The Ins & Outs Of Innovation

How the inflow and sharing of knowl­edge with a team affects innovation.
Prior research has examined how the inflow of knowl­edge into a team affects innovation, but the outflow of knowledge hasn’t received the same attention, say John Lai of the Chinese University of Hong Kong, Steven Lui of the University of New South Wales in Australia, and Eric Tsang of the University of Texas at Dallas. In a recent study, Lai, Lui, and Tsang con­ducted detailed interviews with managers and sent questionnaires to staff at 148 retail units of a Hong Kong-based apparel firm.

The researchers expected to see that a large inflow of ideas would increase innovation in the Hong Kong stores they studied. But they were surprised to see that when a store shared an equal number of its own ideas with other units, its level of innovation increased even more. Employees exhibited the high­est levels of innovation when their units’ inflow and outflow of knowledge were both high and balanced.

Too often, the researchers note, managers seek out knowledge from competitors or other units within their companies, but they do not offer to share what they know with their peers. Other units could per­ceive such a “one-way” approach as selfish, or even aggressive, which could put a damper on innovation. By sharing knowledge equally, managers can build a sense of familiarity, reciprocity, fairness, and goodwill among units, which could encourage more innovative behavior throughout the organization.

“Intrafirm knowledge transfer and employee inno­vative behavior: The role of total and balanced knowl­edge flows” appeared in the February 2015 issue of the Journal of Product Innovation Management.