DEVELOPING A FRAMEWORK AND IMPLEMENTING USER-DRIVEN

INNOVATION IN SUPPLY AND VALUE NETWORK Alexia Jacobsen

*1, Astrid Heidemann Lassen

1, Søren Wandahl

2, and Henrik Sørensen

1

1Center for Industrial Production, Aalborg University, Fibigerstræde 16, 9220 Aalborg, Denmark

2Department of Mechanical and Manufacturing Engineering, Aalborg University, Fibigerstræde 16, 9220

Aalborg, Denmark

*Corresponding author: cankaya@production.aau.dk

ABSTRACT

This paper serves to create a framework for and, subsequently, implementing user-

driven innovation in a construction material industry network. The research has its

outset in Project InnoDoors that consists of a Danish university and a construction

material network. The framework and the implementation process is defined through a

number of characteristics that have been defined in theory, and through a number of

empirical requirements that have been defined be the Project InnoDoors network. Also,

both the framework and the implementation process are created coherently with the

InnoDoors research set-up to ensure that the model is as understandable and usable as

possible as well as ensuring the anchoring process later.

Keywords: User-driven innovation, network, framework, model, implementation

1. INTRODUCTION

During recent years, the idea of including end-users in the development process of a

company has gained not only considerable attention, but has also proven to be highly

successful both empirically and theoretically (Von Hippel, 1988; Chesbrough, 2003;

Baldwin et al. 2006; Lassen et al., 2010). It is generally suggested that user-driven

innovation (henceforth referred to as UDI) may prove itself useful to companies at large.

Yet, this claim has not been substantiated by sufficient empirical data, and UDI remains

to prove its applicability to in particular B-2-B setting. In such settings the concept of

UDI can prove difficult to apply due to the structural distance between manufacturer,

designer and end-user, and thereby the limited knowledge of the end-users’ desires,

needs, wishes, values, and practices. UDI has so far mainly been adopted by companies

with direct linkages to the end-users. For B-2-B setting we argue that it is necessary to

integrate a network perspective in order to be able to generate and apply sufficient

information about the end-user (Lambert, 2006; Bessant el al.2003; Christiansen and

Varnes, 2007), and that the field of UDI needs amendments to become applied on

network basis. To this end, further research is needed in B-2-B industrial settings. In the

present paper, we address this lack in knowledge by specifically targeting the

construction material industry as the unit of analysis of UDI applicability.

The construction material industry has long been known for its conservative and

traditional manners of which to handle daily business with low levels of expenditure on

activities associated with innovation (OECD, 2000; Seaden and Manseau, 2001,

Reichstein, 2005). The industry has been defined as being low tech (below 2% annual

investment on R&D), where focus of the companies has been put on optimising

production processes and existing product portfolios rather than innovation and the

processes connected to that (Wandahl et al., 2011). As such, the industry has been found

to halt behind other industries in terms of innovation and development (Winch, 1998).

Many initiatives have been taken (e.g. in terms of Partnering, Digital Construction, Re-

valuing construction, etc) to raise the level of innovation in the industry. Yet, such

initiatives have failed to live up to their full potential, and the construction industry has

yet to reach a higher level of innovation. This leads us to argue that this particular

industrial setting poses a set of specific challenge to innovation management, and thus

also to the applicability of UDI. The identification and analysis of such specific

challenge in view of UDI will add considerably to the understanding of the applicability

of the UDI concept.

With its outset in a project consisting of a Danish university and a construction material

network, this research study reported on in the present paper aims to raise the level of

innovation in the construction material industry. The project consists of a total of 11

partners, including a supply and value network operating in the construction material

industry. The project serves as a case of this research, and is further elaborated later in

the paper. This research strives to answer the following research questions:

RQ1: How should a model for user driven innovation in a supply and value network

be constructed?

RQ2: How can such model be implemented in the supply and value network?

The two research questions will be addressed in the following manners:

A theoretical conceptualisation based on an extensive literature review within

the field of UDI in networks. This will serve as base for setting the theoretical

requirements for creating a framework for UDI in networks

A review of existing innovation implementation process descriptions

(empirically based on implementations in the construction industry), and gain

insight to theoretical requirements for implementing innovations in the

construction industry

A review of empirical requirements for creating a framework for UDI in

networks and implementation based on a research project at a Danish university

consisting of a network connected to the construction material industry

Compiling the theoretical and the empirical requirements into a framework and a

step-by-step implementation table for implementation

2. METHODOLOGY

This methodology section is divided in two directions; firstly, the theoretical knowledge

and background gathering will be described. The theoretical conceptualisation serves to

define the gaps and subject for further research in the field of UDI in networks.

