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Constraints Aren't So Bad When It Comes to Innovation - Ideas for Leaders
Idea #769

Constraints Aren’t So Bad When It Comes to Innovation

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KEY CONCEPT

Within limits, constraints on innovation have a surprising effect: they increase the likelihood of success. This positive impact disappears when constraints are excessive.


IDEA SUMMARY

An extensive review of innovation studies in leading academic journals reveal that constraints on innovation are not necessarily negative. In fact, according to this careful analysis of 145 academic studies, constraints increase innovation…. up to a certain point. When constraints are pushed too far, they stifle rather than enable and encourage innovation. 

The term ‘innovation’ in this research encompasses both development (i.e., creativity) and the implementation of novel ideas, processes or products.

The analysis, conducted by a team of researchers from the Cass Business School in London, the Rotterdam School of Management, and Drexel University in Philadelphia, revealed three clusters of innovation constraints:

  • Output constraints refer to the limited availability, or complete unavailability, of resources such as time, human capital, funds and materials.
  • Process constraints refer to restrictive procedures and rules imposed on the processes involved in innovation. 
  • Output constraints place requirements on the end result of the innovation — for example, an innovative product cannot use certain materials or must meet certain minimal product quality specifications.

The researchers also identified from their meta-analysis three underlying mechanisms, which they labelled as ‘routes’, through which innovation occurred:

  • The motivational route refers to the intrinsic motivation to innovate. 
  • The cognitive route refers to cognitive processes used in the development and implementation of innovation. For example, an innovation can be developed combining or recombining what currently exists.
  • The social route refers to interactions between individuals, teams and organizations involved in innovation activities. Interdisciplinary teams are using the social route to innovation.

The research then used these elements to construct an integrative framework that shows the relationships between the three types of constraints and the three types of mechanisms. Specifically, the framework shows that: 

  • Input constraints impact innovation through the motivational and cognitive routes.
  • Process constraints impact innovation through the motivational and social routes. 
  • Input constraints impact innovation through the motivational and cognitive routes.

Identifying these mechanisms is key to understanding how constraints influence innovation—and leads to the unexpected conclusions concerning the positive vs. negative impact of constraints.  

As noted above, for example, input constraints, such as the lack of resources, impact the motivational and cognitive routes. Not being given enough time to spend on innovation will reduce the motivation to innovate, and the opportunity to brainstorm ideas. 

However, other published studies analysed by the researchers reveal a different story. In these studies, an abundance of resources can have a detrimental effect on motivation: with no constraint on time, to continue the example above, the urgency to innovate is lost. The same complacency can result from an overabundance of funds. In sum, rather than torpedoing innovation, input constraints can increase the motivation to innovate. 

The same is true for the impact of input constraints on the cognitive route. Rather than having a negative impact, input constraints — a lack of resources — spurs innovation. This positive impact of constraints is more intuitive: business history is filled with examples of small, entrepreneurial firms with less resources competing successfully, through their creativity and innovation, against large incumbents with endless resources. 

In this study, the researchers describe how bootstrapping, which requires entrepreneurs to think of different ways to effectively use their limited funds, exemplifies the positive impact of input constraints. In contrast, cognitive fixation—a psychological term that simply means being fixated or focused on well-known solutions and being unable to imagine or search for alternatives—exemplifies the negative impact of a lack of input constraints: research shows that the availability of abundant resources is more likely to lead to cognitive fixation, and thus undermine innovation. 

A key strength of this meta-analysis of innovation research is the intentional decision to draw from a broad range of disciplines. The research on input constraints, for example, drew from the fields of strategic management, entrepreneurship, organizational behaviour studies and marketing.

The framework based on this meta-analysis of research on innovation and constraints is consistent. That is, no matter which combination of constraint and route is examined, the researchers reveal an inverted-U impact on innovation: constraints can benefit the development and implementation of innovation, within reason. Breaching a certain threshold of constraints, however, starts a downward slide in innovation. 


BUSINESS APPLICATION

This study reverses the conventional wisdom that constraints undermine innovation. Rather than avoiding or eliminating constraints, business leaders and managers may want to deliberately impose those constraints. Perhaps they might ask their innovation team members to develop a minimum viable product, giving them limited funds and time (input constraint). Or leaders may find that required daily stand-up meetings (process constraint) and early customer feedback (output constraint) sparks the motivation to innovate, and lead to cognitive breakthroughs or social-based or inspired solutions.

The second important application of this research is the framework itself: that is, leaders, having shed their aversion to constraints, will want to explore the different routes from constraint to innovation, searching for the tailored constraint structure that works best for the company.


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FURTHER READING

  Oguz A. Acar’s profile at Cass Business School
  Murat Tarakci’s profile at Rotterdam School of Management
  Daan van Knippenberg’s profile at LeBow College of Business
  Cass Business School Executive Education profile at IEDP
  Rotterdam School of Management, Erasmus University, Executive Education profile at IEDP

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Idea conceived

January 23, 2019

Idea posted

Sep 2020
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