The ideas are there, we have lots of them. We also recognize the need for them. So you might say that implementation and ”harvesting” from our radical innovation are the difficulties.

CEO, Gabriel A/S 37

THE INNOVATIVE COMPETENCES OF ENGINEERS

Until now, we have examined the factors that respondents believe to influence the development of innovative projects and companies. Now, we will turn our attention to the respondents’ evaluations of themselves and the skills of engineers as innovators in general. This chapter focuses on the engineer as an individual and the factors that support and inhibit the work of individual engineers with innovation. The following will be addressed: • Which innovation competences do engineers have?

• What do engineers desire of innovative work?

• How can engineers be supported in the best possible way?

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The skills and desires of engineers 5

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Figure 14: The skills and desires of engineers

7.1. THE INNOVATION DESIRES AND SKILLS OF ENGINEERS

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he first analysis of this part of the data will focus on the respondents’ perception of the importance of being able to carry out innovative work and their own skills with regard to innovation.

As seen in Figure 14 below, respondents indicate that it is very important for them to be able to carry out innovative work and that they perceive their skills for doing so as well-developed.

This creates a positive starting point for increasing the innovativeness of Danish engineering companies, as both the will and the ability to innovate are present. The result also points to the importance of solving the issues that were previously identified as inhibiting innovation,

thereby enabling engineers to put these skills and desires to into play.

A self-evaluation of one’s own innovation skills is of course associated with the possibility of bias, as many will be inclined to evaluate their own skills highly. Therefore, we have investigated which characteristics respondents associate with the ability to be innovative.

As Figure 15 below shows, the respondents primarily view themselves as goal-oriented, enterprising, creative, and good at communicating. These traits are all fundamental to the ability to innovate.

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Self-characterization of engineers 5 4 3 2 1

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A closer look at the results reveals that the characteristics with the lowest scores are those such as ”controlling” and ”willing to take risks”.

As presented in this book, control of innovative processes is often very difficult, as the idea develops as more knowledge is generated in the project. Therefore, skills such as overall orientation toward the goal and collaborativeness are of greater importance than being good at detailed control.

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The fact that respondents do not regard themselves as willing to takes risks may be considered problematic, as the lack of willingness to take risks is one of the factors that respondents perceive to inhibit innovation. However, the qualitative interviews with managers in Danish engineering companies provide a possible alternative explanation for the low score of this trait. The interviewees pointed out that the risks of innovation projects are discussed thoroughly in the beginning of the project and are thereafter accepted as part of the basis for the project.

In other words, a certain degree of risk is considered a necessity and engineers instead choose to focus on how procedures, workflows, and reporting can be stabilized to minimize risks.

Another explanation may be that while innovation work may seem risky, the actual financial risk and the risk perceived by employees may be reduced by attempting to make the process routine.

You need a certain willingness to take risks in order to be truly innovative, so that’s part of the mindset when working on innovative projects. You don’t walk around thinking of the project as risky all the time – that’s just one of the many preconditions of the project.

Technology Manager, RTX Telecom

I guess we have a very pragmatic approach to risks. Yes, to get new products on the market and an exciting strategy, one needs to have a lot of stuff sitting right on the brink. You can’t let risks control everything.

CEO, GomSpace

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Communication of ideas 5

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Figure 16: Communication of ideas

7.2. COMMUNICATION PATTERNS

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he surveyed engineers regarded their communication skills as one of their key competences. The literature also connects the ability to interact and communicate with others with the ability to be innovative. We have therefore chosen to investigate this result further by asking engineers who they communicate with about new ideas.

As presented in Figure 16 above, new ideas are discussed with the closest colleagues to a large extent. This result is quite expected and points to the fact that innovative ideas often emerge out of a single discipline and are initially discussed with others in the same discipline. The distinctive Danish tradition is that the individual employee is responsible for his or her own work function. This gives unique

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knowledge and the ability to ask the right questions.

