researchportal.port.ac.uk · Web viewand realized reciprocal complementarity. We apply our framework to the historic case study of the Guinness Draught in-can system project with

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UK

Antecedents and benefits of achieving reciprocal complementarity: a case study of the Guinness Draught in-can system project

Dusana Hullova1, Christopher Don Simms2 and Paul Trott3

11University of Portsmouth, Portsmouth Business School, Portland Street, Portsmouth PO1 3DE, United Kingdom. [email protected] of Portsmouth, Portsmouth Business School, Portland Street, Portsmouth PO1 3DE, United Kingdom. [email protected] of Portsmouth, Portsmouth Business School, Portland Street, Portsmouth PO1 3DE, United Kingdom. [email protected]

The development of a synchronous relationship between product and process innovation within new product development projects (NPD) can present organisations with a number of benefits including cost efficiency of production, smoother launch of new products, and new opportunities for product and process development. Yet, to date the literature provides fragmented knowledge about when and how to achieve such reciprocal complementarity as well as on the range of opportunities that open up to the company once it achieves this. In this paper we develop a new conceptual framework, drawing upon several streams of literature that proposes three components contributing to an organisations ability to achieve reciprocal complementarity within radical new product development projects: potential, co-ordinational and realized reciprocal complementarity. We apply our framework to the historic case study of the Guinness Draught in-can system project with its pre-ceding and following projects focused on froth formation. Our findings demonstrate that all three components of reciprocal complementarity are necessary for synchronous integration to occur. In particular we uncover the significance of external collaboration and absorptive capacity, the need for equal managerial attention to product and process innovation, and the important role played by cross-functional teams and crucial role of the Integrators. Analysis of our findings leads us to develop a number of propositions that drive the way forward for future research. By combining evidence from the literature and results from the case study we suggest several managerial implications.

1. Introduction

Product and process innovation have been perceived as two separate stages of innovation process by both academics

and practitioners (Damanpour and Gopalakrishnan, 2001; Ettlie and Reza, 1992; Lager, 2002; Reichstein and Salter,

2006). A common consequence of this discrete view is that

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designs are “thrown-over-wall” to the manufacturing department, and subsequently found to be unproducible or require

several modifications to improve the quality and cost of production (Adler, 1995; Collins and Hull, 2002; Säfsten et al.,

2014).

More recently, scholars have begun to point to the limitations of these practices, arguing that a range of benefits can be

achieved by the integral consideration of product and process innovation (Damanpour, 2014; McNulty & Ferlie, 2004;

Piening & Salge, 2015). Hullova et al. (2015, p. 16) defined this concept as reciprocal complementarity a “synchronous

adoption and integration of product and process innovation throughout the Product or Process Development Project.”

Up to now, academic literature provides fragmented understanding of the antecedents, moderators and favourable

consequences from achieving reciprocal complementarity (Collins and Hull, 2002; Vandevelde and Vandierdonck,

2003; Nobelius, 2004; Säfsten et al., 2014). One of the main reasons for this are the research findings that span several

research streams without a systematic presentation. These include Technology management (Bruch and Bellgran, 2014;

Lager and Rennard, 2014; Säfsten et al., 2014), Operations management (Hauck et al., 1997; Vandevelde and Van

Dierdonck, 2003), Innovation management (Ballot et al., 2015; Battisti and Stoneman, 2010) and General management

(Adler, 1995; Wischnevsky et al., 2011). Particularly, the Innovation management area is missing to provide

comprehensive guidelines on when and how to implement the reciprocal complementarity. As well as an overview of

the long-term benefits companies could utilize after achieving this complementarity, within future New Product and

Process Development Projects. This can be further demonstrated by a number of influential research papers that called

for further investigations on conditions that lead to the synergetic adoption of product and process innovation (Battisti

and Stoneman, 2010; Ballot et al., 2015; Damanpour, 2010).

The aim of this paper is to deepen our understanding of reciprocal complementarity within the Innovation Management

by analysing the multidisciplinary literature on managing this relationship. We build upon terminology of the key

components of Absorptive capacity, potential, combinatorial and realized capability, (Fosfuri and Tribó, 2008; Jansen

et al., 2005; Zahra and George, 2002) and develop a Conceptual Framework of company’s ability to achieve reciprocal

complementarity between product and process innovation in New Product and Process Development Projects.

We position our study in the context of process industries that are characterised by undertaking predominantly

incremental product and process innovations (Lager, 2002). Particularly, companies operating within the low-

technology process industries often underestimate the opportunities created by undertaking radical projects due to lack

of knowledge and experience (Kurkkio et al., 2011; Frishammar et al., 2011). The existing studies on the New Product

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKDevelopment (NPD) focus on single projects, trying to explain their success/failure (Pinto and Prescott, 1990) or

studying projects as independent phenomenon, irrespective of their history, context or future (Engwall, 2003; Kreiner,

1995; Lakemond and Berggren, 2006). In our study we aim to look beyond the single project level to illustrate the new

concept of firm’s ability to achieve reciprocal complementarity. We use a case study of the most revolutionary beverage

packaging innovation in the beer industry, the Guinness Draught in-can system project with its preceding and following

projects focused on creating the foam head on the beer.

The paper proceeds as follows. The contents of this paper will be separated into two main parts. The first part presents a

Conceptual framework of firm’s ability to achieve reciprocal complementarity, the second part illustrates the developed

concept on the case study of Guinness Draught in-can system project and its preceding and following projects. Finally,

we discuss our findings and contributions made within the paper, managerial implications and future areas for research.

2. Literature review

Product and process innovation have been studied in the innovation literature as two separate phenomenon (Cabagnols

and Le Bas, 2002). Product innovation is commonly characterised as driven by desire to create new products to meet an

external user or market need (Damanpour and Gopalakrishnan, 2001). While Process innovation is concerned with the

delivery of these products, including quality improvements, cost and time savings and productivity enhancement (Ettlie

and Reza, 1992; Lager, 2002; He and Wong, 2004). Therefore, studies of product innovation have focused on how the

innovations are created as well as what are the consequences of product innovation on the firm’s performance (…). On

the other hand, literature on process innovation has focused on organisational determinants and outcomes of successful

process innovation (Damanpour and Aravind, 2006; Frishammar et al., 2012). Limited attention has been devoted to

explain how a relationship between these two innovation types is achieved (Ballot et al., 2015; Bruch & Bellgran, 2014;

Wischnevsky et al., 2011; Damanpour, 2010; Lager and Rennard, 2014).

Prior studies in the innovation literature have tended to portray a linear innovation process that would follow a

sequential stage-gate model (Ford et al., 2014). For example, the product-process pattern in the metal manufacturing

companies (Kraft, 1990) or the process-product pattern in the pulp and paper industries (Novotny and Laestadius,

2014). Further, studies in this research area have developed only conceptual contributions to the literature, often at the

industry level (Abernathy & Utterback, 1978; Barras, 1986; Hayes & Wheelwright, 1979; Kim et al. 1992). Existing

empirical studies have predominantly proposed contingencies that are likely to influence the complementarity, often

using large scale surveys and quantitative data analysis at the industry level (Battisti & Stoneman, 2010; Evangelista &

Dusana Hullova, 03/23/16,

Npt sure about this should I mention process industries?

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKVezzani, 2010). Only a handful of studies investigated existence of complementarity between product and process

innovation adopting qualitative data collection methods to examine specific New Product and Process Development

Projects (Kurkkio et al., 2001; Lim et al., 2006; Novotny and Laestadius, 2014).

