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ORGANIZATIONAL OUTPUT INNOVATIVENESSOrganizational Output Innovativeness: A Theoretical Exploration, Illustrated by a Case of a Popular Music Festival
Iván Orosa Paleo and Nachoem M. Wijnberg
Different interpretations of innovation and innovativeness lead to different approaches and different methods to measure organizational output innovativeness. Two indicators of inno- vativeness are derived from two divergent approaches: the Referent Innovativeness Index and the Classification Innovativeness Index. The article uses the case of the popular music festival to discuss how these indexes can be operationalized and calculated, as well as to outline the implications of the differences between the methods. Introduction
purpose of this paper is to show how differentways to understand innovation lead to differ-
Is it possible to say that one organization is ent ways to understand organizational out-
put innovativeness. These ways range from
organization has become more innovative than
focusing on the extent of the novelty to the
it was five years earlier? This study analyses
focal organization and competitive actors (e.g.,
the theory on which such statements could be
Kleinschmidt & Cooper, 1991), to looking
based and proposes ways to make the actual
at changes in existing classification systems,
directly or indirectly brought about by indi-
organization usually refers to the innovative
vidual innovations (e.g., Wijnberg, 2004), We
performance of an organization as a whole in a
will explore how these different ways can
particular time period, usually a year, and
be operationalized to measure organizational
usually with regard to its output of goods and
output innovativeness in accordance with par-
services. As will be discussed below, although
it is also possible to speak about the innovative
We will illustrate our proposals for the con-
performance of an organization with regard to
struction and operationalization of indices of
how innovative its processes and possibly
innovativeness by looking at one particular
organizational structure is, the focus of this
case, that of a popular music festival, consid-
paper will be on innovative output. To stress
ered as an organization producing an event
this point we will be using the term ‘organiza-
consisting of a series of musical performances
tional output innovativeness’ to denote pre-
(Orosa Paleo & Wijnberg, 2006). The product or
output of the festival can be described as the
Arguments highlighting the innovative per-
line-up or programme of the festival in a par-
formance of organizations are especially sig-
ticular year, containing many different artists.
nificant for organizations in industries where
The structure of the paper is as follows.
being perceived as innovative has become an
First, we review the literature on artistic inno-
important and sometimes dominant determi-
vation, in both the high art and the popular
nant of the value of products and producers
realms. Second, we explore the economic and
(Wijnberg & Gemser, 2000). Notwithstanding
organizational science literature, regarding di-
this interest in organizational innovativeness
fferent conceptualizations of innovativeness, to
with respect to output, the concept has rarely
been given systematic attention. The main
product innovation and innovativeness – in the
Journal compilation 2008 Blackwell Publishing
CREATIVITY AND INNOVATION MANAGEMENT
sense of the importance of an innovation – can
with the focal firm itself (Kleinschmidt &
result in different ways of understanding inno-
Cooper, 1991). Subsequently, product innova-
vativeness. Third, we will present the data and
tions can be classified according to their
methodology that will be used in our empiri-
cal analysis. Fourth, the empirical results will
be presented. Finally, conclusions will round
highly innovative, moderately innovative and
‘low’ innovative. In a survey performed byKleinknecht, Reijnen and Verweij (1990), firms
Innovativeness and Innovation
were asked to self-evaluate the innovations theyhad performed on a scale ranging from ‘new to
The concept of innovativeness has been used
the firm’, along ‘new for the Dutch industry’, to
in two rather different ways: to describe an
‘new for the world’. In their analysis of art
innovation and to describe an organization. On
organizations, Castañer and Campos (2002)
the one hand, it denotes the magnitude or
argue along similar lines with regard to one
importance of the innovation (Kleinschmidt
dimension of product innovativeness, namely
& Cooper, 1991; Garcia & Calantone, 2001;
the referent, which can be self (the focal organi-