Importantly, respondents also indicated that they to a high degree discuss new ideas with the people who are able to move them forward in development. This means that the respondents recognize that innovation does not thrive in isolation, but must be moved forward in the organization and combined with other disciplines.

The one that can bring the idea forward

Interdisciplinary teams

I can see how an outsider might think we’re willing to take risks. But actually, we don’t really like taking risks. To avoid large risks, we’ve instead tried to learn how to take a little risk all the time.

That way, it doesn’t feel very risky in everyday work to be innovative.

Program Manager, TC Electronic

7.3. LEARNING POINTS

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n this chapter, we have investigated the desires and skills of engineers with regard to innovation. The results have shown that: • Danish engineers desire to work with innovation and regard their own skills as suitable for this type of work. This gives a very positive outlook for the ability to meet future demands for continuous development and change.

• Danish engineers emphasize creativity, goal orientation, and communication skills as central characteristics of their innovation competences.

These characteristics are congruent with the competences needed to work with both incremental and radical innovation.

• With regard to the communication skills of engineers, the results show that ideas are broadly discussed. Ini-

tially, ideas are discussed internally in the department, and subsequently with people who can move the idea forward. In both cases, this result points to the importance of project and department managers being able to pick up on new ideas and move them effectively forward. This requires that the job descriptions of project and department managers not only focus on planning and control of existing projects, but also on development, discussion, and idea generation.

• Willingness to take risks is generally holds negative connotations for engineers and was not evaluated as a trait respondents held to a high degree. However, Danish engineers believe that their ability to manage risks, and thereby avoid the need to take large risks, is high. This is an essential competence, especially in connection with the development of radical innovation

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CONCLUSION There is a general consensus around the fact that innovation is crucial in a still more globalized and competitive world. Knowledge about innovation is important for several reasons. From a research point of view, it is vital to be able to build a general understanding of the development of companies and their innovation practice, and to be able to convert these results into useful insights for businesses and politicians. For companies, it is important to gain knowledge of factors that promote and inhibit innovation, as well as to get inspiration for change processes and organizational changes. Politically, it is critical to have an accurate, broad idea of what is going on in companies, what problems and barriers companies meet, and which circumstances stimulate development activities. This is necessary in order establish focused and effective business policies. A central aspect is therefore also the understanding of how innovation is best developed, managed, and implemented in companies.

Throughout the previous chapters, we have investigated a number of factors that have both positive and negative effects on the ability of Danish engineers to make use of their innovative potential. We have continually extracted a number of learning points that will help us specify the areas companies and education institutions would benefit from focusing on in the future when it comes to the utilization and development of engineers’ competences.

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8.1. THE FUTURE OF INNOVATION AMONG DANISH ENGINEERS

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he analysis has identified a number of areas that are especially interesting to focus on in order to increase the opportunities for Danish engineers to work effectively with innovation.

8.1.1. THE SKILLS OF THE ENGINEER AS INNOVATOR

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e have concluded that Danish engineers to a high degree are involved in innovation projects that create and implement new and innovative products and processes.

The competences of engineers are thus crucial for the ongoing development in Denmark. Furthermore, the study has shown that 5 % of Danish engineers have experience with very large and complex projects that involve several types of innovation simultaneously.

This type of project has a particularly large potential to create competitive advantages. It is therefore imperative to focus on how to create the best possible conditions for utilizing the competences of engineers.

The study also showed that Danish engineers in general greatly desire to work with innovation and regard their own skills as suitable for such work.

Respondents highlighted creativity, goal orientation, and communication skills as central characteristics of their innovation competences. These characteristics are congruent with the competences needed to work with incremental and radical innovation.

Danish engineers find their communication skills to be especially crucial and challenging in connection with innovation. They perceive themselves as good at communicating internally in the department, and at identifying key persons that can move the idea forward in the organization. However, they find it difficult to cultivate an understanding in the organization of the need for innovation.

In both cases, this result points to the importance of project and department managers being able to pick up on ideas and move them effectively forward. This requires that the job descriptions of project and department managers not only focus on planning

and control of existing projects, but also on development, discussion, and idea generation. The study shows that this is an area that should receive high priority in order to increase the innovativeness of engineers.