2.1 Conceptual framework of firm’s ability to achieve reciprocal complementarity in the New

Product and Process Development projects

At any point in time, a company may be facing a decision to introduce a radical product and process innovation that

would require achieving reciprocal complementarity. However, not every company can take upon this opportunity in an

effective manner, deliver the innovation and utilize all of the opportunities this provides to the company. Managers

often perceive projects as fundamentally similar “a project is a project” (Hobday, 1998). They seem to overlook that

effective project management is becoming the “wave of the future of global business” (Pinto and Kharbanda, 1995).

Some of the reasons for this are increasing product complexity, decreasing time-to-market period and the need to

respond to customer needs.

Prior research investigating the antecedents, moderators and consequences of achieving the reciprocal complementarity

spans several literature streams. This includes articles in Technology management (Bruch and Bellgran, 2014; Lager

and Rennard, 2014; Säfsten et al., 2014), Operations management (Hauck et al., 1997; Vandevelde and Van Dierdonck,

2003), Innovation management (Ballot et al., 2015; Battisti and Stoneman, 2010) and General management (Adler,

1995; Wischnevsky et al., 2011). As stated by Lager and Renner (2014) these literature streams are aimed at different

readership, which has resulted in few, if any, attempts being made to systematically structure and present prior research

findings in a cumulative manner. Therefore, our Conceptual framework provides a comprehensive overview of when

and how to achieve reciprocal complementarity, but also how to benefit from this in the following New Product and

Process Development Projects, See Figure 1. We build upon terminology of the key components of Absorptive capacity

(Fosfuri and Tribó, 2008; Zahra and George, 2002) and argue that the company’s capability to achieve reciprocal

complementarity between product and process innovation in New Product and Process Development Projects is

determined by its potential, combinatorial and realized capability (Jansen et al., 2005). Below we will divide the

description of the Conceptual framework into three areas; potential reciprocal complementarity, combinatorial

reciprocal complementarity, realized reciprocal complementarity. The selected studies captured factors identified to

influence the development of relationship and favourable consequences of this complementarity between product

innovation and production (Vandevelde and Van Dierdonck, 2003; Turkulainen and Ketokivi, 2012; Wheelwright and

Clark, 1994), product design and manufacturing (Ettlie, 1995; Kim et al., 1992) and product and process design (Adler,


Any others in the innovation management literature

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UK1995), product and process innovation (Freeman and Soete, 1997; Utterback, 1994; Ballot et al., 2015). In the

following, we summarize prior findings along these categorizations and this overview will serve as a basis for the

analysis section.

FIGURE 1. Conceptual framework of firm’s capability to achieve reciprocal complementarity

2.1.1 Components of achieving reciprocal complementarity

Potential reciprocal complementarity

We define the potential reciprocal complementarity as being faced with the necessary antecedents

to undertake radical product and process innovation with an aim to achieve reciprocal

complementarity. We organised the antecedents into the following three categories: Industry level,

Company level and Project level.

Industry level. The organizational theorists have pointed to the impact of the organizational

environment on its internal behaviour for decades (Thompson, 1967; Woodward et al., 1965;

Lawrence and Lorsch, 1967). The average rate of introduction of product generations to the

marketplace for a particular industry has been termed as the “industry NPD clockspeed” (Carrillo,

Industry levelindustry NPD clockspeed Company levelallocation of resourcessize of the firmR&D intensityProject leveldisruptiveness of the projectlevel of system complexity between product and process innovationProduct and Process Development Managers are equally important


Cross-functional collaborationcollaboration between Product and Process EngineersIntegratorKnowledge integration between buyer and supplierCo-ordination between product and process designDesign for manufacturingConcurrent engineeringQuality Function DeploymentTransfer managementTransfer synchronisationFormal organisation

Combinatorial reciprocal

complementarity Launch of new productsSmoother launch of new productsreduced development timeUnique advantagesLong-lasting competitive advantageOverall improvement of company's performanceProtection against imitationFinancial benefitsImprovement of net cash flowsReduced development timeEfficiencyEconomies of scalesEase of production ramp-up processStabilization of process requirementsAbility to control product mix and acquire process equipmentFacilitation of implementing innovative strategies

Realized reciprocal complementarity

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UK2005). For example, the beer packaging category is one of the most innovative within the packaging

industry. Innovations such as the PET moulded container in the shape of can by Volksbier,

Bluetooth-enabled bottles of Grolsch that allow users to unlock free movies on their smartphones

and tablets are just a few of the recent beer packaging innovations arriving on the market annually

(Canadean, 2014).

Company level. Support at the company level, specifically in terms of allocation of necessary

resources by the managerial board, plays an important role when deciding whether to pursue a

radical project. Majority of companies have scarce resources and capabilities, therefore they have to

wisely allocate these towards the “suitable complementarity projects.” While at the same time it is

crucial that they work on a balanced project portfolio in which incremental, short-term oriented

NPD projects are combined with more radical, long-term oriented projects (Bruch and Bellgran,

2014). Findings from the CIS surveys further identified size of the firm (Ballot et al., 2015; Battisti

and Stoneman, 2010; Evangelista and Vezzani, 2010) and R&D intensity (Ballot et al., 2015;

Battisti and Stoneman, 2010) as contingencies influencing the choice of complementarity strategy.

Project level. At the project level, the level of disruptiveness of the project combined with the level

of system complexity between product and process innovation have also been identified as

antecedents of achieving potential reciprocal complementarity. Instances when companies are faced

with radical innovations tend to involve changes in both product and process innovation (Freeman

and Soete, 1997; Utterback, 1994; Reichstein and Salter, 2006). Reichstein and Salter (2006)

identified a strong two-way relationship between the share of sales of products new to the market

and degree of novelty in the process innovation. Hobday (1998) argued that the product

complexity is determined by quantity of tailored components, degree of technological novelty and

the hierarchical manner in which they are integrated together. All of these features would add to the

uncertainty, risk and the speed with which companies are able to introduce new products (Carrillo,

2005). However, effective management of the above mentioned antecedents is dependent on

Product and Process Development Managers, who should be allocated with equal levels of


Find sth on system complexity rather than product complexity?

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKimportance since the beginning of the project. The success of the project is often determined by

their collaboration, when they share and build on existing experience in product and process

innovation as well as external collaboration.

2.1.2 Combinatorial reciprocal complementarity

Once having made an informed decision that a reciprocal complementarity would be required in the

New Product and Process Development Project, the Product and Process Development Managers

have to develop combinatorial capabilities to manage the relationship between product and

process innovation related activities. Prior research used different terms to describe such managerial

techniques, e.g. integration or co-ordination mechanisms (Adler, 1995; Ballot et al., 2015; Säfsten

et al., 2014). We define these as combinatorial capability, an ability to choose and adopt suitable

managerial techniques with an aim to achieve the complementarity between product and process

innovation. Even though prior literature has predominantly explored advantages of different

mechanisms separately (Sriparavastu and Gupta, 1997), we agree with the findings of Cua et al.

(2001) that combining the strengths of several different approaches with requirements of the project

enhances the management of product and process innovation. This tendency might have resulted in

a lack of managerial awareness about:

1) The range of practices they might adopt in projects

2) Inefficiency in executing complex projects that required synchronization between product

and process innovation activities

3) Identifying instances how and when product and project success contribute to long-term

strategic advantages to firms needs to be further investigated (Fowler et al., 2000)

We have categorised combinatorial capabilities across three key areas; cross-functional

collaboration, co-ordination between product and process and transfer management.

