Successful innovation and the alignment of knowledge workers at the executive,management,and technical specialist levels

Abstract

This paper focuses on the critical roles of knowledge workers when a firm pursues a major innovation project. In this context, we consider knowledge workers as those who contribute to a firm's performance at the executive, management, and technical specialist levels. Technical specialists include persons with advanced skills in engineering, analytics, statistics, science, and economics. By analyzing a series of case studies and personal interviews, we demonstrate that alignment (i.e., coordination, integration, and collaboration) among these knowledge workers is critical for the success of an innovation project. The paper concludes with a discussion of the responsibilities of knowledge workers at the executive, management, and technical specialist levels to ensure the necessary alignment occurs for successful innovation.

Keywords

innovation knowledge management knowledge worker organizational alignment project management

INTRODUCTION

Major innovations have impacted virtually every facet of our lives in industries including aerospace, automotive, banking, consulting, education, energy, healthcare, reservations, retail, and telecommunications. But who is responsible for conceptualizing a major innovation? Who is responsible for funding an innovation? If a major innovation requires considerable knowledge that does not reside within a firm, who is responsible for identifying and obtaining the external knowledge? Who is responsible for integrating the external knowledge within the firm? Who is responsible for managing the complex and uncertain innovation process? Who is responsible for developing a major innovation and establishing it as a new product or service? The answer to all of these questions: knowledge workers.

In this paper, we highlight the critical roles played by knowledge workers when a firm introduces a major innovation (see Roels and Staats, 2021, for a discussion of people‐centric operations). We consider knowledge workers as those who contribute to a firm's performance at the executive, management, and technical specialist levels. We explore the independent and interdependent activities among (i) executives (leadership) or entrepreneurs who set the firm's goals and fund the major innovation; (ii) managers who are responsible for overseeing the coordination and integration of various sources of knowledge (both internal and external to the firm) that ultimately develop the major innovation (Gaimon & Ramachandran, 2021); and (iii) technical specialists with advanced skills in areas including engineering, analytics, statistics, science, and economics who typically operate in interdependent teams to design, develop, and implement a major innovation (Gardner et al., 2012; Haas, 2006; Ozkan‐Seely et al., 2015). Lastly, we recognize that a major innovation may be conceptualized by executives, managers, or technical specialists.

Based on a series of case studies in the aerospace, communications, consulting, e‐commerce travel, energy, and food‐processing industries, we discuss the varied roles of knowledge workers who are the engine that drives major innovation. More importantly, we describe the critical importance of the flow of knowledge and the coordination and collaboration of activities among a firm's executives, managers, and technical specialists as key factors that determine the success or failure of a major innovation. For the most part, each section is written in a sequence that corresponds to the organizational level (executive, management, or technical specialists) from which the innovation concept emerged until it was completed. Sections 2 –5 explore several successful innovations: (a) acquiring and integrating an external firm to increase internal skills; (b) performing A/B testing to improve the understanding and interaction between a firm and its customers; (c) creating a knowledge management system to provide a means of communication among a firm's technical specialists; and (d) implementing a program whereby technical specialists improve performance through technology adoption.

In Section 2, we explore the major innovation undertaken by the consultancy McKinsey & Company to expand its capabilities to meet the growing demands of clients who seek a more holistic approach to meeting their needs. The discussion demonstrates how McKinsey's executives, management, and technical specialists jointly assess whether LUNAR, a design firm, should be acquired and how to best manage its subsequent integration with McKinsey to maximize the benefits while minimizing the disruptions to both firms.

The start‐up Booking.com is the focus of Section 3. An important driver of the success of Booking is the early recognition by executives of its lack of knowledge about customers. The executive level asked management to develop and implement a major innovation to test, evaluate, and modify its website to ascertain and to meet the changing needs of its clients and suppliers (hotels). The delegation of responsibility led to the design of the firm's A/B testing system, which remains the source of a substantial number of incremental improvements whose cumulative effect represents a major innovation.

In contrast to Sections 2 and 3, which focus on information gleaned from published cases, Section 4 reports on the outcome of a major innovation project based on an oral presentation by and a follow‐up interview with an employee from a global energy corporation. We describe the major process innovation conceived of by two engineers (technical specialists) working on different continents who recognized the value of knowledge sharing. The two engineers sought and received support from their respective managers and obtained funding from executives for their proposal to establish an information technology system designed for knowledge sharing.