It is clear that this result also points to the necessity of investigating how education institutions can better prepare engineering students to perform these types of project management roles. This requires that courses in technology management, innovation, and change are also integrated in traditional engineering disciplines.

In addition to considering how best to prepare engineering students for innovation tasks, it is also necessary to establish initiatives to further train and educate current engineers. The results of the study indicate that engineers would benefit from expanding their skills in communication, innovation management, and change.

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8.1.2. MANAGEMENT OF INNOVATION PROJECTS

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he conclusion reached above leads to a need to consider how management of innovative initiatives in Danish engineering companies should be organized.

This study has indicated the importance of a constant management effort, even though this effort should take different forms over the course of an innovation project. In the initiation phase, management involvement and attention are the most critical factors in providing a good start for the project. An explanation for this is that management prioritization of the project gives it legitimacy in the organization and creates visible and positive circumstances for the project employees.

In the subsequent phases of the project, project management takes over the importance of management support. The generally high impor-

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tance of project teams for the results of innovation projects indicate that it would be beneficial to focus on developing project management as a competence in Danish engineers.

This would increase the probability of achieving positive results in innovation projects. The competences included in project management might be: • Visible management as a guarantee of freedom and latitude • Experimental attitude • Flexibility • Security and trust • Risk management The Danish tradition of autonomous teams is an exceptional benefit in regard to innovation work. However, this strength is not currently sufficien-

tly understood and operationalized in innovation practice. Therefore, it functions primarily as a type of ”hidden innovation force” or is based on intuitive competences. For radical innovations in particular, it is important to create and supply project managers with management tools that make it possible to work in autonomous teams. Project managers must also be supplied with the tools to plan and evaluate development processes with a different distribution of time and resources than well-known development projects.

8.1.3. INNOVATION STRATEGY

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oth incremental and radical innovations represent real opportunities for Danish companies and organizations. Whether a radical innovation strategy will be more successful than an incremental depends on the demands for change from the market and thereby the environment of the company. If an organization for example serves conservative customers, bases its services on stable technologies, and operates in markets without international competition, moderate improvements of its offerings may be a successful innovation strategy. However, most engineering companies face new and tougher conditions such as increasingly demanding customers and users, rapid technological change and development, and sharper international competition with competitors that display impressive advantages on the cost side.

Therefore, companies will find more and more often that incremental innovation is an inadequate answer to building and maintaining a sustainable competitive advantage. The need for more innovative products and offerings that are better able to meet customer and user needs is steadily increasing. This creates a demand for a deliberate and continuous innovation effort, where renewal is not left to serendipity and certain individuals. In other words, a well-managed innovation effort is needed. The innovation effort should be part of the conti-

nuous, overall strategic prioritization and should not be thought of as just a few good ideas that emerge coincidentally in the organization.

The results of the study show that Danish engineers understand the importance of deliberately prioritizing innovation. They indicate that innovation projects arise from deliberate strategies. Our analysis suggests that projects that are initiated based on a strategic decision are considerably more radical than those that arise spontaneously. The projects that are started based on the good idea of a single employee are often more incremental in nature. The results of our analysis show that Danish engineering companies in general are very strategic in their decision-making in regards to innovative projects.

that incremental projects are insufficient to maintain the current position of the company. This illustrates the importance of initiating and executing radical projects both to strengthen the existing business areas and establish new ones.

Deliberate prioritization of this type of innovative projects may take the form of resources allocated specifically to new development, as well as positive support and visibility of new initiatives. In addition, the innovation strategy can include structural and job designs that facilitate innovation.

Innovation requires a high level of flexibility. A structural way of coping with this is for example to organize in smaller, cooperative units rather than large departments.

