Using stakeholder dialogue as a source for new ideas: a dynamic capability underlying sustainable innovation

Purpose – The purpose of this research is to attempt to gain a deeper understanding on the firm's ability to integrate stakeholder insights into the process of organizational innovation from a sustainable development viewpoint. Design/methodology/approach – Given the early stage of empirical research on the topic, an exploratory case study was used of two Spanish companies that have successfully learned from stakeholder dialogue and have generated innovations that are beneficial both for the company and for sustainable development in general. Findings – The evidence from the two case studies suggests the existence of two simple capabilities – stakeholder dialogue and stakeholder knowledge integration – for generating innovations in accordance with stakeholder needs. Whereas stakeholder dialogue leverages organizational resources that promote two‐way communication, transparency and appropriate feedback to stakeholders, stakeholder knowledge integration relies on non‐hierarchical structures, flexibility and openness to change. Research limitations/implications – The fact that the two companies studied are rather special cases of companies without shareholders might limit the results of the present research. Thus, future research could explore sustainable innovation as a response to the demands of other kinds of stakeholders and refine, validate and test the concept of dynamic capability identified in this paper. Originality/value – The paper sheds some light on the under‐researched issue of linking stakeholder dialogue and sustainable innovation, and thus contributes to open the “black box” of dynamic capabilities and advance in the understanding of this fundamental organizational concept.