Prerequisites for innovation in small companies : A multiple case study

This thesis examines innovation and design processes in small established companies. There is a great interest in this area yet paradoxically the area is under-researched, since most innovation research is done on large companies. The research questions are: How do small established companies carry out their innovation and design processes? and How does the context and novelty of the process and product affect the same processes? The thesis is built on three research papers that used the research method of multiple case studies of different small established companies. The innovation and design processes found were highly context dependent and were facilitated by committed resources, a creative climate, vision, low family involvement, delegated power and authority, and linkages to external actors such as customers and users. Both experimental cyclical and linear structured design processes were found. The choice of structure is explained by the relative product and process novelty experienced by those developing the product innovation. Linear design processes worked within a low relative novelty situation and cyclical design processes worked no matter the relative novelty. The innovation and design processes found were informal, with a low usage of formal systematic design methods, except in the case of design processes for software. The use of formal systematic methods in small companies seems not always to be efficient, because many of the problems the methods are designed to solve are not present. Customers and users were found to play a large and important role in the innovation and design processes found and gave continuous feedback during the design processes. Innovation processes were found to be intertwined, yielding synergy effects, but it was common that resources were taken from the innovation processes for acute problems that threatened the cash flow. In sum, small established companies have the natural prerequisites to take advantage of lead-user inventions and cyclical design processes. Scarce resources were found to be the main factor hindering innovation, but the examined companies practiced several approaches to increase their resources or use existing scarce resources more efficiently in their innovation and design processes. Examples of these approaches include adopting lead-user inventions and reducing formality in the innovation and design processes.