The (apparent) contradiction between Continuous Innovation and organizational routines

1. The (apparent) contradiction between Continuous Innovation and organizational routines Professional Development Workshop Transcending boundaries for successful Continuous Innovation 71st AOM Meeting, San Antonio, August 12nd, 2011 Peter Kesting, CORE, Aarhus University, Denmark, petk@asb.dk

2. CI and organizational routines Routine is receiving increasing attention (in this conference program, the keyword “routine” produces 48 hits) There is an obvious link between routine and Continuous Innovation (CI) How does this link precisely look like? How flexible are routines after all to allow for CI? Some conceptual considerations

3. The (apparent) contradiction between Continuous Innovation and organizational routines • Agenda: • Previous conceptualizations of stability and changeability of routines • Some basic characteristics of routines • How routines function • Limitations to continuous change • Conclusions Peter Kesting Aarhus School of Business petk@asb.dk

4. CI and organizational routines Previous conceptualizations • Nelson&Winter (1982): Routines as “genes” of the firm – no changeability at all • Pentland&Rueter (1994; 1995): Routines as grammar of action – chageability as new combinations of elements according to certain rules • Feldman (2000): Routines as source of Continuous Change – repairing, expanding, striving • Pentland&Feldman (2008): Distinction between “live” and “dead” routines • Betsch et al. (2004): “Oops, I did it again – relapse errors in routinized decision making”

5. CI and organizational routines There is a broad common sense that routines... …are repetitive (Feldman 2000; Pentland&Feldman 2008) …partly subconscious (Winter, 1986; Nightingale, 2003) …are relatively little planning intensive (Simon, 1947; Nelson&Winter 1982; Gersick and Hackman, 1990) …tend to become increasingly efficient (Arrow, 1962; Argote, 1999) …are relatively little risky (North, 1990)

6. CI and organizational routines But it is less clear how routines function Routines as interaction patterns (Becker 2004; Hodgson 1993; Teece, Pisano&Shuen 1997) Routines as ‘generative systems that produce repetitive, recognizable patterns of interdependent action carried out by multiple participants’ (Pentland and Feldman, 2008: 236). Distinction between the ostensive, and the performative aspect, and artifacts. Routines ‘as a behavioral option that comes to mind as a solution when the decision maker is confronted with a certain decision problem.’ (Betsch et al. 1998: 862)

7. CI and organizational routines Continuous Innovation as feedback loop: screening and modifying standard solutions (Feldman 2000: 623) …are there any limitations?

8. CI and organizational routines Limitations to Continuous Innovation (some informed guesses)

9. CI and organizational routines Conclusions • Routine does not fundamentally contradict Continuous Innovation or even make CI impossible • In some sense, routines (repeated standard procedures) even create a foundation for Continuous improvements • But there are certain limitations: • It is not always good to interfere with working systems (planning effort, inefficiencies) • Routines have an element of inertia

10. CI and organizational routines Thank you for your attention