Title: Allocating resources to disruptive innovation projects: challenging mental models and overcoming management resistance

Authors: Fiona Lettice, Peter Thomond

Addresses: Norwich Business School, University of East Anglia, Norwich, NR4 7TJ, UK. ' Queensland University of Technology, Brisbane Graduate School of Business, B422, Level 4, B Block, Gardens Point Campus, Brisbane, QLD 4001, Australia

Abstract: This research, based on four in-depth case studies, probes an overlooked unit of analysis in innovation management literature, namely, management action and cognition, and offers a new qualitative contribution into resource allocation approaches that support radical innovation. The interpretivist approach revealed that a management team|s resource and path dependencies and prevailing mental models underpin resource allocation routines, which prevent managers from pursuing radical innovations. Of particular interest were the innovations that disrupt and re-shape the existing terms of economic engagement in established industries. It was found that managers with restrictive mental models will adopt up to five disruptive innovation rejection strategies: rewarding incrementalism; ignoring the positive aspects of disruptive innovations; focusing on historical perceptions of success; creating perceptions of success with high effort; and holding beliefs in the face of disconfirming information. Initial longitudinal data suggests that rejection strategies can be overcome with holistic portfolio approaches.

Keywords: disruptive innovation; funding routines; portfolio management; resource allocation; mental models; management resistance; innovation management; radical innovation; innovation rejection.

DOI: 10.1504/IJTM.2008.020702

International Journal of Technology Management, 2008 Vol.44 No.1/2, pp.140 - 159

Available online: 12 Oct 2008 *

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