Secondly, the empirical data selection and data collection will be described. The

empirical data will then serve to help gaining insight to and perhaps further fill in some

of the gaps and subjects for further research in theory. Lastly, a data analysis section

will be presented to describe how the data has been analysed in this research paper.

2.1 THEORETICAL CONCEPTUALISATION

The theoretical background for this specific research paper has its starting point in an

extensive literature review upon the subject of UDI in networks to find the possible

gaps and areas that need further improvement (Jacobsen et al., 2011). The approach

used to find the gaps and subjects for further improvement in the literature review were

defined by viewing the subject of UDI in networks in terms of the different theoretical

paradigms of: Bounded rationality theory, institutional theory, population ecology

theory, resource dependency theory, transaction cost theory, and social network theory.

As such, looking for gaps and subjects for further research in UDI in networks theory

were defined through theoretically well-known paradigms.

2.2 DATA SELECTION

This section serves to describe the empirical settings for this research paper.

The paper has its outset in Project InooDoors that serves to enhance the level of

innovation in the construction material industry. Supported by The Danish Enterprise

and Construction Authority, the project was developed by scholars operating within the

fields of innovation, design, and construction management, and includes supply and

value network operating in the construction material industry. Thus, the project involves

partners that represent different actors within a network in the construction material

industry:

Academia

Construction industry confederations

Suppliers

Retailers

Designers

Manufacturer

Besides the partners, the project involves end users on a regular basis to ensure that the

partners of the project gains insight as to how and when to include the end-users in their

development process.

The research set-up for Project InnoDoors consists of four stages, which can be viewed

in Figure 1:

Awareness Visualisation of challenges

and strengts of the supply

chain

Familiarity with methods of

UDI

Readiness Development of joint vision

Readiness assessment of

partners

Process modelling

Deployment

Prototype projects in all links

Improvement

Process Measurement

Systematic process tools

Process improvement

guidelines

Figure 1: InnoDoors Research Set-Up

The stage of Awareness consists of ensuring that the network partners realise the need

and importance for UDI in the construction material industry. It is also during this stage

that the partners get to know each other and begin to trust each other as partners rather

than competitors. The stage of Readiness consists of becoming ready to conduct UDI in

a network setting. This means developing a joint vision for all the partners in the

network as well as learning how the network functions when including end-users in

their daily activities. The stage of Deployment consists of carrying out the chosen

methods and tools, including the users in further developing the idea, and ending up

with an actual product/service/concept. The last stage of Improvement consists of

evaluating upon the learning points of the entire project.

Project InnoDoors consists of two work packages; 1) Analysis and mapping of

industrial contextual specificities; 2) Development of overall analytical frame to fit the

specific needs of the network in working with UDI. These work packages serve as

background for the data collection of the project.

2.3 DATA COLLECTION

The data for the two work packages were collected during the duration of Project

InnoDoors spanning from the fall of 2009 to spring 2011. Being a qualitative study, the

data collection has been focused on gathering as much deep and rich data as possible

(Yin, 1994).

Focus of work package 1 was to introduce the network to the theme and need of UDI in

networks in general, as well as introducing the network for different tools for

conducting UDI. This was done in the manners of:

Semi-structured interviews with project partners including their management in

order to gain grasp of their experiences with working with innovation and

networks

Existing journals and documents of product development processes of each of

the partners, if they existed, in order to gain insight into their development

process structure

Workshops to identify the partners’ strengths/weaknesses within UDI and

working in networks. Also, the workshops served to identify possible UDI

methods and tools that would be relevant for the partners and their daily routines.

Lastly, the workshops introduced the network partners to a number of end users

to identify possible gaps between the partners’ and the users’ perception of

values and needs.

Seminars where other companies, scholars, and associations in the construction

industry were invited

Focus of work package 2 was to transfer the knowledge gained through the

analyses in work package 1 into an analytical frame. This was done in the

manners of:

Semi-structured and situated interviews with end-users used to create personas

and a list of their values

Workshops with the purposes of:

o Mapping the processes starting from users, through the network, and

back to the users

o Segmenting the differences between customers and end-users

o Discussing the empirical needs for an analytical model for UDI in a

construction material network

2.4 DATA ANALYSIS

The collected data is analysed in several manners. Firstly, the InnoDoors research team

covers different directions in theory as the research team consists of scholars within the

areas of manufacturing/processes, construction management, and user involving

methodologies. Insight into the three areas has served as insight into existing theory

within the fields of frameworks for UDI and implementation hereof.

