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informs
doi 10.1287/orsc.1080.0408
2009 INFORMS
n contrast to the prevailing interpretation of capabilities as collectives, this inductive study of product development
in a leading design rm highlights the centrality of the myriad ordinary activities that may shape the evolution of
capabilities. A detailed comparison of 90 diverse product development processes over a 15-year period shows, rst, that
mindful microactivities carried out by individuals in and around the organization and at all levels of the organizational
hierarchy are central in shaping the content of the product development capability and its dynamic adaptation. Understanding
organizational renewal and competitive advantage may hence require a partial shift in focus from capabilities as aggregate
entities, to the practical realities of core organizational processes. Second, this more ne-grained perspective leads to
a set of insights on how organizational renewal may be partially shaped by timely managerial interventions aimed at
encoding successful experiments into higher-level organizational capabilities. Third, higher-level capabilities resulting from
the conversion of heterogeneous experiences display higher process homogeneity and a permanent increase in performance,
because of stabilization of managerial attention. My ndings contribute to unveiling the concept of capabilities, extending
prior research on dynamic capabilities and organizational renewal and providing a lens for research on the microfoundations
of capability evolution and organizational advantage.
Key words: capability evolution; capability microfoundations; mindfulness; dynamic managerial capabilities;
event-sequence analysis; optimal matching analysis
History: Published online in Articles in Advance March 6, 2009.
Introduction
Received wisdom is therefore converging on an interpretation of capabilities as collective entities that directly
drive organizational heterogeneity and competitive outcomes over time (Felin and Foss 2005, Gavetti 2005,
Winter 2003). Individual agents and their ordinary activities are placed in the background, and their role in
effecting organizational advantage is largely disregarded.
Resulting descriptions of how capabilities develop, and
of how this evolution affects performance over time,
may be perceived as not being nal, because they
raise additional questions about the set of causes responsible for capabilities emergence and change. Although
insightful, these descriptions bear little relationship to
peoples day-to-day work. The purpose of this study is
thus to unveil the capabilities concept by exploring how
mindful acts (Levinthal and Rerup 2006) of individuals in and around the organization may explain their
dynamic renewal, thereby extending thinking beyond the
currently prevailing view of capabilities evolving as collective entities.
Unconditional focus on capabilities as collectives is
problematic. Probably some of the mystery and confusion surrounding the concept of capability arises from
linking this organizational-level construct directly to
organizational advantage, thus excising the role of the
myriad intentional microactivities performed daily by
Capabilities and their constant refreshment have a substantial effect on the long term prospects of many organizations (Agarwal and Helfat 2009). Interpreted as
learned and stable patterns of collective activity, capabilities incorporate most of the idiosyncratic knowledge
that determines differential success rates across organizations. This source of observed heterogeneity in capabilities is traced back to the evolutionary history of the
organization as it interacts with the environment, and to
resulting path-dependent complexity (Kogut and Zander
1992, Nelson and Winter 1982). In this picture, organizational agents play the role of homogeneous, malleable beings, whose knowledge and behavior are largely
driven by organizational routines and capabilities (Felin
and Foss 2005, p. 443; Levitt and March 1988, p. 320).
Despite their path dependency, capabilities are also
regarded as change factors, because rms can systematically remodel their capabilities by creating dynamic
capabilities (Eisenhardt and Martin 2000, Helfat 2003).
Although much of this research sees a role for managerial deliberation in shaping dynamic capabilities, here,
too, individual action is relegated to a secondary role.
Dynamic capabilities are conceived as routines or procedures designed to overcome the local nature of learning
implied in individuals ordinary operations (Teece et al.
1997, Winter 2003, Zollo and Winter 2002).
384
385
executing preordained behavioral programs, but as mindful interpreters of organizational capabilities. Accordingly, recent denitions of dynamic capabilities hint at
a state of active awareness, openness to new information, and a willingness to view contexts from multiple
perspectives (Schreygg and Kliesch-Eberl 2007).
Understanding how routine-driven behavior implied
by a collective approach to capabilities may yield organizational adaptation will hence require the complementary discussion of how elements of individual
mindfulness underlie the emergence of adaptive capabilities (Langer 1989, Levinthal and Rerup 2006, Weick and
Sutcliffe 2006). The concept of mindfulness builds on
the psychology literature and is conceived as involving
attentiveness of individuals and their ability to respond
exibly to contextual cues. At the organizational level,
mindfulness has two components: high levels of attention to errors, unexpected events, and the numerous cues
surfacing from the organizations environment and its
own processes; and the ability to effectively respond
to such cues in a exible manner. Mindful organizational behavior is hence nonautomatic behavior characterized by an active awareness, in contrast with the
routine-driven, automatic nature of less-mindful behavior (Levinthal and Rerup 2006, Weick et al. 1999).
