In Search of Innovation: Exploring the Dynamics of Innovation

HMS Industrial Networks AB has been recognized as
one of the most innovative companies in the industrial
communication industry worldwide. The creation of their Anybus
innovation during the 1990s contributed considerably to the
company’s success. From inception, HMS’ employees were
innovating for the purpose of creating new business (the creation
phase). After the Anybus innovation, they began the process of
internationalization (the commercialization phase), which in turn led
them to concentrate on cost reduction, product quality, delivery
precision, operational efficiency, and increasing growth (the growth
phase). As a result of this transformation, performing new radical
innovations have become more complicated. The purpose of our research was to explore the dynamics of
innovation at HMS from the aspect of key actors, activities, and
events, over the three phases, in order to understand what led to the
creation of their Anybus innovation, and why it has become
increasingly challenging for HMS to create new radical innovations
for the future. Our research methodology was based on a longitudinal,
retrospective study from the inception of HMS in 1988 to 2014, a
single case study inspired by the grounded theory approach. We
conducted 47 interviews and collected 1 024 historical documents for
our research. Our analysis has revealed that HMS’ success in creating the
Anybus, and developing a successful business around the innovation,
was based on three main capabilities – cultivating customer relations
on different managerial and organizational levels, inspiring business
relations, and balancing complementary human assets for the purpose
of business creation. The success of HMS has turned the management’s attention away
from past activities of key actors, of their behavior, and how they
influenced and stimulated the creation of radical innovations.
Nowadays, they are rhetorically focusing on creativity and
innovation. All the while, their real actions put emphasis on growth,
cost reduction, product quality, delivery precision, operational
efficiency, and moneymaking. In the process of becoming an
international company, HMS gradually refocused. In so doing they
became profitable and successful, but they also forgot what made
them innovative in the first place. Fortunately, HMS’ management
has come to realize that this is the case and they are now in search of
recapturing innovation once again. Our analysis indicates that HMS’ management is facing several
barriers to innovation related path dependency and other lock-in
phenomena. HMS’ management has been captured, trapped in their
mindset and actions, by the success of the past. But now their future has to be secured, and they have come to realize that moneymaking is
not everything. In recent years, HMS’ management have begun to
search for innovation once more, in order to recapture their past
capabilities for creating radical innovations. In order to unlock their
managerial perceptions of customer needs and their counter-innovation
driven activities and events, to utilize the full potential of
their employees and capture the innovation opportunity for the future.

Authors:

• Michal Lysek
• Mike Danilovic
• Jasmine Lihua Liu

Keywords:

• Barriers to innovation
• dynamics of innovation
• in search of excellence and innovation
• radical innovation.

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