Brockman & Morgan, 2003). On the other
zation’s own past), or local (all other organiza-
hand, it has also been used to describe an orga-
tions in the local field, usually the country) or
nization’s capacity to innovate (Woodside,
cosmopolitan (all other organizations in the
2004; Hurley, Hult & Knight, 2005), and thus a
field around the world). In all these cases, the
precursor to innovative performance. In this
importance of a product innovation depends on
sense, innovativeness is treated as a cultural
the size of the group of competitors – ranging
precursor that provides the social capital to
from the focal firm itself to the whole world – to
facilitate innovative behaviour, and subse-
quently considered as a central aspect to
understanding how to create innovative and
guished in which the focus is not on the inno-
vation’s novelty to the referent but on the
Knight, 2005). Innovativeness relates to a series
innovation’s impact on the competitive envi-
of individual and group level properties that
ronment. Studies in which different dimen-
are characteristics of individual and group
sions are defined, e.g., production and market
idea generation, learning, creativity and
(Abernathy & Clark, 1985) or technological
change. In this vein, innovativeness reflects the
and commercial (Garcia & Calantone, 2001;
potential of organizations to produce innova-
Daneels & Kleinschmidt, 2001), can be seen as
tive products: the extent to which the organi-
steps towards such an approach. Something
zational structure of a firm could influence its
which is new, as seen from different perspec-
capacity to release an innovative product into
tives at the same time, scores highest on inno-
vativeness. This approach can be extended not
As stated in the introduction, the purpose of
only by taking into account different constitu-
this paper is to look at the aggregate measure
encies and dimensions, but also by attempting
of the innovative performance of an organiza-
to consider the economic environment into
tion in a given period, which we indicate by
which the innovation is introduced as a whole.
the term organizational output innovativeness.
The selection systems framework (Debackere
To do so we have to return to the first meaning
et al., 1994; Wijnberg & Gemser, 2000; Wijn-
of the term innovativeness, the importance of
berg, 2004; Priem, 2007) describes competition
in terms of interactions in a market between
All authors agree on at least one point: inno-
producers, consumers and selectors. The selec-
vation implies novelty (Schumpeter, 1942;
Daneels & Kleinschmidt, 2001; Garcia & Calan-
experts, ultimately determine the value of
tone, 2001; Wijnberg, 2004). The degree of
products and the outcome of the competitive
innovativeness of a particular innovation has
processes in the industry/market dominated
to do with how new it is, in an ex post sense.
by a particular selection system. Something is
However, the consensus stops there, before
more innovative if it is recognized as more
answering the question, which is often not
innovative to the relevant selectors in the rel-
evant selection system. This means that each of
the dimensions, as distinguished for instance
possible to distinguish several different
by Garcia and Calantone (2001), can be signifi-
approaches to the determination of the impor-
cant, but only when it is crucial for the relevant
tance of innovation. We have chosen to focus on
selectors. If the selectors are consumers, the
two of them. According to the first, novelty of a
product is determined by the extent to which it
important; if the selectors are technical experts
is new to larger groups of competitors, starting
the dimension of new from a technological
Journal compilation 2008 Blackwell Publishing
ORGANIZATIONAL OUTPUT INNOVATIVENESS
innovative a product is, the greater will be
structures and competitive dynamics. Hirsch
its impact on competitive dynamics, precisely
(1972) and Caves (2000) stress the high degree
because of the innovation’s impact on the
of uncertainty regarding the evaluation of the
decision-making processes of selectors.
quality of musical products, resulting in an
enhanced importance of certification processes
directly. However, it can be argued that the
and demand–supply intermediation. Addi-
classification scheme used by relevant selec-
tionally, the music industry is a field in which
tors to categorize products in the industry will
being considered innovative is often a power-
reflect the preferences of selectors, and there-
ful sales argument for competing products or
fore that the competitive dynamics can be
producers (Wijnberg & Gemser, 2000). This is
observed by studying classificatory dynamics.