The foregoing discussion suggests that truly explaining organizational capabilities, their evolution, and, ultimately, variations in rm performance may require
starting with individuals everyday actions as the unit
of analysis. More specically, I argue that understanding a rms ability to systematically renew its strategies and underlying capabilities requires an in-depth
understanding of the microprocesses that make up an
organizational capability and its component routines,
of the day-to-day events that, at some moments in
time, induce mindful alterations in such sequences, and
of the role managerial intentionality has in leveraging
such alterations with the aim of achieving systematic
improvement in capabilities. Therefore, in this paper
attention is directed at incremental renewal in product
development at the individual level and on resulting
discontinuous transformations in the organizational-level
capability (Agarwal and Helfat 2009).
To better understand the dynamic process through
which capabilities are adaptively renewed by means of
everyday individual activities, I engaged in an inductive study of the new product development (NPD) processes of Alessi, a world-class Italian rm in designer
home furnishings. Over the period of interest to this
study (19882002), Alessi evolved from a niche maker
of precious stainless-steel objects developed by a limited number of top-notch architects into a world-class
manufacturer of countless design products developed by
over 200 designers in different materials, styles, colors,
and technologies. How was this reorientation possible?
What forces shaped Alessis core capabilities in design
386
Methods
Empirical Setting
New product introductions and novel designs have an
important role in strategic renewal (Kim and Pennings
2009, Knott and Posen 2009). My study addresses
the microfoundations of strategic renewal through a
Firm
Alessi
Bialetti
Lagostina
F.lli Guzzini
Metaltex Italia
Abert
Pinti Inox
Lumenon
Inoxpran
Frabosk
Mepra
Barazzoni
Calderoni
1817
693
228
351
583
386
513
664
102
087
752
272
037
397
885
870
485
753
254
244
668
962
187
665
081
497
978
454
496
1180
630
951
548
413
147
3795
690
871
253
over the period that has been crucial to the rms strategic transformation.
Research Design
I drew insights on the microfoundations of strategic
renewal from a single-case design. I chose an inductive case-study methodology as I was interested in
developing theory on the capability evolution processes
that underpin strategic renewal within the context of the
organization (Eisenhardt 1989).
The study format I adopted, however, departs from
common case-study methodology. I addressed the question of how capabilities evolve by tracking 90 product innovation processes that took place at Alessi over
the 15-year period (19882002) that was crucial to the
rm. Availability of a signicant number of instances
of the focal unit of analysisthe product innovation
processallowed a structured analysis of collected qualitative data. More specically, I carefully reconstructed
the action sequences of the 90 NPD processes, clusteranalyzed them, and drew insights about how Alessi
reshaped its key capability to address the challenges
posed by its task environment. This structured analysis of qualitative evidence improved the reliability and
validity of emerging insights.
Sampling. At Alessi, I analyzed 90 NPD processes
that the rm initiated between 1988 and 2002. This
period is suitable for my analysis. First, it includes a
phase of major strategic reorientation and some years
directly prior to it. In the early 1990s, Alessi resolutely
engaged in the development of plastic objects with the
help of a whole new group of young designers who have
since dramatically reshaped Alessis catalogue in terms
of product types, materials, philosophies, and development processes. This intense renewal stage resulted in
signicant alterations of Alessis NPD capability.
Second, internal documents going back to 1987 and
earlier were much less systematic and complete, which
would have reduced comparability with subsequent
years. Key informants corroborated this impression during interviews by recalling that around 1988 the NPD
function became more structured and began placing
emphasis on process articulation and data management.
During the data collection process, I gured that time
and resource constraints would not allow me to analyze more than 90 projects (Van de Ven and Huber
1990). Previous works investigating sequences of complex events focused on a smaller number of instances
(e.g., ve critical events in Isabella 1990, 25 strategic
decision processes in Mintzberg et al. 1976, 23 process
development processes in Pisano 1994, and 53 information system implementation processes in Sabherwal
and Robey 1993). Hence, 90 NPD processes constitute
a relatively large database, given the nature of the data
collection process.
Because my aim was to investigate the evolution of
NPD routines over time, the choice of the number of
387
388
389
Table 2
No.
Desiderata
Internal development:
design
Internal development:
color denition
5
6
7
10
11
12
13
Ad hoc modications
by external actors
15
Ad hoc modications
by Alessi personnel
Contacts with unusual
collaborators
17
Information gathering
on unusual topics
18
Others
Examples
14
16
Event description
A list of recurring/usual suppliers was provided by the company. Coded transcripts of company documents already reported whether a
supplier could be considered habitual. Critical assignments were solved with the help of key informants.
