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Organization Science

informs

Vol. 20, No. 2, MarchApril 2009, pp. 384409


issn 1047-7039  eissn 1526-5455  09  2002  0384

doi 10.1287/orsc.1080.0408
2009 INFORMS

Capabilities Unveiled: The Role of Ordinary


Activities in the Evolution of Product
Development Processes
Carlo Salvato
Management Department, Bocconi University, 20136 Milan, Italy, carlo.salvato@unibocconi.it

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

Salvato: Role of Ordinary Activities in Evolution of Product Development Processes


Organization Science 20(2), pp. 384409, 2009 INFORMS

organizational agents (Felin and Foss 2005; Felin and


Hesterly 2007; Gavetti 2005; Winter 2003, p. 994). This
approach raises at least two controversial interpretations.
First, although organizational capabilities differ among
rms in form and detail, specic capabilities exhibit common features, equally associated with effective processes.
These commonalities are sometimes labeled best practice (Eisenhardt and Martin 2000, p. 1106). Capabilities
per se may hence be characterized by greater equinality, substitutability, and fungibility across rms than current theory proposes. This suggests that the idiosyncratic
rm-level effects embodied in capabilities are probably overstated relative to the idiosyncratic attributes of
individuals and individual actions performed within the
organization (Winter 2003).
Second, the fact that organizational capabilities are
interpreted as being strongly path-dependent entities
sharply restricts the role of strategic choice (Dosi et al.
2000, Helfat 2003). Strategic management is premised
on some role of managerial intentionality in driving the
fate of an organization. Yet, one important manifestation of organizational capability is the rms ability to
adapt without having to rely on top management foresight (Burgelman 1996), or daily maintenance by agents
at different levels of the organizational hierarchy (Nelson
and Winter 1982, Murmann et al. 2003).
These controversial corollaries are apparent in mainstream literature on capabilities. Lacking focus on the
sophisticated workings of ordinary individual action
within the organization, the capability lens regards outcomes of managerial problem solving as stochastic
(Nelson and Winter 1982, p. 136). As long as the relevant
collective features of a capability are present, differences
in form and detail are deemed irrelevant (Eisenhardt and
Martin 2000, pp. 11091110). However, by restricting
the scope of analysis to organizational-level consistencies
and development paths, the primary sources of heterogeneity in knowledge and knowledge transfer may be lost
(Argote and Ingram 2000, p. 156; Nahapiet and Ghoshal
1998, p. 247; Salvato and Leif 2008), along with convincing attempts to closely understand how capabilities are
generated and evolve (Zollo and Winter 2002, p. 341).
These problems are evident in recent empirical studies
that tried to closely follow the emergence and development of organizational capabilities and of their component routines (e.g., Edmondson et al. 2001, Feldman
2000, Howard-Grenville 2005). These works reveal how
seemingly mundane details may have surprising signicance in driving organizational outcomes: college
students are effectively enlisted by free mufns and
friendly greetings (Allen 2002); complex computer networks are successfully implemented as users deliberately ignore some software functionalities (Orlikowski
2000); focus groups and customer visits drive successful
product innovation (Dougherty 1992). In these practical examples, actors are not seen as simple automata

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

Salvato: Role of Ordinary Activities in Evolution of Product Development Processes

386

and product development? What role did the ordinary


activities carried out by individuals within and around
the organization play in these processes?
I addressed these questions by means of sequential analysis methods (Abbott 1990). Over the 15-year
period, I tracked the event sequences through which
90 NPD processes unfolded, that is, 90 performances
of Alessis underlying NPD capability. I then compared
these sequences with optimal matching and clustering
techniques (MacIndoe and Abbott 2004, Pentland 2003,
Sabherwal and Robey 1993). Investigating capabilities
and their component routines according to their traditional denition as semiautomatic sequences of individual actions (Nelson and Winter 1982) offers a detailed
and grounded vantage point for understanding their evolution, in that the origin of mutations can be traced
back to specic agents, actions, and junctures. I recognized different clusters of NPD processes, and the
related different roles played by internal and external
agents and their day-to-day occupations in shaping capabilities innovation and performance.
Alessi shows how mundane details of product development processes may have remarkable signicance.
At Alessi, the minutiae of workday design practices
became a source of advantage in systematically shaping and responding to strategic change. Emerging results
suggest that the coarse rendition of capabilities currently
prevailing in organizational and industry-level literature
may be signicantly improved by reducing grain size
to include everyday actions performed by individuals
in and around the organization. Close engagement with
the actual performance of organizational capabilities can
unveil the real sources of their renewal and of organizational advantage.
Following the typical format of inductive research,
I begin by discussing theory building through my structured event-sequence analysis of 90 NPD processes over
time. I then describe the data and the insights drawn from
them, and conclude by tying these insights to the broader
agenda of exploring the evolution of organizational capabilities and its role in strategic renewal processes. Overall, this work extends knowledge on capability renewal
by offering a perspective on how adaptive capabilities
develop, founded on a detailed and systematic understanding of mindful individual acts. It also suggests
insights into the role managerial intentionality plays in
the development of capabilities, and into the impact these
renewal patterns have on performance.

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

Organization Science 20(2), pp. 384409, 2009 INFORMS

longitudinal investigation of NPD capabilities within


Alessi, one of the world leaders in designer home furnishings. Alessi represents an instructive case study of strategic renewal. Founded in 1921 by Giovanni Alessi, Alessi
was initially a metal- and lathe-works factory that manufactured small, metal kitchen and tableware objects commissioned by external clients. In the 1930s and 1940s,
Carlo and Ettore, the founders sons, joined the rm
and gradually started to collaborate with external designers. These initial collaboration projects with outsiders
helped Alessi understand the company could do excellent things by hiring architects (Ettore Alessi, Vice President). When Alberto Alessi, Carlos eldest son, joined
the rm in the early 1970s, design gradually became the
driving company logic. Over the 1980s and 1990s, systematic efforts were made to collaborate with external
designers and architects. In those yearsthe focal period
of this studyAlessi gradually transformed itself from
a small rm that sporadically attracted the attention of
design experts with unique, though isolated objects, into
a trendsetter, which since then has been systematically
shaping the features of its target environment (Collins
1999, Bhaskaran 2005).
This cultural lead has resulted in widespread market
recognition, in Italy and worldwide, which entailed superior nancial performance. A comparison of Alessis
main nancial indicators with those of selected Italian
competitors over the focal period reveals the positive
impact these choices had on the bottom line. Alessi
has consistently outperformed its direct rivals in the
period of interest, as revealed by the signicantly higher
protability and cash generated by operating activities
(Table 1).
Data available for Alessi consistently show a history
of superior adaptive capabilities and an enduring competitive advantage. It is therefore interesting to explore
how Alessis product innovation capability developed
Table 1

Comparison of Selected Financial Indicators of Italian


Producers of Home Furnishings: 19952002

Firm
Alessi
Bialetti
Lagostina
F.lli Guzzini
Metaltex Italia
Abert
Pinti Inox
Lumenon
Inoxpran
Frabosk
Mepra
Barazzoni
Calderoni

Sales increase Average Average Average cash


19952002 (%) ROI (%) ROE (%)
ow/sales
328
3594a
475
n.a.
67
1758
275
653
412
167
345
58
174

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

Notes. ROI, return on investment; ROE, return on equity.


Source. Databank Competitors plus reports, 2002 and 1996.
a
Resulting from the merger of Bialetti and Rondine, a large producer of metal pots and pans.

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Organization Science 20(2), pp. 384409, 2009 INFORMS

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

sampled projects in each year was critical. I opted to


select the number of projects sampled each year (e.g.,
nine projects in 1998, representing 10% of the whole
sample of 90 projects) based on the proportion of all
projects developed by the rm that year (i.e., 206) to
the total number of projects (i.e., 2,142) developed in
the 15 years of interest (i.e., 206/2,142, that is, approximately 10% of all the products developed over the
15 years of interest). This way, action sequences that
took place in years in which a higher number of projects
were carried out would have a relatively higher chance
of determining enduring effects on the evolution of
the rms NPD capabilities. The underlying behavioral
assumption is that routines and capabilities develop as
a result of learning through repetition (Cyert and March
1963, Dosi et al. 2000, Nelson and Winter 1982).
Projects actually sampled in each of the 15 focal
years were randomly selected in terms of the main
aspect of interest, i.e., the product development sequence.
In choosing projects, I was blind to the structure and
composition of the product development process, which
resulted from later coding and analysis. However, in
choosing project dossiers to be coded and analyzed, I also
tried to ensure that enough variability was observed in the
project dimensions key informants indicated as relevant:
strategic business unit (SBU; Alessi formally codies
its products in eight separate SBUs: plastic, stainless
steel, wood, porcelain, glass, electric appliances, historical reproductions, miscellaneous); product type (e.g., cutlery set, coffee maker, kettle, kitchen scale); product
designer (over the focal period, Alessi collaborated with
approximately 200 external designers); NPD process outcome (i.e., the product actually entered the catalogue or it
was withdrawn); product performance (i.e., actual sales
compared to sales aspirations). This sampling strategy is
not uncommon in qualitative inquiry, where it is sometimes labelled as random purposeful sampling (Miles
and Huberman 1994); it aims to add credibility to the
sample when, as in my case, the potential purposeful
sample is very large.
As a result, the 90 selected projects were developed
over 15 years (19882002) by 40 different designers,
and they were quite heterogeneous in terms of product
type and sales performance. Finally, 10 projects were
not developed beyond the prototype stage.
Data Sources. Data gathering spanned the period
200003, during which over 40 company visits were
carried out. The data collection tactic implied a mix of
secondary and primary data and direct observation. However, given the need to carefully trace sequences of product development processes over 15 years, the main source
of evidence came from access to company archives.
Archival Data. Several hundred pages of documents
were available for each of the 90 sampled products. Of
particular value to the study was access to the NPD

