Building more entrepreneurial organizations through external innovation contests
Angelo Cavallo, J. Henri Burgers
kHUB post date: May 2025
Originally published: October 28, 2024 (PDMA JPIM • Vol 42, Issue 3 • May 2025)
Read time: 60 minutes
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Firms are increasingly adopting innovation contests to obtain ideas for new products and services from external parties, but many firms may not be sufficiently entrepreneurial to benefit from those ideas. Using an inductive longitudinal case study of three financial service firms, we explore the value of external innovation contests for less entrepreneurial and stagnant firms. Our findings indicate that stagnant firms indeed struggle to benefit from ideas generated through external innovation contests. However, we also show that firms undergo a structural change process toward higher entrepreneurial orientation through such contests. In particular, they become aware of an organizational readiness gap and act on it by (i) developing entrepreneurial skills, (ii) collaborating with external partners, and (iii) adapting organizational design and governance. Based on our findings, we propose an original framework for a corporate entrepreneurial learning process triggered by the innovation contest experience.
Practitioner Points
- Innovation contests can be powerful learning mechanisms beyond idea generations to make established firms more entrepreneurial.
- Through innovation contests, firms may become aware of an organizational readiness gap and act on it by (i) developing entrepreneurial skills, (ii) collaborating with external partners, and (iii) adapting organizational design and governance.
- How entrepreneurial behaviors and attitudes change following an innovation contest depends strongly on the engagement of senior managers throughout the process.