Section 5 is based on an oral presentation by and a follow‐up interview with the plant manager of a firm in the food‐processing industry. With executive approval, the manager introduced a two‐phase major innovation project to improve plant performance. First, she delivered an educational program to hourly line workers (referred to as associates). Second, teams of technical specialists, including those from engineering and project management, were supported by associates to automate packaging operations. The success of this innovation served as the foundation of future innovation projects, as well.

While Sections 2 –5 explore innovation projects that were successful, in Section 6, we summarize insights gleaned from two unsuccessful projects: a published case study of Boeing's Vision 2016 that culminated in the creation of the Dreamliner; and an oral presentation by and a follow‐up interview with a manager from a firm in the global energy industry. Both situations show that major innovations conceived of at the executive level and then pushed down through the organization without soliciting input from management or technical specialists on the risks or potential pitfalls lead to innovation failure.

Lastly, we conclude the paper in Section 7 by synthesizing the experiences of the above‐mentioned firms (and others) as we delineate the responsibilities of executives, managers, and technical specialists during major innovation projects. We explore why some innovation projects are successful while others are not. We support our claim that successful innovation projects require alignment among knowledge workers that reside in the executive, management, and technical specialist levels of the firm.

In Table 1, we provide an overview of the four innovation projects that were successful (Sections 2 –5) and the two that were not successful (Sections 6.1 and 6.2). Table 2 gives an overview of Section 7 where we describe the responsibilities of knowledge workers at each organizational level that drive successful innovation projects.

TABLE 1

Overview of cases and interviews

Section	Firm	Origin of innovation concept	Alignment	Success	Source
2	McKinsey & Lunar	Executive	Yes	Yes	Case
3	Booking.com	Executive	Yes	Yes	Case
4	Global Energy	Technical specialists	Yes	Yes	Interview
5	Food Processing	Management	Yes	Yes	Interview
6.1	Boeing	Executive	No	No	Case
6.2	Global Energy	Executive	No	No	Interview

TABLE 2

Overview of conclusions

Section	Responsibilities and alignment execution
7.1	Executive
7.2	Management
7.3	Technical specialists

CASE STUDY I: McKINSEY & COMPANY AND LUNAR

In this section, we explore the nature of the knowledge work that transpired when McKinsey & Company (a consulting firm established in the 1940s with over 60 offices worldwide by 2015) acquired and sought to integrate LUNAR (a design firm founded in 1984 with offices in the United States, Asia, and Europe by 2018). Other world‐class consulting firms (including Boston Consulting Group and Accenture) had already moved to establish design capabilities (Medford, 2018). The importance of design capabilities to enhance the product portfolio of consultancies was supported by a 5‐year survey of senior business and design leaders from over 300 firms worldwide and in different industries (Sheppard et al., 2018). The remainder of this section is based on the published case by Carrick et al. (2018).

Executive

In response to challenges driven by changing technologies, short product life cycles, and global competition, McKinsey's clients were demanding a more holistic experience that integrated analytical approaches with the creativity of physical design. However, McKinsey executives recognized that, despite deep and broad knowledge of analytics, the firm did not internally possess all of the intellectual capabilities needed to create new innovative product solutions.

The challenges when one firm seeks to absorb knowledge from another firm are well established (Cohen & Levinthal, 1990). The executives (referred to at McKinsey as senior partners) sought input from management residing in the Product Development Practice (PDP) division due to its considerable experience working with design firms (Smith et al., 2005). Together with PDP management, McKinsey's executives agreed to the acquisition of LUNAR. The responsibility for integrating LUNAR within McKinsey was left to PDP management, as will be described in Section 2.3. First, in Section 2.2, we articulate the dramatically different ways in which technical specialists at McKinsey (consultants) and at LUNAR (designers) operated prior to integration; with different skill sets, problem‐solving methods, incentives, and career paths.

Technical specialists

McKinsey employed teams of consultants whose expertise involved strategy, operations, and information technology. When consulting on product improvement projects, consulting teams solved a client's problem using the design‐to‐value (DTV) method, which employed advanced analytical tools, including proprietary software to diagnose opportunities to improve product attributes and process capabilities. Products and processes were simplified to improve productivity, time to market, development costs, and quality. Project management methods were used to mitigate risk and to realize timely completion. A repository of client services was accessed to inform consulting teams and to ensure solutions provided excellence.

