Authors: Aihie Osarenkhoe; Jens Eklinder-Frick; Lars-Johan Åge; Vincent Fremont
To stimulate radical innovations, R& D workers are often isolated from the influence of the rest of the organization. This has become known as the Skunk Works model of innovation and is claimed to bring several advantages, including escaping organizational myopia and firm bureaucracy. However, the Skunk Works model of innovation is often seen from an intra- organizational perspective, subsequently ignoring how inter-organizational relationships are affected by the development of radical innovation. IMP theory rests on the notion that business is conducted in supplier-buyer relationships in which companies adapt their resources and offerings to each other. First-hand knowledge about established producer-user interfaces thus facilitates the achievement of innovation. Subsequently, if the raison d' être for the Skunk Works model is to isolate the innovation process from existing organizational structures the future adaption of the innovation into existing supplier-buyer relationships might be jeopardized. This paper examines the process of radical innovation within a large international manufacturing group called Sandvik Machining Solutions (SMS). SMS operates within the metal cutting tools industry, and consists of four product areas that operate as mostly autonomous companies, transacting with each other, as well as collaborating around shared resources. The innovation process studied within this paper is SMS´s attempt to digitalize its manufacturing, supply chain management processes, and customer offerings. The paper concludes that the Skunk Works model of innovation offered SMS an initial freedom to create new organizational structures around their digitalization efforts. However, this paper also present eight problematic issues that the use of the Skunk Works model imposed on existing supplier-buyer relationships. A separation from the resource structures of product areas’ core operations, as well as a shift in ownership of vital resources, became evident. Moreover, the digitalization efforts were built around a technological system that proved incompatible with existing IT structures.
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Publish Year: 2018
Conference: Marseille, France (2018)