Salvato: Role of Ordinary Activities in Evolution of Product Development Processes

388

dossiers in which the rm les all documents related


to each product development process. For each product Alessi developed until at least the prototype stage,
there was a NPD dossier le containing, in chronological order, formal documents, letters, faxes, handwritten notes, designs and drafts, pictures, small artifacts
(e.g., color samples, removable color chips, small product components), minutes of meetings, e-mail printouts,
newspaper clippings, brochures of related products
or materials, packaging items (e.g., labels, attened
boxes, instructions, logos, recipe books), transcripts of
speeches, technical data about products and production processes, photocopies from relevant books or catalogues, and results of focused technical tests. Access
to Alessi dossiers provided extremely detailed and complete descriptions of selected NPD processes, as conrmed by three key informants.
The documents included in each dossier were selectively transcribed, reporting document type (e.g., letter,
fax, manuscript note, consultants report, suppliers
proposal, etc.), date, the person who originated the
document, the addressee, and, most important, abridged
contents of the document with extensive quotes.
Although selective transcription may have resulted in
missing details, raw data was available to resolve uncertainties. Despite the slight chance of missing data, direct
access to company documents warranted a reliability
in reconstructing NPD processes that far exceeded that
achieved with alternative tactics (e.g., Mintzberg et al.
1976, Sabherwal and Robey 1993). This allowed me to
carefully generate the event sequences of investigated
NPD processes.
Primary Data. Thirty-one interviews with twenty-two
key informants enriched my understanding of secondary
data and allowed me to investigate the rationale behind
choices, decisions, and actions traced through archival
evidence. Access to both internal and external informants allowed me to investigate how routines and capabilities result and evolve from interactions within the
focal organization, as well as among internal and external actors. Informants collaboration with Alessi ranged
from 7 to 59 years, with an average tenure of 23 years
for internal informants, and 18 years for external ones,
hence providing an extensive rst-hand coverage of the
focal 15-year period (19882002). Other primary data
included company visits, participant observation, and
hundreds of informal talks ranging from a few minutes
in front of the coffee machine to over one hour in the
rms cafeteria.
Data Analysis
Data analysis consisted of four sequential steps. In the
rst step, I reconstructed the event sequences of the
90 product development processes, I coded all events
according to a classication scheme, and I checked the
reliability of event classication. Analysis of NPD process documents allowed me to carefully reconstruct the

Organization Science 20(2), pp. 384409, 2009 INFORMS

event sequences of each of the 90 NPD processes. For


instance, the development process for Branzis 1988
wooden box (Product 1 in the appendix) consisted
of 32 separate events, whereas 42 events were necessary to develop Venturinis plastic clothes rack in
1996 (Product 40 in the appendix). Altogether, the event
sequences of the 90 NPD processes yielded a total of
2,897 events (an average of 32.2 events each). This called
for a scheme that could classify such events into mutually
exclusive and cumulatively exhaustive categories. The
classication scheme (reported in Table 2) was developed through a number of successively rened versions,
as suggested by Bakeman and Gottman (1997). A similar approach was adopted by Isabella (1990) to classify
events in one organization, and by Sabherwal and Robey
(1993) to classify events in 53 different organizations.
The 18 coding categories were developed using a
combination of deductive and inductive reasoning, as is
typical in sequential analysis (Abbott 1990, Bakeman
and Gottman 1997, Blair-Loy 1999). Through a preparatory deductive phase, I dened the preliminary organizing categories (conceptualization or colligation)
(Abbott 1984) that guided the subsequent inductive
denition of the nal coding categories (measurement). I started by developing an initial categorization scheme of 25 types of events that took place at
Alessi using a subset of the 90 sequences of events.
Two research assistantsblind to the purpose of the
researchindependently classied a random set of 100
events into one of the 25 types. They agreed on the
event type in only 76 cases, which was not considered satisfactory (Isabella 1990, Sabherwal and Robey
1993). I then repeated this procedure twice, until I developed a leaner and clearer classication of 18 types
by creating new categories, merging categories the two
independent raters perceived as similar, and eliminating
categories they seldom used. Adopting this new classication scheme, the two research assistants independently classied another random set of 100 events into
the 18 categories. This time they agreed on 94 of the
100 events. The 94% interrater agreement was compared
with the chance classication accuracy using Cohens
(1960) kappa. The kappa measure showed that the agreement between the two raters was signicantly greater
(p < 00001) than the agreement expected from chance
alone (Bakeman and Gottman 1997). This procedure
assured the reliability of event classication. Finally,
I classied all events for the 90 NPD processes into the
18 types. To check for any intraobserver reliability decay
(Bakeman and Gottman 1997, pp. 5859), a research
assistant coded a random sample (n = 100) of all events.
We agreed in 96% of the cases, and again the kappa
measure was signicant (p < 00001).
In the second data analysis step, I compared the
90 event sequences in terms of similarity/dissimilarity.
This could be done by simple visual aids such as charts

Salvato: Role of Ordinary Activities in Evolution of Product Development Processes

389

Organization Science 20(2), pp. 384409, 2009 INFORMS

Table 2
No.

Classication of Events Within Alessi NPD Processes


Event type/
coding category

Desiderata

Internal development:
design
Internal development:
color denition

5
6
7

10

11

12

13

Document that formally starts product evaluation


and development
Activities carried out by Alessi employees aimed
at developing product design
Activities carried out by Alessi employees aimed
at developing new-product color(s)

81 Desiderata documents selectively transcribed


and coded
The drawings of a new product received from the
designer are transformed into a detailed rendering
The color development form is lled in by Alessi
new-product development staff for Phase 3 (out of six
sequential phases)
A cost estimate for an internally produced item is
developed

Everyday contacts with Contacts between Alessi employees and


habitual suppliers:
recurring suppliers,a aimed at dening product
product denition
characteristics before production is started
Everyday contacts with Contacts between Alessi employees and
habitual suppliers:
recurring suppliers,a aimed at solving
administrative and nancial issues
administrative issues
Everyday contacts with Contacts between Alessi employees and
habitual suppliers:
recurring suppliersa aimed at producing new
production phases
items (typically early phases, e.g., rst trial
production batch, because the study is
focused on product development activities)

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

Internal development: Activities carried out by Alessi employees aimed


administrative issues
at dealing with nancial and administrative
issues related to development of new products
Internal development: Activities carried out by Alessi employees aimed
production phases
at physically making a new product
Internal development: Activities carried out by Alessi employees aimed
packaging
at developing the packaging of a new product
Internal development: Activities carried out by Alessi employees aimed
NPD process check
at checking new-product progress along NPD
up
phases
Internal development: Activities carried out by Alessi employees aimed
critical issues raised
at assessing and solving difculties and
unexpected events in new-product
development
Internal development: Activities carried out by Alessi employees aimed
ad hoc approval
at obtaining approval for nonroutine activities
requested
Everyday contacts with Contacts between Alessi employees and external
designers
designers aimed at developing a new product

14

16

Event description

Activities carried out by external actors (i.e.,


excluding Alessi employees) aimed at altering
established procedures
Activities carried out by Alessi employees aimed
at altering established procedures
Contacts between Alessi employees and
nonrecurring collaboratorsa

The sequence and timing of the production process for a


new, internally produced item is dened
Packaging of a newly developed product is selected
The new-product development form (Scheda SNP
Prezzi) is lled in by Alessi new-product development
staff for the Capitolato phase
Minutes of an internal meeting reporting problems and
difculties on a new product

The desiderata for an unusual new project is sent to the


CEO for approval
Minutes of a meeting between Alessi new-product
development staff and designers, in which the nal
colors for a newly developed product are discussed
and decided
A drawing of the product is sent to the supplier for
examining production-related technical aspects
A cost estimate for realizing a product component is
sent from the supplier to Alessi
A supplier reports that the rst batch of a new product
has been completed and delivered timely to Alessi
A color supplier reports on the match between the
developed color master and the samples approved
by the designer
Alessi reports serious faults in the last delivered batch of
products to the supplier
Designer SG requires a preliminary study of traditional
pots and pans before starting own project
Alessi engineer suggests gathering plastic samples of all
new colors developed for new products

A research lab is required to perform a study of the force


required to extract a cork
A research lab is required a study of the effects of garlic
on colored plastic
Activities carried out by Alessi employees aimed Data on existing product colors used by a competitor
at gathering information about topics, issues or
are collected and analyzed
problems which are nonrecurring in analyzed
Data on performance and price of spectrophotometers
documents
are collected by NPD staff member
Events within Alessi or in external environment
A minority of activities not falling under any of the
that cannot be classied in the above 17 types
previous types

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.

