Innovation culture in business to business (B2B) consultancies – key factors

Abstract

Innovation has become a necessity for the survival of organizations. Recent academic and practitioner publications have focused on the importance of the culture of innovation and have identified a number of cultural practices (referred to as ‘factors’ in this thesis) that enable organizations to be innovative. To understand the factors of innovation culture further, a systematic literature review (SLR) was undertaken. The SLR identified 27 factors of innovation culture, but showed that there is conflicting evidence on which of these factors is most important for innovation. Further, the SLR showed there is only sparse evidence on the reasons why the 27 factors are important. From an academic research standpoint, there is thus a lack of clarity around the phenomenon of innovation culture. From a practitioner standpoint, managers do not have clarity on which aspects to focus, when trying to create a culture of innovation. These gaps in the extant literature led to two research questions (RQs): RQ1 – “What are the most important factors of innovation culture as perceived by managers?”; RQ2 – “Why are the factors (from RQ1) of culture considered to be important?” To investigate these questions, the PSF (Professional Services Firm) sector was chosen because: (a) such firms are constantly under pressure to differentiate themselves by offering innovative solutions to clients, (b) PSFs face a unique set of challenges to overcome in order to innovate, and (c) there are practically no studies on innovation culture in the PSF industry, providing an opportunity to make a contribution to knowledge. Three in-depth exploratory case studies were conducted using a complex research design employing multiple data sources (interviews, focus groups, documents, and observations). Although each individual case study identified a set of factors most relevant to its business context, the cross-case analysis identified 12 key factors of innovation culture relevant to all three cases. The findings from both individual cases and the cross-case analysis form the contribution of this thesis. The main contribution of this thesis to theory is that it identified 12 key factors of innovation culture and so clarifies the phenomenon. Compared to the literature, the study added two new key factors and also provided more empirical evidence for others that had previously been considered as less important. The thesis also highlighted that the industry (PSF)/sub-industry (e.g. IT, management, engineering consultancies) and organizational context determine what factors are relevant for innovation culture. From a practitioner standpoint, this thesis examined each of the 12 key factors and generated insights into how they contribute to addressing the challenges that inhibit the PSFs from innovating. These insights will be helpful to managers at a practical level to be able to create a culture of innovation.