Post on 04-Mar-2023
Syddansk Unversitet - University of Southern Denmark
How to organize for cultural innovation Exam paper in the course “Organization of Innovation” – Spring 2014
Author: 30 38 84 (exam number)
Exam paper in Organization of Innovation – Title: How to organize for cultural innovation – Hand-in date: 6/2/2014
Contents
Introduction ................................................................................................................................ 1
Theoretical streams ..................................................................................................................... 2
Introducing an alternative perspective on innovation ...................................................................... 3
The relevance of cultural innovation in organization of innovation.................................................. 5
Synthesis/discussion .................................................................................................................... 7
Absorptive capacity........................................................................................................................... 7
Absorbing cultural knowledge ...................................................................................................... 8
Diversity of minds in the organization is the key to cultural innovation ....................................... 9
The organizational challenge of implementation ........................................................................ 11
Communities of Practice ................................................................................................................. 12
The appeal of communities of practice for cultural innovation .................................................. 13
What it takes to cultivate cultural communities of practice in an organization .......................... 15
Conclusion ................................................................................................................................. 19
Literature .................................................................................................................................. 21
Exam paper in Organization of Innovation – Title: How to organize for cultural innovation – Hand-in date: 6/2/2014
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Introduction During this course we have almost exclusively focused on innovation with regard to products,
the technology of products or the processes of production and R&D. This may be
straightforward when researching a B2B setting. In a B2C setting, where the value of
products and services is deeply interconnected with symbolic meaning, the innovation theory
of today offers almost nothing. There has been a certain focus in organization and innovation
theory, which naturally emphasizes some aspects of innovation at the cost of others.
Specifically, the cost has been knowledge on how to organize for innovation in B2C setting,
which is a place, where it is not exclusively the technological innovations that comprise value
in business. This paper has the following thesis statement and the supplementary research
questions:
Thesis statement
This paper is an attempt to make an outline of a theory of how to organize for innovation in
the B2C market.
- How can we define innovation, which captures the symbolic dimensions?
- What are the implications of introducing a new definition of innovation for the field
organization of innovation?
There are many perspectives on B2C business and innovation. This paper chooses to go with
a consumer culture theory perspective here. Consequently, the paper is not set up as a
traditional paper within a given academic field; a traditional paper would first presents some
theoretical streams from the field, discuss their relevance for its problem thesis. In the
discussion section, it would analyze the pros and cons of these streams, discuss similarities
and differences with other streams, or extend the line of thought of the streams presented.
This paper, however, attempts to introduce a completely new theoretical stream, namely the
consumer culture perspective, rather than use existing theoretical streams from the
organization of innovation field. In the discussion section the paper demonstrates the value of
the new theoretical stream by integrating it into some specific domains of organization of
innovation, namely how to manage knowledge flows in the organization – more specifically
it goes into the concepts of absorptive capacity and communities of practice.
The output of this paper is thus a presentation of some principles and suggestions for
organization of innovation, which relate to companies operating in a B2C business. More
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specifically it explains how to understand and implement the concepts of absorptive capacity
and communities of practice by using the insights into B2C given by the CCT perspective.
Theoretical streams One of the conventional and even orthodox views on innovation on B2C is the blue ocean
strategy. W. Chan Kim and Renée Mauborgne (2005) introduced the idea of rejecting the
conventions of product categories to craft a product or service, which offer totally new value
and has no competition, thus the coinage “blue oceans” - as opposed to competition-ridded
“red oceans”. From this has evolved two dominant views on innovation. One stresses that
commercialization of new technologies, which create more clever ways of enhancing the
functionality of a product, is what drives business. Another sees innovation as the unexpected
mixing and matching of existing features and technologies from different categories, which
leads to a new unique value proposition for the customer. Both views are loyal to the general
notion of “blue oceans”. These conceptualizations of blue oceans, however, does not capture
some of the most creative and impactful innovation in B2C history: “Consumers – the
ultimate arbiters of market innovation efforts – often find offerings to be innovative even
though they seem quite pedestrian from a product-design standpoint. It turns out that
blockbuster new businesses do not necessarily require radically new features that
fundamentally alter the value proposition” (Holt & Douglas, 2010). We seem to be dealing
with a limitation of scope here. There is something about innovation, which the product
design focused perspectives does not capture and this has also created blind spots in the
literature pertaining to organization of innovation.
In most organization theory functional attributes has been the dominant perspective on
product development. These attributes, however, are no more significant than the symbolic
attributes of products – at least in B2C contexts. Consumers do not make rational choices
based upon, which product performs best, although they like to think, they do (Levy, 1959;
Holt, 2002). Rather symbolic differentiation seems to be the differentiating element in a large
part of B2C businesses. Luckily, other fields have been occupied with this fact of reality for
quite some time. However, we then move into a massive field of management and marketing
studies, which contains a variety of perspectives on how to manage these non-physical or
non-product dimensions of business; e.g. consumer psychology, behaviorism, service
dominant logic (SDL) marketing or consumer culture theory (CCT).
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Introducing an alternative perspective on innovation Of the many available perspectives on B2C theory and innovation this paper will go with the
one emphasizing consumer culture and symbols, i.e. consumer culture theory (CCT). Why?