2.1.3 Cross-functional collaboration

Cross-functional collaboration includes collaboration between product and production engineers,

Integrator and knowledge integration between buyer and supplier. Collaboration between product

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKand production engineers. A close collaboration between product and production engineers was

found to significantly reduce development time and lead to less mismatches between departments

(Adler, 1995; Nobelius, 2004; Turkulainen and Ketokivi, 2012). Vandevelde and Van Dierdonck

(2003) reported that engineering designers who take into consideration the situation in the

production positively influence development of the product/production interface. According to

Egelhoff (1991) such cross-functional collaborations enhance reciprocal information processing and

knowledge flows across functional boundaries. At the same time they improve commitment and

decision making (Bahrami and Evans, 1987). Integrator. Integrator is defined as a core group of

individuals that possesses relevant knowledge and skills in the necessary areas and helps to ensure

the stability in a project developing a new product. Integrators are responsible for keeping both

design and manufacturing perspectives in balance, commonly working in a role of general manager

or product champion (Dean and Susman, 1989; Markham and Griffin, 1998; Wheelwright and

Clark, 1994; O’Connor and McDermott, 2004). During the New Product and Process Development

projects companies often collaborate with a range of external parties, because the necessary

knowledge and expertise is not available within the organisational boundaries (Grant and Baden-

Fuller, 2004; Harryson, 1997). Knowledge integration between buyer and supplier. As emphasized

by Rosell et al. (2012) increased level of knowledge integration between buyer and supplier can

provide input to align the supplier’s manufacturing process and product technology expertise to the

buyer’s product development. This type of joint learning represents a ‘coupled knowledge

integration process’ that often precedes, but also follows the R&D/manufacturing interface.

Co-ordination between product and process design

This area consists of Design for manufacturing, Concurrent engineering and Quality Function

Deployment. Design for manufacturing Pisano (1997) argued based on a sample of pharmaceutical

companies that those, which followed “learning-before-doing” strategy and considered the

production at the early stages of new product development process performed better than those

leaving the process development for the later stages of NPD process (Adler, 1995; Vandevelde and

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKVan Dierdonck, 2003). This practice is similar to the Producibility Design Reviews, when

companies capture the learning from previous projects and develop a detailed knowledge about

company’s manufacturing capabilities that could be used in the design phase to assure producibility

(Lakemond et al., 2007; Walters, 2014).

Concurrent engineering. Concurrent Engineering has become a paradigm for industrial product

development, the collaboration across different functions along the value chain has proven to be

more effective and faster than serial input (Clark and Fujimoto, 1989; Liker et al., 1999). For

example, Collins and Hull (2002) examined how much influence downstream functions such as

manufacturing engineering should exert in product design decisions among 74 companies. They

concluded that the Early Simultaneous influence, a cornerstone of Concurrent engineering, is

especially effective among the first three stages of development. This enables the downstream

functions to have concurrent input to upstream product decisions, through frequent

communications, regardless of position among the value chain, leading to time and cost efficiencies.

Quality Function Deployment. The methodology of Quality Function Deployment, originated in

Japan in 1950’s, however, it is very complex and often difficult for companies to comprehend

(Lager, 2005). Therefore, several simplifications have been developed such as “House of Quality”

(Akao and Mazur, 2003), QFD system adapted for process industry (Lager, 2005) and “Matrix of

Matrices” (Akao, 1990). It has proven to enable companies to develop links between development

cycles, ensuring that requirements of all ‘customers’ in the product design process are taken into

account, including downstream users in the company, end users, suppliers etc. (Wheelwright and

Clark, 1994).

Transfer management

The transfer management part consists of transfer synchronization and formal organisation.

Transfer synchronization. Prior literature has emphasized the importance of managing the transfer

process between product development and production in terms of time and communication (Säfsten

et al., 2014; Wheelwright and Clark, 1994). Rich and bilateral communication and effective

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKintegration between borders are essential in the integrated problem solving (Wheelwright and Clark,

1994). Formal organisation. Specifically, highly complex projects benefit from formal product

development processes and structured ways of working, including prototypes, standards and

schedules. A well-structured transfer process has been found to facilitate the transfer from product

to production, making the knowledge more efficient to exploit, apply and implement (Adler, 1995;

Lin and Germain, 2003; Nobelius, 2004; Vandevelde and Van Dierdonck, 2003).


The effective adoption and management of combinatorial techniques will result in realized

reciprocal complementarity and ability to utilize opportunities from synchronous adoption of

product and process innovation in unique advantages, launch of new products, financial benefits

and efficiency. This research stream was in the Innovation Management area termed by Ballot et al.

(2015) as complementarities-in-performance. Researchers, who specialize in this field are focused

on identifying different economic benefits of combination of different practices done in the

organisation, proving that the joint application of these practices leads to greater advantages than

the individual parts (Ballot et al., 2015). It has to be noted that the ability to realize the opportunities

from reciprocal complementarity might not be straightforward right after launch of the new product

and process. The benefits might be utilised in the long-term within the following projects. However,

this will be possible only if the Product and Process Managers have the necessary knowledge about

the further opportunities that are open to them.

Unique advantages. Development of relationship between product and process innovation may lead

to long lasting competitive advantage (Wheelwright and Clark, 1994), overall improvement of

company’s performance (Damanpour and Gopalakrishnan, 2001; Pisano, 1997; Collins and Hull,


Should I include more detail on different studies???

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UK2002; Martínez-Ros & Labeaga, 2009; Ballot et al., 2015) as well as protect the company from

imitation by creating complex innovation strategies (Rivkin, 2000). Launch of new products. The

realized reciprocal complementarity capability may also result in a smoother launch of new

products (Kotabe and Murray, 1990) and reduced development time (Adler, 1995; Nobelius, 2004;

Liker et al., 1999). Financial benefits. Achieving reciprocal complementarity has also several

financial benefits such as improvement of net cash flow over time (Kim et al., 1992), improvement

in manufacturing unit costs (Swink et al., 2006) and economies of scale (Martinez-Ros & Labeaga,

2009). Efficiency. Last but not least there is a range of efficiency related complementarities-in-

performance, for example ease of production ramp-up process (Pisano & Wheelwright, 1995;

Pisano 1997), ability to control product mix and acquire process equipment (Kim et al., 1992) and

facilitation in implementing innovative strategies (Turkulainen and Ketokivi, 2012).

Methodology

Historical case study

This historical case study of Guinness Draught in-can system project with its pre-ceding and

following projects offered us an opportunity to examine factors leading to the reciprocal

relationship as well as consequences of this practice in ways that both cross-sectional and

longitudinal research could not (Engwall, 2003; Kreiner, 1995). This case study provides a

perspective that covers decades that were necessary to be able to observe the evolution of the

innovation (Hargadon & Douglas, 2001). Innovation management researchers have largerly studied

managerial practices at different stages of projects, e.g. fuzzy front end (Lakemond and Berggren,

2006). Therefore, they often missed to consider the historic and organisational embeddedness of

investigated projects when trying to explain the reasons for project’s success, and how this success

can contribute to long-term strategic benefits (Marsh and Stock, 2003).