particularly true in the highly competitive
Classification systems serve as vehicles to cat-
music festival sub-industry: innovativeness of
egorize innovations by indicating differences
participating artists is an important criterion to
and similarities with existing categories, facili-
a festival’s line-up programmers, who aim to
attract the attention of audiences and of other
allowing its comparison with existing and/or
incumbents in the industry. The perceived
new, competing products (DiMaggio, 1987).
innovativeness of music festivals can boost
Thus, innovations can be detected by looking
their credibility as certifiers of the innovative-
at the emergence of new categories or genres
ness of artists – the fact that artist A performed
(see, for instance, Mezias & Mezias, 2000).
at the highly innovative festival X signals that
If a product can be easily classified in a long-
artist A probably is interestingly innovative
standing and stable category, it will not be con-
him/herself (Orosa Paleo & Wijnberg, 2006).
sidered to be very innovative. In contrast, if a
The case of the music festival is also suitable
product is different enough to be among the
to an empirical study of innovativeness due to
first to occupy new (sub)categories or even
data availability. The line-ups of festivals are
result in the creation of a new (sub)category, it
will score high on innovativeness. Ultimately,
about the career history of the artists appear-
highly innovative products could potentially
ing in that line-up is relatively easy to obtain.
bring about changes in the very composition of
Also, most industries have explicit product
the selection system itself, as changes will occur
classifications – think of cars classified as
not only in the extant classification scheme, but
saloons, hatchbacks, etc., as well as newer cat-
also, importantly, in the set of relevant selectors
egories such as sport utility vehicles – but
there are few industries in which the dynamics
of classification processes are as visible as in
product innovation and how to determine the
the music industry. Audiences, producers and
importance of the innovation provides the nec-
artists use, produce and reproduce musical
essary foundation for the construction of two
genres in order to confer musical products
different measures of organizational output
with meaning (DiMaggio, 1987). New genres
innovativeness. On the one hand, the extent of
conform to pre-existing categories. Stylistic
finding out whether the product is new to
wider cycles of referents: the focal firm, the
between new and existing products will there-
industry, etc. On the other hand, it can be mea-
fore be expressed in the creation of new cat-
sured by assessing the impact on competitive
egories in generic classification systems, and
dynamics as evidenced by how the products
the study of the evolution of the latter will
are classified and their resulting impact on the
dynamics of the classification system. In the
innovative performance of producers of new
empirical part of this study, we operationalize
both approaches and compare the results.
The particular case study presented in this
Before we do so, we will take a brief look at the
paper concerns the Noorderslag Festival, one
music industry and music festivals, the subject
of the better established popular music festi-
of the case to which we will apply the opera-
vals in the Dutch music industry, which takes
place every year in Groningen, the largest cityin the north-east of the Netherlands. The Music Industry and the Music Festival Methodology
The music industry is a conspicuous example
As we discussed above, there are two main
of an industry in which stylistic innovation is a
theoretical approaches to innovativeness of a
2008 The AuthorsJournal compilation 2008 Blackwell Publishing
CREATIVITY AND INNOVATION MANAGEMENT
new product, regarding the different realms in
2. data covering the rise and fall of (selected)
which the group of referents to which the
product is new operate, or regarding changesin competitive dynamics occasioned by the
total of 45 artists/groups out of 52 for the 2004
product is classified relative to the dynamics of
festival, and 40 artists/groups out of 46 for the
the classification system. To obtain a measure
2005 festival. The time-frame of the study thus
of organizational output innovativeness the
consists of these 2 years although some of the
individual product measures need to be aggre-
data necessary for the construction of the
gated. Thus, we will construct two aggregate
measures of organizational innovativeness: thefirst, the Referent Innovativeness Index, will rep-resent how new the products are to the orga-
nization and its competitors. The second, theClassification Innovativeness Index, will repre-
sent the novelty of the product as reflected inhow the artists are classified relative to the
The first approach asks for a measurement of
dynamics of the classification system of the
the novelty of the artists included in the
music industry. In respect to both indexes, we
line-up of the festival in one particular year.