LUNAR employed teams of technical specialists that met the needs of clients with skills including industrial design, communication design, engineering, and user validation. The design team identified the client's need for innovation by observing the client's natural habitat and gaining insight into the final customer's preferences. Subsequently, the design team generated many potential solutions to the client's problem. Since the solutions were identified through observation rather than test marketing, agile experimenting was used to evaluate and test the value of different solutions through an iterative approach of rapid prototyping. The prototype design was refined until an acceptable solution was identified.

Management

McKinsey's PDP division was responsible for managing the creation and execution of the major innovation project to integrate LUNAR and McKinsey (Tu et al., 2006). PDP believed that McKinsey's consulting teams and LUNAR's design teams would blend together well since both valued professionalism, needed their work to have impact, were excited about new ideas, and desired empowerment (Lane & Lubatkin, 1998). Additionally, both firms addressed problem solving by starting with many ideas that are tested and narrowed down (idea funnel).

The aim of the integration innovation project was twofold: minimize the risk of internal clashing and maximize the rewards of the broader package of products and services offered to clients. PDP management carefully incorporated LUNAR within their organization by providing a framework to establish which personnel (the specific combination of consultants and/or designers) would be responsible for the client's assessment of project performance. For example, a LUNAR designer only worked on a project team in which the project manager had a design background to enable him/her to understand the different pacing of LUNAR's design processes relative to McKinsey's DTV methods. Integration also required PDP management to identify new career paths to ensure all employees were motivated to excel. Initially, McKinsey consultants had three career paths: cultivating clients, industry practice expertise, and functional practice expertise. To integrate and incentivize employees from LUNAR, PDP management added a design leadership career path to its functional practice track.

Update

McKinsey & Company assessed that the acquisition of LUNAR was a success. Continuing its expansion of design capabilities, it acquired Veryday (Medford, 2018). Two examples of the success McKinsey achieved by integrating consulting and design services are an innovation project with Distalmotion involving robotic‐assisted surgery (McKinsey & Company, 2020) and an innovation project with 3M involving welding helmets (McKinsey & Company, 2021). Recently, the newly appointed global managing partner of McKinsey reported that the firm is in the process of changing the mix of skills among its employees to better embrace the design perspective (Cutter, 2022).

CASE STUDY II: BOOKING.COM

The discussion of Booking.com (Booking) is based on the published case by Thomke and Beyersdorfer (2018). In 1996, Booking was established when it introduced a two‐sided platform between hotels (supplier partners) and customers who wanted to reserve rooms in Amsterdam. In this section, we focus on the major innovation involving A/B testing: the continuous process of identifying customer preferences and embedding them into the firm's platform. More specifically, we describe how the integration of efforts undertaken by executives (entrepreneurs), managers, and technical specialists enabled Booking to expand worldwide.

Executive (entrepreneurial level)

At its inception, the founders (executives) of Booking realized that they lacked sufficient knowledge to meet customer needs. As such, the initial platform conceptualized by management had minimal capabilities (minimum viable product strategy). The intent was to rapidly add features and functionality by learning about the marketplace via simple A/B experiments (Thomke, 2020). The approach to understanding consumer preferences through online experimentation was new to this industry. Traditionally, firms accumulated a large number of redesigns and released them once every 6 months. However, that approach did not provide rapid improvement in performance, nor did it offer the detailed response information necessary to identify those changes customers preferred from those that were undesirable. In contrast, the A/B experiments provided Booking with a massive amount of information about customer preferences due to the rapidly increasing size of the marketplace that accessed Google. Importantly, the accumulation of these small incremental changes was in effect radical: a major innovation.

Management

To maximize the value and rigor of the A/B experimental method, Booking management created centralized processes and procedures as well as a culture to support and empower its technical specialists. The centralized experimentation infrastructure was established to make the decentralized experiments work on a massive scale throughout the firm. A template was created for a technical specialist to initiate an ethical experiment (described below in Section 3.3). To help identify a worthwhile experiment, management provided the technical specialists with a central and searchable repository of past experiments and outcomes. Management determined the outcome goals for an experiment, referred to as key performance indicators; the primary metric was user conversion (bookings per day). Management developed automated processes to implement and measure experiments, including user selection, randomization, and recording the outcome of the A/B comparisons. For example, test and control groups were set up so that one technical specialist could run an experiment on a sample of Booking's population while avoiding overlap with other experiments. Finally, management recognized that insights gleaned from A/B testing would allow them to tailor the platform to different cultural needs and thereby support global expansion.

