Degree Project
Influential Factors in Innovation Initiatives at a Telecom
Equipment Supplier
A Study of Lead Generation and Add-on Sales’
Hindrances and Enablers
Author: Alina Nunes Souza Anas El Ghazouani Supervisor: Chirstina Mörtberg Niclas Eberhager Examiner: Päivi Jokela
Abstract
In this research, we aim to look at the inner workings of Lead Generation and Add-on Sales through the eye of the people working directly with it. We do that with the objective of understanding what contributes positively to its success and what can cause problems or hinders it throughout all its stages from generating innovative ideas to implementing and selling them.
We have chosen a qualitative method to conduct this study using an interpretive paradigm in performing our analysis of the findings. The data was collected by organizing interviews with participants that we selected in collaboration with Telco’s researchers. The interviews were recorded, transcribed and coded to form our primary data. In addition to that, we have used vast secondary data that was deemed to be relevant to the subject we were researching.
After analyzing the results and findings, we look to answer the research questions, which concern the difficulties accompanying the innovative process between initiating an idea and implementing it as well as identifying the enablers and hindrances that arise during the operations of these innovative initiatives called Lead Generation and Add-on Sales. Once factors were identified, further analysis is performed to discuss if these factors are hindrances or enablers to the innovative initiatives at Telco. The frontline employees’ new business ideas (leads) or add-on sales are added as inputs to the ICT systems of this initiative and follow to subsequent phases until reach the commercialization phase in case they succeed, all the phases and processes occur through the ICT systems. In the context of this research, technology plays a key role and not only make the Lead Generation and Add-on sales processes viable but is also a factor that can either facilitate or impede potential leads or add-on sales to succeed.
We put forward a model to better illustrate our findings and clarify the reasoning behind them. Despite the delimitations in terms of scope of this research, we believe that our findings and analysis can play a role in contributing to the understanding of factors that can be a barrier in the pursuit for innovation.
Key Words: Innovation, Knowledge Sharing, ICT Systems, Customer Integration, Frontline Employees, Interpretive Paradigm.
Acknowledgement
Writing this thesis would not have been possible without the assistance and help we have received from a number of people at different stages of the process. Our supervisor Niclas Eberhagen has been incredibly helpful to us and generous with his time and guidance from beginning to end. We would also like to thank our professor Christina Mörtberg for her advice and assistance and her general conducting of the course.
The other main significant party in this research paper comes from our collaborators at Telco; Nina Washington and Saeed Khanagha. Without them, this thesis could never have been conducted, they have been with us every step of the way and have been responsible for providing the information we need as well as feedback and advice whenever we have asked for it.
We also wish to express our gratitude to Linnaeus University and its professors over the Informatics Systems Masters course. All of them have played a big part in the individuals we are today in terms of the education we possess. We believe that their contribution is visible in our work and without them; we would not have been capable of completing it.
Table of Contents
1 Introduction _________________________________________________ 9
1.1Background ... 9
1.2 Purpose of the Study ... 11
1.3 Significance of the Study ... 11
1.4 Scope and Delimitations ... 13
1.5 Thesis Structure ... 14
2.1 Innovation Initiatives and Customer Integration in Global Companies ... 17
2.2 IT as an Innovation Enabler ... 21
2.3 Knowledge Sharing ... 22
2.4 Motivation: Intrinsic and extrinsic ... 25
2.5 Relevance of literature concepts ... 27
3 Research Methodology _______________________________________ 29 3.1 Research Setting ... 29
3.2 Interpretive Research ... 30
3.3 Data Collection ... 31
3.4 Interviews ... 32
3.4.1 Participants ... 32
3.5 Data Analysis ... 34
3.6 Validity and Reliability ... 38
3.7 Ethical Considerations ... 39
4 Presentation of the Categories _________________________________ 41 4.1 Categories ... 41
4.1.1 Close Customers Relationships ... 42
4.1.2 Motivational Factors ... 43
4.1.3 Workload, Lack of Time and Quality of Relations ... 45
4.1.4 Cross Unit Collaboration ... 47
4.1.5 Communication Tools and Interactivity ... 48
4.1.6 Customer’s Employee Mindset and Local Culture ... 49
4.2 Hindrances or Enablers ... 51
5 Process Model ______________________________________________ 52 5.1 Ideal Path of Innovative Ideas at Telco ... 52
5.2 A Process Model of Lead Generation and Add-on Sales Processes ... 55
5.4 Process Model ... 57
6 Discussions _______________________________________________ 59 6.1 Factors that Influence Turning Customer Knowledge into New Business Ideas
... 59
6.1.1 Factor 1: Close Customer Relationships Discussion ... 59
6.1.2 Factor 2: Motivational Factors Discussion ... 60
6.1.3 Factor 3: Workload, Lack of Time and Quality of Relations Discussion ... 61
6.1.4 Factor 4: Cross Unit Collaboration Discussion ... 62
6.1.5 Factor 5: Communication Tools and Interactivity Discussion ... 62
6.1.6 Factor 6: Mindset and Cultural Factors Discussion ... 63
6.2 Process Model Discussion ... 64
6.3 Lead Generation and Add-on Sales Hindrances and Enablers ... 70
6.3.1 Close Customer relationships as an enabler ... 71
6.3.2 Motivational factors as an enabler ... 71
6.3.3 Workload, lack of time and quality of relations, cross unit collaboration and as hindrances ... 72
6.3.4 Cross unit collaboration as a hindrance ... 72
6.3.5 Communication tools and interactivity as enablers ... 72
6.3.6 Mindset and cultural factors as hindrances ... 73
6.4 Research Contribution ... 74
7 Conclusion ________________________________________________ 76 This chapter contains conclusions about this study, thesis importance to the academia, and recommendations for future work. It also presents the research implications and delimitations as well as our personal reflections. ... 76
7.1 Conclusions ... 76
7.1.1 Enablers: ... 77
7.1.2 Hindrances: ... 77
7.2 Thesis Importance to the Academia ... 78
7.3 Recommendations for Future Work ... 78
7.4 Research Implications and Delimitations ... 78
7.5 Personal Reflections ... 79
8 References _________________________________________________ 82 Appendices __________________________________________________ 92 Appendix A- Participants and Regions ... 92
Appendix B- Interview Briefing ... 93
Appendix C- Interview Guide ... 94
Appendix D- Table with examples of first and second codes ... 95
Appendix F- Table with examples of secondary data coding ... 101
List of Figures
Figure 1 Ideal Path of Innovative Ideas at Telco ... 53
Figure 2 Lead Generation and Add-on sales phases ... 55
Figure 3 Process Model ... 58
Figure 4 Phase 1 ... 67
Figure 5 Phase 2 ... 68
Figure 6 Phase 3 ... 69
List of Tables
Table 1 Thesis Division ... 15
Table 2 Examples of IT innovation (adapted from Carlo, Lyytinen and Rose, 2010) 21 Table 3 Passages and first order codes ... 34
Table 4 Category 'Close customer relationships': hindrance or enabler ... 36
Table 5 Category ' Customer's Mindset’: hindrance or enabler ... 37
Table 6 Categories and descriptions ... 41
Table 7 Hindrances or Enablers ... 51
Table 8 Categories and relations ... 57
1 Introduction
1.1Background
Information and communication technologies (ICT) play a key role in organizations’
pursuit for innovation. However, only the introduction of ICT systems and services is in itself insufficient to succeed with innovation (Gressgård et al., 2014). People, processes and tools are jointly responsible for innovation and development in organizations; with the emphasis that successful innovation requires a well- functioning of these elements (Thomke, 2003). Consequently, ICT based services must to be combined with the adaptation of organizational process and structure to be most effective for the process of innovation.