Salvato: Role of Ordinary Activities in Evolution of Product Development Processes

390

of individual event sequences, which work well when the


number of sequences is small, and when they comprise
few events (e.g., Mintzberg et al. 1976). In my case,
however, the relatively high number of sequences (90)
and event types (18) examined required the adoption
of an automatic procedure to compute intersequence
distances. I relied on optimal matching techniques,
which directly measure sequence resemblance. Optimal
matching methods (Abbott 1990, 1995) are a subset of
sequence analysis techniques (Bakeman and Gottman
1997) and operate by dynamic programming, which is a
class of iterative maximization techniques operating on
stepwise processes. They allow distance measures to be
computed among any set of sequences represented by
a string of well-dened elements, drawn from a relatively small total set. The most common sequence metric establishes a distance between sequences based
on how difcult it is to transform sequences into one
another. The standard algorithm for alignment is the
Needleman-Wunsch algorithm, which calculates alignments based on costs associated with substitution and
insertion (Blair-Loy 1999, Sabherwal and Robey 1993).
I analyzed the sequences of NPD codes with Andrew
Abbotts software program OPTIMIZE (release 2.18).
Once computed, these distances can be clustered, scaled,
or averaged to show patterns and to reveal any common
features or trajectories (Blair-Loy 1999, Sabherwal and
Robey 1993, Pentland 2003).
The third step in data analysis was a cluster analysis of
the 90 NPD sequences. Optimal matching algorithms do
not directly arrange observations into sequence patterns.
However, they generate interval-level measures of resemblance/distance between sequences (called Levenshtein
distances) (Sankoff and Kruskal 1983, pp. 1823) over
a sequence data set. These measures can then be used
as inputs to clustering algorithms, which in turn make it
possible to develop patterns of sequences (Abbott 1995,
Blair-Loy 1999, Sabherwal and Robey 1993). I classied
intersequence distances by the cluster procedure available in SAS. I explored several distance measures and
clustering methods (Aldenderfer and Blasheld 1984).
The (no-square) Euclidean distance and Ward method
yielded the most easily interpretable clusters.
The adoption of the sudden jump in agglomeration
coefcients as a stopping rule suggested a ve-cluster
solution. This was validated by an independent samples
t-test. Each of the ve clusters represents a different
type of NPD routine, i.e., a variant of Alessi productdevelopment capability. Many Alessi NPD routines seem
to fall within a category that can be interpreted as the
standard way of developing a new design object at
Alessi, because they closely mirror sequences dictated
by internally formalized NPD procedures. All other clusters reect some kind of mutation of the standard
NPD capability (Nelson and Winter 1982, pp. 115116).
These modications are typically the result of everyday
experiments by external and internal agents. They repre-

Organization Science 20(2), pp. 384409, 2009 INFORMS

sent the different responses of the organization to both


environmental and organizational stimuli.
The fourth and nal step of the analysis was an interpretation of cluster results. This was aimed rst at gradually developing an in-depth understanding of the specic
reasons behind each alteration of Alessi NPD capability.
Tracing each alteration to the underlying organizational
eventsby going back to the raw data or directly asking
informants in focused interviewsallowed me to understand which specic actions and actors determined the
modications within the NPD sequence and according
to what logic.
The other aim of cluster interpretation was to understand the performance impact of differences within
and across clusters.1 Differencesi.e., heterogeneity
within clusters can be assessed by considering the
medoid sequence for each cluster (Kauffman and
Rousseeuw 1990). The medoid sequence is the individual
sequence that is least distant from all the other individual sequences in the cluster. The medoid NPD process
is thus a real process that can be used as an idealtypical
process to describe the cluster. More important, describing a cluster by its medoid allows to easily compute the
dispersion of the other cluster sequences around it. Thus,
by using the notion of medoid we can compute the minimum, the maximum, and the average distance within a
cluster. This is an important feature because the dispersion informs us whether any given cluster is highly heterogeneous or, alternatively, highly homogenous (Aassve
et al. 2007). Obviously, a homogenous cluster contains
sequences that tend to be very similar (i.e., similar to the
ideal-typical medoid), whereas a high dispersion suggests
that sequences within the cluster are heterogeneous. This
information is crucial when interpreting the meaning of
clusters. Medoids and heterogeneity/homogeneity measures for my ve-cluster solution are reported in Table 3.
Clusters vary in terms of their level of heterogeneity. Two
are relatively homogeneous (Clusters 1 and 5), i.e., the
mean distance and the maximum distance are low, and
the proportion of the total dissimilarity within the cluster
accounted by the medoid (Percentage within) is high,
whereas for the others (Clusters 24) dispersion around
the medoid is high.
In addition to considering heterogeneity within clusters (Percentage within cluster in Table 3), I report
a measure of heterogeneity across clusters (Percentage among clusters). This is computed as the proportion of the total dissimilarity within the whole sample
of 90 sequences accounted by sequences within a cluster. Results discriminate even more markedly Clusters 1
and 5closer to the average Alessi NPD process
from Clusters 24, which are highly heterogeneous when
compared to the whole sample.
Finally, I computed two product performance measures (Table 3): the percentage number of bestseller
products (illustrated in the appendix) in each cluster,
and the average sales performance of products in each

Salvato: Role of Ordinary Activities in Evolution of Product Development Processes

391

Organization Science 20(2), pp. 384409, 2009 INFORMS

Table 3

Cluster Heterogeneity and Product Performance


Heterogeneity/homogeneity measures

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

(16Gino Zucchino) 0.176

0.594

323

536

20

Higher value = higher


heterogeneity

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

Higher value = lower


heterogeneity

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.

cluster, computed as the average difference between


(volume) actual sales and sales aspirations. These
descriptive data were traced to explore possible relations
between degrees of heterogeneity/homogeneity in NPD
processes and product performance.

Analysis and Findings


The preponderance of literature tends to describe the
specic capabilities of an organization as homogeneous
entities (Felin and Foss 2005). In contrast to this common view, my investigation of the microprocesses that
embody a capability reveals that actual enactments
of Alessis NPD capability cluster into distinct types.
In other words, Alessis ability to develop new design
home furnishings takes different forms when expressed
in different projects and over time. These differences
have performance consequences. My analysis allows a
ne-grained interpretation of how Alessis NPD capability evolved over the period of the rms most intense
renewal efforts. In this section, I will rst describe
the ve clusters and forces that shaped their distinctive
traits. Second, I will offer an interpretation of the logic
driving capability evolution, and of its impact on product
performance.

Heterogeneity of NPD Capability Patterns


as Revealed in Clusters
The appendix shows the 90 NPD sequences grouped
according to the 5-cluster solution resulting from my
analysis. I interpreted clusters by carefully analyzing
cluster medoids, by going back to the raw data, which
provide a rich description of each sequenced action, and
by referring to secondary data or to interviews in which
the focal project had been mentioned by informants.
Cluster 1 recipe-book project sequences includes
36 NPD projects (40% of the total sample). These
projects are a closerthough never perfectmatch for
the ideal-type NPD sequence than those grouped in
the other four clusters. The ideal-type NPD sequence
was reconstructed from a company document developed
in November 1989 by Alessis most experienced engineer. The document illustrates a detailed sequence of all
the activities typically involved in the development of a
project. It was developed by systematizing Alessis best
practices in new product development in previous years,
and it was meant to provide formal guidance for future
projects.
As my data suggest, 40% of the 90 NPD processes
that I observed over the period 19882002 followed

Salvato: Role of Ordinary Activities in Evolution of Product Development Processes

392

relatively closely what Alessi considers a conventional


NPD sequence, as key informants conrmed. An Alessi
recipe-book product development sequence is typically
primed, with very few exceptions, by the desiderata
(Type 1; see Table 2), which is the routine through
which Alessi sets the basic guidelines for product development, in line with designers intentions and company targets. Right after the desiderata, recipe-book
sequences normally feature contacts with the designer
with the purpose of dening details of the preliminary
drawings (Type 10). Such contacts will recur several
times throughout the sequence. Contacts with designers
are followed by internal activities (Type 2)and related
external ones (Type 11) involving suppliersaimed at
developing product design in line with designers directions and Alessis targets. These activities allow Alessi to
determine the technical details of the design through an
internally developed rendering and in close contact with
suppliers of raw materials and components. After design
details are dened, internal/external activities aimed at
dening production details (Types 5 and 13) and administrative issues, such as the cost of moulds or components (Types 4 and 12), follow. These preliminary phases
are typically followed by a checkup of performed activities in the form of a revision of the desiderata (Type 1)
or an R.U.D.E. process-checkup meeting (Type 7), or
both. These checkup stages usually lead to further product development phases, both internal (Types 2, 4, and
5, and 3 if the product is colored) and involving external suppliers (Types 11, 12, and 13). Toward the end
of the process, product packaging is usually decided
(Type 6) and nal checks are carried out (Types 1 and
7). Critical issues (Type 8), ad hoc approvals (Type 9),
ad hoc interventions by internal (Type 15) and external
(Type 14) agents, or other unusual activities (Types 16
and 17) are only seldom signicantly present, reinforcing the interpretation of these processes as occurring in
a rather smooth and uneventful fashion.
Cluster 2 in-house-adapted project sequences includes 12 NPD projects (13% of the total sample). These
projects show clear deviations from what can be considered a standard NPD process at Alessi (i.e., the average recipe-book project sequence in Cluster 1) in the
nature of activities involved or in the sequence, or both.
Such variations are, in most of the instances, the result
of extemporaneous day-to-day activities of agents primarily from within Alessi.
Compared to recipe-book projects in Cluster 1,
in-house-adapted project sequences exhibit a higher
number of activities that signal alterations in the smooth
functioning of the product development routine: critical
issues raised by Alessi employees (Type 8 in Table 2),
requests for ad hoc approvals (Type 9), ad hoc modications of standard, recipe-book procedures introduced
by Alessi personnel (Type 15) and, although less often,

Organization Science 20(2), pp. 384409, 2009 INFORMS

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).