will restrict ourselves to the Dutch context, not
looking at the novelty of artists to festivals
respect to two spheres of agents: the organiza-
outside the Netherlands or their classificatory
tion itself and the Dutch festival industry. So
status outside the Netherlands. There are
two very simple reasons for this restriction:
• Novelty to the organization (hereafter NO)
because all the artists performing at Noorder-
reflects the extent to which artists have
slag are Dutch, the overwhelming majority of
already participated in the Noorderslag fes-
them will be new to the world outside the
tival in previous years. The data come from
innovativeness in that sense rather empty;
• Novelty to the industry (hereafter NI)
second, most of these Dutch artists will not
reflects the extent to which artists have had
have yet found their way to classification data-
previous exposure in any of the music fes-
tivals organized in the Netherlands. Data onparticipation of artists in Dutch festivals was
obtained from festivalinfo.nl. The latter
We made use of four main databases, which
comes with an important limitation, since
we developed into two intermediate datasets,
records only start in 1999. Therefore, we
generic classification of artists participating in
artists and music festivals in the Nether-
genre dynamics in the Dutch Top 40. The first
main database is that provided by the Nation-
aal Pop Instituut (henceforth NPI), in which
these websites is not always complete and it
data on the age of artists, generic categoriza-
is therefore possible that previous perfor-
tion and record releases can be found. The
second database is festivalinfo.nl, a compre-
notice, skewing the results towards a higher
hensive Internet resource with up-to-date
information concerning Dutch artists’ perfor-
assigned to each individual artist/group range
history records. The third database was pro-
from 0 to 3. If an artist had never performed
vided by the Stichting Nederlandse Top 40,
and contains information about Dutch Top 40
assigned a NO of 3; if they had never per-
charts in the period 1965–2003. The fourth
formed in a Dutch festival before, the NI was 3.
one is the complete list of the Noorderslag
If they had performed at Noorderslag or in
Festival line-ups through its 20-year existence
Dutch festivals one year before the year under
consideration, NO and/or NI became 2. Two
The intermediate datasets we used to make
years before gave a score of 1. Three years or
even longer before gave a score of 0 on the two
calculated the Referent Innovativeness Index
Journal compilation 2008 Blackwell Publishing
ORGANIZATIONAL OUTPUT INNOVATIVENESS
(hereafter RII): a non-negative index, the value
appear in the yearly Top 40 in the period con-
of which ranges from 0 to 1. The numerator
sidered, we discarded those subgenres with
is the sum of the scores on novelty, NI and
less than five overall records in the period con-
NO, for each artist. The denominator would
sidered or that did not have at least one year in
which they figured in the chart at least four
obtained (which, because maximum scores for
times in one year. It does not make sense to
each artist on each attribute is 3, see below,
calculate average genre dynamics for all sub-
the total maximum is six multiplied with the
genres, because the paucity of data points for
number of artists), given the number of artists
most subgenres will fail to generate meaningful
in the line-up of that year, thus suggesting that
patterns (see also Christianen, 1995). The result-
the innovativeness of a festival in year t is a
ing sample of genres was 48. Then, we con-
proportion of the total possible innovativeness,
structed intervals considering four moments in
the evolution of a subgenre: the entry date in
the Top 40 database, the year in which the
number of hits was equal to or greater than 4,
the year in which the maximum number of hits
was attained, and the exit date from the Top 40.
The exit date was calculated in two ways. Thosegenres active in 2003 were considered to exit
Classification Innovativeness Index
the charts one year later, i.e., 2004. The remain-ing genres were considered inactive after three
The second approach leads us to look at how
consecutive years with no hit records.
the artists in the line-up can be classified and
The next step involves the calculation of the
how that relates to the dynamics of the classi-
averages for each of the following distances:
fication system in the Dutch music industry.
• entry date – first year in which n Ն 4
First, we assigned each artist in the line-up
(n = hits by artists of subgenre i)
to a particular genre, using the NPI database.