Human related activities can also be highly significant in information systems as pointed out by Rozwell (2002) who observed that it is important to consider the role of human activity. When it comes to using information systems and tools’ to support innovation process in firms, one of the challenges that firms have is how to utilize employees’ creative ideas through management systems and motivate them to participate in the process (Fairbank, Spangler & Williams, 2003). In order to deal with this issue, Swanson (1994) suggested that channels of communication are very efficient in processes where the main goal is to achieve innovation, taking into account that there are differentiations between innovations such as the ones that can be typed (i.e. new services or products) and technical innovations (changes to technology or work processes).
Lyytinen & Rose (2003) complemented Swanson’s definitions claiming that the effects of disruptive ICT innovation necessarily spans new services and new types of development processes, illustrating this with the example of IT innovations on telecommunication networks of the 1990s, when ICT innovation encouraged innovation in system development and services. As a result, firm capabilities are being renewed and embedded in its processes focusing on the end use of information technology and not only purely on ICT. Lyytinen & Rose (2003) also proposed three different ICT innovation types in which the third type is service innovation that involves new uses of ICT to support an organization’s business processes or administrative operations.
Sandberg, Holmström and Lyytinen (2010) highlighted the importance of understanding the integration of ICT system and services in order to comprehend ways in which they both enable and inhibit innovation. Laudon et al (2015) explained that information systems are interrelated components working together to collect,
process, store, and disseminate information to provide support for decision making, coordination, control, analysis and visualization in an organization.
ICT services are technologies that support innovative processes (in this case Lead Generation and Add-on sales’ processes) that are not restricted to just increase employees’ access to information but also to contribute to the dissemination of knowledge to organizational members involved. In Lead Generation and Add-on sales processes, ICT systems are also a factor that can facilitate or impede the transformation of customer knowledge into new business ideas. However, it is not an isolated factor and it is combined with other factors that are important for the whole initiative’s processes. In other words, we intend to investigate the factors present in the processes of the innovation initiative considering that technology tools indeed can encourage innovation if they are correctly integrated, tools are only effective as the people and organization using them (Thomke, 2003).
Durst et al. (2013, p.65) explained that service innovation could provide an effective way to create a sustained competitive advantage for a company. In addition, Grönroos (2015) states that the adoption of a service-based strategy have many benefits for a company such as helping to excel service offerings, cost structure, delivery system and technology.
Tushman and Anderson (1986) make the point that innovation is not necessarily supposed to be a great deviation from existing business practices but can simply enhance and improve competencies that are already in place. When the aim is to improve already existing services, an organization can exploit its multiple interactions and relationships with customers to co-create value (Melton & Hartline, 2010) which according to them proved to be favorable to service innovation.
This study attempts to identify factors that influence the success or failure of potential new business ideas in innovative initiatives called Lead Generation and Add-on sales at Telco, before reaching the implementation and commercialization phase with a focus on the organizational activities and contextual factors involved in these processes. Lead Generation and Add-on sales aims to generate new business ideas (leads) through customer’s knowledge and improve existing contracts (add-on).
There have been a number of studies conducted about the influence of customer integration into the innovation process (Vargo, 2008; Bogers, Afuah, & Bastian, 2010;
Enkel, Kausch, & Gassmann, 2005). They were unanimous in considering how helpful customer integration can be when the goal is to use customer’s knowledge in innovation processes. However, they focused mainly on product development or service quality, ignoring many factors involved in initiatives created specially to take advantage of service departments.
1.2 Purpose of the Study
The purpose of this study is to investigate the main challenges regarding turning customer knowledge into new business ideas through the ICT systems used in a telecommunication company called Telco and its innovative initiative: Lead Generation and Add-on sales. In addition to that, this study will identify the main factors that play an important role in these initiatives, classifying them as hindrances or enablers. It is important to point out that the ICT system enables the pursuit for innovative ideas in Lead Generation and Add-on sales.
When analyzing separately the phases of the Lead Generation and Add-on sales process it will be possible to verify that a variety of influential factors emerge and become relevant to distinguish which ones are facilitating or blocking the processes that lead to innovative solutions. Frontline employees have close interactions with customers, they are aware of their needs and expectations which results in a source for potential new ideas or solutions that can be used as input to the Lead Generation and Add-on sales process. The process begins with the frontline employee having insights through constant interactions with customers and adding this potential lead or add-on sales on a tool developed for Lead Generation and Add-on sales purposes. The process ends up when innovative solutions and ideas being sold to customers.
The research questions for this study are therefore:
RQ1: What are the main factors that influence turning customer knowledge into new business ideas through the ICT systems used in Lead Generation and Add-on sales at Telco?
RQ2: Which are the main hindrances and enablers of innovative initiatives (Lead Generation and Add-on sales) at Telco?
The data collection process incorporated semi-structured interviews with participants that job tasks requires Lead Generation and Add-on sales use and knowledge.