Radical innovation projects entail a great effect on the competitiveness of the company and its market position than smaller, incremental projects. Radical projects strengthen both existing business areas and the development of new ones. That radical innovation projects create new business areas is not surprising, as it is in their nature to stand apart from the usual way of doing things. However, a strong statistical correlation between radical projects and improvement of existing business areas shows that radical innovations are necessary to maintain the company’s existing business, and

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8.1.4. COLLABORATION ON INNOVATION

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he need to create flexibility and room for innovation through structural organization leads to a requirement for a better understanding of how smaller units can collaborate across the organization and with external parties.

The study has identified a special challenge for Danish companies in this area. Danish engineers point out that internal ideas and the internal innovation strategy are the main drivers of innovative initiatives. Spotting market opportunities is perceived as a much less important driver. This may represent a problem, as a lack of market knowledge and response to market opportunities reduce the chances of making the most effective use of innovation.

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This issue is also seen in relation to external collaboration. This type of collaboration has a high priority for managers in Danish engineering companies, but is not executed in practice to the same degree. This signals an awareness of the importance of opening the innovation process, but also shows that the ability to practice this remains lacking. The same tendency applies to collaboration with research institutions, which is regarded as very valuable, but only takes place in practice to a limited degree.

This provides food for thought in relation to modern principles in innovation management such as ’open innovation’ (Chesbrough, 2003) and ’collaborative innovation’ (Baldwin and von Hippel, 2009). These principles highlight the importance of openness

and cross-organizational collaboration.

The concept of ’open innovation’ has become widespread in the business world in later years. Open innovation means that innovations are not created within the limits of a single company, but instead in active collaboration with suppliers, customers, and even competitors. While customers, users, and suppliers have been involved in development processes for some time, Chesbrough’s (2003) open innovation has placed additional focus on external and internal involvement in innovation work. Chesbrough has contributed with knowledge and systematization of how to work with and involve different parties. However, there remains a gap in knowledge of how involvement of internal and external parties affects how radical innovations are.

This study shows that the degree of involvement of various internal and external parties varies. The effect of these parties on the result of the projects also varies considerably.

Unsurprisingly, R&D has the highest involvement in innovation projects.

The analysis also shows that the projects in which R&D participates have far more radical results than those in which R&D plays a less active role.

With regard to the participation of external actors, we found that active involvement of suppliers is associated with a lower level of radical results (Laugen et al., 2009). This may be because suppliers most often contribute knowledge related to existing products, components, and technology, meaning that they are most often involved in more incremental pro-

jects. Conversely, we find that where universities and research institutions are actively involved, projects have a higher level of radical results.

The implications of this are in stark contrast to the current low level of involvement of universities and research institutions in innovation projects in business. The companies that do involve these types of institutions have reaped considerable benefits from this in the form of more radical projects.

This result confirms that a challenge still exists with regard to translating research knowledge into a form that can contribute ideas to radical projects, which will then be able to provide considerable competitive advantages for Danish companies.

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8.1.6. COMPLETE RECOMMENDATIONS

8.1.5. INSTRUMENTS

D

anish engineers experience that especially factors related to resources constrain their innovativeness.

These factors include costs associated with the development of the innovation, the prospect of long payoff periods, and the risks of investing in innovation.

The qualitative interviews and quantitative questionnaire both found that the demands of daily operations inhibited innovativeness. Danish engineers thus feel pressured to perform in the short term, which has negative consequences for the development of innovation with a more long-term focus.

Two factors that contribute to the increased risk of failure associated with radical development projects are the rhythm and length of the development process. • The rhythm of the development process refers to the fact that innovation projects that apply a sequential development model have a greater risk of failure than projects using iterative development methods (for example Larman, 2004). An iterative development method applies several repetitions that each form a mini-project with activities such as analysis, performance specification, design, development, and test. Each iteration takes place of a fairly short period of time, the purpose of which is to ensure the quality of the project and compliance with the deadline. • It is characteristic for radical innovation projects that their development processes are nonlinear and that they often take a long time to make it from idea to market implementation. A good way to handle the unpredictable and hard-to-define process is therefore to break the project into smaller, more manageable sub-projects that are defined in parallel and continuously as needs arise. The length of projects should be limited as much as possible. The longer time the

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project takes, the more uncertainties must be taken into account due to changes in market requirements and the developments of competitors since the project was initiated and defined (Lassen, 2007).