Secondly, the documented data has been presented for all the partners in the InnoDoors

network and analysed through a number of workshops, meetings, and interviews.

Personas of end-users and scenarios were created to ensure relevance of the discussions

of the findings. Also, simulations of possible processes in the network, going from the

end-user through the network and back to the end-users were conducted. This helped

visualising the ‘distance’ between the end-users and the network as well as allowing

detailed tracking of products and communication between the end-users and the

network.

The theory, personas, scenarios, simulations, and data collected in general helped

defining a number of pilot projects that will be run through the developed InnoDoors

model to ensure continuous development and anchoring.

3. THEORETICAL CONCEPTUALISATION

This section serves to present the theoretical research that has been conducted already in

the subject of UDI in networks that will help describing and defining the theoretical

necessities to create a framework for UDI in networks and, subsequently, implementing

the notion of UDI in networks in a construction material network.

The concepts of UDI and network theory are fields that are covered extensively

individually. Jacobsen et al. (2011) have through an extensive literature review defined

several gaps that remain uncovered and a number of subjects that need to be improved

when the two theoretical fields are combined, illustrated Table 1 below:

Subjects for improvement Subjects that are not mentioned

Linking UDI and networks

- The characteristics

- How to create them

Implementation and action plans for networks for

UDI

Co-design/co-creation in networks process

description

Information sharing between networks

Further elaboration on costs for UDI in networks Ensuring that user input goes beyond helping one

company to helping an entire network

The discussion of who to include in the network for

UDI

- E.g. is it relevant to involve the company making

the trees if the subject at hand is a door?

Looking into how to ensure continuous

improvement for UDI in networks in order to

ensure future growth and success

Table 1: Gaps in Theory Covering UDI and Networks

These gaps and subjects for further improvement stress the theoretical need for

developing a framework and implementation for UDI in networks. The following

sections will look further into the two subjects individually.

3.1 DEVELOPING A FRAMEWORK

Buijs (2003) has presented the development of innovation models through time,

spanning from Kolb’s (1976) Experiential Learning Model to Koen’s (2001) New

Concept Development Model and March’s (2003) Circular Model of the Product

Innovation Process. The models presented by Buijs (2003) are highly relevant as source

of information when wanting to create a model for UDI in networks, however, the

models are based on single entity level and fail to include the end-users. Thus, further

characteristics for a model for UDI in networks are necessary.

Wandahl et al. (2011) have defined a number of characteristics and topics that need

coverage when wanting to create a model for UDI in networks:

Describe when within the innovation process the end-users should be involved

and to which extent.

The model needs to illustrate when the different network partners should work

together and when it is important for them to gain support or knowledge from

their individual companies

The different roles the end-users should play in the different sub-processes of

the innovation project

The types of information/knowledge necessary from the end-users

The tools and methods required

Distinction between network activities, individual network partner activities, and

user involvement activities

3.2 IMPLEMENTATION

Looking further into general innovation in the construction industry, several scholars

have looked into how to implement innovation.

Manley (2008) defines demands for successful implementation: High level of internal

innovation competency; Challenging project requirements; Involvement in value-driven

tender selection; Encouragement of alternative tenders; Design of new forms of contract;

Attention to relationship management on projects; Participation on technology

demonstration programs.

Whilst Manley (2008) goes no further than defining demands, Slaughter (2000), on the

other hand, presents a step-by-step implementation process based on five stages:

Identification, Evaluation, Commitment, Preparation, and Use (followed by post-use

evaluation).

Linton (2002) chooses the approach of defining a number of criteria for successful

innovation implementation: Organisational structure, Technology, Project management,

Divisibility, and Social interactions.

Lastly, Miller et al. (2009) have defined a Perception-Influence model that covers three

main areas of innovation implementation: Pre-implementation planning, On-going

monitoring, and Post-implementation evaluation.

The theoretical requirements for a model and implementation plan for UDI in networks

can, thus, not be found in a combined manner, but on an individual level. As such,

combining the different fields will also need an empirical insight, which is presented in

the following section.

4. DISCUSSION AND RESULTS

Through the process of analysing the collected data a number of empirical requirements

for the InnoDoors model and implementation process were defined by the network. This

combined with theory within the fields of UDI and implementation will serve as input

for creating the InnoDoors model and, subsequently, for the implementation process.

