Innovation as a new organizational function: evidence and characterization from large industrial companies in Brazil

Bagno, Raoni Barros; Salerno, Mario Sergio; Dias, Ana Valeria Carneiro

doi:10.1590/0103-6513.207316

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Research Article • Prod. 27 • 2017 • https://doi.org/10.1590/0103-6513.207316 copy

Innovation as a new organizational function: evidence and characterization from large industrial companies in Brazil

Authorship SCIMAGO INSTITUTIONS RANKINGS

Abstract

Although innovation has acquired increasing importance for companies, achieving regular innovation capability imposes huge challenges for managers. Recent studies analyzed the experience of some large companies in setting up a dedicated team with the specific mission of conducting innovation management activities. Based on this analysis, innovation has been pointed to as a distinct and emerging organizational function. In this context, the central question posed in this study arises: what are the characteristics of such a function? Case studies were conducted in fifteen large industrial companies in Brazil that, except for two control cases, have established dedicated teams for innovation management activities. The analysis revealed key characteristics of the Innovation Function (IF), divided into six perspectives: general purpose, origins, legitimacy and guidance, people, assignments and future perspectives. The characterization of IF adds new elements to existing knowledge about how companies can build and maintain regular and systemic innovation capability.

Keywords
Innovation management; Organizational functions; Industrial companies; Systematic innovation

Comps.	Context
Chem-1 Brazil	Chem-1 results from many alliances and acquisitions. It starts as a fast follower of commoditized products, but sectoral regulation forced investments in R&D. Chem-1 is a base industry with rigid continuous production processes and there are innovation opportunities in new applications of its products. Innovation management is conducted in a formalized department with clear objectives, budget and stable links with the rest of the organization.
Chem-2 Overseas	Company globally recognized for its innovation. Chem-2 dominates technologies that can be combined in different ways, opening opportunities to innovate. Innovation in chem-2 has been consolidated over many decades and there is no centralized team to manage it.
Chem-3 Brazil	A spin-off from a big industrial group, based on commodities and a strongly regulated market. Innovation management in the previous company was well institutionalized. Innovation team responds to the technological center, with the central mission of bringing regulatory, normative, knowledge management, IP and prospection issues to the debate.
Chem-4 Brazil	Brazilian company, very recognized by a distinct market/distribution model, based on people networks. Innovation is a common value and processes are well consolidated. The vice-presidency of innovation takes several specific responsibilities with regard to culture, competences, academic programs, open innovation efforts, etc.
Elect-1 Overseas	A global industrial conglomerate, with many business units (BUs), each one based on specific technology and market. Innovation efforts in BUs are mainly incremental. Radical innovation is conducted at the corporate level by the innovation board, that concatenates external partnerships with the demands/interests of the BUs.
Elect-2 Brazil	A group with some BUs that supply electric-based systems for the operation of industrial plants and associated services. Customized products were a good strategy to conquer market share, but currently rethinking volume-variety strategy is necessary to establish as a large-sized organization. An innovation program conducts R&D activities, captures funding and seeks out academic partnerships.
Elect-3 Overseas	This company operates on B2C market with strong brands of products. Technology and design play important roles in firm's innovation. Different configurations of Innovation teams marked the last decade, but, finally, a “stable” team had a proper space inside the New Product and Innovation Development Department, mainly after a significant market grew in the late 2000's.
Elect-4 Brazil	Brazilian company with global recognition for quality and innovation, that supplies subsystems of Elect-3's products. Captive market is responsible for much of the revenues, but there are notably opportunities for innovation in other markets. The long-term partnership with a local university marks the innovation path. Innovation activities were very fragmented before the innovation team was formally created in 2010.
Metal-1 Brazil	After decades of technological learning from foreign sources, Metal-1 became monopolist in many markets, also favored by the global economic context in 2000's. A well-structured technology center was in place for many years, and this scenario funded the creation of a big innovation department, assigned to manage the technological center and also other transverse initiatives of innovation culture, communication, knowledge management, etc. In spite of this, a period of strong contentions directly affected the organizational structure associated with innovation. Metal-1 is an example of strong retrogression of innovation efforts, despite a previous phase of high formalization and power of innovation structures.
Min-1 Brazil	A rich and giant commodity company with operations spread over several sites. Although this facilitates access to resources and government support, the organizational structure is notably heavy and imposes special challenges for innovation management. Innovation is focused on processes and distribution operations.
Telec-1 Brazil	Telec-1 competes in a very dynamic market in which stability represents a risk. Innovation is focused on new products for B2B context in a highly regulated environment, which reduces the importance of marketing competences. Public procurement represents good opportunities to propel the business. An innovation program was created to make the innovation process more regular and fluent.
Transp-1 Brazil	A Brazilian company that has a well-consolidated technological competence. The business is centered on a highly complex product for the B2B market. The so called innovation team born more recently and has focused on innovation efforts such as culture, management tools, new business development.
Transp-2 Overseas	Transp-2 represents an industrial sector dominated by subsidiaries of global companies, but very prominent in Brazil of 2000’s, after an important period of consolidation of capabilities in new product development (NPD). Success in this industry had been marked by the practices of operational excellence, which turns into a barrier to introduce a culture of innovation. The technological development is still very dependent on knowledge of the foreign units.
Transp-3 Overseas	Transp-3 was responsible for one of the main Transp-2's product subsystems and belonged to the same industrial group. An innovation program was set up in 2008, but, at the time of data collection for this study, was on the verge of establishing a dedicated department.
Transp-4 Overseas	Transp-4 competes with Transp-2, but its Brazilian subsidiary is significantly younger. Recent sectoral regulations (which stimulated the siting of local R&D and production activities, partnerships with universities, etc.) was a strong lever for innovation efforts. Transp-4 was on the verge of the creation of an innovation program at the time of data collection. Spread initiatives marked the innovation efforts in previous periods.