Management formulated a hiring process that continues today to assess an applicant's interest in working in challenging situations with risk, willingness to fail and quickly move on, ability to work in teams, and inclination to be self‐driven. Those hired as technical specialists receive rigorous training that includes experimentation and statistics. Overall, management recruits technical specialists, ensures they possess the power to run ethical experiments and interpret the outcomes in real time, and supports a distributed experimental culture. Lastly, it is critical to emphasize that all of these management efforts benefited from guidance and input as well as financial support by executives at Booking.

Technical specialists

Once training is complete, technical specialists have vast knowledge including ethics, experimental design, systems software, management science, computer programming, consumer behavior, and data analysis. According to the case, approximately 75% of the 1800 technology specialists actively used the experimental platform. About 1000 controlled experiments were run concurrently. Moreover, the technical specialists remain empowered with the autonomy to perform experiments to improve the website.

At the time the case was written, Booking was still using A/B experiments to improve performance: A technical specialist who wants to initiate an experiment completes a standard form (template) that specifies the name of the experiment, its purpose, the primary target audience whose service it seeks to improve (customers or partners), its relationships to past experiments, and the specific A/B experiment to be performed. The template is designed to minimize the effort of introducing a new experiment. The technical specialist who initiates an experiment carefully assesses the test outcomes, which are collected in real time to determine whether to continue the test, stop the test, or permanently introduce the feature or functionality that passes the test. In addition to the employee who initiates an experiment, other technical specialists observe real‐time outcomes and an automated “monitoring” system alerts everyone to potential problems using secondary metrics. Lastly, technical specialists provide feedback to management on the challenges and opportunities associated with improving the performance outcomes of the A/B experimental method. (See Shaywitz, 2020, and Thomke, 2020, for more detail on how A/B experimentation works as well as on firms that use it to improve performance.)

Update

Booking.com is committed to other major innovation projects to improve performance from the customer and supplier perspectives (Mariano, 2021). Booking is also actively expanding its capabilities and markets through acquisition: within 2 weeks in late 2021, it acquired Getaroom (a distributor of hotel rooms) for $1.6 billion (Prnewswire, 2021) and e‐Traveli Group (a provider of global flight booking) for $1.8 billion (May, 2021).

CASE STUDY III: GLOBAL ENERGY CORPORATION (KNOWLEDGE SHARING)

This section is based on an oral presentation by and a follow‐up interview with Jim Parton regarding his role at a leading corporation in the energy industry whose global headquarters is located in France. Early in his career, the corporation was comprised of about 1500 employees in almost 35 independent companies and seven engineering and manufacturing divisions operating globally.

Technical specialists

While working as a mechanical engineer (i.e., technical specialist), Mr. Parton became acquainted with a colleague, Bala Kumar, in Mumbai, India. The U.S. engineering and manufacturing division had been operating 10 years longer than its counterpart in India. In a casual conversation with Mr. Parton, Mr. Kumar described a problem he was having concerning a customer who used saturated steam while the firm's equipment was designed for superheated steam. If left uncorrected, the situation could cause the equipment to leak high‐pressure steam into the customer's facility. Based on Mr. Parton's past experience, he was able to suggest a solution to Mr. Kumar's problem.

While continuing their conversations, Mr. Parton and Mr. Kumar acknowledged that the technical specialists in one engineering and manufacturing division of the global firm could similarly benefit from the experience developed in other divisions (also see Crama et al., 2019). As such, the two mechanical engineers recognized the value of shared knowledge. They were convinced that a means of global communication (Lakhani et al., 2015) among divisions was essential for the corporation to move forward.

Executive

The two engineers wrote a business plan on the concept of a global knowledge sharing communication system and submitted it to their respective managers. Both company managers endorsed the potential value of shared knowledge and conveyed the opportunity to the global leadership team (executives) who provided funding. The substantial financial support from executives included the purchase and implementation of software from IBM that served as a knowledge repository for documentation, provided an internal means of communication (intranet), facilitated the posting of blogs, and enabled the organization of small target groups.

Management

Unfortunately, despite its potential, the success of the open innovation internal community was less than expected. Upon investigation, Mr. Parton and Mr. Kumar identified two major organizational incentive barriers: some employees did not want to post solutions because they equated the ownership of knowledge with power and job security, and some employees did not want to post the nature of problems they could not solve because they were fearful of damage to their reputation and positions.

To address these problems, management modified the incentive system for the engineering and manufacturing divisions by introducing a performance metric that explicitly captured the value of sharing knowledge (Christensen & Baird, 1998). Of course, changing behavior is one of the most challenging endeavors facing organizations; it took a full year before the knowledge sharing system gained enough traction to improve global performance. Today, the knowledge sharing system is used widely throughout the corporation.