A single case study methodology was chosen as it is well suited to investigating topics that have not

received much academic attention with an aim to understand a phenomenon in its own

organizational context (Song & Montoya-Weiss, 1998; McDermott and O’Connor, 2002). Despite

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKthe relationship between product and process innovation being one of the commonly referenced

characteristics of process industries, little academic attention has been devoted to studying this

phenomenon (Lager, 2002; Rönnberg Sjödin et al., 2011). A few studies have taken place in high-

technology industries (Feldman & Ronzio, 2001; Pisano & Wheelwright, 1995; Pisano, 1997).

There is, however, a lack of academic attention devoted to low-medium technology sectors

(Kurkkio et al., 2011; Lager et al., 2013; Novotny & Laestadius, 2014; Keupp et al., 2012).

Data collection

The primary sources of information underpinning this paper were semi-structured interviews and

secondary data collected over a three-year period. The interviews ranged from one to two hours in

time and were undertaken with highly knowledgeable informants who were involved in different

areas of the project; the packaging experts, plastics specialist, gas and equipment supplying

company and industry experts. This ensured representativeness of respondents’ insights. We were

also able to talk to representatives from companies, who were working on the competing in-can

systems, who provided additional valuable insights. The case study followed the procedures

identified by Yin (2009). The list of questions was designed with an aim to identify management

practices that enabled Guinness to achieve the reciprocal complementarity. The format of

interviews was adapted and changed slightly to identify new and potentially fruitful points about the

project (Nag et al., 2007). Moreover, two of the authors conducted interviews in order to obtain

investigator triangulation to develop a deeper understanding of how different investigators view the

issues and avoid any inaccuracy in responses caused by high involvement of the respondents in the

project as well as time that passed since the development of the floating widget (Podsakoff et al.,

2003; Denzin, 1978). This allowed researchers to gain complementary insights that have added to

the richness of the data and possibility to identify novel insights (Eisenhardt, 1989). Additionally,

documentary studies were performed regarding U.S, G.B. and European patents, books published

about the company, written reports and journal articles were used to validate the information

collected in interviews (Amaratunga & Baldry, 2001). As the current study is investigating new


Irani et al. (2004) p. 646 did not include the number of interviews they included just mentioned with whom they were done

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKrather than well-established research area within the Innovation Management, pattern matching

(comparison of the existing findings with those already present in the literature) might have

negatively influenced the internal validity (Denzin & Lincoln, 1994). We tried to overcome this

limitation by providing a clear chain of evidence to ensure the reader is clear about how the

research question matches with the conclusions. Further, to increase transparency and future

replication a case study protocol with case study database were developed including notes from the

interviews, narratives and documents (Yin, 2009). We acknowledge that the generalizability could

be problematic with our chosen design. Despite this, the main objective is to employ analytical

generalizations from empirical observations to develop theory. Hence, we do not imply that the

current findings are generalizable beyond the case investigated (Sjödin et al., 2011).

Case study analysis

Factors leading to achievement of reciprocal complementarity between product and process

innovation: The case of Guinness in-can system project and its pre-ceding and following

projects

Background and overview

Guinness, one of the most prestigious dark beers with 250 years heritage and consistency in quality,

is being brewed in 50 countries and sold in more than 150, with 2 billion pints sold each year

(Diageo, Annual Report, 2014). The brand has recently celebrated its 250th anniversary of signing

the lease of the St. James’s gate site at £45 per annum for 9,000 years in 1759. The brewery merged

with Grand Metropolitan to develop multinational alcoholic drinks producer Diageo in 1997. It

remains the core brand of Diageo’s beer business and the only global stout brand in the world with

key markets in Great Britain, Ireland, Nigeria and United States (Diageo, Annual Report, 2014).

Guinness has become well-known for its development of the ‘in-can system’ technology. This

technology won the Queen’s Award for technological achievement in 1991, as the only brewery in

history to have won this award. Further, in 2004 it was voted by British consumers as the greatest

invention of the past 40 years, ahead of internet and mobile phone. The technology has celebrated


Should I include this?

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKits silver 25th anniversary in 2013, marking the production of 2.75 billion widgets (Irish Examiner,

2013). Since then, the widget technology has become a standard system to produce a white creamy

head from canned as well as bottled beverages and has come to characterise the British and Irish

breweries and their exports (Turner, 2001).

The story of Guinness Draught in-can system

Within the Guinness froth formation projects, product and process innovation were recognised as

equally important from the early beginnings. Every single project was full of iterative processes

with many cycles and interconnections between product technologies and production requirements

(See Appendix for detailed description of different projects). As stated by one of the project

leaders “We could not have come up with the solution for Guinness widget without a tight

relationship between product and process innovation. There are still many companies that are

separating packaging and brewing and not realizing the importance of this relationship.”

The success story of the Guinness Draught begun in 1964 with the Guinness Draught dispensing

from a bulk container (keg) that has revolutionized the brand and brought a new experience to

consumers at local pubs. This project was led by Michael Ash, who developed the “Easy Serve”

system based on a single metal cask, which combined two sections: one for the stout and the second

one correctly pressurized mixture of carbon dioxide and nitrogen (Mansfield, 2009). This invention

has identified that a solution having mixture of gases will provide the desirable qualities for the

head to develop (Arthur Guinness Son & Company (Dublin) Limited, 1972). The commercial

success of the Guinness Draught inspired Toney Carey, the brewing director at Guinness, to begin

looking into a solution for inserting Guinness Draught into cans, through an initiation mechanism

that would stimulate the formation of bubbles. Throughout the following 17 years Guinness devoted

a significant amount of investments into research and development and patented several different

versions of the widget. These included a syringe supplied with the bottles to help create a surge of

bubbles and consequently the foam head; initiation of the evolution of mixed carbon dioxide and

nitrogen gases from beverage by ultrasonic excitement or by pouring the beverage over an


Reference!

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKexcitation surface such as polystyrene granules (Arthur Guinness Son & Company (Dublin)

Limited, 1978). All of these attempts were short-lived and proved not to be commercially viable.

Incurred were extremely high costs in development. However, each significantly contributed to the

learning process, helped progress technology and production knowledge. For example, GB patent

no. 1,266,351 was a predecessor of the famous ‘widget’ and identified a need for a two chambered

container. Nevertheless, the high costs of development and special facilities necessary for charging

of mixed gases and sealing of the container proved commercially unacceptable.


The Guinness Draught in-can system project started to gain considerable attention in the 1980’s,

when new R&D director was appointed, who gave new life to the project and the development of

the widget was back on agenda. This was combined with canned beer becoming popular. The

Guinness brand was facing increasing competition from international brands such as Castlemaine

XXXX, Fosters and Miller Lite. Lager producers were enjoying growing success, due to the fact

that lager tasted much the same whether it was canned, bottled or on draught. The take-home

market was also increasing. Guinness believed its current headless beverage was regarded by

consumers as unattractive, particularly when drank from the container. As stated by the technology

manager working on the project: “There was a strategic commercial need inside the company,

coming from the highest levels, to develop a completely novel technology to put nitrogenised

Guinness Draught into cans and bottles suitable for shelf storage and retail purposes.” These were

some of the main reasons that lead to the beginning of development of a beverage package

technology to form a froth without any external influence being applied to the package. Table 2.

provides a timeline of the notable events in the development of the Guinness in-can system.