390
391
Table 3
Percentage Percentage
within
among
Percentage of Average sales
cluster
clusters
best sellers performance (%)
(6)
(7)
(8)
(9)
Cluster
(1)
Size
(2)
Medoid
(3)
Mean
(4)
Max
(5)
Cluster 1
Recipe book
Cluster 2
In-house adapted
Cluster 3
Externally adapted
Cluster 4
Externally driven
Cluster 5
Recombinant
36
(49Titan)
0.299
0.563
234
302
12
(11Helmut)
0.452
0.527
92
111
(7Mix Italia)
0.416
0.623
193
81
13
(41Placentarius)
0.586
0.758
77
46
0.594
323
536
20
Performance measures
11.1%
(4/36)
8.3%
(1/12)
11.1%
(1/9)
23.1%
(3/13)
25.0%
(5/20)
+68
+6
28
35
+127
Notes. (1) The ve rows report data concerning each of the ve clusters of NPD sequences emerging from analysis.
(2) Size is the number of sequences in the cluster.
(3) The column Medoid reports the clusters medoid sequence, i.e., the individual sequence that is least distant from all the other
individual sequences in each cluster.
(4)(5) Mean and Max are the mean and maximum distances between sequences in the cluster and the medoid. The higher these
values, the higher heterogeneity within a cluster.
(6) Percentage within cluster is the proportion of the total dissimilarity within the cluster accounted by the medoid. The higher this
value, the lower the heterogeneity within a cluster. Hence, for instance, sequences in Cluster 5 are relatively more homogeneous among
each other than sequences in Cluster 4, which are relatively more heterogeneous among each other.
(7) Percentage among clusters is the proportion of the total dissimilarity within the whole sample of 90 sequences, accounted by
sequences within a cluster. The higher this value, the lower the heterogeneity of cluster sequences compared to the whole sample. Hence,
for instance, sequences in Cluster 5 display more similarities to sequences in the other four clusters than sequences in Cluster 4, which
are highly dissimilar from sequences in the other four clusters.
(8) Percentage of best sellers is the percentage number of best-seller products (illustrated in the appendix) in each cluster. A best
seller is dened by Alessi as a product whose actual sales (volume) exceeded aspirations by at least 200%.
(9) Average sales performance is the average difference (for all products in each cluster) between (volume) actual sales and sales
aspirations set by Alessi.
392
contacts with unusual collaborators (Type 16), and information gathering on unusual topics (Type 17). A closer
analysis of sequencesby going back to raw data, further secondary data, or interviewssuggests that these
activities carried out along the project, though ordinary
and apparently uneventful, altered the NPD sequence.
At least four Types of these internal adaptations
emerged: rst, suggestions by Alessi personnel to
involve external consultants following project complications (e.g., Thuns Campari cocktail shaker, Product 2
and Rossis La Cubica cooking box, Product 8); second, adaptations improvised during early experiments
aimed at discovering new design talents (e.g., Starcks
Hot Bertaa kettle, Product 6); third, the suggestion to
adopt a sort of target costing method to reduce product cost of Castiglionis AC04 fruit bowl (Product 27);
nally, internal mutations because of the peculiarities of
the designers involved as well as of the objects developed (e.g., Girotondo Products 34, 48, 58, 66, and 79).
Cluster 3 externally adapted project sequences consists of nine NPD projects (10% of the total sample).
These projects have in common variations from the
more standard sequences in Cluster 1, which tend to
result from everyday adaptations introduced by agents
external to Alessi. These product development processes
are characterized by the presence of ad hoc modications by external actors (Type 14), and by some related
contacts with unusual collaborators (Type 16) and information gathering on unusual topics (Type 17). Sometimes (e.g., Sequences 7, 59, and 60) these external
alterations raise critical issues inside Alessi (Type 8).
Consequences of these alterations on the product development process require specic internal ad hoc approval
(Type 9), e.g., in Sequences 35, 67, and 78. Three
types of these external adaptations emerged. A rst
instance are those daily experimentations and suggestions by external actors aimed at improving color development routines (e.g., NPD Sequences 15, Firebird;
59, Dr. Kleen; and 60, Rondo, Sden, Otto). A second
type of external mutations are those driven by special
designer traits, as in the case of the Mix Italia espresso
coffee maker (1991, Product 7), designed by Giovannoni
and Venturini. Giovannonis set of Mami pots and
saucepans (Product 62, 1999) is a third example of an
NPD sequence altered by designers intervening in the
process. In developing what was, since its inception, a
very demanding project, designer Giovannoni decided to
follow an unusual procedure that resulted in a signicantly altered NPD sequence, in which several internal
product development activities are carried out early in
the process, whereas most of the designers activities,
which are usually at the inception, follow. A nal type of
external adaptation relates to the development of a new
edition of a historical Alessi project (e.g., Alessandro
Mendinis How much white table set in white porcelain, Product 35).
