International Journal of Technology Management · 2019
How can organizations turn customer knowledge into innovation, and what enables employees to move that knowledge from customers into R&D?
Mahringer, C. A., Rost, M., & Renzl, B. (2019). How individuals perform customer knowledge absorption practices – A contextual approach to open innovation. International Journal of Technology Management, 79(3/4), 274–298. 10.1504/IJTM.2019.099604
Organizations increasingly look outside their boundaries for knowledge that can improve products, services, processes, and business models. Customers are an especially valuable source because they experience products in use, identify unmet needs, and may recognize emerging requirements before firms do. Yet having access to customer feedback does not mean that this knowledge will actually influence innovation.
The paper examines the organizational conditions that determine whether employees can turn external customer knowledge into something the organization can use. It focuses on salespeople because they occupy a boundary-spanning position between customers and internal functions such as R&D. They have to obtain customer knowledge, make sense of its relevance, and transfer it across internal boundaries before that knowledge can contribute to innovation.
We ask: Which contextual factors enable or constrain employees in performing customer knowledge absorption practices as part of open innovation?
We studied customer knowledge absorption in the North American subsidiary of a global pharmaceutical packaging-machines company. Over five months, the research combined participation in the sales department with document analysis, 12 interviews with salespeople and R&D engineers, and an expert survey. The study examined concrete incidents in which employees obtained, analysed, and transferred customer knowledge. This design allowed us to connect what employees actually did with the organizational conditions that helped or hindered those activities.
Enabling individuals to perform open innovation practices requires an in-depth analysis of the context in which those practices are enacted. However, research on the context within which open innovation is practiced, is still in its beginning. This paper develops a theoretical framework of the relationship between open innovation practices, individuals performing those practices, and context factors that enable or constrain those individuals carrying out open innovation practices. Moreover, the paper reports empirical research on context factors enabling or constraining salespeople in performing customer knowledge absorption practices, a specific subset of open innovation practices, in a pharmaceutical packaging machines firm. The paper contributes to open innovation research by (1) advancing a contextual view on open innovation, (2) emphasizing the need to distinguish between open innovation practices that provide an analytical tool to unravel the social dimension of open innovation, and (3) identifying context factors that enable or constrain customer knowledge absorption.
The study shows that customer knowledge becomes useful for innovation through specific employee practices that are enabled or constrained by their organizational context.
Open innovation becomes more concrete when it is broken down into what people actually do. Customer knowledge absorption involves obtaining knowledge from customers, analysing its relevance, transferring it inside the organization, and ultimately commercializing it through new or improved products, services, processes, or business models.
Strategy, structure, culture, employee skills, and tools and processes shape whether customer knowledge can move through the organization. At PackCo, structural separation, misaligned objectives, weak customer orientation, and a not-invented-here syndrome constrained knowledge absorption, while employee skills, meetings, knowledge tools, and HR practices often enabled it.
Salespeople connect external customers with internal engineers and other organizational actors. Their social, technical, methodological, and personal skills help them build trust, interpret customer requirements, communicate why those requirements matter, and compensate for organizational barriers that would otherwise block knowledge transfer.
The study connects open innovation with customer knowledge management, absorptive capacity, boundary spanning, organizational design, and the human side of innovation. It shows why research should move beyond asking whether a firm is “open” and examine the specific practices through which external knowledge is obtained, interpreted, transferred, and used.
It also develops a contextual perspective on innovation. The same organizational factor may enable one practice while constraining another, which makes broad claims about an “open innovation culture” or “open innovation structure” insufficiently precise. Understanding innovation therefore requires attention to the interaction between particular practices, the people performing them, and the contexts in which they work.
Collecting customer feedback is only the first step. Organizations also need employees who can interpret that knowledge and move it across boundaries between sales, marketing, engineering, and R&D. Managers should therefore examine where customer knowledge gets lost, ignored, or blocked after it enters the organization.
The findings point to several levers: make customer orientation explicit in strategy and objectives, reduce structural bottlenecks between customer-facing units and R&D, develop employees’ social and technical skills, provide meetings and knowledge-structuring tools, and establish clear responsibilities for analysing and transferring customer knowledge.
