Expanding innovation through challenging organization endowments

Abstract

Radical innovation in mature or large organizations has been on the decline in recent years. Incremental innovation is the norm and few large organizations create evolutionary or radical innovative offerings. A reason for the lack of innovation in mature or large firms is based on management practices over the last several decades for pursuing sustainable competitive advantage that are affected by various biases. The resource-based view of the firm, open innovation, and design thinking are discussed, and resulting endowment effect biases are identified from literature and case studies from individual companies and industries. An innovation endowment effect framework is created to qualitatively assess strengths of various endowments. Various methodologies and processes are discussed to reduce the impact of endowment effect biases and increase radical innovation.