Symbols and the concept of culture capture very effectively most of the non-physical and
non-functional aspects of consumption. Sidney J. Levy was one of the first to acknowledge
this with his seminal article “Symbols for Sale” (1959) in the Harvard Business Review. “The
things people buy are seen to have personal and social meanings in addition to their
functions [by implication, the things are symbols1]. To ignore or decry the symbolism of
consumer goods does not affect the importance of the fact. The only question is whether the
goods are to be symbolized thoughtfully or thoughtlessly.”. This was thought-provoking at
the time for some of the conservative minds in the marketing industry.“This point is worth
some emphasis since many people disapprove of the fact that purchases may be made on
what they consider to be insubstantial grounds.”. Levy here refers to the natural disposition
of especially the Western individual (Weber, 1920) to appear as a rational being with clearly
intentional motivations. That one’s consumption pattern is supposed to be driven by symbols
of social class or caste, sex or by the fulfillment of desires (hedonic experiences) rather than
rational needs goes against such a self-image. Levy represented one of the early perspectives
of the consumer culture theory field, which is a family of perspectives on consumption, such
as anthropology, sociology and other social studies disciplines. These perspectives can be
said to commonly have an interest in “cultural meanings, sociohistorical influences, and
social dynamics that shape consumer experiences and identities” (Arnould & Thompson,
2005) all of which is mediated through the marketplace of today.
As CCT has kept evolving, it has produced a framework on innovation, which challenges
most conventional thinking about innovation. Douglas Holt and Douglas Cameron (2011)
argue in their book “Cultural Strategy” that a lot of innovations are based on a latent demand
for ideology rather than a latent demand of functionality. Thus they identify ideology as that,
which the abovementioned product design focused perspective on innovation could not
capture. As history is written, this brings with it cultural and ideological changes as well. In
many Western countries WW2 brought with it consequent cultural and ideological2 dynamics
1A symbol is something which stands for something else than itself. Because of this they can to a certain extent be defined as mediums of meaning –. The symbol can be regarded as the fundamental unit in cultural and social sciences, much in the way the atom is the fundamental unit in physics. 2This paper does not present the formal definitions of “culture” and “ideology”, since the common
understandings of these is sufficient for any reader to understand the argument put forward throughout the paper.
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in the decades following the war, such as more working women, new wave of consumer
technologies (adaptions of the war machinery) or international solidarity (the UN). Such
historical opportunities are continuously answered with specific cultural content residing in
commercial elements as brands, products or communication. These elements are as much part
of today’s cultures as is a museum or family patterns. Innovation in this framework is defined
not as the invention of functionally better performing technologies, but as the successful
management of products and brands as the vehicles of cultural expressions, they are. A
cultural expression is composed of ideology, myth and cultural codes. Cultural expressions
carry immense innovative potential. For example, Nike’s shoes were not functionally better
performing than all other brands. The brand of Nike however conveyed an ideology of
combative solo willpower. They staged this ideology in the myth of their slogan “Just Do It”,
which suggests overcoming societal discrimination through sport. The myth was in turn
conveyed in advertising and communication by use of specific cultural codes of poor black
youth, chain link hoops and housing projects. The main takeway here is that cultural
expressions create a halo effect affecting perceptions of functionality. Nike conquered the
mass market because consumers of that time strongly identified with the cultural expressions
of Nike. It fit so well with their identity projects, that the consumers readily made strong
inferences about how Nike shoes improved their own performance.
The red ocean in this perspective is the cultural orthodoxy, i.e. taken-for-granted cultural
expressions of brands. For example one could argue that cultural expressions in the luxury
cars industry are worn out – i.e. the myth of a powerful, well-dressed man, who knows what
and who he wants and gets it. However, only an elaborate cultural understanding of the
(potential) buyers of luxury cars (we will return to how such understandings can be achieved)
would clarify whether there is indeed a latent ideological demand with these buyers, which
must be addressed by a particular new cultural expression. The authors refer to social
disruptions in this regard: “the engine of cultural innovation is historical change in society
that is significant enough to destabilize the category’s cultural orthodoxy, creating latent
demand for new cultural expressions”. The social disruption driving Nike’s ideology of solo
combative willpower was the rise of the historic rugged individualism of the USA, which was
a product of the economic downturn of the seventies. The rise of popularity of individual
sports compared to team sports was a manifestation of this new emphasis on rugged
individualism. Nike used this social disruption to symbolize the break with team sport to
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celebrate solo willpower instead, which allowed them to break through to the consumer
masses.
The final fundamental element in this framework is source material, which are the
inspirational elements used in crafting the cultural expressions. These material sources come
in three types: subcultures (e.g. running enthusiasts), media myths (often packaged in popular
culture) and brand assets (e.g. Nike is the goddess of victory).
There are more elaborations on how marketers can apply this framework, but which cannot
be included in this
short introduction of its
main principles. We
can conclude that this
framework makes a
systematic discipline
out of utilizing cultural
expressions. In practice
until now, successful
cultural expressions of
brands have mostly
been the result of the
gut-feelings of entrepreneurs and marketers or something, which came naturally from being
passionate about one’s undertaking and immersed in a particular subculture or industry. The
founders of Ben & Jerry’s were passionate about the counterideological movement to
conservative Reaganism in the 1980s America, which manifested itself through the “free
food” movement and other “back-to-the-land” initiatives. Their brand built on exactly this.