Insight

This case study demonstrates the success achieved when executives value and, subsequently, provide financial support for concepts that emanate from the firm's technical specialists, and the critical role played by management to enable the potential benefits of the concept to be realized. As such, the integration and alignment of all levels of the corporation contributed to the success of this major innovation.

CASE STUDY IV: FOOD‐PROCESSING INDUSTRY

This section is based on a presentation by and a follow‐up interview with Ms. Waters, the plant manager of a 2000‐employee production facility for a corporation in the food‐processing industry. Ms. Waters reports to the vice president of one of the business units (i.e., the executive level); engineers, project managers, and supervisors (i.e., technical specialists) report to Ms. Waters; shop‐floor workers (referred to as associates) report to supervisors.

Management

Ms. Waters held quarterly meetings with the technical specialists to identify opportunities to improve plant performance. At one such meeting, an idea surfaced to automate palletizing operations to reduce costs and improve safety. Ms. Waters acknowledged, however, that this major innovation project, which would lead to the elimination of jobs due to automation, might alienate associates, and disrupt plant operations. Moreover, Ms. Waters recognized a bigger challenge: the need to bring associates on board to contribute ideas, participate in developing solutions, and ensure successful implementation of innovations. Ms. Waters determined that education was the answer: to train the associates about how each workstation in the plant drove performance.

Executive

Ms. Waters presented her two‐part plan to the business unit executives: (1) engage the firm's Education and Learning Division to help create the educational program for associates and (2) create teams consisting of technical specialists and associates to automate palletizing. The major innovation project was estimated to take a year from executive approval to completion of the automation of palletizing operations and have a payback period of 2½ years. During that year, the displaced associates from the manual palletizing workstations had ample time to identify new positions in the plant; opportunities would arise due to the attrition of several hundred associates each year. Additionally, Ms. Waters claimed that educating associates would enhance the ability of the technical specialists to innovate and improve future plant performance. The major innovation project was approved by executives at the business unit level.

Technical specialists

With support from the more broadly trained associates, the technical specialists consisting of engineers, project managers, and supervisors worked in teams to design, develop, implement, and optimize the performance of the customized palletizing equipment. Automating palletizing required customization because the products on each line were packaged in different configurations (case sizes). Engineers identified equipment specifications for each line; the project managers developed plans including those involving implementation, testing, and fine‐tuning; and all of the technical specialists engaged in activities involving vendors.

Insight

The project to automate palletizing was deemed highly successful. More importantly, the investment in the education of associates enhanced the job performance of the technical specialists and served as an important mechanism to motivate future innovation. Overall, this section reinforces the importance of alignment among the executive, management, and technical specialist levels for the firm to attain success while pursuing major innovation.

OTHER MAJOR INNOVATIONS

Sections 2 –5 demonstrate the importance of organizational alignment as a driver of successful innovation projects. To provide a balanced perspective, in this section, we briefly describe two failed innovation projects that suffered from a lack of organizational alignment: one is based on a published case about Boeing (McDonald & Kotha, 2015), and another is based on an oral presentation and a follow‐up interview with a manager from a global energy corporation. The primary causes of the innovation failures are briefly described here and are explored further in the conclusions (Section 7).

Case study V: Boeing

In 1997, Boeing executives Condit (CEO and Chairman) and Stonecipher (President and COO) announced a radically new direction forward called “Vision 2016.” The vision defined three core competencies: (i) large‐scale system integration, (ii) detailed customer focus and knowledge, and (iii) lean and efficient design and production systems. The goal was to transform Boeing from a plane maker (driven by engineering and manufacturing expertise) to a systems integrator (driven by the information economy to manage external networks and partnerships with suppliers). Notably, Boeing executives sought to share both the costs and the risks of building an airplane with its equity partners (tier‐one suppliers).

“Vision 2016” required that Boeing undertake new management principles, procedures, and processes; a new organizational structure with substantial responsibility given to equity partners; new roles for its highly skilled technical specialists; and new methods for the design and manufacture of components from tier‐one suppliers. For the development of its new Dreamliner airplane, management determined that Boeing would only provide performance targets; its global partners would develop the detailed designs and drawings. Moreover, management would pursue a modular strategy for the Dreamliner whereby partners would manufacture large integrated assemblies; Boeing was responsible for the final assembly.