Therefore they are able to share their views regarding the innovative initiative processes.
1.3 Significance of the Study
This research study will identify the relevant factors that can be either hindrances or enablers in a specific process called Lead Generation and Add-on sales, the aim of which is to transform customer knowledge into new business ideas or innovative solutions. Previous research (Yang et. al, 2010; Fleming, 2001) concluded that innovative outcomes are often the result of a recombination of existing resources and elements of knowledge.
Zahra et al. (2002, p.186) mentioned the importance of absorptive capacity as a ‘set of organizational routines and processes by which firms acquire, assimilate, transform and exploit knowledge to produce a dynamic capability’. Zack (1999) and Thomke (2006) stated that the impacts of ICT systems depend on individual and organizational factors. This study considered in addition to individual and organizational factors, contextual factors in order to take in account particular characteristics of the Lead Generation and Add-on sales processes.
The significance of this study is tightly linked to the role that innovation plays in companies and modern businesses. If a firm aims to compete in the modern market, innovation is one vital ingredient to achieve that objective. It is regarded as a vital part for organizations that want to remain competitive or that seek long term advantages (Hamel, 1998; Roberts, 1998; Grant & Baden-Fullen 2004; Karabulut 2015).
The research will be performed at a telecommunication company called Telco. Telco is no different than other big organizations in that area. It is a multinational firm with the objective of competing and leading in its field. In order to achieve that, it is necessary for Telco to innovate and create innovative initiatives. Telco, like a number of big organizations is divided into different regions due its size. We focused on two different regions in order to contrast and examine particular differences between them since our main objective is to reach a better understanding of what helps this specific innovation process and what stands in its way. The innovation initiative examined is called Lead Generation and Add-on sales and our main objective is to understand obstacles that emerge during the process of taking customer knowledge and it them into new business ideas. Being able to distinguish what are the enablers and hindrances of this initiative is of massive importance to implement changes and improvements. This will contribute to enable more efficient use of innovation as in order to devise new modern strategies, it is important to successfully diagnose where previous failings have occurred and where successes have been achieved to build on them.
Prior research has highlighted relationships among resources and service innovation (Hsieh et al, 2015), analyzed innovation failure aspects and its impact (Liao & Cheng 2013; Grégoire & Fisher 2006) and focused mainly on the investigation of the R&D role as an internal technology sourcing (Lokshin et al., 2008). These studies focused on companies’ capabilities to balance both internal and external sources of knowledge
that have potential to affect innovation processes. However, few studies examined specific factors (in a particular initiative) that can either facilitate or impede the transformation of customer knowledge into innovative solutions.
Hayes (2011) studied knowledge management initiatives considering simplistic technology aiming at distributing knowledge throughout the organization. Other studies (Kelley, 2010; Lindegaard, 2010) focused on the generation and management of internal knowledge but the aim was to reach open innovation.
This study does not focus on innovation departments attempting to identify general factors using customer knowledge because it intends to fill the existing gap examining a continuous process that requires a set of skills of employees in the organization (Birkinshaw et al., 2011). This research is taking into account the importance of the combination of distinct factors (organizational, individual and contextual) in the process of generating new business ideas using customer knowledge. Furthermore, this study sheds a light on the importance of service departments in the pursuit for innovation considering customers as co-creators given the growing interest that global companies and academia have in searching for innovation, that is not limited to research and development departments or seeking to reach only product’s development.
The findings of this study will offer new insights about the transformation of customer knowledge into new business ideas considering that innovation plays a key role in the whole process. For the academia, this study will provide insights that can uncover unexplored variables in innovation company’s initiatives that can be applicable to future research tackling innovation effects on creating competitive services, operational efficiency and value creation through new information technologies. This study can provide a more accurate and illustrated view about innovation pursuit in a practical way, looking deep into the factors of an implemented innovation initiative in a global company, allowing scholars and practitioners to apply existing concepts and business models and also analyze the impact that ICT- tools have on similar innovative initiatives.
1.4 Scope and Delimitations
This research has been focused on two regions of the Telco organization, which are RMED and RMEA. RMED refers to the Mediterranean region of the firm whereas RMEA refers to the Middle East region. Therefore, we have collected the data for this study from interviews with employees from Spain, Turkey as well as Iran working in positions in sales, management and close customer relationships. We had access to internal sources of documents (questionnaires) that contained views of Telco’s employees from all regions in order to support our analysis and conclusions.
We made the choice of the three countries for the interviews in two regions on the basis of comparing distinct perspectives. It was impossible to interview people from all of Telco’s regions, which can be considered delimitation but a boundary had to be defined for the purposes of this study. To help counter that, we have used questionnaires from all the other regions to complement our findings and give a wider perspective of our conclusions.
This study examines the Lead Generation and Add-on sales processes at Telco, consequently we can point out as a limitation the fact that the findings of this project cannot be generalized for other cases because it is possible that the analysis may not reflect the behavior of other similar organizations. Additional research is required to prove that our findings in this research can be applied for other cases.
Since the purpose of this study is to investigate the main factors regarding turning customer knowledge into new business ideas and if these factors are hindrances or enablers to the innovative process, we intend to cover only the factors that are crucial to this process. We will then be establishing criteria to define what is relevant for this study and excluding additional findings that do not contribute to answer the research questions.
1.5 Thesis Structure
This thesis paper has the following structure: after an introductory part (Chapter 1) that explains the background, motives, questions, scope and delimitations of our research, we will move on to introduce some definitions of the concepts we intend to explore in the literature review chapter (Chapter 2). Following that, we will explain the methodology used (Chapter 3) and the way our data was collected and analyzed as well as the ethical considerations we applied during that process. In the next chapter we present our findings and data analysis (Chapter 4) followed by a process model (Chapter 5) developed based on our findings that contain relationships between different factors identified and that affect the issues we aim to analyze. We then present the discussion (Chapter 6) that includes the factors’ influence and how do they allow us to answer the research questions. In the conclusion section (Chapter 7), we will summarize the findings, look at their implications and finish off with sharing our personal reflections on this study.
Since this research paper is conducted by two researchers, the tasks have been divided with the intention to make sure that both parties contribute to every stage of the research as well as make sure that both of points of view are applied when it can be useful such as the discussion chapter. The division of tasks is as follows on Table 1.