The relevance of cultural innovation in organization of innovation
Holt & Douglas touch only a little upon how a company can organize for cultural innovation.
They present the concept of cultural studios, which are essentially communities of practices,
which consist of the designers of cultural innovation, its strategy and execution. An extended
discussion of this is made in the analysis section. It must be noted that others have also
proposed principles of organization with regard to cultural innovation, such as Grant
McCracken (2010), (2012). Although this would certainly be relevant to include in this paper,
it is not possible, because of the limited number of pages assigned.
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Let us recapitulate the relevance of organization of innovation in all we have talked about
until now; we first addressed above the lack of an organization perspective with regard to
innovation on B2C. The CCT perspective offers a very powerful perspective on B2C in
general. We then showed how CCT has produced a very specific perspective on B2C
innovation. Now, in the analysis section we will take a closer look at how companies can
organize for this new and potentially powerful kind of innovation on B2C. What we are
basically doing is introducing a perspective from the field of CCT to the field of organization
of innovation. CCT brings with it an emphasis on culture, but very rarely goes beyond the
idea and creative stages of business. Organization of innovation, on the other hand, is very
focused on technology and the physical processes of business, but is nevertheless more
practically oriented with an emphasis on management and implementation.
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Synthesis/discussion There are implications of the new definition of innovation. One may first think of the
management knowledge flows, which are the basis for discovering innovation opportunities
and ensuring that the organization is capable of exploiting this. This leads us to another
aspect, which goes a step further with regard to implementation of the new kind of
innovation, namely creating ambidexterity. Ambidexterity is an issue, because a company
must first explore new ideologies and then exploit the ideology in the product and
communication development. Thus, this paper could potentially discuss how to manage
exploring and exploiting at the same time when it comes to non-technological innovation at
the B2C market. One could take out examples of famous B2C innovations, which
demonstrate the significance of the symbolic dimensions (e.g. Nike, Starbucks or Clearwater
pregnancy test – all of which are brands, whose physical product is not unique nor the best
performing) and then show how ambidexterity may be understood in such organizations.
There are other aspects, which would be very relevant from both an organization of
innovation and the CCT viewpoint, such as the exploitation phases of cultural innovations
(the above framework focuses almost exclusively on exploration phases) or open vs. closed
innovation. This paper, however, chooses to focus on how to deal with the abovementioned
knowledge flows. This makes sense, since knowledge flows are the most decisive element of
a cultural innovation. In the following we will bring together our CCT perspective with two
organizational concepts of knowledge flow management; absorptive capacity and
communities of practice. The former provides us with some general organizational principles
with regard to innovation, whereas the latter is a specific example of how a model of
organization of innovation can drive B2C innovation, i.e. cultural innovation.
Absorptive capacity Absorptive capacity is a term, which Cohen & Levinthal (1990) introduced in order to
describe organizational learning and innovation. The idea of absorptive capacity provides
some very powerful notions of how managers can make their organizations more apt to
perceive and utilize knowledge leading to innovations. In the following we will try to use
these powerful notions to suggest organization principles with regard to cultural innovation.
In order to say something about how to manage knowledge flows in our new
conceptualization of innovation, we must first understand the type of knowledge, we are
dealing with. Cultural knowledge.
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Absorbing cultural knowledge
There seems to be two ways of working with cultural knowledge. One can use ethnographic
or sociological analyses to illuminate and unpack the often tacit cultural knowledge. This is
common in corporations, because they have a strong need to know exactly, why and how
their product, brand or communication has an attractive cultural expression. A formal cultural
analysis by an anthropologist meets that need. An alternative option is to rely on the aspect of
embodied knowledge (Bourdieu, 1977) i.e. manage the organization in a way, that obviate
making cultural knowledge formally explicit and external to ourselves as in the first way.
Many successful B2C companies are indeed successful because they have an in-built quality,
which meant that its employees without much thought continuously and selectively collect
relevant information from society and use it in products and branding. Such organizations are
perfectly tuned in with their surrounding culture and thus automatically “absorp” relevant
knowledge to create innovative products. Cultural knowledge works here as an heuristic for
marketing decision making. i.e. the management does not need to specify exactly what
psychological or neuroscientific variables are triggered in a customer from a particular
communication or brand association in order to support a particular decision . This is the
need, for physical and tangible proof, which is common in many organizations. However a
proper mastering of culture can actually show to be more fool-proof than any other
“scientifically” tested communication campaign. One needs not the intellectual framing of
culture by an anthropologist in order to create culturally resonant brands.
One of the thoughts Levinthal and Cohen built their concept on is March and Simon’s
(1958:188) observation that innovation is actually more a result of borrowing than invention.
This notion of innovation is at the core of cultural innovation. Innovation lies not in the
invention of new ideologies or new meanings for your brand. Rather you are part of
something “cultural”, something “ideological” yourself. The innovation lies in how you
utilize this to create a brand, which gives you competitive edge. You borrow existing
ideologies to create myths around your own brand, hence becoming an ideological parasite
and proselytizer at the same time (see Holt (2006) for an analysis of this feature of brands).