Unfortunately, Boeing's “Vision 2016” led to substantial quality problems (incomplete components for assembly), cost overruns, and extensive delays. Recognizing its failure to monitor and control equity partners, Boeing executives invested $2B so that its technical specialists (i.e., employees involved in engineering design, manufacturing, production, and supply chain management) could establish and operate a 5100 square‐foot production integration center 24/7 and in 28 languages. Boeing's technical specialists worked in multifunctional teams; pursued contingency planning; placed some of its workforce at partner sites for close collaboration; installed cameras to monitor partners to identify, preempt, and control problems; and assumed responsibility from partners who were failing.

Boeing eventually delivered the first Dreamliner to Nippon Airways in 2011, but a fire started in an empty Japan Airlines plane in 2013. This was the beginning of the discovery of new problems with the design and manufacture of the Dreamliner (Lee & Schmidt, 2017; Tangel, 2021). In fact, the negative impact on Boeing's financial situation in the aerospace industry and its reputation for safety and reliability still lingers today.

Case study VI: Global energy corporation (standardization project)

This subsection is based on a presentation by and a follow‐up interview with Ms. York, a manager in a global energy corporation. As background on the corporate organizational structure, 35 independently operated firms in different regions of the world were served by seven engineering and manufacturing divisions. Each of those divisions performed batch processing; parts were produced in midrange volumes and were tailored to meet the specific needs of customers. Moreover, each division had its own supply chain and produced similar (though not identical) products using parts from different vendors.

The corporate executive level introduced a major innovation project to standardize its product line across global boundaries. With the intent of reducing the costs of materials through economies of scale obtained by contracting with fewer vendors, the executive level mandated that all engineering and manufacturing divisions work together to develop standardized products to be offered globally. In other words, management and technical specialists needed to agree upon the basic attributes, features, and functionality necessary to standardize components to meet the demands of customers in the highly dispersed firms.

Unfortunately, fundamental problems arose among managers and technical specialists. First, managers of the independent firms were resistant to the innovation project because they believed that their personal relationships with customers were a source of competitive advantage. Additionally, if the features and functionality changed to be consistent with corporate standards, managers worried that they might lose existing customers because customers would have the option of choosing between the new standardized product and the products offered by competitors. Second, a multitude of problems were identified by the technical specialists in the engineering and manufacturing divisions. Essentially, the technical specialists could not agree on standard features given the different units of measurement used (inches vs. millimeters), different electrical sources of power, and other differences in infrastructure throughout the regions of the world they served.

Following 2 years of extensive efforts, the global standardization innovation project was canceled. Despite the problems cited above among managers (including Ms. York) and technical specialists, the corporate executives surmised that the core problem preventing success of the innovation project was simply resistance to change. In contrast, we believe that the failure of the global standardization project was inevitable because it was conceived by executives without input or feedback from managers or technical specialists. Lastly, the toll on corporate performance lingered well after the failed innovation project due to the considerable strife and disruption that had ensued.

CONCLUSIONS

Our discussion of cases and interviews supports our claim that achieving success while pursuing a major innovation requires alignment (i.e., coordination, integration, and collaboration) among knowledge workers at the executive, management, and technical specialist levels. In this section, we elaborate on the responsibilities of those knowledge workers when a firm pursues a major innovation. Moreover, we consider the success and failure of the major innovations described in Sections 2 –6 as well as those in other corporations.

Executive

Executives of an existing firm may conceptualize an innovation or entrepreneurs may identify an innovation to form the basis of a new startup. In either case, the executives must collaborate with managers (who establish a link with technical specialists) to ensure the viability of the innovation as well as its implementation. McKinsey & Company is an example of a consultancy whose executives sought input from management on the necessity and viability of supplementing the firm's existing capabilities with design expertise (Section 2). At Booking, consistent with its goal of global expansion, the executive (entrepreneurial) level invited participation from management and technical specialists to help design and implement A/B testing whereby changing customer preferences could be identified and embedded in its two‐sided software platform over time (Section 3). In contrast, it appears that Boeing (Section 6.1) and the global energy corporation (Section 6.2) suffered from executive leadership that defined long‐term goals involving major innovations without soliciting input from management or technical specialists; unfortunately, this suggests that the executives deemed the value of such contributions to be negligible.

Executives must recognize the value of obtaining innovative concepts from management and technical specialists. In the food‐processing firm, the executives funded a proposal from management to implement an educational program for associates (hourly workers) to improve the design and implementation of the work accomplished by technical specialists (Section 5). In the energy corporation comprised of independent firms from around the world, technical specialists proposed an innovation to facilitate global knowledge sharing (Section 4). The proposal was first approved by management and was funded by the executive level.