Table 1 Thesis Division
Anas El Ghazouani Alina Souza
Introduction and Theoretical Framework Relevant background about
innovation and knowledge in organizations and previous studies in the field.
Provide the necessary
background for Telco and the relevant departments and previous studies.
Methodology Definitions of the methodology
and specification of the role of researcher, the process and unit of analysis.
Explanation of the methods to collect data and analysis. The ethical considerations and validity of the research.
Collecting Data (Interviews and Transcription) Interviews of an equal number
of participants (4) as well as transcribing their own
interviews. One interview (first one) was conducted by both researchers.
Interviews of an equal number of participants (4) as well as transcribing their own
interviews. One interview (first one) was conducted by both researchers.
Analyzing Data (Coding and Analysis) and Model Applying the first codes to the
second half of the passages and the second code later.
Analyzing half the samples (3) of the variables deduced from the coding).
Co-creating the model and contributing to the relationships between variables.
Dividing the interviews into passages and applying the first codes to half of the passages.
Analyzing half the samples (3) of the variables deduced from the coding).
Creating the relationships and co-creating the model.
Discussion Discussion of the findings from
the analysis of samples that Alina has conducted to provide a different point of view for the discussion.
Discussion of the findings from the analysis of samples that Anas has conducted to provide a different point of view for the discussion.
Conclusion The general conclusions based
on the discussions and findings.
Reflections.
The contribution, validity, implications and future research.
Reflections.
2 Literature Review
In this section, we look at the main concepts that are of relevance to the area of concern of this paper. It is for this reason that the literature review of this paper will look at defining those concepts and providing an understanding of their context and how they are viewed within the framework of our study. In other words, this section aims to present what previous researches have had to say about these relevant concepts.
2.1 Innovation Initiatives and Customer Integration in Global Companies
Innovation and its importance to the wellbeing of organizations cannot be underestimated. This is especially the case in recent times with the evolvement of clients and their demands. Füller (2006) argues that consumers are demanding even more products and services and in larger varieties. In order to satisfy the demands of these consumers, firms have started involving them more in the innovation process.
Homburg, Wieseke & Bornemann (2009) argue that there is more orientation towards customers from modern firms in an effort to keep up with the new trends.
The switch in attitudes towards customers from mere users to active contributors in the innovative process has been a hot topic among many researchers. The roles used to be defined in a way such as that customers can be individuals or firms expecting to utilize a design, product or a service whereas the producers are the ones expecting to benefit from selling said design, product or service (Baldwin and von Hippel, 2009, p.3). These attitudes are however shifting to a new direction. The expectation is that consumers nowadays are recognized for their ability to contribute to the improvement of quality of services through their valuable input during the production operations (Bitner, Faranda, Hubbert, & Zeithaml, 1997). This new role and process is what is referred to as customer integration which is defined as incorporating resources that are available from customers and using them in the process of companies (Moeller 2008, p. 198). In other words, customers are actively integrated in the process of innovation and production of services.
Chesbrough (2003) claims that an increasing number of companies are favoring a collaborating process using the help of outside stakeholders such as customers as opposed to the outdated paradigm of internal and closed research. Despite the seeming agreement of the benefit of customer integration, there is however an issue concerning the extent to which it should be applied. During the process of new product
development, companies may work with a lead-user method in the early stages and product individualization in the latter stages in an effort to obtain better results (Franke, von Hippel, & Schreier, 2006; Lüthje & Herstatt, 2004; Olson & Bakke, 2001). However, the same cannot be said about the core development phases of the products. Cassiman and Veugelers (2006) argue for example that many companies are still hesitant about using external knowledge such as one coming from the customers and uncertain about using the process of customer integration more actively in all of the developing phases.
In addition to innovation that is based on the relationship with customers and users, there are other types of innovation that have emerged such as Open Innovation, Design-Driven Innovation (DDI) and Employee-Driven Innovation (EDI) (Teglborg et al., 2012). An integral part of the innovative process at Lead Generation and Add- on Sales initiatives concerns the frontline employees. Kesting and Ulhøi (2010, p. 71) define this type as based on acknowledging that it is the employees who often acquire a deep, exclusive and highly context dependent knowledge which cannot be said to happen with the same frequency with the managers.
In order to achieve successful results using Employee-Driven Innovation, it is necessary to use and share knowledge in an efficient manner among the different units of the company. Gressgård, Amundsen, Aasen & Hansen (2014) argue that successful EDI requires that the generation and management of internal knowledge in the company need to function on a high level in addition to the acquirement of the relevant knowledge from external resources and dissemination of this knowledge throughout the organization. It is this necessity to manage, generate and acquire knowledge in an efficient way that makes ICT systems and services extremely beneficial when it comes to supporting Employee-Driven Innovation approaches (Gressgård et al., 2014). The facilitation of the knowledge processes to help innovation initiatives is the main role for the ICTs used at Lead Generation and Add- on Sales processes.
The ICT systems referred to in this context include a variety of technologies that support and help the smooth functioning of the processes of knowledge (Gressgård, 2011). However, those tools can result in a number of implications, which can range from structural to behavioral ones (Gressgård, 2011). According to Gressgård (2011), the structural implications of these ICT systems can be the improvement of both internal and external knowledge as well as the dissemination of knowledge among the different members of the organization. The behavioral implications on the other hand concern the influence that ICT systems can have on the human interaction between employees and customers. This influence can either facilitate or impede the development of knowledge or the sharing of understanding between the members of the organization.
The impact and implications of ICT systems on the innovative initiatives can depend on factors that can be individual or organizational (Thomke, 2006; Zack, 1999). The structure of the organization as well as the personality and mentality of the employees can be a factor in those implications. An example of this would be the role of the people linking internal networks to external sources of information in an organization;
this role can be significantly lessened as a direct consequence for the emergence of ICT systems and Internet Technologies in general (Assimakopoulos and Yan, 2006).
Durst et al. (2015) described ‘service’ innovation as the type of innovation taking place in various contexts of services, including the introduction of new services or incremental improvements of existing services. This description fits exactly in the context of Lead Generation and Add-on sales; Lead Generation is about generating leads and new business opportunities (introduction of new services) while Add-on sales is about selling additional products or services for customers (incremental improvements).