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Organization Science 20(2), pp. 384409, 2009 INFORMS

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

system that would eventually allow the rm to easily


communicate with both designers and suppliers. These
initial experiences later yielded a full-blown formalized
ling system (The Color Box), adopted in the development of nearly all new colored products.
Third, new editions of successful past Alessi products (e.g., Colorbavero table set, Product 74, 2001,
the decorated version of Castiglionis Bavero table
set developed in the 1990s; B 9093, 9093 GD kettles, Product 84, colored versions of the famous kettle
designed by Graves in 1985) were the result of a systematic search for opportunities to revitalize old products
through colored decorations or minor technical improvements, which followed early experiences of new editions of old products (falling in Clusters 3 and 4). This
resulted in a project known as New edition of historical projects, launched by Alessis CEO in 1996, which
consisted of meetings with designers, presentations to
employees, and formal documents reporting basic directions for developing new versions of old products.
In summary, the 90 sampled NPD sequences fall into
a few general patterns characterized by minor withingroup variation. These ve patterns represent as many
enactments of Alessis NPD capability. Forty percent
of the expressions of this capability closely mirror
the NPD process sequence formalized by top management. Over one-third, the in-house adapted, the
externally adapted, and the externally driven, show
alterations determined by everyday experimental activities performed by internal or external agents. Nearly
one-fourth, the recombinant, ensue from intentional
attempts to sift out, rene, formalize, and reproduce
apparently promising, though minor, mutations.
Capabilities Evolving: Interplay of Improvisation
and Intentionality
Empirical evidence provided so far portrays an organization whose core routines and capabilities develop
more as a result of everyday, mundane activities than
of managerial cognition. This would shed a rather dim
light on managerial prospects of intentionally improving capabilities and facilitating strategic renewal. In spite
of that, my data show that the emergence of what
I have termed recombinant processes (Cluster 5) shows
clear signs of intentional managerial intervention. At
Alessi, I tracedthrough additional secondary and primary dataseemingly intentional managerial activities
through which managers selected, developed, and reproduced interesting experiments that had occurred in
Clusters 24 sequences. These activities were always
subsequent to the experiments they aimed to rene
and reproduce, whereas they preceded the recombinant
sequences (Cluster 5), in which rened practices are later
inserted. Table 4 summarizes the supporting data.
The eight rows in Table 4 report distinct instances
of evolutionary patterns followed by product development activities at Alessi. The rst column describes

Salvato: Role of Ordinary Activities in Evolution of Product Development Processes

394
Table 4

Organization Science 20(2), pp. 384409, 2009 INFORMS

Reproduction Patterns of Improvisational Acts: Summary of Evidence

(I) Description of activities


involved

(II) Internal/external
adaptations (Clusters 24)
(instances of improvisation)a

(III) Intentional selection


and development of
adapted traits

(IV) Observed recombinant


sequences (Cluster 5)
(reproduction of developed
improvisations)a

1. Development of a set of
routines to
systematically
encourage projects of
young designers not
previously known to
Alessi (the workshop)

In-house adapted (Cl.2)


6, Hot Bertaa, 1990 (F)
11, Helmut, 1992 (F)
17, Tin Man, 1994 (T)
64, Gsa, 1999 (BS)
Externally driven (Cl.4)
56, Hi Fi set, 1998 (n.a.)

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,

Merdolino, 1993 (BS)


Gino Z., 1993 (BS)
Molly, 1994 (BS)
Escar-gog, 1994 (F)
Black J., 1995 (T)
Tralcio muto, 2000 (T)
Strawbowls, 2000 (F)
Te , 2000 (F)
Canaglia, 2000 (T)
Mr. Cold, 2000 (T)

2. Development of a
formalized color-ling
system, and related
routines for faster and
less costly development
of new colors

Externally adapted (Cl.3)


15, Firebird, 1993 (T)
59, Dr. Kleen, 1998 (F)
60, Rondo    1998 (T)

Color-related problems
emerged early in these
projects,
i.e., Nov.-Dec. 1996

28,
42,
43,
44,
52,
73,
82,

Mary Biscuit, 1995 (BS)


Fred Worm, 1997 (T)
EM01, 1997 (F)
Happy spices, 1997 (T)
Alibaba, 1998 (BS)
Okkio!, 2000 (T)
Bunny & Co., 2002 (T)

3. Development of new
versions of earlier,
successful products

Externally adapted (Cl.3)


35, How much white, 1996 (T)
Externally driven (Cl.4)
5, Caccia, 1990 (BS)
13, Christy, 1993 (T)
25, 90043, 1995 (T)
41, Placentarius, 1997 (T)

Research on color (1996)


Development and adoption of
a formal procedure for color
development (color
development form; early
1997)
Development of a formal
color-ling system (The
Color Box; early 1997)
Project: New edition of
historical projects (1998).

4. Development of ad hoc
work practices to
increase involvement of
a small subset of
promising designers

Externally adapted (Cl.3)


7, Mix Italia, 1991 (F)
67, Girotondo, 2000 (F)
In-house adapted (Cl.2)
34, Girotondo, 1996 (T)
48, Girotondo, 1997 (T)
58, Girotondo, 1998 (T)
66, G. soaps, 2000 (F)
79, Girotondo, 2001 (F)

Focused brieng documents


to a small subset of promising
designers.
Regular meetings with 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

In-house adapted (Cl.2)


2, Shaker Co., 1988 (T)
8, La Cubica, 1991 (T)

No evidence of intentional
selection and retention.
Involvement of external
consultants always resulting
from ad hoc decisions.

Several instances not included in


the sample (e.g., JM13, 2000;
JM20/56, 2003; Cosmo, 2003;
Chiringuito shaker, 2004).

6. Ad hoc decision to
adopt a target costing
procedure
7. Decision to follow a
deductive product
development process
8. Various activities

In-house adapted (Cl.2)


27, AC04, 1995 (T)

No evidence of intentional
selection and retention

No evidence of systematic
reproduction

Externally adapted (Cl.3)


62, Mami, 1999 (BS)

No evidence of intentional
selection and retention

No evidence of systematic
reproduction

Externally adapted (Cl.3)


78, Kalura, 2001 (T)
86, Babyboop, 2002 (T)

No evidence of intentional
selection and retention

No evidence of systematic
reproduction

74, Colorbavero, 2001 (F)


84, B 9093    2002 (T)
89, Techno t. 1, 2002 (T)

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).

Salvato: Role of Ordinary Activities in Evolution of Product Development Processes


Organization Science 20(2), pp. 384409, 2009 INFORMS

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

These suggestions gradually convinced Alessi to develop


a structured color-ling system (The Color Box) meant
to help designers nd new colors from an array of colors
already developed by Alessi, thus dramatically reducing
the time and costs involved in developing colors, and
increasing aesthetic coherence among the objects developed by different designers.
Other instances of intentional managerial interventions
reported in Column III of Table 4 relate to initiatives that
aim to systematically reproduce early experiments with
new editions of existing Alessi products, or to increase
the involvement of external consultants in NPD processes successfully tested in earlier projects. Some such
interventions are later retained by the organization. Others are abandoned, typically because they imply activities that are too exible and too creative to be subject to
effective intentional manipulation.
In the last column of Table 4, I report observed instances of NPD processes resulting from the retention of
previous adaptive experiments. Some of these sequences
are the result of the reproduction of alterations (second
column in Table 4), selected and developed by Alessi
executives (third column) as potentially adaptive modications of recipe-book NPD sequences. Hence, in
the rst row (Activity 1, encouraging projects of young
designers), the 10 reported projects in the last column
were developed through versions of the workshop routine developed and rened through the managerial activities described in the third column: products developed
in the 1991 FFF workshop (Products 14, 16, 18, and
19) and the 1993 Memory Containers workshop (Products 26, 68, 69, 70, 71, 72). Similarly, the seven projects
in the second row feature the use of the color development procedures that Alessi executives had rened in previous years, as a result of early experiments in the development of a structured color-ling system. The three
projects in Row 3 result from following the procedure,
rened by managers and built on previous extemporaneous experiences in developing new versions of old products and historical reproductions.
A vivid example of managerial intervention aimed at
encoding previous mindful experiments, and hence stabilizing attention on emerging issues and opportunities,
is provided by the development of a formalized colorling system and related routines for faster and less
costly development of new colors (Row 2 in Table 4). The
upper part of Figure 1 reports four instances of everyday,
ordinary experiments carried out in 1993 by both external and internal actors (two events of Type 14 in Table 2,
ad hoc modication by external actors, and two events
of Type 17, information gathering on unusual topics).
The middle part of Figure 1 reports top management
activities carried out in 1995 (development of a structured color-ling system mainly consisting of guidelines

Salvato: Role of Ordinary Activities in Evolution of Product Development Processes

396

Organization Science 20(2), pp. 384409, 2009 INFORMS

Figure 1

Enhancing Product Development Capabilities by Leveraging Mindful Acts: A Simplied Example from Available
Product-Sequence Data

Cluster 3. Externally adapted Sequence 36: Firebird electronic gaslighter (1993)


10 1 3 2 3 11 11 13 13 18 4 14 14 14 18 1 17 14 8 14 11 11 4 12 18 6

17 11 12 6 6 5 14 14 7 16

Event Type 14: Ad hoc modifications by external actor:

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)

Event Type 17: Information gathering on unusual topics:

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)

Top management activities (19951999):


Research on color
Training internal staff on color
Development and adoption of a formal procedure for color development
(color development form)
Developing a tailor-made filing system for colors
Organizing systematic production of plastic samples with suppliers

Subsequent higher-level
managerial refinement and
codification
(19951999)

Development of systematic color-filing system (1995)


Development of The Color Box (1999)

Cluster 5. Recombinant project sequences


Consistent use of systematic color-filing system (after 1995) and of The Color Box (after 1999) in
projects requiring new color definition:
42, Fred Worm, 1997
43, EM01, 1997
44, Happy spices, 1997
52, Alibaba, 1998
73, Okkio!, 2000
82, Bunny & C., 2002

to NPD team members and the gradual collection of


colored plastic samples from suppliers), which culminated in the development of The Color Box in 1999.
These activities were aimed at rening and codifying
previous experiments resulting from everyday practice.
Finally, the lower part reports examples of new products developed by enacting the adapted routine arising
from previous experiments and subsequent managerial interventions. As Rows 1 to 3 in Table 4 show,
observed adapted routines (Column 4) were always
implemented after managerial renement and codication (Column 3), which in turn have always followed
in time experiments carried out by means of everyday
activities (Column 2).
Strategic renewal encompasses an investigation of outcomes and performance, besides process and content
(Agarwal and Helfat 2009). Data in Table 3 reveal how