Lastly, executives must financially support the major innovation throughout its life cycle. The necessary resources may already reside within the firm or may require substantial investment in knowledge external to the firm, or a combination of the two. If the executive level assesses that the firm does not possess the intellectual skills needed to close the capability gap in the desired time frame, it may outsource knowledge on a large scale (raising issues with absorptive capacity) (Gaimon & Ramachandran, 2021) or jointly develop features of the major innovation through an alliance or partnership (raising issues with coordination and integration) (Gaimon et al., 2017). For example, McKinsey acquired another firm to add design capabilities to the product portfolios offered to clients (Section 2). After many initial failures, Boeing's executives invested heavily in systems to help facilitate the design, development, and manufacture of the Dreamliner (Section 6.1).

Management

Management has several roles when a firm pursues a major innovation (Leonard‐Barton, 1992). If the executive invests in an alliance, partnership, or acquisition of an external entity to supplement the firm's internal capabilities, management is responsible for ensuring the absorption of external knowledge (Gaimon et al., 2017). To illustrate, management at McKinsey & Company was responsible for guiding the acquisition and integration of technical specialists at LUNAR on projects requiring consultants with knowledge of design‐related methodologies. Alternatively, management may recognize the need to hire more technical specialists or may identify an opportunity to leverage external knowledge on a smaller scale, such as by hiring a consultant who either provides the missing “ingredient” for the innovation or coproduces it with the firm's own technical specialists. In the first case, management is responsible for absorbing and deploying the outsourced knowledge (Lee et al., 2019). In the second case, management is responsible for the coordination and integration during the co‐production undertaken by the consultant and the firm's technical specialists (Roels et al., 2010; Xue & Field, 2008). Lastly, management may pursue educational programs, such as in the global food‐processing firm that designed and delivered a training program for its associates to ensure the success of innovation projects led by technical specialists (Section 5). Booking.com (Thomke & Beyersdorfer, 2018) describes the extensive screening and training designed by management for its technical specialists (e.g., statistics, risk management, and the design of experiments) to enable them to improve the performance of the two‐sided platform through A/B testing (Section 3).

Beyond the knowledge residing in human resources, we have provided several examples in which management undertook major innovation projects that required the design and development of machine tools and computer systems (hardware and software). For example, the management team at Booking envisioned a way to democratize product and process improvement when it introduced a template for technical specialists to directly test, learn, and update the firm's two‐sided platform (Section 3). The computer system acquired from IBM was the mechanism management used in the global energy corporation to facilitate knowledge sharing (Section 4). In the food‐processing industry, a key element of management's major innovation project was to design, develop, and implement palletizing equipment to automate the corresponding manual operations (Section 5). Ultimately, to gain control of its supply chain, Boeing invested in a production integration center that provided round‐the‐clock support to monitor and aid suppliers (Section 6.1).

Management is responsible for designing and delivering a system to incentivize, monitor, and provide feedback to its technical specialists on how to maintain and improve performance. For example, the technical specialists in the global energy corporation (Section 4) were not comfortable using the knowledge sharing system due to the loss of knowledge ownership and the need to openly acknowledge unresolved problems. To reverse this situation, management modified its performance criteria to include peer assessment; it needed to demonstrate the value of sharing knowledge. A similar situation occurred in Booz & Company when it established peer evaluation as a criterion of performance to encourage more senior consultants to contribute to and more junior consultants to learn from its knowledge sharing system (Christensen & Baird, 1998). Additionally, management modified performance criteria, responsibilities, and career paths when McKinsey acquired LUNAR in order to integrate the consultants and designers (Section 2). Booking's management recognized that its hiring program needed to identify employees who were predisposed to risk taking to capture the value of failing forward (Section 3).

Project management is critical when designing, developing, and implementing a major innovation (Bowen, 1996). After management identifies the intellectual resources (skills) needed to undertake the innovation, it assigns technical specialists to project teams (Haas, 2006). Management's characterization of the team structure, composition, and size are key factors to achieve innovation success while not exceeding the given time and cost constraints (Rahmani, 2021). Teams may operate independently where “assembly” occurs after the teams’ work is complete, or in tandem where management is responsible for integration among teams. Lastly, beyond traditional project management techniques, management must establish effective incentives and boundaries for those undertaking the innovation to increase the probability of success and limit the downside risk of implementation failure. Management must be careful to establish the “rules of engagement” to guide the flow of knowledge between various teams, including those both internal and external to the firm.