• year of maximum n – exit date
Where the artist was assigned multiple genres
by NPI, we looked only at the youngest one. Second, we determined the age of each
The results were respectively 5, 10 and 18 years
(sub)genre. The age of individual subgenres is
defined as the difference between the year of
On the basis of this preliminary analysis, we
the current festival and the start date of the
assigned the score of 3 to artists in subgenres
(sub)genre. The start date of a (sub)genre was
between 0 and 5 years old, 2 to artists in sub-
genres between 5 and 10 years old, 1 to artists
descriptions of genres in the NPI database,
in subgenres between 10 and 18 years old, and
typically including a list of ‘important record-
0 to artists in subgenres older than 18 years.
ings’, and taking the year of the release of the
After determining the AG scores for all the
first important recording. If no such list was
artists in the line-up, we calculated the Classi-
given, we determined the years of release of
fication Innovativeness Index (hereafter CII)
the two oldest records by artists ascribed to
which is a non-negative index, ranging from
the genre: the simple average of these two
0 to 1. The numerator is the AG. Again, the
denominator expresses the maximum score on
Third, we scored each of the artists – again
aggregate innovativeness, thus suggesting that
ranging from 0 to 3 – on the basis of the age of
the innovativeness of a festival in period t is a
the subgenre(s), yielding a measure of innova-
proportion of the total possible innovativeness,
tiveness per artist, the age of genre (hereafter
the latter amounting to a maximum of one.
AG). In contrast to our approach in respect to
the RII, we did not simply assign scores of 3 to
artists in genres new to the year of perfor-
mance, 2 to artists in genres 1 year old, etc.
Because there is a significant lag before newgenres are recognized as such, we first con-ducted a preliminary analysis of genre dynam-
ics in the Netherlands. To do so, we used thesecond intermediate database which consisted
Tables 2–4 show a descriptive analysis of the
of genre identifications, using not just informa-
Noorderslag festival line-up for the years 2004
tion from the NPI, but also the internet data-
bases of Allmusic and Muziekweb, of all the
Table 5 depicts the situation regarding sub-
artists that figured in the Dutch Top 40 in the
genre composition of the line-up. The average
period 1963–2003. Of the 248 subgenres that
age of subgenres displayed in the line-up was
2008 The AuthorsJournal compilation 2008 Blackwell Publishing
CREATIVITY AND INNOVATION MANAGEMENTTable 1. Score Interval Dimensions – 48 Subgenres from the Dutch Top 40 (1965–2003)Subgenre Ն 4–t0 t1–max
Journal compilation 2008 Blackwell Publishing
ORGANIZATIONAL OUTPUT INNOVATIVENESSTable 2. Noorderslag Festival Line-up (2004)Artist name First appearance Subgenre Subgenre age at nl festival
2008 The AuthorsJournal compilation 2008 Blackwell Publishing
CREATIVITY AND INNOVATION MANAGEMENTTable 3. Noorderslag Festival Line-up (2005)Artist name First appearance at Subgenre nl festival
18.2 years in the 2004 festival, rising up to 21.55
cent) were labelled with a subgenre younger
years in the 2005 festival. This is also reflected
than 18 years in 2004, whereas this figure
in the proportion of acts associated to sub-
dropped to 22 acts (55 per cent) in 2005.
genres younger than 18 years (the threshold of
positive scoring for our CII): 31 acts (69 per
one festival to the next, both indexes of
Journal compilation 2008 Blackwell Publishing
ORGANIZATIONAL OUTPUT INNOVATIVENESSTable 4. Previous Exposure of Artists – Noorder-Table 6. Results (Novelty Innovativeness Index,Classification Innovativeness Index)
because, as we discussed in the theory section,
novelty-to-referent criterion, incorporated in
the RII, and while novelty is a prerequisite
for innovation, most authors on the music
industry emphasize stylistic novelty when
discussing the innovations they deem really
important, while stylistic novelty often issignalled by classification dynamics and the
Peterson and Berger (1996), who in an earlier
study (Peterson & Berger, 1975) used a simple
novelty criterion, suggest, ‘non-trivial innova-
tion in music is generally signalled by the wide
use of a new name for a style of music and an
associated group of performers’ (p. 176). Of
course, there can be some interrelatednessbetween the indices insofar as bands that arenew to referents are also more likely to repre-sent new genres.
