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How social media can fuel innovation in businesses: a strategic roadmap

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Abstract

This paper aims to present a framework to guide managerial action for social media (SM) strategies for innovation by exploring its constituent elements – the “what” (SM types), the “who” (stakeholders to be reached), the “for” (innovation types) and the “how” (innovation process stages), as well as the value, benefits and barriers. SM type and use tend to differ across innovation processes. The authors identify four types of SM in use across four stages of innovation, supporting six types of innovation, influenced by five categories of barriers, benefits and stakeholders each. The research provides an integrative set of building blocks to consider for developing further studies of SM and innovation. By highlighting the intertwined aspects of SM and innovation in an open and collaborative environment, the paper calls for development of an SM readiness organisational diagnosis. It empowers managers with a coherent framework of different elements they should take into consideration when defining their SM strategies for innovation. Research on SM adoption and the extent of its usage for innovation purposes is still at its infancy. Given the increasingly open and collaborative innovation settings, the authors draw managerial attention to the need of SM strategies for innovation activities and provide a coherent analytical framework to guide action for organisational diagnosis.

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Over the past two decades, firms have increasingly adopted information technology (IT) tools and services to improve the new product development (NPD) process. Recently, social media tools and/or tools that include social networking features are being utilized to allow users both inside and outside the organization to easily communicate and collaboratively design, manage, and launch new products and services. Unfortunately, there is little empirical evidence to suggest what influence these new IT tools have on NPD performance. Through a project-level, exploratory, empirical study, the impact of these new IT tools on the development phase of the NPD process is investigated. We find that the use of these new tools is significantly lower than the adoption of traditional IT tools such as e-mail and computer-aided-design. Traditional tools have a significant, positive impact on NPD outcomes, including team collaboration, the concepts/prototypes generated, and management evaluation. Interestingly, new media tools such as project wikis and shared collaboration spaces also have a significant, positive impact on concepts/prototypes generated, and management evaluation. Surprisingly, social networking tools like weblogs and Twitter negatively impact management evaluation while having no impact on NPD team collaboration and concepts/prototypes generated. These results suggest that social networking tools in their current guise are not helpful to the NPD team and may in fact be distracting to innovation management during the development phase.
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Leveraging social network sites is high on the list of priorities for a lot of businesses that are eager to find more effective ways to reach, learn about, and engage customers in new product development ( NPD ). However, the rapidly changing landscape of social network sites can be difficult to navigate successfully and doubts remain about whether and how they can be used to good effect. In fact, empirical research confirming a positive relationship between the use of social network sites in NPD and business performance is scarce. This paper reports on research examining the use of social network sites for three purposes, namely for market research guiding the development of new products, for getting customers to collaborate in the NPD process, and for new product launch. The results of this research suggest that the benefits expected from using social network sites in NPD are largely not being realized by businesses. Using social network sites to conduct market research leading into the NPD process was not found to contribute to business performance, and in fact was found to have negative relationships with both profitability and market growth. Using social network sites to get customers to collaborate in the NPD process was found to be positively related with innovativeness but not with market growth or profitability. Finally, using social network sites for new product launch was where the most positive indications were seen, since this was found to be positively related with innovativeness, market growth, and profitability. Thus, it appears that while businesses may get good results from using social network sites for product launch, they still have a learning curve to traverse before they can successfully use them for market research or customer collaboration in NPD . While there is currently a great deal of enthusiasm—even hype—about the potential opportunities of using social network sites for NPD , this research suggests that businesses should move carefully and recognize that just jumping on the social network bandwagon will not insure success.
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