Grönroos (2015) claims that service innovation is a vague term. Durst et al. (2013) complements this argument pointing out one example of a manufacturing firm selling a service agreement as a supplement to its tangible products, whereas a service firm may introduce new service products. Both are innovative in the context of services (p.66). As a result service innovation can involve simultaneously innovation in service industries or new services independent from its level of novelty.
In order to better define the concept of service innovation, Hertog (2000, pp.494-498) presented a model of service innovation:
(1) Service Concept, which is a new service in the market,
(2) Client Interface, which refers to new ways as to which clients are involved in the service production,
(3) Service Delivery System, which encompasses new ways the actual services are delivered to the customers,
(4) Technology, which has to make sure that services can be provided efficiently.
The model presented by Hertog (2000) had four dimensions; consequently there are different forms of innovation processes appearing in diverse places like for example, distinct departments of the same company.
Lusch et al (2015, p.157) stated that the literature on service innovation in the information systems field has followed a different path largely because of its primary
focus on software as the central artifact. Lyttinen and Rose (2003) extended the work of Swanson where the focus was not on service innovation to a typology that identified four types of ICT service innovations (administrative process, technological process, technological service, and technological integration innovations). They also pointed out that some studies narrowly focus on ICT applications and process innovations but ignored the broader perspective of service.
When it comes to the understanding of IT role regarding service innovation, Smedlund (2012) explains that the customer is the beneficiary and is an active participant of the innovation process, emphasizing the critical role of IT in developing diverse patterns across the traditional producer-consumer divide.
As defined by Luo Carlo et al. (2012, p.869), service innovation includes the use and adoption of knowledge with the aim to create new functionality for clients. They go on to make the point that this can be either internal or external, which can be said about other types of innovation. Lyytinen and Rose (2003) point out application design, concepts and frameworks, training seminars, upstream vendors among others as examples of what constitute externally sourced types of service innovation. On the other hand, internal service innovation is mainly concerned about innovation types that are the result of experimentation, trials and learning by doing (Messerschmitt and Szyperski, 2003; Swanson, 1994).
Service innovation can be also the sum of the integration between computing, design, economics business processes, the psychology of the users and their experiences, the structure of the organization with an understanding of what can be achieved through the use of the already existing technologies in the organization (Messerschmitt and Szyperski, 2003). It is this marriage of the base technologies at a company with the competences and awareness accumulated from knowing and understanding the customer, techniques and the business side of the operations that is necessary when embarking on the process of service innovation.
The types of innovation and the integration of customers are concepts that we felt to be very relevant to the area of concern of this study. Lead-Generation and Add-on Sales is an initiative that aims to innovate and open new platforms for the company, which makes looking for the literature concerning innovation initiative a necessary step before designing the questions for our interviews. Customers and their integration in different phases of the production is a useful strategy for successful innovation and at Lead-Generation and Add-on Sales, we will attempt to look how customers are used throughout the process and try to identify how it contributes to the operation.
2.2 IT as an Innovation Enabler
IT innovation occurs in the organizational application of digital computer and communication technologies (Swanson 1994) being able to result in an expansion of the current firms capabilities (affecting directly data transmission and storage).
Lyytinen and Rose (2003) distinguished three types of IT innovation that were illustrated by Carlo, Lyytinen and Rose (2010) in Table 2.
Table 2 Examples of IT innovation (adapted from Carlo, Lyytinen and Rose, 2010)
IT Innovation Sets Description Examples IT Base (type 1) Base technology
innovation Development
capability innovation Service capability innovation
DBMS, client/server computing;
Software patterns; software component brokering, quality assurance
Point and click GUI, multimedia, QoS System
Development (type 2)
Administrative process innovation
Technological process innovation
Maintenance departmentalization, CIO, open source development Systems programming, data administration, prototyping System and
services (type 3)
Administrative process innovation
Technological process innovation
Technological product innovation
Technological
integration innovation
Accounting systems, EIS MRP, computer-integrated manufacturing
Remote customer order and follow-on customer service systems
Inter-organizational information systems, EDI
The first type of innovation presented in Table 2 is the IT base innovation that changes in IT platforms (technical core of firms used to develop applications and support their development (Carlo, Lyytinen and Rose, 2010). The second type involves changes in processes and covers changes in development of tools, methods, teams and their structure (this type of IT innovation covers both technological and administrative process innovations. (Lyytinen and Rose, 2003). The third type
includes new delivering computing capabilities (i.e. technical and business solutions to clients and users).
2.3 Knowledge Sharing
Knowledge and the ability to handle it in a successful and efficient way is an essential part of any firm that aims to remain competitive and innovative (Gupta et al., 2000).
Arrow (1999, p.19) stresses that for firms as well as countries, it is not enough that they are receptacle and possessing of multiple sources for new ideas, which is mandatory, but also make sure that those ideas are used and diffused in the most efficient way. The diffusion of new ideas and the way they are used is what researchers refer to as knowledge sharing.
An example of this interchangeability comes in the work of Riege who points out in one article more than thirty obstacles for what he refers to as knowledge sharing (2005), only to use the term knowledge transfer in a more recent article that suggested ways and methods to solve and overcome the obstacles from the previous article (Riege, 2007). Knowledge sharing or knowledge transfer can refer to a part of the processes of knowledge management if we consider the definition of knowledge management as the panoply of procedures and techniques that an organization uses to get the most out of its tacit and codified know-how (Teece, 2000) or that knowledge management refers to the overall process of creating, retaining and sharing knowledge by an organization (Argote, 1999; Huber 1991). According to those two definitions, knowledge sharing is an important part of the process of managing knowledge by an organization.
It is not as straightforward however to identify what constitutes efficient knowledge sharing. According to Cummings (2003), a company needs the ideas available to it concerning innovation and development to be made locally applicable and therefore, successful knowledge sharing would be more achievable through extended learning processes as opposed to simple communication processes. He goes on to identify five variables that have an effect on the success of the implementation of knowledge sharing processes:
· Relationship between the source and the recipient: The reliability of the source of knowledge according to the recipient.
· Form and location of knowledge: The way the content of the knowledge is presented to the recipient and where can the recipient have access to that knowledge.
· Recipient’s learning predisposition: The potential inclination of the recipient to interpret new information in a specific way.
· Source’s knowledge sharing capability: The amount of knowledge that can be processed and shared.