Subsequent
reproduction of
adapted routine
(1997 onward)

the evolution of capabilities described in this section


generated different patterns of heterogeneity and performance within and across clusters. Cluster 1 recipebook project sequences are characterized by relative
homogeneity, as the medoid sequence (Product 49, the
soap dish Titan, designed by Marc Newson) accounts
for 23.4% of sequence dissimilarity within the cluster
(Column 6, Percentage within cluster). These fairly
standard sequences are also comparatively homogeneous when contrasted with the whole sample of 90 NPD
processes, as they account for 30.2% of the total variance
(Column 7, Percentage among clusters). Mutations
introduced by internal and external agents amplify process heterogeneity. Experiments carried out by external
agents (Clusters 3 and 4), in particular, result in fairly
lower levels of both within-cluster homogeneity (19.3%
and 7.7% in Clusters 3 and 4, respectively) and, even

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Organization Science 20(2), pp. 384409, 2009 INFORMS

more markedly, among-cluster homogeneity (8.1% and


4.6%, respectively). Mutations introduced by internal
agents (Cluster 2) are also a source of signicant heterogeneity (9.2% within and 11.1% among clusters). On the
opposite, Cluster 5 recombinant sequences display the
highest levels of both internal (32.3% within cluster)
and across-cluster consistency (53.6% among clusters).
Apparently, mindful managerial interventions aimed at
encoding and reproducing Clusters 24 experiments generated relatively automatic, uneventful sequences.
Equally striking is the impact different heterogeneity
levels seem to have on product performance. As resulting
from Table 3 data, the stable recipe-book routines in
Cluster 1 yielded positive product outcomes. Four of 36
products exceeded volume sales aspirations by more than
200%, and were hence classied as best sellers by Alessi
(Column 8, Percentage of best sellers). On average,
actual volume sales of these 36 products exceeded aspirations by 68% (Column 9, Average sales performance).
In contrast, variations by internal and external agents in
Clusters 24 processes apparently had a negative impact
on product performance. Although the proportion of best
sellers resulting from these mutated NPD processes is in
line with recipe-book routines, if not higher, ranging
between 8.3% in Cluster 2 and 23.1% in Cluster 4, average product performance is signicantly lower. Mutations by Alessi actors (Cluster 2) yield products whose
average performance relative to aspirations (+6%) is signicantly lower than in Cluster 1, though still positive.
Mutations by external actors (Clusters 3 and 4) result in
even more marked decline, as average product performance is negative, hence signaling a decreased capacity
of these altered routines to yield expected results. In contrast, Cluster 5 recombinant products are the best performers within the sample. One of four was classied as a
best sellerthe highest percentage of best sellers among
the ve clusters. More important, average product performance (+127%) is almost double the performance of
recipe-book sequences. Although product performance
in the design industry is driven by several, often elusive factors (Bhaskaran 2005, Collins 1999), my data
suggest that a signicant relationship may exist between
routine/homogeneity and variation/heterogeneity on one
side, and product performance on the other. An interpretation of this relationship, and of its drivers and
outcomes, is discussed in the next section. Equally
interesting is the observation that routine/homogeneous
processes (Cluster 5) resulting from the encoding of
variance-enhancing mutations (Clusters 24) perform
signicantly better than baseline routines (Cluster 1).

Discussion and Implications


This paper explores evolutionary patterns of organizational capabilities within the context of organizational renewal. Focus is on the role day-to-day activities
play in shaping event sequences representing different

397

enactments of a capability over time. The aim is to


understand the extent to which the evolution of capabilities is shaped by ordinary interactions, and the extent
to which such evolutionary patterns can be intentionally
directed to increase the adaptive chances of change processes. As noted at the outset, this issue is central in
recent conceptualizations of capabilities-based strategic
renewal (Gavetti 2005, Helfat and Peteraf 2003, Winter
2003, Zollo and Winter 2002), but it has rarely beneted
from accurate empirical treatment.
There are three key ndings, synthetically illustrated
in Figure 2. First, established capabilities, which function as semiautomatic, less-mindful entities (left vertical box in Figure 2, level n capability), are systematically reshaped by mindful ordinary acts carried
out by individuals within and around the organization
(two horizontal boxes on the right of Figure 2). These
intentional experiments recombine the existing capabilities repertoire on a day-to-day basis, hence resulting in
increased process heterogeneity and temporary performance decline. Second, timely managerial interventions
encode successful experiments into higher-level organizational capabilities (right vertical box in Figure 2,
level n + 1 capability). The resulting adapted capability incorporates previous mindful experiments into
a homogeneous, semiautomatic entity. Third, whereas
mutated processes resulting from mindful experiments
temporarily underperform the original level n capability, n + 1 level capabilities resulting from the encoding of such heterogeneous experiments display higher
process homogeneity and a permanent increase in performance. Apparently, insights from previous experiments encoded in higher-level capabilities increase the
quality of organizational attention. Hence, adapted capabilities integrate mindful improvisation by internal and
external agents and thus thrive on heterogeneity. These
insights extend prior work on capabilities and organizational renewal. They suggest future research directions
on how the concept of mindfulness can be used to unveil
the microfoundations of capabilities evolution and organizational advantage.
Mindfulness in Action: Ordinary Activities and
the Evolution of Capabilities
My ndings suggest that micro, ordinary activities carried out by individuals within and around the organization and at all levels in the organizational hierarchy are
central to determining the idiosyncratic content of capabilities and their dynamic adaptation over time. Getting
closer to the subtleties of Alessis practices, as I tried
to do in my study of 90 NPD processes, one is even
tempted to conclude that not only are individuals and
ordinary activities important in conferring capabilities
their uniqueness, but that they are in some ways the only
relevant things. My data reveal that the rich repertoire
of existing product development routines at Alessi has

Salvato: Role of Ordinary Activities in Evolution of Product Development Processes

398
Figure 2

Organization Science 20(2), pp. 384409, 2009 INFORMS

Interplay of Mindful and Routine Behavior in the Evolution of Capabilities

NPD capability - level n+1


(Cluster 5)
Heterogeneity: lower than n
Performance: higher than n
NPD capability - level n
(Cluster 1)
b

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).

been constantly adapted through mindful improvisations


by internal and external agents, resulting in increasingly
rich and heterogeneous processes.
New product development processes in Clusters 2 (inhouse adapted), 3 (externally adapted), and 4 (externally
driven) exhibit clear mutations of the baseline NPD
routine (Cluster 1 recipe-book NPD processes). These
mutations result from highly local attempts at responding to the demands and contingencies of the present. The
current sophisticated workshop formatwhich allows
Alessi to systematically bring in young, promising
designersstems from an early test carried out by CEO
Alberto Alessi and Alessandro Mendini and organized
by Alessi in Paris in November 1986. The ingenious
Color Boxcurrently allowing Alessi to quickly and
efciently develop aesthetically homogeneous colored
objectswas rst suggested by designer Venturini in a
fax sent to Alessis NPD staff on December 6, 2003. The
decision to reverse the traditional product development
sequence by starting with conceptual research on form
which yielded the blockbuster Mami series in 1999
was made by designer Giovannoni when the CEO asked
him to develop yet another series of pots and pans.
These examples, and others reported in Table 4, are
all instances of experiments aimed at improving the

smoothly functioning NPD routine by mindfully adapting it to the conditions at hand.


Although subsequent activitiesdiscussed in the next
sectionthrough which top management encoded some
of these early experiments can be interpreted as higherlevel, conscious strategic initiatives, these initial triggers of capability change have the nature of ordinary,
though mindful, activities carried out by various individuals at all levels within and outside the rm. These
activities depart from traditional descriptions of conscious strategic initiatives because they are improvisational in nature, highly local, and they involve thinking
in real timea state of active awareness simultaneous
with the execution of action (Miner et al. 2001), dened
by Levinthal and Rerup (2006, p. 505) as mindfulness
in action. Each time Alessi product development capability is enacted into the design of an actual product,
individuals make apparently mundane adjustments that
can have durable effects.
Mindful experimentation by internal and, more
intensely, external agents results in high levels of withinand between-cluster heterogeneity. As Figure 2 suggests,
the semiautomatic or less-mindful repertoires of action
underlying Cluster 1 NPD processes form the basis for
mindful experimentation in Clusters 24 projects. Estab-