From the above, it can be deduced that the management of radical innovation can be supported by splitting long projects into smaller units. The overall project can thus be thought of as program that forms the framework for the sub-projects. The program is open, while the sub-projects are more fixed.

Willingness to take risks is a common characteristic of the most innovative companies. However, these companies are willing to take calculated risks and do not act on gut feeling. The most innovative companies are also the most thorough in analyzing the market, customers, and the future. The poorest innovators innovate based on gut feeling. Gut feeling may be right, typically in the case of a visionary entrepreneur, but is also a dangerous way to attempt to create sustained growth.

A good climate for innovation is characterized by willingness to take risks, support, trust, freedom, and understanding of the fact that innovation processes do not always result in financial gain. A positive risk culture is characterized by openness and curiosity, which create a good environment for innovation processes. However, in order to foster this willingness to take risks, the entire organization must participate in and understand the importance of innovation and accept that success is not possible every time.

Instruments to support engineers’ work with innovation must include increased understanding and planning of development processes that also take into account more radical types of innovation, development of tools to evaluate the progress of innovation projects that are not only based on ROI calculations, and continual prioritization of long-term development projects.

I

n Figure 17, we summarize the conclusions and recommendations we have reached through the previous results and discussions. We have divided the recommendations into actions that can be taken by companies, research and education institutions, and political actors to promote opportunities for Danish engineers to be more innovative. These recommendations focus on how to support the individual, the organization, and the framework conditions of society.

Our recommendations build on the strengths of Danish management tradition and the skills of Danish engineers. The unique Danish work organization is expressed in the responsibility and independence granted to Danish engineers, which are higher than anywhere else in the world. The extremely independent Danish engineers mean that the tasks of the individual can rapidly be adapted to new and changing requirements.

This combination of management and skills creates a unique Danish position of strength that should be cultivated not only locally or nationally, but in a global context in order to maintain and increase the development of Danish business.

It is our hope that the results and discussions in this book have given the reader inspiration for how to continue to work with innovation in a number of ways.

Action level

Actor

The individual

Companies

Research and education institutions

Recognition and deliberate use of individual innovative skills.

Integration of disciplines such as technology management, innovation, and change in traditional engineering educations, thereby giving engineers enrolled in education the competences to carry out innovative projects.

Create understanding of processes and structures for both incremental and radical innovation.

Create opportunities for interdisciplinarity between engineering and other educations.

Cultivate adaptability and innovative attitude as core competences in individuals.

Improve cultural understanding – internally in organizations and in relation to globalization. This will improve the ability to make use of cultural and disciplinary diversity in innovation.

Political actors Support greater global mobility of the workforce. Danish engineers need inputs from both international colleagues in Denmark and stays abroad.

Rewards in the form of time allocated to the group rather than financial rewards given to the individual.

Organizational

Develop understanding of innovation management.

Development of focused middle manager educations specializing in innovation.

Development of short-term as well as long-term innovation strategy

Further training and education of engineers that enables them to better understand innovation processes.

Increased focus on the potential for innovation in medium-sized companies.

Focus on the central role of middle managers in the development of innovation processes.

Strengthen research in radical innovation that can develop processes and tools for this area.

Create understanding of the processes and structures of both incremental and radical innovation.

Frame onditions

Collaboration on innovation between various disciplines.

Greater transparency in relation to collaboration opportunities.

Incentive pools for development of radical innovation in companies.

Create understanding of processes and structures for both incremental and radical innovation.

Actively searching out research collabo- Prioritization of research funds based rations with businesses. on criteria of innovative business potential.

Actively searching out collaboration on Entrepreneur support for development student projects with businesses. of innovation in medium-sized companies – not just for start-ups.