· Environment in which knowledge sharing occurs: The environment can influence the success of knowledge sharing in terms of providing the right tools, technical and psychological, for the recipient to best learn the knowledge that is being transferred.
Knowledge sharing can be a complicated process that can fail for a number of reasons. It is highly dependent on a lot of parties that contribute to its success or failure (Frost 2014). Whereas, it is established that knowledge in all its forms is necessary for the innovative process for any firm, it is important that the organization successfully shares its knowledge through the right processes for the organizational learning to occur (Cummings, 2003). This directly impacts the innovative process, as without efficient knowledge transfer, there are fewer chances of successful innovations. Nelson (1993) makes the point that successful knowledge transfer leads to firms mastering practice product designs, the processes of manufacturing as well as new organizational designs. All of these potential results are highly influential when it comes to an organization and its innovation efforts.
The role of personnel is a vital part when it comes to knowledge sharing. Lee (2001, p.323) defined knowledge sharing as activities involving transferring or disseminating knowledge from one person, group or organization to another. Chien et al. (2013) mentioned that when employees are more involved in knowledge sharing, they internalize a greater amount of knowledge and this directly benefits innovative behavior.
Woodman et al. (1993) made interesting points when they argue that innovative behavior extends from individual to a group and then to an organization. Chien et al (2013) added that members of staff in an organizational could create and share knowledge by valuing organizational coherence.
Woodman et al. (1993) made interesting points when they argue that innovative behavior extends from individual to a group and then to an organization. Chien et al (2013) added that members of staff in an organizational could create and share knowledge by valuing organizational coherence.
Fu et al. (2007) explained that in one organizational climate, employees feel encouraged to create and share knowledge. Specifically in the operations of an organizational system, employee’s innovative behavior can be affected by the atmosphere regarding sharing at an organizational or team level, which results in variations in organizational atmosphere among departments.
Sambamurthy et al (2005) explained that information technology can play an important role in leveraging knowledge resources in organizations. Alavi and Leidner
(2001) added that organizations can also implement information systems that include features such as intranets and document repository (Hansen and Haas, 2001) that are specifically designed to support various aspects of knowledge activities in organizations. These ICT systems have potential to encourage certain communication and collaboration practices (Sue Young et al., 2010).
ICT is one of the ways that knowledge management and sharing can be enhanced in organizations (Shahid, Alamgir, 2011). The perception in modern organizations is that ICT can be significantly influential when it comes to sharing knowledge in the sense that it can decrease temporal and spatial barriers between knowledge workers while at the same time increase the access for information about knowledge (Hendriks 1999, pp. 91). According to Hendriks (1999), ICT can either support knowledge sharing or take over the process entirely. The idea is that if used in the right way, ICT systems can be of great benefit to the process of sharing knowledge. If properly used and applied, ICT can make the capabilities of knowledge sharing more efficient and accelerated in terms of both time and space dimensions (Mohamed, Stankosky and Murray, 2006, pp. 104).
However, it is misleading to presume that ICT can solve all of knowledge sharing issues in an organization. Shahid and Alamgir (2011) argue that whereas it is exciting to look at the potential or how far can ICT contribute in helping knowledge sharing, it does not mean that ICT can solve all the problems related to knowledge and its management in an organization. Reimus (1997) goes further to make the point that a common mistake that organizations keep making is the misinformed belief that investing in ICT alone can create solutions for all of their knowledge sharing problems and barriers which often ends up in disappointments. Whereas ICT boast a large number of advantages, it still has a lot of shortcomings as well. This is the case when it comes to issues like tacit knowledge. Mohamed, Stankosky and Murray (2006) argue that ICT investments are still not enough to counter its shortcomings compared to the human brain in areas such as retrieving tacit knowledge, double-loop learning, cognitive abilities, etc.
A possible reason for the belief that ICT alone can be the answer to knowledge sharing problems is the benefits and convenience that its implementation provides.
Shahid and Alamgir (2011) make the point that ICT can be inciting in that sense to organizations in terms of its ease and enhancement of the different operations involved, the reduction of costs as well as time, decision intelligence and other significantly helpful contributions. Despite its limitations, the role of ICT and technologies in general when it comes to knowledge sharing is continuously rising and playing a big role in organizations (Shahid and Alamgir, 2011). It is important however to not mistake the contribution and help that ICT can provide for the ultimate and only answer to all knowledge sharing obstacles and barriers. Instead of looking at ICT as the one solution that can solve all knowledge transfer problems, it should be
looked at more within the lines of a facilitator (Hendriks, 1999; Mohamed, Stankosky and Murray, 2006).
Knowledge sharing is a necessary part in the process of innovation, which is why it has been selected as one of the concepts for this review. We will be using the literature concerning knowledge sharing to guide us when designing the questions that we want the participants of our interviews to shed lights on. This will be done in the sense that identifying how knowledge sharing works and its potential pitfalls as well as helpers will help direct us in terms of what to look throughout the process of collecting our data. We will then return to the literature in our analysis and attempt to detect in patterns or connections.
2.4 Motivation: Intrinsic and extrinsic
When looking at the obstacles standing in the way of innovation, the concept of motivation can be seen as an important factor that goes a long way in influencing employees’ performance. Amar (2004, p.90) refers to motivation as the ensemble of forces influential to the behavior of a person. Whereas this definition gives an insight to the meaning of this concept, it can still be vague and incomplete. Wiley (1997, p.263) points out that motivation is not a fixed trait. She goes on to define it as a
“dynamic internal state” that comes from the impact of personal and situational factors which means that motivation is susceptible to change depending on changes in personal, social and other factors. From those two definitions, we can consider motivation as a state of mind that determines one’s willingness to achieve certain tasks. We can also understand that motivation is highly reliant on inside and outside forces, which makes it a continuously changing mindset.
The interest in this field has started as early as the 1930s’ when researchers have attempted to understand that most basic of questions; what motivates employees and what demotivates them. In the early phases of the studies about motivation in organizations, Kovach (1987) explains that organizations have largely done a good job in satisfying the basic needs of their employees in terms of financial rewards but failed to match that with satisfying their workers’ ego and self-fulfillment needs. The research that has been conducted from the 1980s and forward has shown a shift in this trend. Wiley (1997) claims that downsizing as well as competition during that period have led to wages and job security becoming the main priorities for workers in the list of factors that motivate them instead of the aforementioned ego and self-fulfillment needs.