Cluster 4 externally driven project sequences includes 13 NPD projects (15% of the total sample). These
projects are reproductions of historical objects, such as
the metal tray from the Pompeii excavations, or a tea
infuser designed by Bauhaus architects in 1924 (Products 5, 13, 25, 33, and 41), or they are the result of
collaborations with unusual industrial partners such as
Philips, 3M, or Hagen Dazs (Products 32, 36, 51, 53,
56, 76, 80, and 87). Hence, just as in Cluster 3, Cluster 4
project sequences are shaped by external forces. The
main difference is that whereas mutations in Cluster 3
were determined by specic individual actions within
the framework of ordinary Alessi products, here, product development sequences differ from recipe-book
sequences because the underlying product idea itself
arises from an interaction between Alessi and some
external actor. Therefore, Cluster 4 projects can also
be interpreted as adaptations of Alessis NPD capability
made necessary by externally driven choices.
Finally, Cluster 5 recombinant project sequences
comprises 20 NPD projects (22% of the total sample). In contrast with the four previous clusters, these
sequences encompass patterns of activities that resulted
neither from following rules codied before the sampled
period (19882002), nor from experiments performed in
the course of the project. Rather, activities and patterns
that seem to pool these sequences were shaped by managerial actions geared to reproduce select improvisations
observed by managers in previous years as internal or
external mutations. In other words, sequences in Cluster 5 incorporate internal (Cluster 2) or external (Clusters 3 and 4) experiments that occurred in previous years,
and that Alessi managers recognized as potentially valuable improvements to the NPD process, and eventually
selected and retained.
These higher-level managerial activities regard three
main areas. First, some projects result from executives intervention aimed at structuring the workshop,
a procedure aimed at discovering and attracting new
design talents worldwide. Projects 14, 16, 18, and 19
resulted from the Family Follows Fiction FFF workshop, a more structured and rened version of the
Memory Containers: Creole Project workshop organized
some time before. Projects 26 (Memory Containers: Biological Project) and 7072 (subsequent versions of the
FFF workshop) also resulted from further renements of
the original workshop process and structure.
Second, Projects 28, 42, 43, 44, 52, 73, and 82, which
generated colored plastic products, share a new procedure for developing product color. This procedure was
developed by Alessis management from the embryonic
color-ling system that emerged from both the internal
and external mutations classied in Clusters 2 and 3. The
development sequence of Giovannonis Mary Biscuit
plastic box (Project 28, 1995), for example, displays the
rst signs of the development of a structured color-ling
393
394
Table 4
(II) Internal/external
adaptations (Clusters 24)
(instances of improvisation)a
1. Development of a set of
routines to
systematically
encourage projects of
young designers not
previously known to
Alessi (the workshop)
Appointment of Metaproject/
Workshop coordinator (1991)
Development of workshop
routines (over 10 workshops
per year) and documents
(1993 onward)
Workshop schedule posted on
company website (2000)
14,
16,
18,
19,
26,
68,
69,
70,
71,
72,
2. Development of a
formalized color-ling
system, and related
routines for faster and
less costly development
of new colors
Color-related problems
emerged early in these
projects,
i.e., Nov.-Dec. 1996
28,
42,
43,
44,
52,
73,
82,
3. Development of new
versions of earlier,
successful products
4. Development of ad hoc
work practices to
increase involvement of
a small subset of
promising designers
No evidence of systematic
reproduction: reproduction
activities devised by Alessi
management (Column III) are
too exible and too creative to
be routine. Structure and
regularity are soon dropped and
systematic reproduction is thus
prevented. Rather, projects
resulting from reproduction fall
into the internally adapted
project cluster.
5. Involvement of external
consultants within the
NPD process
No evidence of intentional
selection and retention.
Involvement of external
consultants always resulting
from ad hoc decisions.
6. Ad hoc decision to
adopt a target costing
procedure
7. Decision to follow a
deductive product
development process
8. Various activities
No evidence of intentional
selection and retention
No evidence of systematic
reproduction
No evidence of intentional
selection and retention
No evidence of systematic
reproduction
No evidence of intentional
selection and retention
No evidence of systematic
reproduction
a
For each listed product I report the following: product number, e.g., 86 (within the n = 90 sample; see the appendix); product name (e.g.,
Babyboop vase); year the product entered Alessis catalogue, or its development was discontinued (e.g., 2002); product performance,
according to the appendix footnote (i.e., BS = best seller; T = troops; F = failure; n.a. = discontinued project; Cl = cluster). For the concept
and denition of improvisation, see Miner et al. (2001).
the product development routine or activity that experienced the change-inducing events I observed at Alessi
(Description of activities involved). The second column (Internal/external adaptations) reports instances of
ordinary activities that induced alterations in Alessis
NPD routine. Such experiments were carried out
by Alessi employees at all levels of the organizational hierarchy (Cluster 2, in-house-adapted project
sequences), by external agents (Cluster 3, externally
adapted project sequences), or by carrying out externally
directed projects (Cluster 4, externally driven project
sequences). Each of these activities implied some deviation from standard NPD procedures (Cluster 1, recombinant project sequences), and thus induced variation
in Alessis design capability.
