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We analyze innovation incentives when firms can invest either in increasing the product's value (value-increasing innovation) or in increasing the hidden prices they collect from naive consumers (exploitative innovation). We show that if firms cannot return all profits from hidden prices by lowering transparent prices, innovation incentives are often stronger for exploitative than for value-increasing innovations, and are strong even for non-appropriable innovations. These results help explain why firms in the financial industry (e.g. credit-card issuers) have been willing to make innovations others could easily copy, and why these innovations often seem to have included exploitative features.

Copyright © 2015 by the American Economic Association.

Remote monitoring technology (RMT) is widely acknowledged as an important enabler of servitization however, there is a dearth of understanding about how RMT is used by manufacturing firms to support servitized strategies. This paper aims to contribute to this important yet somewhat ignored topic in servitization research. It attempts to address the following questions: What has constrained, and what has enabled the exploitation of RMT in the context of servitized strategies? The research adopts an exploratory multiple-case study design. Four in-depth descriptive case studies of companies operating in aerospace, industrial equipment, marine, and transport sectors were conducted. The collected data was analysed and synthesised, drawing out conclusions.

With permission of Emerald

The “variance hypothesis” predicts that external search breadth leads to innovation outcomes, but people have limited attention for search and cultivating breadth consumes attention. How does individuals' search breadth affect innovation outcomes? How does individuals' allocation of attention affect the efficacy of search breadth? We matched survey data with complete patent records, to examine the search behaviors of elite boundary spanners at IBM. Surprisingly, individuals who allocated attention to people inside the firm were more innovative. Individuals with high external search breadth were more innovative only when they allocated more attention to those sources. Our research identifies limits to the “variance hypothesis” and reveals two successful approaches to innovation search: “cosmopolitans” who cultivate and attend to external people and “locals” who draw upon internal people.

© 2014 The Authors. Strategic Management Journal published by John Wiley & Sons Ltd.

With information technology (IT) becoming ever more ubiquitous and pervasive, the resulting deluge of data is driving a wave of digital disruption. No industry, it seems, is immune, and business performance is increasingly dependent on the effective use of IT and investments in technology that generate real business benefits. Yet research continues to report that most of these investments don’t pay off as expected. Blame for such scenarios is normally placed at the feet of the Chief Information Officer (CIO). Some commentators have even suggested that it is now time to replace the CIO role with that of CDO (Chief Digital Officer). This line of thinking ignores the inherent organizational dynamics that lead to the derailment of the executive in charge of IT; merely changing the job title won’t fix the problem. This article uses research conducted over the course of 8 years to illuminate reasons why CIO leaders are derailed, and what they and the CEO can do to avoid this outcome. Causes of derailment are presented in detail, and prescriptive advice is given for CIOs and CEOs alike regarding how to address causes of executive failure in leading the digital transformation of organizations.

With permission of Elsevier