As Wiley (1997) alludes to, motivation is not strictly the responsibility of the personnel. The organization and its policies play a significant part in terms of creating an environment that encourages employees and provide them with a strong sense of
well-being. This does not necessarily have to come in the form of incentives as Etzioni (1971) points to, but can be through adopting strategies that show how much the organization value its employees.
This study took into account the two main motivation distinctions pointed by Deci &
Ryan (1985): intrinsic and extrinsic motivation. Intrinsic motivation refers to motivation where the individual gets her/his reward from the desire to perform a task for its own sake whereas extrinsic motivation refers to contingent reward as in promised reward based on performance quality (Bénabou & Triole, 2003). Vallerand (1997, p.271) also points out that intrinsic motivation deals with behavior performed for itself in order to experience pleasure and satisfaction inherent in the activity while extrinsic motivation is related to achieve separable goals.
These two types of motivation were considered for this study because Telco stipulates two types of targets for frontline employees: individual targets and team targets that are mainly connected to extrinsic motivation given its reward and performance nature.
Intrinsic motivation also plays a key role in Lead Generation and Add-on sales processes because frontline employees need to be continually on alert to realize new business opportunities and to achieve this they need to enjoy performing related tasks.
Etzioni (1971) makes the point that there is a possibility that workers feel alienated and dehumanized when they sense that their behavior is controlled via incentives, as is the case in extrinsic motivation. Other researchers argue that contingent rewarding systems can negatively impact employees’ intrinsic motivation. The benefits of pay- for-performance incentive systems can be significantly decreased when the process undermines the intrinsic motivation of the worker Baron and Kreps (1999, p. 99). This was evident in a case of IQ testing for example. Gneezy and Rustichini (2000) have observed that when offered financial incentive, the performance of the subjects has decreased in a significant way.
Deci and Ryan (1985) criticized the use of performance-contingent rewards in work setting, claiming that extrinsic motivation has its advantages as it can encourage employees and push them to a higher level of performances. However, it is important to remember that a delicate balance needs to be maintained to not undermine the workers’ intrinsic motivation.
A significant contributor to motivation and how it affects the levels of innovation in a company can be the tolerance of failure and how prepared the organization is to wait for success. Holmström (1989) argues that incentive schemes that motivate innovation must show to its employees a tolerance for failure. Holmström (1989) goes on to argue that the measures for performance for innovation related activities can be noisy and therefore, in order to motivate employees, the idea should be to compensate based less on performances and immediate success. Other researchers have argued for the benefits of tolerating failure for the sake of long term success. In an experiment,
reward and compensation schemes that accepts early failure rewards long-term success has been shown to significantly encourage innovation (Ederer and Manso, 2010).
The argument according to a number of researchers is that failure tolerance can encourage creativity as it offers the workers more freedom for ideas in the safe knowledge that it won’t affect them in a negative way in case those ideas fail.
Azoulay, Graff Zivin, and Manso (2010) claim that policies that are based on tolerating early failures and that set a long horizon for the evaluation of results can be a direct contributor to motivating creativity. This point is emphasized by Tian and Wang (2010) who find that venture capitalists backed firms that tolerate failure are significantly more innovative. A possible reason for this can be the fear of consequences. Seru (2010) argues that there is evidence that high level managers can be hesitant when it comes to investing in novel, untested projects for fear of having their resources relocated by their bosses.
2.5 Relevance of literature concepts
The selection of these concepts in this Literature Review section has been conducted with the aim to highlight the terms that are relevant to this research in terms of how they play a significant role in our attempt to answer the research questions. Innovation initiative and the degree of success of customer integration are a vital part in helping or hindering the process of innovation at organizations like Telco. It is therefore necessary to understand how this integration works and where it can potentially fail when evaluating how Telco has performed this procedure.
Knowledge sharing is another concept that plays a big role in every organization. The efficiency of which it is conducted goes a long way in deciding the success of different operations within a company. Considering the fact that Lead Generation and Add-on Sales is an operation that relies on gathering different types of knowledge from customers and managers, it is important to look at this concept in a detailed manner and how it functions in big organizations. We intend to use that when selecting the questions for our interviewees in an attempt to evaluate how different types of knowledge are shared within Telco between the different departments. It is also important to understand where IT innovation stands when it comes to innovative initiatives such as Lead Generation and Add-on sales, for this reason we looked the previous research regarding the types of IT innovation to further discuss its role in our research.
We have also agreed that motivation is most of the time a major player whenever personnel and employees are involved. It is possible to have efficient systems and structure but without willing and motivated employees, the end result might still not
be satisfactory. This is why we have decided that it is important to try and measure how motivated the employees at Telco were and what were their thoughts on this aspect of their work in order to judge whether motivation plays a negative or a positive role in the processes of Lead Generation and Add-on Sales.
3 Research Methodology
The research methodology section is reserved to describe the research setting, research paradigm and methods used in this study. We begin by presenting the research settings then we identify the research paradigm and move on to introduce the methods that we have utilized in terms of the way we have collected, interpreted and analyzed the data. Then we present the validity and reliability of this research in order to clarify the process we have followed.
3.1 Research Setting
Telco supplies telecommunications equipment, communication technology and services also offering software and infrastructure to telecom operators (Telco 2013, p.2). It is a global company that supports more than 500 operator customers and increasing number of non-operator customers, it has business in countries at Europe, Asia, Latin America and Oceania (Telco 2014, p.1). Given the size of the company, this study focused on two Telco regions (RMED and RMEA), specifically in 3 countries (Spain, Turkey and Iran). Being a major player in an ever-changing and competitive telecommunications industry requires a persistent necessity for innovative products and services. Naturally, the company is challenged to offer innovative services that suits customers, for this reason, innovation plays a key role in developing new business ideas. Telco’s main objective when launching Lead Generation and Add-on sales was to take advantage of frontline employees’ knowledge about customers to develop new business ideas.
The participants of this study worked in the aforementioned countries that belong to RMED and RMEA (see Appendix A that present the country and the region of each participant). We chose participants that work in strategic positions at Telco that are currently dealing with Lead Generation and Add-on sales processes and we also chose regions that had conflicting results regarding Lead Generation and Add-on sales in order to contrast and better understand the issues that emerge in innovative initiatives.