Invention of the Guinness Draught in can

It was not until 1989 that the UK patent GB-A-2,183,592 defined the famous invention of the

widget in the form of a hollow insert (pod) which had a 15ml chamber that linked with the beverage

through a 0.3 mm restricted aperture (Arthur Guinness Son & Company (Dublin) Limited, 1985)

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UK(See Figure 2). It was developed as a discrete insert rather than an integral part of container for

convenience of manufacture. The insert contained liquid that comprised of beverage containing

gases, with a pressure greater than atmospheric in the headspace of the container. Once opened to

atmosphere this resulted in pressure differential causing the pressure in the insert to eject fluid (this

could include gas, beverage or froth) from the insert in the way of restricted aperture. This caused

stout being “ripped apart” and generating extreme minute bubbles that left “vapour trails” of larger

initiated bubbles which developed within the headspace leading to the desired froth. A conventional

filling and canning line to pack Guinness lager was heavily modified to include the additional steps:

i) drilling of the restricted aperture ii) placing the pre-formed pod inside at the bottom of the can;

iii) three-cycle evacuation system and nitrogen flushing stage to remove oxygen from insert and

can; iv) reversing the can after filling the headspace; v) following pasteurization re-inverting the

can. The restricted aperture was formed in a side wall of the pod immediately before being inserted

into a can, while the filler applied the three-cycle and evacuation system and nitrogen flushing. In

the next step the can was charged with approximately 440 millilitres of stout that was

supersaturated with mixed CO2 and nitrogen gases at a temperature of 0 degrees while the

headspace above the stout was purged of air by the use of liquid nitrogen to overcome

contamination of the stout by oxygen. The can was closed and sealed under atmospheric pressure

with nitrogen added immediately before the lid was applied. Following this the can was quickly

inverted avoiding the beer being forced into the widget during pasteurisation. Consequently, the can

was subjected to pasteurisation process at approximately 60 degrees for about 15-20 minutes, re-

inverted and cooled at an ambient temperature causing the can pressure to fall and gas disappear

from the chamber. The project meant the Guinness could now sell the ‘perfect pint’ at home. As

stated by Packaging Manager: “The innovation added to the ‘theatre’ at home, which was

considered to be the key part of the experience.” However, it was more than just the appearance

that was affected, the beer flavour was much smoother, very different to traditional beers such as

Guinness Extra stout that included carbon dioxide (Wainwright, 1995).


Figure 2. diagrammatically illustrate the progressive stages in the formation of the beverage package in a canning line

The following sections will analyse the combinatorial reciprocal complementarity and the key

managerial practices that enabled Guinness to achieve the synchronous adoption between product

and process innovation; Design for manufacturing; Collaboration with external parties and internal

understanding of invented technologies; Cross-functional collaboration and role of integrators.

Combinatorial reciprocal complementarity

Process industries differ from assembly industries in many ways and hence require unique

management approaches (Utterback, 1996). Product and process development are an interlinked

process, often difficult to separate, therefore companies require a set of capabilities to manage them

when facing new projects (Chronéer & Laurell-Stenlund, 2006).

The following section will build on the Conceptual Framework of company’s capability to achieve

reciprocal complementarity. We will discuss three key antecedents that emerged from the primary

data collection as major contributors in development of the potential reciprocal complementarity,

capability to acquire and assimilate, between product and process innovation in the Guinness

Draught in-can system project.

Design for manufacturing

The food and beverage industry is commonly described as mature and slow-growing, with a level of

investment into R&D of less than 1 per cent (Costa & Jongen, 2006). Product and process

innovation are perceived as risky, complex and time-consuming endeavour (Sarkar and Costa,

2008). This often leads to projects in which companies continuously optimise their production


processes and product technologies, instead of undertaking radical innovations. These industries are

oriented towards cost minimization and therefore they are often reluctant to pass away the

preceding investments into established technologies and instead focus on improvements of the

production efficiency (Bunduchi & Smart, 2010). This results in companies building on well-

established capabilities rather than applying new problem-solving approaches (Tushman and

Anderson, 1986).

The Guinness in-can system project was an exception to this generalization. The devotion to

introduce this innovation within Guinness was sufficiently strong that the company was willing to

invest significant and notable time and resources, equally towards product and process innovation

from the beginning of the project. Commonly known as design for manufacturing (Pisano, 1997).

According to Hobday (1998) the more complex is the project, the more investment, experience and

knowledge is required particularly at the early stages of production. The development of the in-can

system was a result of more than two decades of R&D investment. Guinness originally spent around

£13 million developing the widget, and ‘blew up’ two factories in the process. While between 1984

-1988 the development of a radical new product technology and changes to the production line cost

Guinness around £5 million (Wainwright, 1995). As stated by one of the Project Leaders: “At those

times £30,000 was a lot of money, I myself was asking for more money to be devoted to the

project.” Guinness was able to justify the original, and subsequent, investments in development and

equipment on the production volumes and calculations of breakeven, as well as feedback with a

payback period of less than five years. Moreover, people working on the project always tried to

achieve the highest cost efficiency of production and the product technology. The key consideration

in the success of the filling and canning process was to maintain canning speeds, which are

typically 2,000 cans a minute. As any reductions in speed would increase costs substantially for the

company, thus maintaining speeds to as higher degree as possible was key to the product’s success.

As stated by the Packaging Manager: “For the inclusion of the widget to be


According to Bayus (1997) “in general, optimal development time and product performance levels are positively related”, while products with higher performance levels require longer development times. Williams (1992) argued that companies operating within the slow clock-speed industries often rely upon unique resources such as proprietary knowledge and patents. He also found out that the timing decision of the new product introduction is mainly influenced by the industry’s clockspeed.


viable option for us financially, canning speeds in the production process had to at least match the

current rate, if not better it. Despite the concerns about the production costs, once the new

machinery and technology have been in place the costs per can decreased.” This was one of the

key challenges within the project.

Proposition 1: Achieving combinatorial reciprocal complementarity requires equal prioritization

towards investment into product and process innovation, known as design for manufacturing.

Collaboration with external parties and internal understanding of invented technologies

Another characteristic of the food and drink industry is adoption of already existing technology

within the industry or development of a new application of technology used within other industries

(Archibugi et al., 1991). For example, adoption of technology for printing edible images from

Italian bakery by Procter & Gamble to develop Pringle’s potato crisps with words and images

(Huston and Sakkab, 2006). Guinness did not follow this approach, as they wanted to be the first to

develop the froth forming technology and supervised every single step in the NPD process.