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Organization Science 20(2), pp. 384409, 2009 INFORMS

lished product development routines provide a repertoire


of initiatives allowing internal and external actors to
respond rapidly to stimuli and to engage in a wide set
of possible experiments. As Levinthal and Rerup (2006,
p. 505) suggest, mindfulness in action is local and situated and involves spontaneous recombination of wisdom accumulated from prior experimental learning    
Recombination of well-rehearsed routines can therefore
be seen as an important activity that makes mindfulness
in action possible.
These efforts of internal and external agents are mindful, because their aim is to obtain local improvements in
the existing repertoire of action dictated by the conditions
at hand. Alessi employees and external collaborators systematically search for process improvements that may
yield more promising or apt product development processes. My study reports several instances of this mindful
conversion of ambiguous stimuli into creative responses
to difculties or opportunities. All adaptations listed in
Table 4, Column II are as many instances of special cases
that had to be tted by internal and external agents to
Alessis given repertoire of NPD routines through mindful conversions. These creative adaptations testify both
the richness and exibility of Alessis baseline routines,
and the effortful, nonautomatic enactment of such routines by agents within and around the organization. This
way, routines are constantly modied and adjusted to
accommodate unexpected contingencies and to capture
unanticipated opportunities (Chirico and Salvato 2008).
Insights emerging from Alessi ground and advance
conceptual literature on the interplay between mindful and less-mindful behavior, and its role in shaping
organizational capabilities. Levinthal and Rerup (2006)
identied four key interrelationships between mindful
and less-mindful processes: (1) the richness of existing less-mindful routines enhances the richness of
organizational mindfulness by providing a reliable base
for recombination and improvisation; (2) less-mindful
processes of monitoring sustain mindfulness across time
by providing reliable routines to systematically scan the
environment; (3) mindfulness allows the exible and
adaptive execution of routinized less-mindful behavior
by interpreting the context before selecting the appropriate routine to be performed; and (4) mindfulness enables
processes of reinforcement learning, which allow the
encoding of ambiguous outcomes into increasingly adaptive less-mindful routines.
Evidence of mindfulness in action discussed in this
section points to the existence of a relentless process of
mindful adaptation of organizational capabilities resulting from the recursive enactment of interrelationships (1)
and (3). Although the repertoire of existing routines
provides the building blocks for exible recombination,
exible responses to a changing environment result
in adaptations of the baseline routines. Mindful and
less-mindful processes coexist in shaping capabilities

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

Salvato: Role of Ordinary Activities in Evolution of Product Development Processes

400

sustain capabilities innovation across time (Levinthal and


Rerup 2006, Winter 2003). The superiority of mindful
managerial intervention to the establishment of innovation routines has been recently noted by Schreygg
and Kliesch-Eberl (2007, pp. 927928) in their model
of capability dynamization: As nobody can know in
advance which kind of signals or events occur and where
they show up, any prestructuring in terms of general rules
is likely to blind the observer     To guarantee a rms
responsiveness and exibility the scanning process therefore has to be in ux.
At Alessi, however, local experiments are not always
transferred to subsequent initiatives. The ad hoc decision to adopt a target-costing procedure for developing Castiglionis fruit bowl in 1995, for example, was
not applied later to other projects (Row 6 in Table 4).
Similarly, designers suggestion to follow a deductive
design process was apparently applied only to developing the Mami set of pots and pans in 1999 (Row 7
in Table 4). A possible explanation is that Alessi executives considered these experiments too creative and too
exible to be honed and systematically reproduced. Codifying and reproducing them would not, in other words,
bring signicant benets to the organization. Alternately,
the experiment was not reproduced later because it went
against ingrained understanding of how product development should be performed at Alessi. Either way, this
and similar occurrences show that not all local attempts
at improving the product development process have later
been institutionalized by top managers.
However, a signicant number of other experiments
were later codied, rened, and drilled into habit. A representative example is provided by the development of
a formalized color-ling system and related routines for
faster and less costly development of new colors, that
I described in Figure 2 and Row 2 in Table 4. Other
instances of mindful managerial interventions aimed at
crystallizing and reproducing promising experiments are
reported in Table 4, Column III.
The outcome of these effortful interventions by top
management are recombinant projects in Cluster 5.
As shown in previous sections, these 20 product development processes incorporate experiments carried out by
internal and external agents in previous periods, rened
and codied to ease their reproduction within subsequent projects. Despite this enrichment, note that these
20 sequences are internally less heterogeneous than not
only Clusters 24 mutated sequences, but also Cluster
1 recipe-book processes (Table 3, Percentage within
clusters). In addition, their across-clusters heterogeneity is also the lowest in the sample. An interpretation
of these results is offered by the literature on mindful learning (e.g., Levinthal and Rerup 2006, Weick and
Sutcliffe 2001, Weick et al. 1999). The aggregation and
codication of these prior experiments into Cluster 5
recombinant sequences is the result of learning processes that crystallize such previous experience. Hence,

Organization Science 20(2), pp. 384409, 2009 INFORMS

recombinant capabilities are learnt and stable patterns


of action that thrive on the richness and heterogeneity
of previous mindful experiments, while at the same time
incorporating the wisdom of the repertoire of established routines adapted by these experiments.
These ndings closely match process (4) in Levinthal
and Rerup (2006), that is, the encoding of ambiguous outcomes through processes of mindful learning. As my data
reveal, managers replicate past experiments by mindfully formalizing a selection of them into organizational
routines. Selection of novel practices to be replicated
is driven more by their relative heterogeneity than by
their performance outcomes. As Table 3 shows, NPD
processes resulting from improvisation and experimentation often result in a decrease in product performance.
Nonetheless, managers often tap this reservoir of apparently lower-performing processes to improve capabilities.
Future research may explore how managers construct
the outcome structure on which their interpretation of
experiments is based, and how they overcome related
ambiguities. Reinforcement learning (Levitt and March
1988) implies that outcomes classied as exceeding aspirations are interpreted as a success and are reinforced
in subsequent periods. At Alessi, promising experiments
often result in outcomes not meeting sales aspirations
and, hence, are judgedon that dimensionas failures. This cognitive dissonance is apparently resolved, as
managers systematically select and replicate mutations
that resulted in low-performing products. The interpretive framework adopted by managers in deciding which
behavior should be reinforced and the underlying cognitive processes may thus be more nuanced than standard
learning theory suggests.
Capabilities Thrive on Heterogeneity: Mindful
Improvisation and Organizational Advantage
My data suggest that mindful improvisation by internal
and external actors, followed by the encoding of resulting
improvements into the NPD capability, may signicantly
enhance product performance. As Table 3 illustrates, the
average performance of products resulting from improvisational acts (Clusters 2 to 4) is signicantly lower than
recipe-book NPD processes (Cluster 1). In the case of
externally induced mutations, it is even negative (Clusters 3 and 4). However, when these mindful experiments
are subsequently encoded by managers into recombinant processes (Cluster 5), the performance of resulting products is almost twice as high as the performance
of products resulting from the established baseline NPD
routine (Cluster 1). Mindful experiments have gradually
extended the repertoire of experiences on which Alessi
managers could draw lessons to improve NPD routines.
Resulting recombinant capabilities hence thrive on the
heterogeneity generated by such experiments.
Heterogeneity is generally better for learning. Extant
literature has focused on the role of experience heterogeneity in reducing error rates in high-reliability

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Organization Science 20(2), pp. 384409, 2009 INFORMS

organizations (e.g., Haunschild and Sullivan 2002).


Similar arguments can be leveraged to explain product
performance and, more broadly, organizational advantage (Levinthal and Rerup 2006). If organizational performance is affected by learning, and if rms learn from
experience, then the features of this experience are likely
to affect the rate of learning and its effectiveness.
A relevant attribute of experience explored by empirical works is heterogeneity in the causes driving experience (e.g., Beckman and Haunschild 2002, Haunschild
and Sullivan 2002). Three factors suggest that heterogeneous experiences are better than homogeneous
ones in driving learning and organizational performance
(Haunschild and Sullivan 2002, pp. 613615): variance
helps focus attention on latent causes, and thus leads to
a deeper analysis of contingencies faced by the organization; variance forces a situational analysis, rather than
explanations and responses based on surface phenomena; variance produces constructive conict in groups,
which leads to deeper analyses and responses to problems and opportunities.
These mechanisms have apparently been simultaneously at work at Alessi. As part of this study, I conducted
informational interviews with Alessi product development personnel, which complement results of the structured analysis. It is clear that Alessi has systematically
encouraged heterogeneity in internal and external practices, with the aim of favoring the emergence of highly
performing products. As an Alessi product manager illustrates, outcomes of these experiments are later drilled into
more rened versions of Alessis NPD capability:
Weve been paying increasing attention to honing NPD
processes to make them increasingly productive, to make
them yield more and be more responsive to our basic
objective, which is making unique products     We try to
create opportunities to make those strokes of luck more
frequent. We try to create this humus, to fertilize this
ground, so that if a seed falls there, it has good chances of
becoming a good fruit. This doesnt happen frequently;
best sellers arise only once in a while! (DA, Product
Manager)

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

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402

may be an explanation of why and how the encoding


of heterogeneous experience may have gradually rened
Alessis capabilities and improved product performance.
More specically, observed processes of capabilities
evolution may have gradually resulted in an increase
in the quality of managerial attention, and an enhanced
ability to simultaneously attend to novelty and recurrence. Recombinant routines allow Alessi NPD staff to
both reliably perform new practices resulting from past
experiments, and simultaneously focus attention to the
novelty implied by new strategic opportunities.
These results offer a complementary view to explanations of strategic renewal premised on the concept
of dynamic capability. According to this framework,
environmental dynamism requires rms to constantly
adapt their endowment of capabilities. In highly adaptive
organizations, researchers have traced patterned ways of
dealing with change that fall under the broad label of
dynamic capabilities. Organizations possessing effective
dynamic capabilities display a reliable way of dealing
with change because they can adaptively recombine their
endowment of routines and capabilities in a rather automatic fashion (Eisenhardt and Martin 2000, Helfat et al.
2007, Teece et al. 1997).
My data reveal no link between some generic higherlevel routine, formula, or best practice on one side, and
Alessis effectiveness at dealing with strategic renewal
on the other. Rather, Alessis adaptation rested on a
deep understanding by internal and, sometimes, external actors of how its idiosyncratic attributes should be
adapted on a day-to-day basis to an ever-changing competitive environment. It is here that patterned behaviors played a role. By relentlessly locating, rening, and
reproducing potentially adaptive innovations emerging
from local experimentation, Alessi managers constantly
improved the quality of organizational attention, and in
particular its stability.
Managerial cognition is important in understanding
organizational outcomes (Eggers and Kaplan 2009). The
stability of attention is determined by the percentage of ascertaining moments that are directed at the
intended object rather than at some other object (Weick
and Sutcliffe 2006, p. 519). Within organizations, attention stability increases if managers reduce the number
of objects that organizational actors are supposed to
ascertain, or if they regroup objects into fewer meaningful clusters, or assign responsibilities for managing specic objects to organizational agents in specic
roles or positions (Weick and Sutcliffe 2006, Weick
et al. 1999). At Alessi, encoding Clusters 24 heterogeneous experiences into the more stable and homogeneous Cluster 5 recombinant routines has been a way
of stabilizing attention. Building and rening capabilities
at an increasingly higher level in the capability hierarchy
(Collis 1994, Winter 2003) allowed Alessi to focus its
attention on those threats and opportunities that appeared
to currently underpin strategic adaptation. This may be