For example, if we had chosen regions that only have the best results so far when it comes to Lead Generation and Add-on sales, we would probably not detect factors that could appear in regions that have poorer results. Consequently, we chose to take one region with excellent Lead Generation and Add-on sales scores, other with reasonable results and other with poor results. The Lead Generation and Add-on sales targets are annually evaluated according to the targets (individual and in teams) that each service employee has so it is possible to have results about the performances of each Telco region.
3.2 Interpretive Research
Orlikowski and Baroudi (1991) discussed three paradigms: positivist, interpretive and critical. They also argued that when researchers intend to investigate the phenomena from the perceptive of people connected to these phenomena, the social context and interactions affect the understanding of the ‘reality’. In the case of the phenomena investigated in this study, we can point out that the participants were related to the phenomena studied and might have diverse points of view regarding it. This subjective meaning of the world we live in is a characteristic of interpretive research.
Considering these views, this research will be using the framework of an interpretive perspective as we have considered it the most suitable way to obtain our objectives.
Walsham (1995) defines interpretive research as one that aims to produce an understanding of the phenomena from a social context whereby the phenomena has an impact and is impacted by the social context. One of the most distinguishable things about interpretive research is its assumptions that people will always be subjective when recounting their experiences. Orlikowski and Baroudi (1991) point out that interpretive studies take it for granted that when people interact with their surrounding environment, they automatically associate their own subjective and intersubjective meanings to it which is why interpretive researchers work to analyze the phenomena through understanding the way the participant relates to it.
Another way to look at it is Walsham’s (1993) remark that the starting point of interpretive approach is the assumption that human actors including researchers themselves construct our idea of reality. He goes on to point out how this is different to positivist method of research in the sense that unlike it, interpretive research does not recognize the existence of an objective reality. This will be always a subjective account strictly linked to participants’ own experiences and environment. Berger and Luckman (1967) established social constructionism and considered the relevance of people building their own organizational truth based on their own experiences. In other words, people’s experiences and understandings are constructed depending on the contact and where they are located.
We aim to collect the views of the people concerned and use interpretive research to understand and decipher the participant’s meanings of the phenomena in focus. The founding idea of interpretive research is that we gain knowledge and then filter it through the constructions of language, consciousness and shared meaning (Klein &
Myers (1999). We believe that the best ways to understand the situation at Telco and its Lead Generation and Add-on Sales processes is to analyze the views of the participants and use interpretive methods to filter the data we collect to make coherent meaning out of it.
This study uses qualitative research methods and techniques for inquiry. This has been chosen because the phenomena in focus have peculiar characteristics such as taking place in the natural setting. In addition to that, as researchers we intend to understand the phenomena from the participants’ point of views and its particular social and institutional context (Myers, 1997). We have considered it of great importance that this study does not become a ‘tightly prefigured’ type of research because our objective was to be receptive to several aspects that could possibly emerge during the implementation of this research project, which is another qualitative research characteristic (Creswell, 2009). Taking into account that qualitative research methods particularly are vastly useful as the focus of information systems shifts from technological to managerial and organizational issues (Myers, 1997).
3.3 Data Collection
There are a number of views on how to go on about selecting the research method but the majority of them insist on the importance of basing it on the nature of the research problem considering that it is the most influential aspect of the research. Trauth (2001) argues that what the researcher wants to learn should determine how the researcher goes on about learning it. In other words, the method of research is a guide to explore what the researcher is going to do.
According to Creswell (2008), one of the methods aimed at collecting data for qualitative research is semi-structured interviews. Interviews are useful to understand the story and meaning behind the participant’s experience where the interviewer can also seek more in-depth information about the specific topic (McNamara, 1999).
Walsham (2004, p.323) pointed out that other forms of field data in an interpretive study should supplement interviews, and these may include other publications on the sectorial context of the organization studied, internal documents that included strategies plans and surveys. This research study used internal sources of documents such as annual reports that are available online. These documents are public and intend to give shareholders information about the company’s activities and financial performance. In the last two years, Telco’s annual reports give general information about the company’s current strategy and it was possible to verify the importance that innovation has in the company strategy.
We also had access to internal sources of document consisted of questionnaires with 390 Telco’s employees as respondents from all Telco’s regions that answered direct questions concerning Lead Generation and Add-on sales processes. We refer to these questionaries’ as secondary data since we did not collect this data.
Tull and Albaum (1993) define primary data as one collected by the researchers for the specific purposes of the study whereas secondary data is empirical material that is already available from previous work. In that sense our primary data is in the form of
the data collected from interviews with Telco employees from the two regions RMED and RMEA.
We are aware of the benefits of using various methods as pointed by Walsham (2004).
However, a combination between primary data and secondary data for this research produced a rich understanding of the phenomena, enough to allow us to develop this study and reach its purpose, which is ultimately answer the research questions.
3.4 Interviews
The interviews were conducted between May 20th and June 21st, 2015. The interviews were conducted via Telco Conference Call system, which is a system that can record the interviews. Despite possessing this feature, we decided to have an alternative source of recoding. The alternative source of recording consisted of an USB sound connected to iPhone with QuickTime player. The decision of having another recording alternative was based on the fact that Telco Conference Call system takes days to send the recording files by email and another recording method would allow us to start the transcriptions after the end of the interview, using the notes and observations right after the events.
An interview guide with the following topics was used see Appendix C. We started by looking at the objectives of this research. Having established that we want to understand the obstacles in terms of Lead Generation and Add-on Sales processes, we agreed that would be important to understand participant’s general and particular views about the process. The questions had to therefore revolve around getting the participants to describe the processes, its tools, advantages and drawbacks of Lead Generation and Add-on Sales.
The interviews were recorded by the Telco Conference System only after taking the permission of the interviewees and lasted between 40 and 60 minutes. In addition to that, we have conducted verbatim transcriptions. After finishing the interviewing process and the transcription work, what we have ended up with is a large amount of data. This data was still made of unorganized views and information, which is why the next step was to code the data in order to give it some cohesiveness.
3.4.1 Participants
The participants work in the Mediterranean and Middle East regions at Telco. It is important to point out that we chose the participants but did not contact them directly for accessibility reasons (our contacts at Telco had access to potential participants through an internal contact information database allowing them to contact respondents via email).