However, despite having the froth development knowledge from the keg project as well as

numerous product concepts and enabling technologies that were developed internally, combined

with own filling and packing line, the project was too complex and team did not achieve any

significant success. The competition from lager producers was increasing, therefore Guinness

decided to identify, absorb and utilize different sources of the external knowledge to help them with

development of the unique product technology (Chesbrough, 2003). As stated in a growing number

of studies, during the innovation process, companies need to interact and collaborate with various

parties in the supply chain to complement internal R&D (Chesbrough, 2012; Huston & Sakkab,

2006). Laursen and Salter (2006) identified two dimensions of openness: i) breath (the number of

partners including scope of their combined activities) and ii) depth (referring to the level of

engagement and quality of relationship). According to survey on employment of inter-

organizational relationships conducted by Knudsen (2007), companies active in the food and


According to Williams (1992) companies operating within the slow clock-speed industries often rely upon unique resources such as proprietary knowledge and patents.


beverage sector have collaborated with at least one organization in their important product

innovation projects. Knudsen (2007) found that companies preferred to work with customers,

suppliers and competitors in comparison to research organizations and seemingly unrelated

businesses. However, these companies often struggled with the implementation of open innovation

practices due to lack of absorptive capacity (Spithoven et al., 2010). Moreover, based on the

findings of Freel and Harrison (2006), UK manufacturing companies tend to collaborate with buyer

firms when working on ‘novel’ product innovations. On the other hand when developing a ‘novel’

process innovation they co-operate with suppliers. In the case of Guinness this rule of thumb did not

apply, some of the key parties in the Guinness in-can system project were companies from outside

of the beverage industry. These collaborations were characteristic with high levels of engagement,

covering a broad scope of activities. McKechnie Plastic components was based in the automotive

sector and National Engineering laboratory in United Kingdom (UK) was a government-funded

public research laboratory. McKechnie Plastics Components, currently owned by Rosti group,

helped Guinness to design and develop the small plastic widget. Guinness has originally selected

various companies that would be able to produce a widget. Ultimately they chose McKechnie

Plastic Components, who were perceived to have the skills to help them develop and produce

100,000,000 of units in the mid 80’s.

There was a high level of risk involved in the project and at the beginning the plastic components

company was reluctant to get involved. Guinness had to convince them that the project will be

feasible and has the potential on the market. As stated by one of the project leaders: “They were

convinced only once it was evident for the widget to be successful on the market.” They

experimented with various technologies to produce the widget, at those times were common

thermoplastics and blow moulding, however plastic injection moulding proved to be the most

suitable option. The result was a hollow disk with circumferentially spaced array of radically

outwardly extending flexible tabs in a food grade plastics material with the use of a non-


contaminant gas as the blowing medium and immediately closing the pod to retain the gas inside

(Arthur Guinness Son & Company (Dublin) Limited, 1985). A diligent process was also drilling

and controlling for the size of the restricted aperture with a laser as Guinness did not want to

compromise on the quality of the froth. Guinness’s product and process knowledge enabled them to

work with their suppliers to develop this solution.

Guinness has partnered with the National Engineering Laboratory in the UK and their physicists

and mathematicians to conduct modelling work in order to understand all technologies and

processes involved in the project. The laboratory helped them to answer all the remaining questions

and weaknesses about functioning of the widget, levels of CO2 and the ideal size of the hole. As

stated by one of the project leaders: “The collaboration with National Engineering laboratory was

critical for the success of the project and we have learned a lot from it.”

Proposition 2: Achieving combinatorial reciprocal complementarity requires a high breath of

collaboration partners and high depth of level of engagement with external parties, while ensuring

that the inventor understands every step within the development of product and process innovation.

Cross-functional collaboration and role of integrators

The third integration mechanism that enabled Guinness to achieve reciprocal complementarity was

the cross-functional collaboration. The lack of intra- and inter-organizational coordination as well

as the sequential approach towards innovation have been identified as major barriers to innovation

in the food and drink industry (Costa and Jongen, 2006). In the Guinness in-can system project

there was a rich mutual communication between functional borders, as well as beyond

organizational boundaries. This was captured in response of the project leader, who compared

organization of work of the in-can system to a traditional German approach: “The in-can system

project did not portray the German model of division of work when scientists are working with

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKscientists and engineers with engineers, we tried to bring all of the knowledge together and were

open to exploring.” Hence more flexible internal working systems were evident.

The nature of innovation in the food and beverage industry is often complex and requires

innovation processes to be carefully coordinated both within and across organizational boundaries

(Grunert et al., 1997; Costa and Jongen, 2006). General management’s active central decision is

often stated as a potential solution in coordinating changes across departments, as the added value

of one resource depends on the utilization of other resources (Thompson, 1967). There were three

full-time general managers appointed by Guinness to lead the project and each acted as gatekeeper

in the collaborations with the external parties. Their inter-functional expertise enabled them to

effectively supervise all product development stages. Their role was especially important when

creating new resources and capabilities (Hauck et al., 1997) as they needed to develop new

complementarities between learning processes and ensure that Guinness made the best choice of the

product technology and production processes (Winter, 2000).

Proposition 3: Achieving combinatorial reciprocal complementarity requires cross-functional

collaboration and a team of cross-disciplinary individuals (integrators) to manage the

collaborations.

Realized reciprocal complementarity leading to complementarities-in-performance

We further build on the conceptual framework identified in the Literature review and illustrate the

exploitation and transformation capabilities, realized reciprocal complementarity, on the case of

Guinness Draught in-can system.

As stated by Fergal Murray, the Master Brewer at Guinness, Diageo: “The introduction of the

widget meant that consumers could now enjoy the perfect pint both in the pub and at home. It was a

long journey but every step was a masterful experiment and the end result is considered one of the

major innovations in the evolution of the beer industry.”


Innovation in the existing product and manufacturing process

Continuous improvement and innovation are the ‘life blood’ of organizations that do not want to

fall into complacency with current practices (Irani et al., 2004). Matlack and Holmes (2003) argue

that the slow clock speed industries, such as the food and drink industry, are known for strong

learning effects that are driving the reductions in the manufacturing costs. After introduction of

Guinness Draught can range the company continued working on reducing cost of the plastic insert,

processing costs for fitting the inserts into the container and more effective product technology. A

result of the following eight years was introduction of the current version of floating widget; a small

white plastic sphere 1.5 inches in diameter used in the Guinness Draught cans. Firstly, its benefits

were in the simple structure of the widget with one or more restricted apertures that made it possible

to efficiently produce and drop it into the container, without a need for specialist equipment on the

filling line to locate it. Secondly, when using the floating insert it was possible to use a thinner can

that lead to further savings. Thirdly, the pre-sealed inserts containing gas under pressure were

expensive whereas the floating insert derived its gas under pressure from the pressurized headspace

of the sealed beverage container. Moreover, it was ballasted into its natural floating position by

weighting provided by variations in thickness in the wall of the capsule. Fourthly, pressuring the

secondary chamber eliminated any wastage that was previously caused by beverage being drawn

into the hollow insert and not being ejected back once the container was opened. The development

of floating widget was later followed by introduction of the rocket widget that enabled Guinness to

bring the Draught experience to bottles and electronic plate, known as ‘surger’ that did not require

the technology anymore and lead to further cost savings.

Proposition 4: Achieving realized reciprocal complementarity leads to capability to identify further

product and process innovation opportunities.


Development of unique competitive advantage

The decades that were necessary to observe the evolution of the innovation allowed us to identify a

variety of benefits and opportunities the introduction of the widget brought to Guinness. According

to Williams (1992) companies that operate within the slow clock speed industries are able to

develop unique set of resources that enables them to differentiate from the competition. After the

development of the original in-can system by Guinness various companies have introduced different

forms and structures of hollow inserts to their own beverage packaging (Turner, 2001), see Table 3.

As stated by Wainwright (1995, p. 38) “widgets have proved so appealing and made such a great

impact on sales and brand shares that all major British brewers now offer them.” However, many of

the competing widgets relied upon a complex technology (e.g. sophisticated arrangements of

individual chambers and interconnecting passages, use of displaceable ballasting arrangements)

were very costly and hence ceased several years after development. Alan Forage, the widget’s

inventor in the book A Widget’s Tale stated: “It’s very satisfying to invent something that

revitalised both Guinness and the UK beer industry.” After trying their own modifications, they

(competitors) have come back to ours, because ours is the best.”