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LIST OF FIGURES Figure 1: Incremental and radical innovation Figure 2: Likert scale Figure 3: Experience with innovation Figure 4: Number of employees in surveyed companies Figure 5: Age of surveyed companies Figure 6: Drivers of initiation of innovation project Figure 7: Internal participation in innovation projects Figure 8: External participation in innovation projects Figure 9: Internal vs. external innovation partners Figure 10: Factors of significance for innovation projects

5 7 11 14 14 18 21 23 26 29

Figure 11: Factors that inhibit idea development 34 Figure 12: Factors that promote innovativeness 37 Figure 13: Most difficult aspects of radical innovation efforts 41 Figure 14: The skills and desires of engineers 45 Figure 15: Self-characterization of engineers 46 Figure 16: Communication of ideas 48 Figure 17: Recommendations 61 Figure 18: Level of education 69 Figure 19: Engineering discipline 69

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9. APPENDIX 9.1. FURTHER INFORMATION ON METHOD AND DATA

T

he following sections provide an elaboration of the method on which the study The Innovative Engineer was based.

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9.1.1. RESPONDENT COMPOSITION

9.1.2. VALIDITY

9.1.3. RELIABILITY

T

he selection of data was driven by a desire to investigate engineers’ experience with innovation across job situations and geography. Thereby, the study will be able to act as a starting point for a debate on increased innovation focus in a variety of companies that employ engineers.

T

he selection of data was driven by a desire to investigate engineers’ experience with innovation across job situations and geography. Thereby, the study will be able to act as a starting point for a debate on increased innovation focus in a variety of companies that employ engineers.

”R

In regards to gender, the originally surveyed segment of 3000 individuals was distributed between 2643 men and 357 women. According to IDA, a distribution of 7.4:1 is a representative distribution of their members.

Of these, 717 men and 86 women responded to the questionnaire, giving an approximately representative distribution of 8.3:1.

In regards to gender, the originally surveyed segment of 3000 individuals was distributed between 2643 men and 357 women. According to IDA, a distribution of 7.4:1 is a representative distribution of their members.

Of these, 717 men and 86 women responded to the questionnaire, giving an approximately representative distribution of 8.3:1.

The education background of the respondents is distributed across the following engineering disciplines: Structural and Civil, Data/Informatics, Export, Electronic, Energy, Industrial, Chemical, Food, Mechanical, Environmental, Production. It has been a deliberate decision to focus on a cross-section of engineers instead of a specific discipline, in order to provide a picture of innovation in a variety of industries.

The education background of the respondents is distributed across the following engineering disciplines: Structural and Civil, Data/Informatics, Export, Electronic, Energy, Industrial, Chemical, Food, Mechanical, Environmental, Production. It has been a deliberate decision to focus on a cross-section of engineers instead of a specific discipline, in order to provide a picture of innovation in a variety of industries.

eliability is present when there is agreement between the results achieved by different measurements of the same phenomenon” (Andersen, 1990). The reliability of this study should also be mentioned.

The scope and response rate of the study is a rough indicator of its reliability. The scope of 3000 possible respondents and a response rate of 27 % are evaluated as giving a reliable picture of Danish engineers.

In addition, the research design itself is also significant for the reliability of the study. In this regard, the choice of words and formulation of questions is central. We have therefore chosen to avoid the use of abstract terms such as ”intrapreneurship” and ”radical innovation”. These words have been replaced by, for example, ”development”, ”creativity”, and ”new ideas”.

These words are thought to be less loaded for individuals and therefore ensure a more uniform perception of the questions.

Level of education

Number

PhD

4

Master’s degree

310

Bachelor’s degree or equivalent

469

International/other education

12

Not stated

7 Figure 18: Level of education

Engineering discipline

Number

Structural or civil

141

Data, Data/Informatics, Electro Data/Informatics

33

Export

13

Electro

216

Energy

3

Industrial, Production

45

Chemical

82

Mechanical

173

Environmental

8

None/other/not stated

88 Figure 19: Engineering discipline

57

58

58

59