Starbucks for example was a proselytizer of the rising ideology of cultural elitism in 1990s
America, which revolved around branded sophistication rather than just expensive stuff (thus
emphasizing cultural capital alongside economical capital for social class distinction). Hence
being a sophisticated coffee drinker was what drinking Starbucks symbolized for a long time.
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The main principle of successful absorptive capacity is that the organization’s expertise (i.e.
prior knowledge of a field) is highly correlated with their ability to identify technological
opportunities. Aspirations and strategy are not driven by potential economic performances
and results, but framed within the possibilities, which they see as a result their knowledge
base. Levinthal and Cohen may have underestimated the scope of this principle. It is not
merely a question of identifying technological opportunities, but also cultural opportunities,
which inspire creativity, which can drive combinations of ideology, myth and cultural codes
into an innovative cultural expression – such as Starbucks’ branded sophistication.
Diversity of minds in the organization is the key to cultural innovation
Within this framework, organizations (and individuals for that matter) possessing a lot and
diverse knowledge will tend to be more proactive, exploiting the technological opportunities
present in their environment, independent of current performance. Alternatively,
organizations having less diverse sources of knowledge tend to be reactive and more
occupied with performance criteria, which are economic rather than technical (such as
profitability, market shares or big data). Again, if we merely change the word “technical”
with “cultural”, we have a very resonant organizational principles to add to our CCT
perspective on innovation. Cohen and Levinthal’s description of the reactive organization is
very alike to the culturally orthodox organization in B2C, which reproduces taken-for-granted
cultural expressions, thus never escaping a red ocean scenario. Red oceans, if we recall, are
characterized by fierce competition driven by incremental innovation, since all follow the
same template for cultural expression in a culturally unreflective attempt to position and
differentiate themselves in the mind of the consumer. This was the case with coffee in
America before Starbucks introduced a new cultural expression for coffee based on cultural
sophistication. The proactive tendency referred to, then captures the organization, which
actively challenge the cultural orthodoxies and make their product or brand a symbol for a
latent ideology that is framed in a resonant myth and conveyed by strong cultural codes,
exactly as Nike, MTV or Levi’s in the 80 and 90s accomplished3.
From the above it seems clear that a diverse range of organization knowledge must come
through a diverse range of employees. It is the current and potential expertise of employees,
3 It is important to note that although most of the examples of cultural innovations on B2C throughout this paper are super-successful global brands, there are also a lot of examples of smaller organizations undertaking cultural innovations on a daily basis. Presenting such small companies, however, requires more elaborate descriptions of their business and of their consequently more particular cultural expression. The amount of pages assigned only allows reference to brands and ideologies, which the reader probably knows and where the link between the cultural innovation and the company success is more straightforward to acknowledge.
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which determines the organization’s prior knowledge of a given field. Cohen and Levinthal
also stress that a diverse range of knowledge alone will not lead to the proactive exploitation
of opportunities; “… an organization's absorptive capacity is not resident in any single
individual but depends on the links across a mosaic of individual capabilities” (p. 133). An
organization only utilizes the expertise of different individuals, if these have an overlapping
knowledge base, which will allow for effective communication and interaction with each
other. There is however a trade-off between the desirable diversity of knowledge and the
practically necessary commonality of knowledge. A culturally innovative organization must
consist of individuals, who can gain access to and handle the source materials for a cultural
expression; Some would have knowledge of or are immersed in a particular subculture (for
example employees in Samsungs TV division, who are part of Hi-Fi enthusiast communities),
some who are constantly aware of media and popular culture myths (Employee awareness of
how flat-screen TVs appear in popular culture) and others would recognize the potential of
existing assets with the organization (ESPN sports channel employees used their informal
low-budget studio in their advertising, which created an authenticity, which drove their
success). All such individuals are the representatives of a diversity of knowledge. A
commonality of knowledge, to ensure easy coordination among employees, must flow from a
general appreciation by organizational employees of the value of cultural expressions of
brands and products. Finally, mangers are also a source of common ground for the diversity
to meet. They must be culturally savvy individuals, who can identify latent ideologies in the
marketplace. As lead coordinators of a cultural innovation, they must know exactly how the
cultural expression works. They are the one, who coordinate a work group, who has access to
potential source materials (this is what Howard Schultz at Starbucks or Darius Bikoff at
Vitaminwater accomplished). Important to stress here, is that what we term “knowledge”
here, is something, which often goes unarticulated and is used in the advertising and product
development on a “gut-feeling” basis (Sunderland and Denny, 2007). This is because we are
dealing with cultural knowledge, which has the property of often being embodied, which
means individuals may not be very conscious of their own cultural skills.
Levinthal and Cohen were very limited to talking about R&D as the organizational unit
responsible for absorping (i.e. discovering and exploiting) relevant knowledge. This clearly
needs not be the case with cultural innovation. More specifically Holt & Cameron suggest
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cultural studios, which were mentioned above, as the real “absorpers” of the organization4.