Proposition 5: Achieving realized reciprocal complementarity leads to developing a unique

competitive advantage for the company.

Brewer Widget name Year introduced/ after Guinness

Brief description

Worthington Bass In-Can-Draught

1995 The system was very different from others currently on the market and was based on bubble trapping technology using non-woven polypropylene fibre sheet folded to give a concertina. It is held in place by a locating ring to ensure that the sheet does not float.

Carlsberg Tetley Smoothflow 1993 The system consisted of an extruded polypropylene tube that was curved in the can base and held by holding ring, a separate injection moulded component.

John Smith Courage Caskpour 1993 System is manufactured using injection moulded polypropylene to create two separate components; one component forms a cavity to hold the system tight in the can and the second is a cap that forms a chamber.


Reference!


This chamber has a jetting hole on its underside and a standpipe above it.

Theakston Draught Best Bitter

Scottish & Newcastle Tapstream

1994 The most complex system on the market consisted of 5 components; three moulded polypropylene, machined plastic ball and ring of metal knives. The system was assembled and pre-pressurized in a lengthened fashion and dropped into can in expanded form.

Boddington Whitbread Draughtflow

1992 The system consists of two injection moulded plastic components; body and a cap. The body holds the system at the base of the can, it also has a cavity that forms a chamber when the snap fitting cap is applied. Both components are flushed and pressurized with nitrogen on assembly.

Table 1. Examples of widgets commercialized after introduction of in-can system by Guinness

Extension of the product range

Moreover, the knowledge developed during the original widget project has led to further product

opportunities. In 1999 the Guinness Draught range was extended to bottled beer by development of

the ‘rocket widget technology’ that required development of a new product technology as well as

production machinery, leading to further investment of £15 million. Recently, Guinness had

developed the ‘surger’, which consisted of a new product and a separate surging plate to create the

head and ‘fizz’ to the product. The glass of Guinness is put on an electronic plate that releases

sound waves into the liquid and creates a creamy head. The original impetus for this came from a

brief to ‘get rid of the widget’, and to do something else clever with physics to produce the same

result, whilst maintaining or increasing the ‘theatre’ of the experience. The development of the

surging system resulted in a cost reduction of around two pence for the widget itself and three pence

for the insertion. Furthermore switching the line over to produce these new cans required no

significant investment by the company. The same line was used, essentially the only difference was

that the machines for inserting and scanning for the widget were switched off, and different print

was applied to the can. Following the launch of the ‘surger’ in Great Britain in 2003, after a period

it was withdrawn from the retail/at home market, due to relatively poor sales. However it still

remains successful in the Japanese market, where bars are relatively small and the original kegs that

store eighty-six pints cannot not be utilized based on low demand within a week. See Table 2. for an

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKoverview of the key froth formation projects Guinness has worked on and the complementarity

between product and process innovation.

Proposition 6: Achieving realized reciprocal complementarity leads to capability to identify further

opportunities for extension of the product range.

Furthermore, according to the GB patent no 2,183,592 the invention could have been equally

applied to soft drinks such as fruit juices, squashes, milk and milk based drinks. This opportunity

has led to collaboration with Ball packaging Europe in 2003 and the development of the 0.53 litre

can that made it possible to apply the widget technology to milkshakes, mixed drinks, yoghurt

based drinks and coffee drinks. One of these examples is the coffee-flavoured soft drink “Kenco Ice

Cappio” produced by Kraft Foods in the United Kingdom in the widget can.

Proposition 7: Achieving realized reciprocal complementarity creates an opportunity for licensing

of a unique product technology to other product categories.

Figure 2. summarizes the potential, combinatorial and realized reciprocal complementarity

determinants that enabled Guinness to achieve reciprocal complementarity in the Guinness Draught

can project.

Year Events1964 Nitrogenation and Guinness Draught from

keg revolutionized consumption of beer in the pubs by Michael Ash

Late 1960’s Toney Carey, the brewing director at Guinness began looking into solution of inserting Guinness Draught into cans through a mechanism that will stimulate formation of bubbles

1972 First patent, called Guinness Acorn, that included the idea of internal chamber within a can (G.B. 876,628) by Sammy Hildebrand & Toney Carey

1978 Bottled Guinness Draught with an initiator device called syringe supplied with the bottles (U.S. D263107S) by Peter Hildebrand, launched in Irish market in 1979

1986 Board of directors at Guinness has agreed


about the strategic need inside the company to develop the in-can system

1989 The first commercially successful in-can system patented by Alan Forage and William Byrne (U.S. 4,832,968)

1991 The in-can system technology won The Queen’s Award for Technological Achievement

1997 Guinness merged with Grand Metropolitan Drinks to become Diageo, a global leader in beverage alcohol with iconic brands in spirits, beer and wine

1997 Guinness moved to the floating widget that is currently being produced by McKechnie Plastic Components

1999 Introduction of the rocket widget has extended the range of Guinness Draught to bottles.

2003 Surger, an electronic plate, releasing sound waves into the Guinness beer was released in Great Britain.

Table 2. Milestones in Guinness widget’s development


Figure 3. Determinants of achieving reciprocal complementarity in the Guinness Draught-in-can project

Conclusion

Companies operating within the low-medium-technology industries with low R&D spending

predominantly undertake incremental product and process innovations. This may result in the lack

of experience to undertake complex radical projects as well as a lack of knowledge on determinants

of successful achievement of reciprocal complementarity, the synchronous adoption of product and

process innovation. This paper makes two main contributions: to have developed a Conceptual

framework of company’s ability to achieve reciprocal complementarity based on a literature review

that spans several research streams, and to have illustrated the proposed concept on a unique

historic case study from a low-technology process industry, the Guinness Draught in-can system

project with its preceding and following projects.

The Conceptual framework builds on the theoretical assumptions of components of absorptive

capacity (Zahra and George, 2002; Fosfuri and Tribó, 2008). We identified antecedents of potential

reciprocal complementarity at three levels (industry level, company level and project level), three

categories of managerial techniques to achieve combinatorial reciprocal complementarity (cross-

Appointment of new R&D directorChanging consumer trends:Increasing competition from international brandsComplex product and process innovation


Design for manufacturingCollaboration with external parties and internal understanding of invented technologiesCross-functional collaboration and role of integrators

Combinatorial reciprocal

complementarity Innovation in the existing product and manufacturing processDevelopment of unique competitive advanatgeExtension of product rangeLicensing of product technology to other product categories


Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKfunctional collaboration, co-ordination between product and process design, transfer management)

and four different types of complementarities-in-performance from achieving realized reciprocal

complementarity (launch of new products, unique competitive advantages, financial benefits,

efficiency). Conceptualizing this fragmented knowledge from research domains of operations,

technology, general and innovation management within a single framework is one of the first

attempts to systematically structure and present prior research findings on reciprocal

complementarity. Our aim is to be the starting point in closing the bridge between these related

fields that are presented in journals with different readership (Lager and Rennard, 2014).

Our findings demonstrate that all three components of reciprocal complementarity are necessary to

achieve synchronous adoption between product and process innovation. Firstly, support for a radical

innovation should be coming from industry, company as well as project level at which both Product

and Process Development Managers should be willing to collaborate on the innovation, leading to

the potential reciprocal complementarity. Secondly, in order to move closer to achieving realized

reciprocal complementarity the Product and Process Development Managers have to adopt

combinatorial capabilities (one or more mechanisms). Evidence from the case study has explicitly

highlighted the important role played by cross-functional teams and crucial role of the Integrators.