4.1 EMPIRICAL FINDINGS

This section serves to present the empirical requirements when wanting create a

framework and creating an implementation process for UDI in networks. These

empirical needs were uncovered through a number of workshops and collaboration in

Project InnoDoors. Table 2 below define and describe the different empirical aspects

that need to be considered for a framework and implementation process for UDI in

networks:

Topic – Model

Creation

Explanation

Partner involvement in

developing the model

The different partners all have different manners of handling

their daily business; different product development processes

(if existing); different customers; different management,

different goals, etc. Thus, involving the different partners in

the development process will help enhancing the usability

and effectiveness of the model

Trust amongst partners In order to gain input in creating the model, the matter of

trust between the partners has shown itself as having a very

big impact. Being in a traditional industry where

collaboration between partners have been based on

contractual agreements, opening up and sharing one’s

manner of conducting business can be very difficult

The model must support

the partners’ daily

activities

To ensure interest in developing the model it is of outmost

importance the model supports the partners’ current

processes. Also, the risk of having the partners viewing the

model as an add-on to their jobs rather than being a part of

their everyday life in the company must be minimised

Ensure that the model is

gone through and

discussed

To ensure continuous improvement and development of the

model. Even though the partners are interviewed and

involved in the beginning of the model creation process, new

aspects may occur when discussed amongst network partners

Topic -

Implementation

Explanation

Trust A subject that seemed of outmost importance not only in the

creation of the model, but also in the implementation of UDI

in a network. The topic of trust in the implementation of

UDI in network bounds in sharing the new

product/service/concept ideas that will arise through network

collaboration

Top management

support

Management amongst the partners in the network seem to

have low ‘radar altitude’, meaning that the management

prefer to have their say in most decisions made in the

companies.

Incentives for using the

model

As when creating the model, it must be ensured that UDI

becomes part of the daily processes at the given companies.

Ensure a ‘support-

person’ for each project

The partners in the network are not used to working with

models, let alone working with models in their network. As

such, having a support person could help introducing and

easing the process of UDI in networks

Have a ‘process-

responsible’ for each

sub process

To ensure documentation and development

Small publications with

examples of how to use

the model

Pilot testing the model might work for the moment, however,

having small publications with step-by-step examples of how

to use parts of the model might ease the process of

conducting UDI

Continuous

documentation of

successes and failures

To repeat the successes and learn from the failures for future

projects to ensure continuous development

Table 2: Empirical Needs for UDI in a Construction Material Network

4.2 THE MODEL

With the theoretical and empirical requirements set for a model for UDI in networks,

Figure 2 illustrates the outcome:

Figure 2: Model for UDI in a Network

The model follows the InnoDoors research set-up as the starting point of the model is

that the partners in the network become aware of a new idea and considering the

possible partners to collaborate with in order to realise the new idea. As the partners

become aware of the new idea, they become ready to carry out the process of using

methods and tools for UDI in the network. As they use the different tools and methods

for UDI, the deployment process in the InnoDoors research set-up is carried out.

The model covers the theoretical requirement of explicitly illustrating when in the

innovation process the users should become involved. Also is divided into three activity

areas:

Internal activities: the activities that the individual partners in the network must

perform within the limits of their own company

Network activities: the activities performed in the network

User-oriented activities: activities that involve the end users. User input can be

by physically contacting the users (e.g. through co-creation or interviews), but it

can also involve gathering data about the users (through e.g. statistics)

By dividing the model into three activity areas, the theoretical requirements of explicitly

illustrating when within the process the users should become involved, as well as

showing when the network should meet and perform activities together and which

activities the partners in the network should conduct individually are covered.

The model is illustrated through squares and circles. While the squares represent the

main processes for the UDI model, the circles represent the sub-processes to the squares.

The division between main processes and sub-processes makes the model more clear,

understandable, and usable. It allows the users of the model to gain insight into the

requirements and all activities needed in each process, including the tools and methods

needed to conduct the process, thus, covering the theoretical requirement of clarification

of methods and tools needed for each activity.

By each ‘evaluation’ sub-process, the network discusses the previous processes and

prepares itself for the future processes. This will not only ensure that the network

discusses the project at hand, but also ensure that the model’s structure and composition

is frequently discussed and perhaps improved to fit the network partners’ needs. This

helps covering the empirical requirements of ensuring that the model becomes part of

the network partners’ daily activities as well as ensuring that the model is gone through

and discussed on a regular basis.