The third column (Intentional selection and development of adapted traits) reports instances of managerial
activities aimed at improving the emerging alterations,
and at creating an overall organizational awareness of
the underlying problems and of ways to solve them.
A rst instance of intentional managerial interventions
in the evolution of NPD routines was the development of
a formal workshop procedure in the early 1990s, aimed
at systematically discovering new young talents worldwide. The rst observed instance of a workshop (Cluster 2, Hot Bertaa kettle, Product 6, 1990) resulted
in a failure, performing below 5% of expected sales.
Project documents show that Alessi had failed to properly channel, within the boundaries of technical feasibility, the imaginative product idea resulting from the Paris
workshop. To strengthen workshop activities, the CEO,
in 1991, appointed a workshop coordinator charged with
the explicit task of structuring work with young designers by formalizing and reproducing an activity that had
been more the outcome of intuition and experimentation. Since then, the workshop coordinator has organized an average of nearly 10 international workshops
per year. The workshop structurea ve-day residential
meetinghas been gradually formalized and posted on
Alessis Internet site, together with a schedule of forthcoming workshops, an application form, and notes on
venues, organization, and fees.
A second example of intentional managerial activities is the research on color suggested by Alessis top
managers as a result of numerous stimuli originating
from within and outside the organization. Problems in
the denition of colors for new plastic products eventually prompted some organizational actors to introduce a
new method of selecting colors:
We used to work with Pantone a color-ling system
based on removable color chips on paper, but Pantone
is paper based, and its a mix of more than one color.
So, theres never perfect conformity between Pantone
and plastic. We often started from a Pantone and they
would go crazy, because they could never get the right
color. And we were never satised, because we would
always run into a bunch of problems In the end,
395
they developed this Color Box, because they were so
desperate that whatever instrument would have helped.
Designer, Interview, March 2003
396
Figure 1
Enhancing Product Development Capabilities by Leveraging Mindful Acts: A Simplied Example from Available
Product-Sequence Data
17 11 12 6 6 5 14 14 7 16
Dear C. [Alessi engineer], I sent you fluo colors for a new firebird proposal is it
possible to see a plastic sample of them? If we pursued these apparently insignificant
experiments, when we then need a new color it is already formulated and all, isnt it?"
[December 1993, Designer to Alessi].
Experimental development of new-color plastic samples by R.Ltd., Alessi color supplier.
Everyday, ordinary
experiments
(1993)
Data on existing product colors used by a competitor are collected and analyzed to experiment
color replicability
Data on performance and price of spectrophotometers are collected by NPD staff member to explore
the benefits of more scientific color development process (in particular, to improve consistency
between prototype and end-product colors)
Subsequent higher-level
managerial refinement and
codification
(19951999)
Subsequent
reproduction of
adapted routine
(1997 onward)
397
398
Figure 2
Mindfulness in action
Improvisation by INTERNAL agents
Heterogeneity: higher than capability n
Performance: lower than capability n
(Cluster 2)
Internal
a
Agents
a
Mindfulness in action
Improvisation by EXTERNAL agents
Heterogeneity: higher than capability n
Performance: lower than capability n
(Cluster 3 4)
External
Less mindful
Semiautomatic
Mindful
intentional
Behavior
Notes. (a) Improvisation: Availability of a stable repertoire of action (level n) forms the basis for mindful enactment of routines, which results
in experimentation (mindful acts). (b) Encoding: Mindful retention and reproduction of improvisational acts (level n + 1).
399
evolution. Predominantly mindful processes of adaptation, premised on a logic of consequences, would lack the
richness and realism provided by the existing repertoire
of routines. However, predominantly mindless processes,
primed by a logic of appropriateness, would result in the
nearly endless repetition of existing routines, with little
or no adaptation to changing contextual cues. Data from
Alessi suggest that truly explaining organizational capabilities, their evolution, and, ultimately, performance may
therefore require selecting the interplay of existing routines and individuals everyday mindful acts as the unit
of analysis. Future research may expound the qualities of
less-mindful behavior enabling mindful recombination,
and the features of mindful behavior resulting in adaptive
alterations of baseline routines.
Encoding Heterogeneous Experience: Intentional
Managerial Intervention and the Emergence of
Adaptive Capabilities
At Alessi, design excellence resulted from the conuence of a myriad daily activities, each one learned or
come across, that were carefully disciplined into habit
and then tted together in a coherent, homogeneous
whole through the mindful intervention of top managers.