We will return to this shortly. A central theme in Cohen and Levinthal is for example the
copying of innovation from and of competitors (spillovers and appropriability). With the
cultural innovation these themes become of much less importance, since it is much harder to
legitimately (in the minds of consumers) imitate a cultural innovation than a technological
production process of product. For example, it would be very hard for LG mobiles to get
away with saying that “LG stands for anything, you want it to stand for”, since this would be
an exact same element of the cultural expression, which HTC is promoting of their brand.
The organizational challenge of implementation
“Absorptive capacity is more likely to be developed and maintained as a byproduct of routine activity
when the knowledge domain that the firm wishes to exploit is closely related to its current knowledge
base. When, however, a firm wishes to acquire and use knowledge that is unrelated to its ongoing
activity, then the firm must dedicate effort exclusively to creating absorptive capacity (i.e., absorptive
capacity is not a byproduct). In this case, absorptive capacity may not even occur to the firm as an
investment altemative. Even if it does, due to the intangible nature of absorptive capacity, a firm may
be reluctant to sacrifice current output as well as gains from specialization to pennit its technical
personnel to acquire the requisite breadth of knowledge that would permit absorption of knowledge
from new domains.” (Levinthal and Cohen, 1990, p. 149)
Although the above quote is about technological innovation, the issues put forward resonate
even more strongly with cultural innovation. Cultural innovation often occurs through
individuals of the organization, who are naturally immersed within the surrounding culture
because of personal interest or passion, i.e. their cultural knowledge is the “byproduct of
routine activity”. By-product in this case is of course cultural knowledge, and as mentioned
before, culture has the wonderful property of residing in our very bodies and is therefore
accessed by marketers and businesspeople on a “feel”-basis. They are able to interpret culture
and to see “patterns”, which are relevant for the company brand and product – thus enhancing
the organizations absorptive capacity with regard to cultural innovation. This is the
individuals in the cultural studio or the individuals, who from their passion of some ideology
or culture succeeded in making great businesses (particular examples are Ben & Jerrys, Nike
or Starbucks). But what then, when one does not possess these “gut-feelings” of the fact that
flat-screens for example, are not just about the technical performance, but just as much a
furniture in the home, an aesthetic piece, for which reason wives of hi-fi geeks become key
4 If we ask McCracken (2009) (another perspective on innovation based on CCT), he would identify the absorbing unit as the Chief Cultural Officers.
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decision makers? In such a case, we note that cultural analysis (made by anthropologists, for
instance) unpacks and illuminates specifically such tacit cultural knowledge. In the words of
Levinthal and Cohen such cultural analyses represent a dedicated ”effort exclusively to
creating absorptive capacity [emphasis added]”, as a compensation for the lack of by-
products. We mentioned formal cultural analysis as a way of obtaining cultural knowledge
above. It effectively serves as a compensation for the lack of prior cultural knowledge in
many companies today. Specifically qualitative (and possibly also quantitative) research
often become the tools for building an organization’s absorptive capacity. You conduct
interviews, perform observation, make semiotic analyses or discourse analysis in order to
build the absorptive capacity, which is needed for making innovations based on cultural
knowledge. This indeed is a topic for another paper on B2C innovation; how must one
organize the research efforts and integrate its resulting knowledge into the organization – in
other words, organize a research-driven company? The last point in the above quote,
however, raises an important point; many firms are reluctant to “sacrifice current output as
well as gains from specialization to […] acquire the requisite breadth of knowledge that
would permit absorption of knowledge from new domains” – in our case, we recognize this as
the reluctance to spend money on cultural research. We can ascribe this to the
aforementioned need for more tangible research, such as statistics, neuropsychology and
other positivistic sciences. Even more, marketing is often the first area to get fewer resources
or be cut down on. This also significantly lowers the absorptive capacity with regard to the
symbolically driven innovations, since marketing departments are the often the only ones
acknowledging the value for business of such innovations.
In this section, we have identified some general organizational principles and issues based on
the concept of absorptive capacities. They however are of little practical use as they give no
directions for implementation. We will now move on to a more specific organizational model
with regard to cultural innovation.
Communities of Practice Communities of practice (CoP) is one organizational approach to cultural innovation. There
are of course other organizational approaches or tools, which potentially promote the
commercial utilization of cultural knowledge. Lane and Wenger (1991) were main promoters
of the CoP concept. A slightly reductionist definition of their concept of CoP, which suffices
in this paper, is “groups of people informally bound together by shared expertise for a joint
enterprise” (Wenger & Snyder, 2000).
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The appeal of communities of practice for cultural innovation
We do not have the space for giving an elaborate description of how a CoP works.
Fortunately, we only need to deal with some basic principles of CoP in order to demonstrate
its appeal with regard to cultural innovation. The appeal of CoP lies in the fact that these
communities evolve themselves. It is commitment to a particular element of work, which is
driven entirely by passion and identification with the group’s expertise. Such commitment to
develop particular knowledge, which has potential value for the company, is not even to be
found in informal networks (where it is mutual needs among friends, rather than passion for
knowledge, which is attended to), and certainly not formal work groups and project teams
(Wenger & Snyder, 2000). It is the social dynamics of CoP, which creates access to its
rewarding practice – i.e. the “shared repertoire of communal resources (routines, sensibilities,
artifacts, vocabulary, styles, etc.) that members have developed over time” (Wenger, 1998). It
is exactly this, which makes CoP very adept organizational vehicles of cultural innovation,
because such shared repertoires are a prerequisite for the absorption and exchange of cultural
knowledge, which is so often tacit throughout an entire innovative development. We will
elaborate on this by introducing three organizational concepts.