Planning under uncertainty is one of management's most challenging tasks when pursuing a major innovation. Naturally, as a first step, management must pursue every means to limit uncertainty. This may entail investing in knowledge creation and vicarious learning from other parts of the firm or from sources external to the firm (Leonard‐Barton et al., 1994). Also, management may make contingency plans whereby responses are prespecified when possible intermediate outcomes arise. Boeing did not initially manage uncertainty when implementing the major innovations associated with Vision 2016 (Section 6.1). Ultimately, however, after suffering deep problems with suppliers, Boeing pursued contingency planning; placed some of its engineers at partner sites; installed cameras to monitor partner design and manufacturing to identify, preempt, and control problems; and assumed responsibility from partners who were failing.

Typically, however, uncertainty cannot be fully eliminated when pursuing a major innovation. Uncertainty necessitates that management establishes guidelines for monitoring, learning, and adapting the plan for the innovation project while it is underway (Lenfle & Loch, 2010). In this context, trial and error may be applicable. Additionally, management may need to budget buffer time and cost to respond to unforeseen but inevitable problems. Alternatively, management may consider the trade‐off of working on alternate solutions to increase the likelihood of success (funnel) (Wheelwright, 1990). Based on a personal interview with a manager in a privately held global firm in the pulp and paper industry, management's innovation plan should include both the cost and the time necessary for iterative testing and learning to combat the multitude of risks involved in major innovation projects. In contrast, Boeing's initial implementation of its executive vision did not consider how to manage the risks of undertaking major innovation projects (Section 6.1), which led to a series of critical failures causing quality and reliability problems that persist today (Tangel, 2021).

If reducing the time to market is essential and uncertainty exists regarding the specific features and functionality desired by the marketplace, then management may pursue the minimum viable product strategy. Booking used this approach when, at the outset, it introduced a preliminary platform with limited capabilities and reach (Section 3). Booking's management enabled the success of the A/B testing approach by creating an infrastructure through which technical specialists could experiment with new features and functionality in a safe yet controlled environment. The infrastructure included not only the technical resources but moreover specific rules (a template) for managing the experimentation and subsequent improvements to the two‐sided platform that served as the interface between the firm, the marketplace, and the suppliers.

Technical specialists

We have explored the key role of technical specialists who utilize their skills and expertise in domains including design, engineering, mathematics, and science to design, develop, and implement phases of an innovation. The phases may be iterative and involve activities including problem solving, testing, building prototypes, running experiments, and simulation. The technical specialists may operate individually or in teams; the activities may be sequential or without precedence relationships. The accomplishments of the technical specialists may require joint efforts (so that the final output has a multiplicative relationship as with the Cobb–Douglas production function) or may entail efforts that are accomplished independently and then combined (so that the final output has an additive relationship) (Gaimon & Ramachandran, 2021).

Another crucial role of technical specialists is to synthesize knowledge from sources external to the firm. An innovation may involve the implementation of software obtained from an external source, which requires considerable interaction and integration between the firm's technical specialists and the software provider (Section 4). During the design and development phases of an innovation that involves introducing new equipment, technical specialists work closely with vendors (Section 5). Interaction between the firm's technical specialists and suppliers is critical, not only to the success of the immediate innovation but also to the firm's long‐term survival. The information gleaned from component suppliers could aid in troubleshooting problems associated with a current innovation or become a source of ideas for future innovations (Lee & Schmidt, 2017). The success of Boeing's Vision 2016 required that its technical specialists maintain in‐depth interactions, monitoring, and control of suppliers to ensure the contracted deliverables were met (Section 6.1).

Lastly, technical specialists must interact with customers. They may test the viability and ease of use of the innovation under development with a small set of customers to provide input to improve performance (Eisenmann et al., 2014). Furthermore, technical specialists may design a computer system that continuously obtains input from customers and provides feedback to automatically improve characteristics of the innovation (Section 3). Lastly, technical specialists must recognize how technology is evolving external to the firm. The technical specialists involved in the original innovation project referred to as Iridium (satellite communication) did not leverage how cell phone technology was developing and thereby failed to capture the original target market of international business travelers (MacCormack & Herman, 2001).

Postscript

This article highlights the crucial role of knowledge workers at the executive, management, and technical specialist levels to ensure the ultimate success of a major innovation. Utilizing case studies and personal interviews, we demonstrate the importance of alignment among these levels of the organization in the hopes of stimulating further research on this important topic.

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