Innovation in Construction A Project Life Cycle Approach

4. A Survey of Construction Innovation at the Firm-LevelIn order to develop measures for innovation that areappropriate to particular sectors it is necessary tounderstand the sectors own view of the significanceof innovation and how and why it does (or does not)occur. To this end, this section of the report presentsan analysis of innovation at the firm level that is theresult of a survey of entrants for the 2009 NorthwestRegional Construction Awards. The entrants for theawards provide and interesting sample for analysis as,by definition, they believe themselves to be at the forefrontof current practice. The survey itself used an InnovationValue Chain (Hansen and Birkinshaw, 2007) approachso that although the survey considers innovationfrom a firm-level it considers all stages in the process ofdeveloping new ideas, putting these ideas into practiceand diffusing successful practice to the wider organisation.4.1 The innovation value chainThe stages of innovation have been classified invarious ways by different authors. Rogers (2003)offers five stages namely, knowledge, persuasion,decision, implementation and confirmation. Wolfe (1994)suggests ten stages including idea conception,awareness, matching, appraisal, persuasion, adoptiondecision, implementation, confirmation, routinization,and infusion.Tangkar and Arditi (2000) proposed asix-phase labyrinth of innovation, where the flow ofsuccessful innovation comprises need, creation,invention, innovation, diffusion, and adoption.Hansen and Birkinshaw (2007) on the other hand presentsinnovation as a sequential, three-phase process thatinvolves idea generation, idea development, and thediffusion of developed concepts that includes sixcritical tasks namely, internal sourcing, cross-unit sourcing,external sourcing, selection, development, andcompanywide spread of the idea. In their classification,the whole process is referred as the IVC. The first phaseis to generate ideas that can happen inside a unit, acrossunits in a company, or outside the firm; the second phaseis to convert or select ideas for funding and developingthem into products or practices; and the third is to diffusethose products and practices. Similarly, Roper et al.(2008) model IVC as a recursive process that has threemain links such as ‘knowledge sourcing’ to assembleknowledge necessary for innovation, ‘knowledge transformation’to translate knowledge into physical innovation,and finally ‘knowledge exploitation’ to improve theenterprise performance. The IVC offers a tailored andsystematic approach to assessing firm-level innovationperformance (Hansen and Birkinshaw, 2007). It is possibleto apply the basis of the IVC framework and investigatethe innovation process at the project level as wellas the firm level. Table 1 shows the links of value chainand key questions to measure each link.Table 2: The innovation value chain at firm-level (Hansen and Birkinshaw, 2007)IDEA GENERATIONCONVERSIONDIFFUSIONIn-houseCross-pollinationExternalSelectionDevelopmentSpreadCreationwithin a unitCollaborationacross unitsCollaborationwith partiesoutside the firmScreening andinitial fundingMovement fromidea to first resultDisseminationacross theorganisationKeyquestionsDo people inour unit creategood ideas ontheir own?Do we creategood ideas byworking acrossthe company?Do we sourceenough goodideas from outsidethe firm?Are we good atscreening andfunding newideas?Are we good atturning ideas intoviable products,businesses, andbest practices?Are we good atdiffusingdeveloped ideasacross thecompany?7