Learning processes underpinning the emergence of
adaptive capabilities demand the aggregation of prior
experience. Systematic encoding of experiential outcomes is hence essential to allow the accumulation of
wisdom (Levinthal and Rerup 2006, p. 509). Given the
consistently adaptive nature of Alessis NPD capability, when analyzing Alessis NPD processes and their
evolution over time, I was struck by the absence of
established practices such as formal analysis of routines
performance, strategy workshops and project groups
aimed at improving NPD process efcacy, and systematic intervention of executives or consultants to intentionally reengineer the NPD routine. Instead, my data
reveal that Alessis adaptive prospects were improved
by the timely ad hoc intervention of Alessi executives,
aimed at rening and reproducing promising experiments emerging from local search. These mindful interventions accelerated the transfer, at the organizational
level, of potentially adaptive alterations in the NPD
capability, which were occurring locally.
Lack of established innovation/search routines aimed
at systematically improving the ongoing validity of
Alessis current competence pattern may stem from the
incidental and potentially unfamiliar character of the
experiments emerging from local search. The deliberate installation of scanning routines may do a poor
job in capturing the promise of experiments occurring at all levels within and outside the organization.
An alternative explanation to the prevalence of ad hoc
managerial intervention over routinized practices could
be the opportunity cost of developing and maintaining reinforcing structures and processes necessary to
400
Interestingly, key informants at Alessi refer to this ability to build higher-level capabilities as managing variance. At Alessi, developing unique design products is
explicitly interpreted as a job that requires fostering heterogeneity to increase requisite variety, but also developing a synthesis of such disparate signals and drilling
emerging lessons learned into everyday practice:
These signals are issued by different parties: by top
management, for what concerns the company; by the
designer, for issues concerning the project; by myself,
for issues concerning product development and so on,
at different levels in the hierarchy. Our job is to put
all these signals together and to nd a synthesis, to
make these different entities coherent The difculties rest in the fact that there are many variances of a
401
different nature and magnitude. What do we do then?
We try to lower their noise by inserting suitable practices. Hence, the advantage is that we only manage relevant variancesI mean, quantitatively, and qualitatively
relevantand not all of them. (DA, Product Manager)
The positive impact of encoded heterogeneity on performance may also explain Alessi competitive superiority
relative to its direct rivals (Table 1). Alessi is unique
among design rms in terms of variety of styles, materials, product types, and production exibility (Bhaskaran
2005, Collins 1999, Verganti 2006). Such variety is
made possible by collaboration with over 200 designers, and by product development phases that encourage
and shelter the autonomous development of designers
ideas, preserving their integrity from premature interference from other functions. At Alessi, managers guiding
design-driven renewal recognized the value of experimentation and provided different arrangements to supply
designers with the resources and the freedom required
to engage in autonomous exploration of new forms
and concepts (Ravasi and Lojacono 2005, p. 59). This
results in a rather heterogeneous palette of experiments
from which managers can draw lessons to improve product development practices and performance.
These ndings parallel other research suggesting that
capabilities exhibit substantial similarities across effective rms, although differing in subtle details, and that
their value for competitive advantage lies in the resource
congurations they create, more than in the collective
itself (Eisenhardt and Martin 2000, p. 1106). My data
suggest that rather than focus exclusively on capabilities,
we had better investigate what organizations and individuals within and around them actually do that creates
outstanding performance. In other words, the concept
of capabilities devoid of their detailed microunderpinnings may hinder a clear understanding of organizational
advantage. What we call capability risks becoming no
more than a projected reication of things done: experimenting new kinds of brainstorming with designers;
recording feedback from area managers on the adoption
of product-evaluation heuristics; testing designers suggestions on process improvements; commissioning the
development of a prototype for a color-ling system to
a supplier of plastic materials. Too-broad conceptions of
capabilities may therefore conceal the concrete actions
that create outstanding performance.
Managing the Quality of Organizational Attention
as a Dynamic Managerial Capability
At Alessi, the encoding of heterogeneous experiences
resulted in recongurations of existing product development routines (recombinant Cluster 5 sequences).
The conversion of experience into recongurations of
assumptions, frameworks, and actions is one of the
possible descriptions of mindfulness and of the enhanced
organizational awareness it implies (Levinthal and Rerup
2006, p. 507; Weick and Sutcliffe 2006, p. 517). This
402
interpreted as a reinforcing mechanism of Interrelationships (2) and (4) between mindful and less-mindful
behavior in Levinthal and Rerups (2006) framework.
At Alessi, I found no trace of the routines and practices for sustaining mindfulness suggested by Levinthal
and Rerup (2006, pp. 506507) as one of four relevant
relationships between mindful and less mindful behavior. What I noticed is that the mindful encoding of
ambiguous outcomes from previous experiments (Interrelationship 4) enhances the adaptiveness of routinedriven behavior, which in turn helps sustain high levels
of attention and mindfulness (Interrelationship 2).
Higher-level competence for strategic renewal is hence
achieved when lower-level skills and routines are learned,
perfected, and maintained through everyday practice.
