Top teams and innovation

Over the past 20 years there has been increasing interest by researchers into the composition, roles, processes and the value-added by Top Management Teams (TMTs). However, there have been few studies that have examined how TMTs deal with the topic of innovation. This is a significant gap in our understanding of Innovation Management, since there is considerable evidence that top managers have considerable influence over the status of innovation in their organisations, how innovation is to be facilitated and what deliverables should flow from innovation resource allocation commitments.

Relevant theoretical perspectives for studying the topic include Domain Theory, Neo-Functionalism, Resource-Based Theory, Dynamic Capabilities Theory, Contingency Theory (of organisation configurations) and Group Dynamics Theories.

Preliminary findings from our research suggest the following hypotheses:

H1: TMTs operate as dominant coalitions that set an organisation's innovation agenda as a dimension of their strategic positioning: innovation is not differentiated from wider strategic commitment decisions.

H2: The current consensus on the key components of Resource-Based Theory underestimates the significance of four TMT-level managerial dimensions: namely, (i) the cost of acquiring resources; (ii) the complexity of constructing resources; (iii) the significance of fora for exploring competing arguments for future innovation-orientated resource configurations and (iv) the problem of measuring levels of resource capability.

H3: In successful companies, TMTs undertake six key roles in relation to organisational innovation. These are: (i) determining the corporate level of ambition in relation to innovation; (ii) specifying the key result areas ("this is where we need innovation"), (iii) specifying the modalities by which flows of value-creating innovation will be facilitated, (iv) legitimising innovation through leadership acts; (v) taking 'big bet' decisions and (vi) protecting the organisation from the potential downsides of the corporate commitment to innovation on other dimensions of the business.

Our research is at an early stage of development. We will explore the role of top management teams in constructing the organisational capabilities to increase the probability that what I call 'good' innovation will occur to create value faster than cost and improve the organisation's strategic position.

Our earlier research, and that of others, has demonstrated that how top managers think and how they behave makes a particularly important impact on innovation, partly because doing new and different things disturbs the status quo and requires commitment decisions. It is therefore incumbent upon those of us who are interested in the management of innovation to deepen out understanding of how TMTs operate in this area and, eventually, to develop evidence-based theories of effective and ineffective teamwork practices.

This is a complex research topic and one that draws on at least half a dozen pools of literature. We believe that recent developments in several research areas, particularly those concerned with Dynamic Capabilities and a sociological school of thought known as neo-functionalism, open the door to a higher level of research-based theory and new insights into practice.

Our unit of analysis (UoA) is the TMT, rather than an individual senior manager. We selected the TMT as the UoA not because the individual is unimportant but because there is evidence (Janis) that ill-functioning teams can damage or destroy individuals' capacity to make an effective contribution. And that effective teams strengthen individuals' capability, provide alignment, increase motivation and strengthen leadership. (Incidently, this view is consistent with recent trends in leadership research that suggests that leadership can be a shared function, rather than a set of individual attributes.).

A scan of our initial research data suggests that there are five major roles for top management teams. These are:

(1) determining the corporate level of innovation ambition and key success factors

(2) ascertaining the link between different forms of innovation and larger overriding corporate strategies

(3) determining the required facilitative innovation architecture (4) specifying the types of nature and severity of innovation challenges that the company faces

(5) clarifying the role of the top management team visibly pursuing the corporate innovation agenda.

A top management team has five major responsibilities. These are:

(1) determining the required membership of the core and support teams and how those interrelationships work

(2) determining the required team culture the processes for dealing with innovation related issues and monitoring performance and understanding the required deliverables at consensus is required

(3) clarifying decision-making processes related to innovation

(4) clarifying the decision-making processes related to innovation both those which require the active decision of the top management team and the process by which our subordinate decisions are taken in the appropriate levels

(5) what leadership messages and what is required of top management team members in signalling the commitment of the leaders to innovation and lastly configuring the innovation architecture for the organisation.

© D L Francis 2018. Creative Commons.