However, even if one prefers the classifica-
tion index as the most meaningful indicator oforganizational innovativeness, that does notmake the referent index superfluous. In fact,
the RII can add much value to the interpreta-tion of the CII results. Comparing the CII and
RII scores of Noorderslag leads to the conclu-
sion that Noorderslag is more concerned aboutshowcasing relatively young bands, while
innovation in terms of new subgenres is not a
central issue. We do not have sufficient infor-
Noorderslag in relation to other Dutch festi-
vals, but the data suggest that Noorderslag’s
reputation rests not so much on its innovativeperformance as such, but more on its functionas a springboard for new Dutch bands.
This study has its limitations. Compared to
innovativeness reflect a decrease. For the 2004
other industries, the music industry is excep-
festival, the RII yields a result of 0.73, dropping
tional with regard to the availability of data,
to 0.69 in 2005 (see Table 6). The CII corre-
not only about products and sales, but also
spondingly shows a decrease in the innova-
about classifications of products and produc-
tiveness of Noorderslag, from 0.30 in 2004 to
ers. However, it certainly is not the only indus-
try to which our approaches could be usefullyadapted. See, for instance, the analysis ofLounsbury and Rao (2004) on category dura-
Discussion and Conclusions
bility and change in the American mutualfunds industry. The basic story about organi-
In both years, the RII turns out much higher
zational output innovativeness is fully general-
than the CII. The divergence is important
izable to other industries and can prove highly
2008 The AuthorsJournal compilation 2008 Blackwell Publishing
CREATIVITY AND INNOVATION MANAGEMENT
useful to achieve a better understanding of
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what it means to state that an organization is
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This paper benefited greatly from the useful
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and Kristin McGee. The authors would also
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like to thank Ming Ming Chiu, Joeri Mol, Paul
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Rutten and Michael Christianen, as well as
and Innovation: The American Feature Film
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Pop Instituut. The usual disclaimer applies.
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Iván Orosa Paleo is a PhD candidate at the
Organisation Studies, 25, 1413–33.
Faculty of Economics and Business, Univer-
Wijnberg, N.M. and Gemser, G. (2000) Adding
sity of Groningen, the Netherlands. He is
Value to Innovation: Impressionism and the
Transformation of the Selection System in Visual
industrial and market environments. In his
Arts. Organisation Science, 11, 323–9.
dissertation, he deals with the role of orga-
Woodside, A.G. (2004) Firm Orientations, Innova-
nizations in the development of classifica-
tiveness, and Business Performance: Advancing a
tion systems, processes of genre formation
System Dynamics View Following a Comment on
Hult, Hurley, and Knight’s 2004 Study. IndustrialMarketing Management, 34, 275–9.
uva.nl) is Professor of Cultural Entrepre-neurship and Management at the Univer-sity of Amsterdam Business School. Hereceived his PhD from the RotterdamSchool of Management. His interests rangefrom innovation management to entrepre-neurship to organization theory, withspecial attention to the competitive dynam-ics of the cultural industries.
2008 The AuthorsJournal compilation 2008 Blackwell Publishing
Visiting Assistant Professor Illinois Wesleyan University Research Interests The formation and expression of long-term memory involves a dynamic interplay between gene products, synapses, cells, networks, systems, and behavior. How this interplay changes in aging or with stress is my primary research focus. The long-term goals of my research program are to provide a more complete understandin
Melnyk's next big move – Merger of JJR and Trimel BioPharma Barry Critchley, Financial Post · Feb. 25, 2011 He did it once and turned Biovail Corp. into one of the country's largest specialty pharmaceutical companies and along the way attracted attention from investors, customers - and the regulators. Now Eugene Melnyk is back, hoping to create the next Biovail. J5 Acquisition Corp., a