In the early 1970s, developing design objects with external architects was an entirely new eld for Alessi. All
product development activities directly involved the CEO
and his closer collaborators. Each single activity required
relevant doses of directed, conscious efforts at the highest
levels of the organizational hierarchy. Early workshops,
for example, were carried out by Alessis CEO and by the
rms main designer consultant. When Alessis Research
Center (CSA) was set up in 1989 and a workshop coordinator was appointed, this activity gradually became a
routine way of stimulating projects from new designers.
The CEO quickly abandoned this activity and turned his
attention to developing enduring relationships with the
designers he met through early workshop experiences.
In later years, the CEO and his collaborators devoted
their attention to developing the network of core Alessi
designers, while leaving contacts with new ones entirely
to CSA.
Clearly, the day-to-day repetition of prosaic activities
resulted in a gradually perfecting of lower-level product development practices, which could then be delegated
to a tailored organizational function. This allowed the
CEO and the entire NPD staff to turn attention to the
higher-level initiatives, which a changing environment
was suggesting as increasingly relevant in determining
organizational adaptation. For instance, development of
Alessis workshop routine in the early 1990s allowed
the rm to adopt it in the development of increasingly
diversied products, until its recent use in the development of licensing projects within unrelated businesses
such as bathroom objects, wristwatches, cordless telephones, and fashion items. Hence, the most valuable
outcome of the processes of capabilities development
observed at Alessi seems to be the ability to simultaneously perform reliable product development processes
and mindful exploration of novel strategic opportunities:
Simultaneity seems to be the assumption behind the proposal that people need to do activities on autopilot so that
simultaneously they can scan the situation attentively for
discrepancies (Weick and Sutcliffe 2006, p. 522). As
my data suggest, recombinant NPD procedures allow
ad hoc attention be paid only to relevant discrepancies,
403
Conclusion
This paper explores the role of capability evolution in
underpinning organizational renewal. The rationale is that
daily individual interventions must be carefully tracked
to offer a realistic account of how capabilities evolve and
support organizational change and performance.
My data suggest that adaptive renewal is premised on
a number of day-to-day activities, whereby mutations
resulting from local search are rst tested by internal or
external selective forces, and then rened and reproduced
404
Product name
Year
Description
SBU
Y/N
Perf.
Designer
Wood
Steel
Steel
Steel
Steel
Steel
Plastic
Steel
Plastic
Wood
Porcelain
Steel
Steel
Porcelain
Steel
Miscellan.
Plastic
Plastic
Porcelain
Steel
Miscellan.
Plastic
Plastic
Steel
Plastic
El. appl.
Plastic
Steel
Steel
Glass
Porcelain
Plastic
Glass
Porcelain
Plastic
Plastic
no
yes
yes
no
yes
no
no
yes
yes
yes
yes
yes
yes
no
yes
yes
yes
yes
yes
yes
no
yes
no
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
n.a.
F
F
n.a.
F
n.a.
n.a.
T
BS
F
F
T
T
n.a.
T
T
BS
BS
BS
F
n.a.
T
n.a.
T
T
F
T
F
T
T
F
F
BS
T
T
T
Branzi
Gehry
Graves
Brass
Caramia
Carallo
Graves
King Kong
Mendini
Sottsass
Sottsass
Graves
Sapper
Burkhardt
Sottsass
Starck
Venturini
Venturini
Castiglioni
Castiglioni
Cavallaio
Newson
Santachiara
King Kong
Mendini
Sapper
Newson
Mari
DUrbino
Castiglioni
Castiglioni
Feiz
Giovannoni
Venturini
Mirri
Harry & Co.
Steel
Steel
Miscellan.
Steel
Steel
Steel
Plastic
Miscellan.
Plastic
Porcelain
Miscellan.
Plastic
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
T
F
T
F
T
T
T
T
T
BS
F
F
Thun
Starck
Rossi
Cassina
Boym
Castiglioni
King Kong
King Kong
King Kong
Abdelkader
Giovannoni
King Kong
405
Appendix (contd.)