4.3 IMPLEMENTATION

It is important that the implementation process of the InnoDoors model is coherent with

the InnoDoors research set-up to ensure that the all partners in the network can become

part of improving the process for future use. Also, since the InnoDoors model is

consistent with the InnoDoors reseach set-up, it can be argued that the implementation

process for the model should also be coherent with the research setup.

When considering the theoretical and empirical requirements for implementation in the

model, there seems to be a number of topics that can be related to the ‘Deployment’

stage as well as having a number of topics covering the stages of ‘Readiness’ and

‘Improvement’ in the InnoDoors research set-up. While some topics only cover one

stage of the InnoDoors research setup, some topics can be used in several aspects (e.g.

the topic of trust). Table 3 below gathers the empirical and theoretical requirements for

UDI in networks within the stages of ‘Readiness’, ‘Deployment’, and ‘Improvement’ in

the InnoDoors research setup:

Readiness Deployment Improvement

Theoretical requirements

High level of internal

innovation competency

(Manley, 2008)

Challenging project

requirements (Manley,

2008)

Participation on technology

demonstration programs

(Manley, 2008)

Attention to relationship

management (Manley,

2008)

Involvement in value

driven tender selection

(Manley, 2008)

Post-use (Slaughter, 2000)

Identification stage

(Slaughter, 2000)

Encouragement of

alternative tenders

(Manley, 2008)

Post-implementation

evaluation (Miller et al.,

2009)

Commitment (Slaughter,

2000)

Design of new forms of

contract (Manley, 2008)

Organisational structure

(Linton, 2002)

Attention to relationship

management (Manley,

2008)

Technology (Linton, 2002) Use (Slaughter, 2000)

Project Management

(Linton, 2002)

Preparation (Slaughter,

2000)

Social Interactions (Linton,

2002)

Divisibility (Linton, 2002)

Pre-implementation

planning (Miller et al.,

2009)

Ongoing monitoring

(Miller et al., 2009)

Empirical requirements

Trust Trust Trust

Top management support Top management support Top management support

Incentives for using the

model

Incentives for using the

model

Incentives for using the

model

Ensure a ‘support-person’

for each project

Continuous documentation

of successes and failures

Have a ‘process-

responsible’ for each sub

process

Small publications with

examples of how to use the

model

Continuous documentation

of successes and failures

Table 3: Theoretical and Empirical Requirements for Implementing UDI in Networks

The theoretical and empirical requirements for a framework and an implementation plan

have now been combined and most of them have been met. However, some subjects

remain uncovered and are, simply, too difficult to foresee and prepare for in a model or

plan. E.g. the subject of trust, which is of outmost importance both in the model creation

and in the implementation plan, is problematic to put into a model without comprising

the usability, understandability, and reality of it. Thus, the topic of trust must remain a

subject for further research.

5. CONCLUSION

This section serves to conclude upon the outcome on the two research questions for this

paper. Each research question will be concluded upon individually.

RQ1: How should a model for user driven innovation in a supply and value network

be constructed?

Creating a framework for user-driven innovation (UDI) in a network setting requires a

deep theoretical insight to define the critical characteristics that must be considered. The

paper had its outset in an extensive literature review within the fields of UDI and

network constructed by Jacobsen et al. (2011) and a number of theoretical requirements

for a framework for UDI in networks defined by Wandahl et al. (2011). After having

defined the theoretical requirements, an additional number of empirical requirements

were defined through workshops with the partners involved in Project InnoDoors,

consisting of a Danish university and a network operating in the construction material

industry. The theoretical and empirical requirements were merged into the circular

mode named InnoDoors Model. The model divided its activities into main processes

and sub-processes, as well as dividing the different activities in terms of user-oriented

activities, network activities, and internal activities.

RQ2: How can such model be implemented in the supply and value network?

A number of theoretical requirements for implementation were set by scholars who

looked into implementing innovation in the construction industry. As such, a list of

theoretical criteria was set. Subsequently, through workshops with the InnoDoors

partners, a number of empirical requirements were set to consider. The theoretical and

empirical requirements were combined with the InnoDoors research set-up to ensure

consistency and usability for the network partners. Also, the InnoDoors research set-up

can help anchoring the newly set implementation plan.

Whilst a model for UDI in networks and a subsequent implementation plan has been

developed, especially one subject has remained uncovered in spite of its empirical

importance: the matter of trust amongst the partners in the network. The topic of trust

remains a subject for further research as a continuation of this research paper.

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