Power – CoP functions as a sphere protecting from the formal power relations in the
organization (Roberts, 2006)5. Being free of the formal organizational power grid is often
exactly what the culturally minded marketing employees need in order to turn their cultural
knowledge into an innovative campaign. CoP are designed so to give full control of their idea
phases, and subsequent planning and implementation process. A CoP is independent of
superiors, who give little validity and legitimacy to the use of culture and ideology in
marketing work, which are today still quite a lot of people. We often see an amount of
bureaucracy in marketing departments, which ruins the creative process, because everything
must be backed by what they consider “scientific” (Brown, 1996) – often quantitative
approaches are thought to have this quality. This explains why many marketing departments,
without much thought, base their work on statistics of how consumers behave and think as
exemplified by Big Data (which is basically putting numbers on something that essentially
qualitative). As another example, the introduction of neuropsychology in marketing
represents the search for physical proof that people have “buy-buttons”, which can be pressed
5 There are of course limitations to this as well: “Communities of practice may become static in terms of their knowledge base and resistant to change. Knowledge that is aligned with the specific predispositions of a community and supports the identity and current practices of its members is likely to be adopted more readily than knowledge that challenges current identity and practice.” (Roberts, 2006)
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by advertisers. Consequently in a CoP members will not have to explain that a particular
kind of cultural code must be used, because it conveys a myth and an ideology, which will fit
the product into the everyday lives of a group of consumers. The process towards cultural
innovation is more likely to be corrupted along the way within a formal organizational power
grid than within the protective structures of the CoP.
Trust – Another reason why CoP are so appealing an organizational form for managing
cultural knowledge is the trust among its members: “Trust, familiarity and mutual
understanding, developed in their social and cultural contexts, are prerequisites for the
successful transfer of tacit knowledge” (Roberts, 2006). Many of today’ organizational
interpersonal relations are mostly formal and individual security lies in contracts, which
means that social trust is limited. CoP are an exception to this. There is no contract, no
predefined structure or roles. Actually, these are things, which are co-created by the
members. This leads to a interpersonal trust, which can never be achieved in their
conventional organizational roles. Coopey (1998) notes, ‘the ideology and practices that
constitute “management” tend to undermine the foundations on which trust is built, and hence
the processes through which people become committed to an enterprise, and those through
which they learn and innovate.”
Although our perspective in this paper would like a marketing department to work as a CoP,
we must of course have some degree of formal procedures and contract-based security. A
department culture leading to the kind of trust among employees as in a CoP, can be achieved
only by having marketing employees, who apart from their strong “feel” for culture and its
commercialization, must all be able to create relations to each other which go beyond their
formal organizational roles. We will talk more about the importance of people management
below.
Predisposition – Knowledge sharing in a group is dependent upon the predisposition of its
individual members. Thus the knowledge a member is moderated when brought to the table
and pooled with the others’. CoP stand out in this regard with its flexibility of its member
base. Since there are no predefined rules for when or how to join and leave a CoP, there is a
lot more potential for different combinations of people and predispositions, and thus different
combinations of tacit knowledge, which may lead to groundbreaking ideas. There is an
important potential pitfall here though; “Communities of practice may become static in terms
of their knowledge base and resistant to change. Knowledge that is aligned with the specific
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predispositions of a community and supports the identity and current practices of its
members is likely to be adopted more readily than knowledge that challenges current identity
and practices” (Roberts, 2006).
It is no coincidence that the idea of cultural innovation is so suggestive of CoP. The most
successful cultural innovation are actually created by marketing departments, which have the
characteristics of communities of practice. Holt and Douglas saw this and referred to these
cultural CoP as “cultural studios”. Now that we can have demonstrated the appeal of CoP we
will we move on to discussing how to cultivate CoP/cultural studios building on the ideas of
Holt and Cameron themselves and the general CoP literature.
What it takes to cultivate cultural communities of practice in an organization
“The context within which a community of practice is embedded is a major factor
determining its success as a means of creating and transferring knowledge” (Roberts, 2006).
It is important to acknowledge this fact of reality of communities of practice, because the
context, we want a CoP to appear in here is the marketing department. This paper proposes
that the marketing effort be driven by principles of CoP. This specifically requires creating an
environment, in which CoP are the natural way of organizing marketing efforts. This is where
this paper tries to break new ground in organization theory.
It is highly dissatisfying to suggest that “more decentralization” and “more autonomy” -
which is seen in so much of organization and marketing theory alike – leads to employees
forming CoP. As if it is only a question of reorganization to something “more democratic”,
more “free”, more “liberal” (see e.g. Kotler, 1992) and away from the evil “authoritarian”,
“hierarchical” and “bureaucratic” kind. Although this may have a factor to some extent, such
contentions often have more to do with Western cultural ideals of agency and democracy, and
less to do with a practical assessment of business reality. Such contentions seem to forget real
factors of social life and organizations such as trust, power and predisposition, which we
discussed above.