Organization Science 20(2), pp. 384409, 2009 INFORMS

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,

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Organization Science 20(2), pp. 384409, 2009 INFORMS

signals, and events, which are labeled variances in


Alessis parlance. As an Alessi product manager vividly
explains: I only pay explicit attention to large variances,
and I manage them with the CEO or with designers    
Well, this is the point: the more youre able to build a
team which does things as you would do them, the more
youre free to do more relevant things.
This may explain the apparent paradox in the role
played by homogeneity and heterogeneity in driving
organizational renewal and performance. As Table 3 and
Figure 2 suggest, introducing heterogeneity in organizational capabilities is good because it expands learning
opportunities. However, experiments and improvisation
result in a temporary performance decline. In contrast,
the subsequent formalization and replication of some
such experiments result in more homogeneous processes
and an increase in performance. Hence, increased homogeneity is not benecial per se, but only when it incorporates the routinized version of previous experiments.
Recombinant NPD routines in Cluster 5 are not simply more homogeneous than those in Clusters 24. They
incorporate some valuable insights emerging from learning processes that occurred in previous experiments. By
selecting and replicating such experiments, managers
can reliably and nearly automatically handle the external
contingencies that prompted experimentation in previous
periods. This heightens the attention they can devote to
confronting novel cues emerging from a dynamic competitive environment.
Recent works have noted the importance of managerial information-processing capabilities enabling the rm
to identify the nature of the changing market environment and sense opportunities (Augier and Teece 2009,
Tripsas 2009). In line with this work, others have started
to elaborate the concept of dynamic managerial capabilities to refer to the capacity of individual managers to
create, extend, or modify the resource base of an organization (Adner and Helfat 2003, p. 1012). The dynamic
capability concept has been gradually extended to include
the capacity with which to identify the need or opportunity for change, formulate a response to such a need or
opportunity, and implement a course of action (Helfat
et al. 2007, p. 2). My analysis contributes to this stream
of research by suggesting how such capabilities may
emerge from gradual renement of lower-level organizational capabilities.

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

by managerial intervention. The data in this study did not


tell a story of unique yet blurry rm-level traits and of
superior top management foresight. Rather, day-to-day
activities carried out by individuals within and around
the organization with the aim of improving streaming
core processes can allow organizations to successfully
renew their core capabilities. Organizations should hence
become skilled in recognizing potentially valuable experiments occurring at all levels of the organization and,
sometimes, outside its boundaries. Managing capabilities
renewal means encouraging and motivating all units, subunits, and even external collaborators to actively participate in experimenting novel solutions within the ongoing
functioning of capabilities. The heterogeneity and variety of experiments from which lessons for improving capabilities are drawn can be increased through
such mechanisms as promoting individual discretion
over decisions, reducing bureaucratic controls, favoring
face-to-face interaction styles, and promoting diversity
of internal and external collaborators. The interpretation of resulting local experiments should be run by
top managers as ad hoc problem solving, rather than
by establishing innovation routines and operating rules.
However, because experiments often yield inferior outcomes in their rst iterations, accepting lower performance in the short run may be a necessary price to be
paid for an effective capability renewal process.
Future research may investigate the specic selection
criteria that managers use to retain and institutionalize some of the improvised mutations and not others. Because mutations often lead to lower performance
in their rst iteration, the focus should be on understanding the criteria and cognitive processes prompting
managers to select and retain variations that initially
show negative performance outcomes. Future research
may hence add depth to the cognitive dimension of
processes through which managers learn which alterations in capabilities bear the highest adaptive potential, and which intentional selection and reproduction
activities can more effectively replicate this potential.
Attention should also be devoted to understanding under
what conditions evolved capabilities directly improve
organizational performance, rather than simply constituting reliable building blocks for innovative efforts.
If these inductive insights survive empirical testing, then
they may extend theories of capabilities-driven strategic
renewal beyond the oppositeand equally unrealistic
views of change resulting from blind search or from
nearly full managerial foresight.
Acknowledgments
The author is indebted to Leif Melin for his invaluable intellectual guidance and encouragement. He thanks Sid Winter
for many formative and stimulating comments and conversations. He is also grateful to guest editors and two anonymous
reviewers for their outstanding review work, and to Andrew
Abbott, Nicolai Foss, Daniel Levinthal, Tomas Mllern, and
Ivo Zander for many developmental suggestions.

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Organization Science 20(2), pp. 384409, 2009 INFORMS

Appendix. Five-Cluster Solution of NPD Sequences at Alessi


Clusters 1 and 2/Side 1
N

Product name

Year

Description

SBU

Y/N

Perf.

Designer

Cluster 1: Recipe-book project sequences (n = 36; 40%)


1
Scatolo
1988
Box
3
Pito
1989
Kettle
4
MGP
1989
Kettle
9
Pentola
1992
Casserole
10
Rio
1992
Salt and pepper set
12
Sottopentola
1993
Travet
20
Bilancia
1994
Kitchen scale
21
Girotondo
1994
Press lter coffee maker
22
Anna G.
1994
Zamak corkscrew
23
MS0212
1994
Salt grinder
24
ES01
1994
Oven-to-table dish
29
Pellicano
1995
Espresso coffee maker
30
Bandung
1995
Automatic teapot
31
Vaso
1996
Vase
37
Sherazade
1996
Jug
38
Ded
1996
Produced in aluminium
39
Nonno di Antonio
1996
Garlic squeezer
40
Appendino Antonio
1996
Clothes rack
45
Bavero
1997
Table set
46
Grand Prix
1997
Cutlery set
47
Mensola
1997
Shelve
49
Titan
1997
Soap dish
50
Scolainsalata
1997
Salad drainer
54
Girotondo
1998
Paper basket
55
Anna Light
1998
Cigar lighter
57
Cobn
1998
Espresso coffee machine
61
Sigma
1999
Wall clothes rack
63
EM07
1999
Gardening trowel
65
Augh
2000
Extensible trivet
75
Orseggi
2001
Glass set
77
Tea for Two
2001
Tea set
81
Clip-tree
2001
Magnetic paper clip holder
83
Ethno
2002
Kitchen box with lid
85
Hikuri
2002
Dishes set
88
Lupita
2002
Bowl for dog food
90
Germano
2002
Shoehorn in PA

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.

Cluster 2: In-house-adapted project sequences (n = 12; 13%)


2
Shaker Campari
1988
Cocktail shaker
6
Hot Bertaa
1990
Kettle
8
La Cubica
1991
Cooking box
11
Helmut
1992
Citrus basket
17
Tin man
1994
Kitchen box
27
AC04
1995
Fruit bowl/colander
34
Girotondo
1996
Kitchen timer
48
Girotondo
1997
Candles
58
Girotondo
1998
Ice cube moulds
64
Gsa
1999
Container for couscous
66
Girotondo
2000
Soaps
79
Girotondo
2001
Cutting board

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

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Organization Science 20(2), pp. 384409, 2009 INFORMS

Appendix (contd.)
Clusters 1 and 2/Side 2
Sequence length

Product development sequence

Cluster 1: Recipe-book project sequences (n = 36; 40%)