This practice is consistent with findings of prior studies (Lakemond et al., 2007; O’Connor and

McDermott 2004; Turkulainen & Ketoviki, 2012; Wheelwright and Clark, 1994). Moreover, the

equal prioritization towards investment and attention towards both product and process innovation

resembles the design for manufacturing practice identified in the literature review (Adler, 1995;

Vandevelde and Van Dierdonck, 2003). The literature on interface between product and process

innovation currently lacks to provide insights into the ways suppliers can provide the product and

manufacturing knowledge (Rosell et al., 2014). The Guinness Draught in-can system case study

provides insights into collaboration of the beverage company with a company seemingly unrelated

to the industry on development of a unique product technology. It further demonstrates the


Moreover we contributed to the literature on the role of focal company as a co-ordinator throughout the collaborations with the external parties.

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKimportance of having the internal understanding about the developments, instead of outsourcing it

to be able to introduce the radical innovation.

Effective adoption and management of these techniques will then result in realized reciprocal

complementarity and ability to utilize opportunities in the launch of new products, performance and

efficiency. However, it has to be noted that the ability to realize the opportunities from reciprocal

complementarity might not be clear right after launch of the new product and process. The benefits

might be utilized in further projects. This will be possible only if the project leaders are aware of the

further opportunities that are open to them. Guinness was able to achieve a range of

complementarities-in-performance following the in-can system project such opportunities for

development of new products. The case has further confirmed the findings of previous research

(Rivkin, 2000; Wheelwright and Clark, 1994) by being able to develop a unique first-mover

competitive advantage. This advantage has also lead to licensing of the product technology to other

product categories in the food industry, providing additional revenues for Guinness, Diageo.

Managerial implications and future research recommendations

The Conceptual framework as well as findings will be particularly relevant to Product and Process

Development Managers responsible for the product and process portfolio of new projects. Their role

is to effectively manage the relationship between product and process innovation, particularly

within the radical Product and Process Development Projects. Therefore, having clear guidelines as

when and how to achieve this will result in more effective management of time and resources within

these projects as well as help managers to consider the range of opportunities that opens up to the

company once it achieves realized reciprocal complementarity.

However, we would like to note that we are not arguing that all companies in all of their NPD

projects should aim at the reciprocal complementarity. There might be various organizational and

contextual factors that will not allow development of such complementarity. These could be long

interconnected production chains, large fixed items of capital equipment or inequality in power


Moreover, our analysis provided further evidence that hypothetical suggestions and results of quantitative studies cannot capture the reality in the same way as insights from specific new product development projects. The case study provided evidence that the commonly stated linear, sequential type of innovation that was identified by studies in the low- technology industries is not generally applicable (Kraft, 1990; Novotny and Laestadius, 2014, Ford et al., 2014).

Paper submitted to:R&D Management Conference 2016 “From Science to Society: Innovation and Value Creation” 3-6 July 2016, Cambridge, UKbetween the buyer and supplier (Kurkkio et al., 2011; Lager, Blanco & Frishammar, 2013; Simms

and Trott, 2014).

To conclude, even though the current paper has focused on a single case study that took place in the

late 1980’s in the beverage industry. We believe that due to the common characteristics shared by

sectors operating in the process industries the findings of this research are applicable across a range

of both high and low-technology sectors (Lager, Blanco & Frishammar, 2013). Future research is

proposed to identify further cases that portray the reciprocal complementarity in order to

demonstrate whether the findings of the current research are simply idiosyncratic to the case of

Guinness Draught in-can system or similar factors were replicated by other cases of NPD projects

(Eisenhardt, 1991).

References

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Appendix

Project Keg Project Syringe project In-can system technology project

Floating widget project In-bottle system project (rocket widget)

Aims To develop a technology of serving Guinness Draught from the keg.

To develop a technology to create surge of bubbles and consequently the head of foam from the bottle.

To develop a novel product technology that would enable canned Guinness to provide the same experience and flavour as Guinness Draught at home.

To make the existing in-can system technology cheaper and simpler to produce and insert.

To develop a novel technology and insert Guinness Draught into bottles.

Challenges faced during development

To keep a balance between the pressure, temperature and how much gas went into beer.

Achieving the same foam head as when served from the keg.

Required steps to be done by the consumer, increasing the complexity of consumption.

Extremely high costs of development.

To choose the most suitable technology to produce the hollow insert.

To make the existing canning line compatible with the technology of widget, increasing production complexity.

Drilling and controlling of the hole in insert

Achieving the required volume of foam.

Pre-sealed inserts containing gas under pressure were expensive.

Decrease the cost of production, caused by additional steps added to the conventional filling and packaging lines.

Beverage was being drawn into the hollow insert and not being ejected back once the container was opened.

Plastic taint was evident in the flavour, particularly towards the end of shelf life.

Required development of unique widget that would not pass the bottle head and create the same foam as the in-can system but optimized for drinking straight from the bottle.

Required new production line.


Process changes

The gas company supplied a mixture of gases that were automatically dispensed by the bar tender pulling the tap.

The consumer had to develop the froth by himself.

Conventional canning line was used.

Need to include and attach a syringe in packaging process.

Conventional filling and canning line were modified to include additional steps:

To drill a hole inside restricted aperture

To feed widget to the can along conveyor belts one by one

Inserting the widget required several steps, as it was inserted on its side and then turned within the can to be placed flat to the floor of the can.

Insertion of the liquid and gases.

To rapidly invert the can after the lid was seamed to prevent beer getting into the widget.

To pasteurize the can and re-invert it.

To check the widget was inside the can and at the right level.

Some of the stages of production process were removed.

No need for specialist equipment on the filling line drill a hole and locate the insert.

It was necessary to add the additional step of an X-ray of the cans, to ensure the widget was inside.

It was not necessary to invert the can.

New packaging and filling machinery was required to insert the plastic in-bottle system.

Product technology changes

Easy serve system based on a single metal cask, combining two sections: one for the stout and cylinder with correctly pressurized mixture of carbon dioxide and nitrogen.

The keg was filled with Guinness stout and on the top part was attached a cylinder with a mixture of gases; one for 21mol CO2, 79 mol liquid nitrogen. Two lines were attached to the keg; one leading to the premixed gas cylinder the

Development of a separate syringe device was required.

The hollow insert was developed as a discrete insert rather than integral part of container for convenience of manufacture.

First to use a mixture of liquid nitrogen and oxygen in packaging.

The new improved technology benefited from simpler structure, with one or more restricted apertures that made it possible to efficiently produce and drop it into container.

Floating insert derived its gas under pressure from pressurized headspace of the sealed beverage container that eliminated any wastage of the beer.

Able to use thinner cans.

The rocket widget was developed as a discrete insert.


other leading to dispensing tap.On its way to the spout of this tap, the beer is forced at high speed through orifice plate with 5 small holes allowing existing micro bubbles to expand evidenced in the surge of bubbles.

Patent number

G.B. 876,628 U.S. 263,107 GB-A- 2,183,592 EP 1 053 953 B1

Figure 1. Figure caption (below centred figures)

Table 1. Table caption (above centred tables)

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researchportal.port.ac.uk · Web viewand realized reciprocal complementarity. We apply our framework to the historic case study of the Guinness Draught in-can system project with