“While cultural studios emerged for reasons that are often ideosyncratic, the properties of
the studio itself were consistent in all of cases” (Holt & Douglas, 2011). It should be no
surprise that the common properties are the result of a certain mindset of those managing and
involved in a CoP/cultural studio. Wenger & Snyder (2000) emphasize that organizing for
innovation through CoP very much relies on successful managers to reap the benefits of CoP.
We noticed above also the requirements of the managers with regard to absorptive capacities.
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We need the managers to be culturally savvy, i.e. identify ideological opportunities and be
the coordinator, evaluator of the creation or maintenance of cultural expressions. The
manager is the one who, help his colleagues see, what they can’t – much like Don Draper6
decides if an idea should be executed or not, but everyone knows he is right. Actually, the
cultural innovations throughout time tell us of invaluable managers, who were neither
creative nor passionate enough to be involved in a CoP. They, however, became unsung
heroes of an innovation by protecting the CoP from bureaucratic powers throughout the
process and giving them resources along with the full responsibility for the success and
failure of their ideas. For example Holt and Douglas (2011) note in this regard: “Selling
cultural innovation to senior management requires a delicate dance … they necessarily lack
the nuanced tacit knowledge that has evolved within the cultural studio [i.e. CoP] […] [but
they] often want to put their mark on the work”. Such executives with the need for control,
but who lack the required knowledge and skills, are often what ruins the success of a CoP
undertaking. A minimum appreciation of the cultural approach is needed for a manager –
regardless of whether he/she is the active or supportive kind - , because one of the drivers of a
potential innovation is something as simple as listening to the stories of the CoP members in
systematic ways. “You can’t just collect certain stories, perhaps the most compelling ones,
because isolated events can be unrepresentative. A systematic effort captures the diversity
and range of activities that communities are involved in” (Wenger & Snyder, 2000). We will
now elaborate on how to listen and how to act on such listening when cultivating CoP with
the intention of raising the probability for cultural innovations.
A key task for the members of a CoP is defining a community’s domain. The virtue of CoP is
that every single member commits themselves fully to the group’s area of expertise (Wenger
and Snyder, 2000). It is up to the manager to ensure that this area of expertise or this domain
is clear throughout an entire process, so every member keeps having a personal dedication
with the CoP. Using the framework developed in this paper, a manager would ensure that the
CoP consists of people, who can frame a product or brand in a latent ideology or myth, others
who have access to source materials for the cultural codes needed (for example a subculture,
design director or journalist on a relevant magazine).
Communities of practice are vulnerable because they lack legitimacy and budgets – thus it is
the job of the manager to create a notion of legitimacy around voluntary activities such as
6 An advertising genius from the TV drama series “Mad Men”
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communities of practice. Managers must seek to “structure spontaneity” because spontaneity
is often what initiates a CoP undertaking. In relation to cultural innovation every employee
must at least understand the embodied nature of cultural knowledge, and thus that cultural
insight can appear at anytime with anyone. This may give them the confidence to trust their
own spontaneousness and seek the value from their ideas through a community. An important
task for the manager is also to use his structural overview to make connections between
different CoP across the marketing department (or even the entire organization), and thus
suggest supplements or inspiration for each CoP.
Managers must be able to have regular interaction with the attempts at CoP in order to help
them with structural or financial problems if he or she sees the potential of a particular CoP’s
work. So in our case of cultural innovations, what does that mean? For one thing one must be
sensitive to trial and error. Be ready to sacrifice resources on something, which may not yield
results until a certain amount of time has passed. Just because you feel you are on to
something and the first campaign or cultural expression doesn’t work, does not mean that
your “feel” for culture was wrong. Maybe it just need some time and corrections. This is very
common with some of the most innovative cultural expressions – such Marlboro, Nike,
Levi’s or Snapple. As a matter of fact cultural knowledge is accumulated iteratively. This
means that a CoP or cultural studio will not initiate because of a specific idea or cultural
expression, which needs a strategic execution. Rather the motive for the immersion in the
CoP will be the enjoyment of continually discovering cultural leads, new minor insights and
nuances from passionate and empathetic immersion with the product and its consumers and
lastly the satisfaction of the CoP’s collaborative improvisation, which pushes an idea forward
iteratively. (Holt and Douglas, 2011)
A realistic assessment would include some critical points about the ideas and suggestions
above. For instance, in order to spend a manager’s time and the organization’s resources on
CoP initiatives, which may or may not carry value, relies heavily on having the employees,
who are actually skilled and passionate enough about the brand, product and the consumers.
Otherwise the organization is moving down a very dark and financially damaging path.
