Organizational Design for Enhancing the Impact of Incremental Innovations : A Qualitative Analysis of Innovative Cases in the Context of a Developing Economy

Research literature on innovation in established firms has made a useful distinction between radical innovation and incremental innovation and identified the organizational features associated with each. An implied assumption of many such studies is that radical innovations (compared to incremental) would have a greater impact on the organization as well as the economy. While this is generally true, it is incorrect to assume that all incremental innovations could be uniformly categorized as low-impact innovations. In a study of 31 cases of innovation implemented in large corporations in India, it was observed that though all of them could be classified as 'incremental', their impact varied considerably. A combined index for assessing the impact based on the novelty of the idea, revenues generated/costs saved, dissemination within and outside the organization, extent of commercialization and patentability, was used to categorize the innovations into high impact (HI) and low impact (LI) groups. The analysis of the two groups was qualitative and was based on the detailed case studies prepared through extensive interviews of people involved in the projects. Inferences from the comparative analysis are explained under six sub-themes that emerged as important in differentiating between low and high impact innovations, namely: individual versus team action; the top management support; the role of the immediate supervisor; rewards, recognition and incentives; focus on core versus non core areas; and documenting and patenting practices. An important factor that enhances the impact of innovations is that organizations should have a deliberate innovation strategy and corresponding organizational structures and processes. Coupled with the innovation strategy, organizations should also develop and implement a value appropriation strategy