Company	Person Interviewed	Innovation team's core mission
Chem-1	Corporate Innovation Director	- Standardization of innovation practices throughout the organization. - Idea generation, and development until bench tests. - Agglutination of managerial competences related to innovation.
Chem-2	Innovation Manager-industrial market	Develop innovative products, and new business opportunities.
Chem-3	Resource Coordinator for systems and technology	- Relieve researchers from “administrative burden” in technological innovation projects (avoid “noise” in technical activities). - Synergistic competence gains in supporting activities that are vital for research efficiency.
Chem-4	Manager of networks and partnerships for innovation	Governance of the innovation process, network building for S&T, product development, and issues related to consumer safety.
Elect-1	Director of technology and innovation	- Underlying activities related to innovation in a more synergic way in order to generate value for several BU's. - Serve as formal input channel for opportunities that come from external partners and/or require special skills, spread in the company.
Elect-2	Manager of innovation core	Formulation and acceleration of business plans, attraction of funds and partners for R&D.
Elect-3	Innovation area (several respondents)	- Ensure sustainability and financial returns from innovation. - Define a local innovation strategy; - Manage the innovation process, defining and managing targets for other teams involved in innovation initiatives; - Catalyze the engagement of people in innovation activities; - Generate, lead, and manage innovation projects.
Elect-4	Institutional Relations Manager- R&D/ Innovation	Conduct the technological plan and monitor the innovation funnel.
Metal-1	Innovation team - board of directors	“Orchestrate” innovation efforts regarding products and processes, and to integrate these efforts into the routine of other company sectors.
Min-1	Innovation Manager	Promote adequate environment for technological innovation through science-oriented activities, open innovation partnerships and funding for strategic projects.
Telec-1	Manager of innovation Committee	Systematization and organization of processes associated with radical innovation (daily routine processes would just deal with incremental innovations).
Transp-1	Manager of Innovation and knowledge management	- “Take care” of innovation within the company, by promoting corporate policies, processes, organizational environment and knowledge management. - Create metrics for innovation.
Transp-2	Manager of strategic planning and Innovation	Systematize innovation, balancing operational efficiency efforts. The innovation team should encourage innovation in the company, but was not responsible for idea generation.
Transp-3	Innovation Program Manager	Capture opportunities concerning new products, partnership consolidation with universities and public funding.
Transp-4	Research and Development Manager -innovation	Get closer to universities and leverage opportunities related to new products, markets and processes. Part of the team also focused on opportunities regarding information technology, innovation culture and partnership consolidation.

Purpose and Origins	Legitimacy and Guidance	People and Organizational Design	Assignments	Future Perspectives
IF acts as an Innovation catalyzer – not executor	Some short term result is vital	IF can be depicted in a core team, strategic committees, focal points and project teams	IF presents twelve different assignments: - Capture of funding and tax incentives - Establishment of partnerships with STIs - Other partnerships (industry associations, clients, suppliers, government, etc.) - Management of innovation portfolio and projects - Management of IP - R&D - Strategic, technological or market prospection - Dissemination of innovation culture - Competence building - Idea management - Knowledge management - Leverage of new businesses and incursions in venture capital	Increase the focus on diffusing the culture of innovation throughout the company
IF is embryonic and is being constantly adjusted within organizations	Strategical role must be clear	Few people work permanently in IF’s core team		Constitution of more complex innovation networks
The more “new to the company” is an innovation opportunity, more responsive IF is expected to be	Network relationships generate supports from the outside	Many educational backgrounds mark IF people: engineering, management, economics and design, but social skills count more		Nobler activities, but with no bigger scopes
IF is not R&D, but the IF-R&D interactions has an impact on IF’s relationships with other functions	Regulatory concerns help to support IF	People come to IF seeking for new career options, personal affinity, escape strategy (blocked careers) or exposure		Small, but highly influential boards, with great interaction with other areas
Previous initiatives, economic incentives, S&T environment, market struggles, brand image and follower reaction are the main triggers of IF	Proximity to strategic levels and good communication of initiatives and achievements diffuse IF throughout organization	Clearer strategies for talent attraction are needed	There is no case with all assignments neither with the same level of importance among them. Assignments may arise over time

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