Cultivating and nurturing CoP means investing, and it is not for everybody – only those
with confident, skilled and passionate enough employees. How do we know whether this
is the case? Cultivating and nurturing CoPs is very much dependent upon the HR effort of the
organization in hiring and developing its employees (Roberts, 2006). We mentioned above
that this paper envisioned a marketing department, which is driven by CoP work, because
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B2C innovation depends so much on the symbolic non-technological features of products
rather than the functional and technological ones. Based on our above description of cultural
expressions and of how CoP work, the marketing department must consist a certain kind of
individuals: Firstly, it must be people, who get annoyed by cultural orthodoxies – i.e. worn
out symbolic meanings and cultural expressions - in their respective market (for example
trendsetters have grown tired of the hipster appeal in clothing and many other spheres and
have begun a new cultural expression of normcore; buying clothing in discount stores and
doing everything not to stand out in their appearance, i.e. being as normal as possible7”).
Secondly, it must be individuals, who are passionately immersed in the product or brand of
the company. These people have a much greater incentive to be part of external networks of
artists, journalists, trendsetters or any kind of individuals, who can bring in valuable extern
knowledge into a CoP and thus the organization. The immersion of these people into
networks or relevant subcultures also makes them more likely to identify latent ideologies
and source materials (i.e. subcultures, media and popular myths and prior brand assets)
needed in creating a new cultural expression. A marketing department with individuals, who
fit these characteristics, will have greater success at cultivating CoP, which in return may lead
to new successful cultural expressions boosting sales. Such individuals, will know if and
when to join a cultural CoP. They will be people, who have a great incentive to share and
exchange knowledge and not least enjoy iterative learning and trial-and-error experiences
through a community of likeminded. Such people have internalized their cultural knowledge
and learning specific to the brand and product to a degree that creating innovative marketing
material seems to come naturally to them (Holt and Douglas, 2011). One question comes to
mind here: What is the difference between this and other academic and professional
admonitions about being passionate about your business or being an authentic company etc.
(Schultz & Yang, 1999; Amabile, 1999 or Steve Jobs8) - ? Such admonitions have until now
been good advice because it can lead to great results and personal happiness. Here however
we go into a deeper analysis and suggest that this only becomes a commercial success if the
particular passion and authenticity of the company caters some latent ideology with the
consumers.
7 http://www.information.dk/493515 8 “You've got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle. As with all matters of the heart, you'll know when you find it”, Steve Jobs’ speech to graduating students at the Stanford University in 2005.
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Conclusion The first thing to conclude with regard to this paper is the fact that it is not a traditional
treatise on organization of innovation. As mentioned in the introduction, this paper is rather
an attempt at extending the line of thought within the theoretical field of organization of
innovation by introducing new concepts. The paper started out with an argument, that a lot of
innovation – especially in the B2C market – cannot be accounted for nor explained by the
theory of organization of innovation. Consequently, the paper introduces a perspective from
marketing studies, which may carry the solution to this research gap. In this new theoretical
perspective it is a widely accepted that, commercial ideas break through because of their
symbolic content as much as their functional attributes. Specifically with regard to innovation
we moved on to the cultural strategy framework of Holt & Douglas (2011). The basic idea
here was that cultural expressions resonating with contemporary culture and history of a
society leads to innovative business. A successful cultural expression draws its inspiration
from latent ideologies in a society, from myths relating to the ideology and lastly specific
cultural codes in the advertising and communication, which symbolize this myth.
Having introduced the concept we started integrating it with existing concepts in organization
of innovation, which relate to managing knowledge flows; absorptive capacities and
communities practices. From this we have tried to introduce some principles and advice
relevant for academics and practitioners alike.
From the theory on absorptive capacities, we concluded that employees must reflect a diverse
knowledge base of the organization in order to continuously spark interest for new and
relevant cultural knowledge – for example individuals who know about contemporary
popular culture and media myths, about relevant subcultures and understand the potential of
the existing brand and organization. Managers would then be responsible for the
commonality of knowledge which can allow for effective utilization of the diverse and
random cultural knowledge, which the organization absorbs. We also argued that cultural
research may be a compensation for employees lacking cultural knowledge or skills.
Communities of practice represented a very attractive model of organization with regard to
cultural innovations. The appeal of CoP lies in its “shared repertoire of communal resources
(routines, sensibilities, artifacts, vocabulary, styles, etc.) that members have developed over
time”, which creates attractive power and trust relations. Furthermore its flexible member
base creates a desirable knowledge flow. All this eases the creation and proliferation of
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cultural ideas in the organization – i.e. if there are skilled managers to cultivate, nurture and
legitimize the operation of CoP. Furthermore and just as importantly, CoP yields results only
if comprised by passionate and highly knowledgeable (knowledge of the organization’s
customers and the culture in which these are immersed, the company brand, of the competitor
strategies etc.) individuals within the organization.
We started the synthesis section of this paper by identifying implications of the new
definition of innovation, which the cultural strategy framework provides. This paper has
chosen to limit itself to the domain of knowledge flows, which is indeed very fundamental to
cultural innovation, as this is a relatively very qualitative (with regards to the “fabric” of
work) and untangible idea. In summary of the above, one could make practically relevant
extensions of this framework by including more organizational ideas such as how to
understand ambidexterity in cultural innovation or how to exploit an already well-received
cultural innovation (the theory on cultural strategies are almost exclusively occupied with
how to discover, create and explore relevant cultural knowledge). Lastly since cultural
innovations depend so much on knowledge flows, the theory on open innovation may provide
some helpful organization tools for absorbing relevant cultural knowledge.
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