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ORGANIZATIONAL OUTPUT INNOVATIVENESS Organizational 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 MANAGEMENT Table 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 INNOVATIVENESS Table 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 MANAGEMENT Table 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 INNOVATIVENESS Table 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 Caves, R.E. (2000) Creative Industries. Contracts what it means to state that an organization is Between Art and Commerce. Harvard University Christianen, M. (1995) Cycles in Symbol Produc- of the innovativeness of organizations can tion? A New Model to Explain Concentration,Diversity and Onnovation in the Music Industry.
be deduced from different perspectives on product innovation. Of course, in the opera- Danneels E. and Kleinschmidt E.J. (2001) Product tionalization of both indexes we have taken Innovativeness from the Firm’s Perspective: Its Dimensions and Their Relation with Project differently, primarily with respect to the Selection and Performance. Journal of Product scoring schemes. The importance of this study Innovation Management, 18, 357–72.
lies not in determining the scores or establish- Debackere, K., Clarysse, B., Wijnberg, N.M. and ing that the 2005 Noorderslag festival seems Rappa, M.A. (1994) Science and Industry: A slightly less innovative than in 2004, and the Theory of Networks and Paradigms. Technology case study is not a test of the robustness and Analysis & Strategic Management, 6, 21–38.
DiMaggio, P. (1987) Classification in Art. American usefulness of the indexes and the underlying Sociological Review, 52, 440–55.
methodology. The main contribution of this García, R. and Calantone, R. (2001) A Critical Look study is to show how the concept of organi- at Technological Innovation Typology and Inno- vativeness Terminology: A Literature Review.
understood in the light of current theoretical Journal of Product Innovation Management, 19, 110– approaches to innovation and to show that the principal ways in which this concept can be Hirsch, P. (1972) Processing Fads and Fashions: An understood can be translated into operational- Organization Set Analysis of Cultural Industry izable indexes, based on measurable data. Pre- Systems. American Journal of Sociology, 77, 639– cisely by detailing the choices that have to be Hurley R.F., Hult, G.T.M. and Knight, G.A. (2005) made to derive meaningful measures from the Innovativeness and Capacity to Innovate in a theoretical approaches, this study has clarified Complexity of Firm-Level Relationships: A what one has to know to be able to make state- Response to Woodside (2004). Industrial Market- ments about an organization being more or less innovative. By doing so this study has also Kleinknecht, A.H., Reijnen, J.O.N. and Verweij, J.J.
demonstrated that the concept of organiza- (1990) Innovatie in de nederlandse Industrie en Dien- tional output innovativeness can be usefully stverlening: een enquête-onderzoek. Ministerie van employed to achieve a better understanding of Kleinschmidt, E.J. and Cooper, R.G. (1991) The Impact of Product Innovativeness on Perfor-mance. Journal of Product Innovation Management,8, 240–51.
Acknowledgements
Lounsbury, M. and Rao, H. (2004) Sources of Dura- bility and Change in Market Classifications: A This paper benefited greatly from the useful Study of the Reconstitution of Product Categories in the American Mutual Fund Industry, 1944–1985. Social Forces, 82, 969–99.
and Kristin McGee. The authors would also Mezias, J.M. and Mezias, S.J. (2000) Resource like to thank Ming Ming Chiu, Joeri Mol, Paul Partitioning, the Founding of Specialist Firms Rutten and Michael Christianen, as well as and Innovation: The American Feature Film Industry, 1912–1929, Organization Scence, 11, 306– Korver and Matthijs Brouwer of the National Pop Instituut. The usual disclaimer applies.
Orosa Paleo, I. and Wijnberg, N.M. (2006). Popular Music Festivals and Classification: A Typology ofFestivals and an Inquiry into their Role in theFormation of Musical Genres. International Journal References
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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. Industrial Marketing 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

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