Clusters 1 and 2/Side 2
Sequence length
16 10 2 1 8 8 8 9 10 4 12 5 1 7 8 8 11 11 10 9 9 6 13 13 13 1 7
16 10 9 9 16 9 10 10 2 8 8 1 10 10 5 5 16 15 15 3 1 10 4 12 12 11 13 13 8 8 9 13 7 7
10 2 8 8 9 10 4 12 8 17 18 7 5 9 7 5 12 2 5 8 8 8 9 17 12 7 5 7 7 8 8 16 5 17 17 12 7 6 5 5 6 10
1 8 8 8 9 17 16 15 15 10 15 10 4 5 5 1 7 8 8 2 4 5 5 4 5 6 7 5 5 4 10
8 8 9 1 10 17 8 16 16 10 15 15 10 5 5 4 1 7 8 5 2 4 5 4 5 6 10 7 5 4
10 1 8 8 15 9 9 4 2 2 2 15 15 9 2 5 5 1 2 2 4 8 4 55 5 6 7 4 10 7
1 8 7 9 17 7 7 16 3 7 10 9 9 7 10 4 5 5 1 7 8 18 3 9 9 2 4 5 5 4 5 6 7 5 5 4 10
10 1 7 9 17 7 7 16 3 7 10 15 9 9 10 4 5 5 1 7 9 9 2 4 5 5 4 5 6 7 5 5 4 10
1 7 9 17 7 10 3 7 15 10 9 9 10 4 5 5 1 7 8 9 9 2 4 1 7
1 8 8 8 9 17 16 15 15 10 15 4 12 12 5 11 11 10 4 11 1 8 8 2 4 12 13 13 4 6 7 13 4 10 7
1 8 8 15 10 10 9 9 4 2 15 15 15 9 2 1 7 2 2 5 5 4 8 4 5 6 6 10 4 7
1 7 9 19 7 7 9 16 3 7 15 10 9 9 7 10 4 5 5 1 7 18 3 9 9 2 4 5 5 4 5 6 7 5 5 4
406
Appendix (contd.)
Clusters 3, 4, and 5/Side 1
N
Product name
Year
Description
SBU
Y/N
Perf.
Designer
Steel
Plastic
Porcelain
Plastic
Plastic
Steel
Textile
El. appl.
Steel
yes
yes
yes
yes
yes
yes
yes
yes
yes
F
T
T
F
T
BS
F
T
T
King Kong
Venturini
Mendini
Starck
Pirovano
Giovannoni
King Kong
Meda
Arad
Hist. repr.
Hist. repr.
Hist. repr.
Plastic
Plastic
Steel
Hist. repr.
Plastic
Plastic
Porcelain
Steel
Plastic
Plastic
yes
yes
yes
yes
yes
no
yes
no
yes
no
yes
yes
yes
BS
T
T
T
BS
n.a.
T
n.a.
F
n.a.
F
T
BS
Caccia D.
Dresser
Bauhaus
Castiglioni
Castiglioni
Sapper
Anonimo
Thun
Arad
Philips
Castiglioni
Venturini
Mirri
Plastic
Plastic
Plastic
Steel
Glass
Plastic
Plastic
Plastic
Plastic
Plastic
Steel
Miscellan.
Plastic
Steel
Plastic
Plastic
Porcelain
Plastic
Steel
Plastic
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
BS
BS
BS
F
T
BS
T
F
T
BS
T
F
F
T
T
T
F
T
T
T
Giovannoni
Venturini
Giovannoni
Giovannoni
Caramia
Giovannoni
Venturini
Mari
Giovannoni
Giovannoni
Sansoni
Lassus
Pirovano
Pirovano
Giacon
Venturini
Castiglioni
Giovannoni
Graves
Vos e Pezy
Mix Italia
Firebird
How much white
Dr. Kleen
Rondo, Sden, Otto
Mami
Girotondo on the beach
Kalura
Babyboop vase
1991
1993
1996
1998
1998
1999
2000
2001
2002
Coffee maker
Fire lighter
Table set
Toothpick holder set
Lid for toothpaste tube
Pots
Cotton jacquard towel
Electric hot-plate
Flower vase
Caccia
Christy
90043
Sleek
Firenze
Patty2
Placentarius
La caldissima
The soundtrack
HI FI ceramica
Splugen
Mangiauovo
Hagen Dazs
1990
1993
1995
1996
1996
1996
1997
1997
1998
1998
2001
2001
2002
Cutlery set
Sugar bowl
Two tea infusers
Mayonnaise spoon
Wall clock
Garbage disposal
Rectangular tray
Jug
Self adhesive CD rack
Hi Fi set
Bottle opener
Egg catcher-egg cup
Ice cream cup
Merdolino
Gino Zucchino
Molly
Escar-gog
Black Josephine
Mary biscuit
Fred Worm
EM01
Happy spices
Alibaba
Tralcio muto
Strawbowls
Te
Canaglia
Mr. Cold
Okkio!
Colorbavero
Bunny & Carrot
B 9093, 9093 GD
Techno tales 1- Match
1993
1993
1994
1994
1995
1995
1997
1997
1997
1998
2000
2000
2000
2000
2000
2000
2001
2002
2002
2002
Toilet brush
Sugar sifter
Kitchen scale
Snail dish
Biscuit box
Biscuit box
Jug
Bread-basket
Containers for spices
Jug
Tray
Table centrepieces set
Tea strainer
Nail clipper
Liquid soap dispenser
Table brush
Table set
Kitchen roll holder
Kettle
Fire lighter
407
Appendix (contd.)
Clusters 3, 4, and 5/Side 2
Sequence length
408
Endnote
1
I am indebted to two anonymous reviewers for their suggestions to explore performance implications of capability evolution and, in particular, the impact of heterogeneity within and
between clusters on product performance.
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