32
1 10 2 2 10 2 10 11 3 5 13 4 4 12 13 13 1 7 2 3 3 11 4 3 12 3 6 6 10 6 1 7
32
1 10 10 2 10 11 5 5 13 2 18 4 12 1 7 10 10 10 2 2 11 4 4 6 12 5 5 10 13 6 1 7
27
1 10 2 10 10 2 2 11 8 5 13 14 5 4 12 1 7 2 11 4 12 5 5 13 6 1 7
29
10 10 2 2 10 11 10 2 5 1 13 4 2 12 1 7 2 2 10 10 11 4 4 12 4 10 6 1 7
37
1 10 10 2 2 11 3 2 5 10 13 4 4 12 10 10 1 7 2 2 10 2 3 3 2 10 11 3 4 12 6 3 5 13 6 1 7
22
1 10 2 2 11 5 5 5 13 4 12 7 2 11 4 4 12 5 6 10 4 7
23
1 10 2 2 13 11 13 4 12 8 13 2 3 11 3 4 3 3 4 3 12 7 7
32
1 10 10 2 2 11 13 10 10 5 13 4 15 12 13 1 7 2 11 4 4 13 12 5 6 6 13 6 13 1 7 13
34
1 10 3 2 10 11 5 13 4 12 10 10 1 7 3 2 3 10 10 10 11 3 4 12 5 10 13 6 6 6 1 7 10 10
30
1 10 3 2 2 11 10 10 5 4 13 4 12 10 10 1 7 2 11 3 3 4 2 12 5 13 6 1 7 13
34
1 10 2 11 10 2 10 10 5 13 13 4 18 4 13 12 1 7 2 11 4 12 10 13 5 13 13 6 13 6 1 7 4 12
32
1 10 2 11 5 13 14 13 4 12 1 7 2 10 10 11 4 4 12 5 13 13 16 10 13 13 6 6 13 1 7 10
30
9 10 10 2 2 13 1 10 10 6 11 5 13 4 12 2 1 7 2 13 11 4 12 6 5 6 1 10 10 7
26
1 10 2 2 11 5 10 3 4 4 8 12 10 7 11 4 12 2 2 13 2 10 6 7 12 12
36
1 2 10 2 11 5 13 13 4 12 1 7 2 10 10 3 3 3 13 11 6 10 4 4 12 3 4 5 3 13 10 13 6 13 1 7
34
1 10 2 2 10 10 11 5 13 4 12 1 7 2 11 2 10 10 4 12 5 13 15 10 10 10 10 13 13 6 10 1 7 6
37
1 10 10 10 3 3 3 2 2 11 6 2 5 13 10 4 12 1 7 10 10 2 3 10 2 10 3 11 4 12 3 5 13 6 1 7 13
42
1 10 10 2 2 3 3 6 10 11 5 3 13 13 4 4 10 12 1 8 7 13 10 10 2 2 3 3 10 11 4 3 10 12 5 13 13 6 10 10 1 7
31
1 10 2 10 2 11 5 13 13 4 13 12 10 1 2 18 7 2 11 4 4 12 5 13 13 13 10 10 10 1 7
26
10 10 2 10 10 11 5 13 10 1 4 12 1 7 2 2 11 4 2 12 5 6 13 6 1 7
20
1 2 10 2 11 5 13 4 12 2 11 12 13 3 12 10 4 10 12 4
22
1 10 2 11 5 13 4 12 1 7 10 2 3 11 4 12 5 13 6 6 1 7
29
9 10 10 1 2 11 5 13 4 12 2 10 3 11 3 3 12 10 13 13 10 13 6 4 6 4 10 12 8
25
1 2 10 2 11 10 5 13 4 12 13 18 1 7 2 11 4 12 5 13 13 6 6 1 7
28
1 10 2 3 6 11 6 5 10 10 10 13 4 12 1 7 3 2 8 3 3 11 12 5 13 6 1 7
35
1 10 2 11 3 10 3 5 6 13 4 4 12 1 7 2 3 3 11 3 4 4 4 12 10 10 5 13 6 6 6 1 10 10 7
31
1 10 2 10 11 10 13 5 13 13 10 4 10 12 10 10 1 17 8 7 2 3 11 4 4 12 5 13 13 1 7
34
1 2 10 10 2 2 11 10 14 18 10 10 5 13 13 4 12 1 7 2 2 11 2 4 4 12 4 5 13 13 6 6 1 7
36
1 10 2 11 13 5 5 13 13 4 12 5 1 10 10 10 4 5 7 2 10 10 10 11 13 4 5 12 13 13 5 5 6 1 7 6
34
1 10 10 2 11 5 13 4 12 10 10 2 1 7 2 11 4 4 12 8 5 13 2 13 6 13 13 13 14 10 10 1 7 10
32
10 2 2 10 10 8 1 11 3 5 13 2 4 12 10 13 1 7 2 11 4 4 12 13 13 13 5 13 6 1 6 7
36
1 10 10 2 2 11 10 13 2 2 2 5 2 2 13 4 4 12 1 7 2 3 11 3 4 4 12 5 13 13 2 13 6 6 1 7
28
1 10 2 2 11 5 13 4 4 12 1 7 2 11 4 12 4 5 13 10 10 15 6 6 13 6 1 7
31
1 10 2 11 2 5 13 4 4 12 1 18 7 2 2 11 2 2 4 12 3 5 10 16 10 13 6 6 10 1 7
34
1 10 10 2 2 11 5 13 4 4 6 12 4 1 7 2 2 3 3 3 11 13 13 4 12 4 13 5 3 13 6 1 3 7
35
1 10 2 2 2 1 5 13 13 4 12 1 6 7 8 2 18 3 11 3 4 10 10 15 12 10 4 10 5 13 13 6 13 1 7
Cluster 2: In-house-adapted project sequences (n = 12; 13%)
27
34
42
31
30
30
37
34
25
35
30
36

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

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Organization Science 20(2), pp. 384409, 2009 INFORMS

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

Cluster 3: Externally adapted project sequences (n = 9; 10%)


7
15
35
59
60
62
67
78
86

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

Cluster 4: Externally driven project sequences (n = 13; 15%)


5
13
25
32
33
36
41
51
53
56
76
80
87

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

Cluster 5: Recombinant project sequences (n = 20; 22%)


14
16
18
19
26
28
42
43
44
52
68
69
70
71
72
73
74
82
84
89

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

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Organization Science 20(2), pp. 384409, 2009 INFORMS

Appendix (contd.)
Clusters 3, 4, and 5/Side 2
Sequence length

Product development sequence

Cluster 3: Externally adapted project sequences (n = 9; 10%)


30
1 10 10 14 14 2 10 7 2 5 4 5 5 5 14 8 7 1 7 10 10 14 4 5 5 6 14 14 6 7
36
10 1 3 2 3 11 11 13 13 18 4 14 14 14 18 1 17 14 8 14 11 11 4 12 18 6 17 11 12 6 6 5 14 14 7 16
42
9 1 10 9 9 9 10 10 10 10 9 10 10 10 10 10 10 1 18 18 5 10 18 18 6 4 14 7 7 6 5 18 4 4 18 12 6 9 18 18 18 18
33
10 1 10 2 14 2 5 5 11 11 12 4 5 8 6 6 13 14 6 7 1 7 14 4 12 13 13 13 6 10 14 14 7
34
2 1 11 10 2 14 10 11 14 14 10 2 12 4 5 14 13 8 1 7 7 10 14 4 12 12 13 13 6 13 7 6 14 14
34
1 10 10 1 14 14 14 8 2 17 10 2 14 5 4 14 8 5 5 7 1 7 10 10 2 14 4 5 5 14 14 7 6 7
32
14 1 10 9 16 11 14 14 3 9 11 2 3 10 2 16 16 5 12 4 14 8 7 1 7 4 6 14 14 14 6 7
28
10 10 1 2 14 14 9 16 3 10 3 2 4 5 14 7 1 3 10 10 14 16 7 4 6 14 7 14
28
1 10 14 14 2 10 2 5 4 5 5 14 8 7 1 7 14 10 10 5 4 5 5 6 6 7 14 14
Cluster 4: Externally driven project sequences (n = 13; 15%)
39
18 1 5 3 17 17 5 16 9 13 12 7 3 16 2 16 16 1 3 17 4 14 17 17 13 11 12 18 13 3 12 7 16 3 3 6 12 5 13
43
1 17 17 5 11 11 16 16 16 3 5 5 16 9 18 18 2 13 3 17 4 17 12 7 14 18 3 3 14 12 13 12 6 13 7 3 5 13 16 3 3
34
1 16 16 16 5 5 16 9 13 17 17 5 2 17 17 4 1 17 12 12 11 13 7 14 6 7 5 13 18 14 12 13 12 16
39
1 17 17 10 10 16 16 17 18 18 12 3 9 16 16 5 6 11 5 17 10 5 4 18 3 12 12 16 16 5 5 4 6 12 18 12 5 5 4
38
18 1 17 17 5 5 16 9 16 16 3 5 2 11 13 12 12 7 14 18 3 17 4 17 17 3 3 5 13 16 14 12 13 12 6 13 7 3
31
1 11 8 16 17 17 11 16 8 9 2 12 12 7 16 16 1 17 4 17 17 8 14 18 14 12 12 6 7 5 16
25
1 16 2 17 17 2 5 4 4 6 16 11 6 5 11 6 16 12 3 2 17 13 18 16 18
30
10 12 10 8 10 9 12 12 12 18 10 17 18 7 10 17 16 16 16 16 16 16 16 17 18 16 16 16 16 8
40
18 10 16 16 1 18 3 3 2 4 4 6 7 8 9 9 10 11 17 11 1 10 10 6 6 11 11 17 12 12 13 13 13 16 16 16 17 17 18
42
16 8 1 9 8 16 16 5 16 5 16 16 16 16 8 16 16 16 16 18 16 16 18 18 18 16 16 18 16 18 8 18 16 16 16 16 16
31
16 1 3 9 17 17 10 10 12 16 5 10 5 4 18 5 6 11 5 17 5 4 5 6 3 16 12 12 12 17 17
33
10 1 18 2 3 3 4 4 9 9 10 11 13 10 10 13 1 6 17 17 6 7 8 11 11 11 1 17 12 12 16 16 17
39
1 10 3 3 18 2 6 7 8 9 4 4 9 10 11 17 10 10 18 6 6 11 12 12 13 11 11 17 1 1 13 16 16 17 17 18 13 13 16
Cluster 5: Recombinant project sequences (n = 20; 22%)
29
1 12 7 7 7 10 13 10 10 7 12 13 9 9 8 10 3 3 13 7 3 13 14 13 10 8 17 12 5
29
1 7 7 3 3 10 7 10 4 5 5 1 7 18 8 2 4 13 13 4 13 6 7 13 13 13 4 12 10
36
1 7 9 17 7 7 16 3 7 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
37
1 8 2 2 9 9 9 17 16 7 7 4 12 15 7 7 10 10 4 5 5 1 7 7 2 4 13 13 4 12 5 6 7 7 10 7 4
38
1 7 9 17 7 7 3 12 12 7 12 9 9 10 7 10 4 5 5 1 7 8 3 4 12 12 9 9 2 4 5 5 4 5 6 1 7 4
41
10 10 1 2 13 13 10 10 7 10 3 3 4 12 14 8 8 15 15 8 5 7 1 4 4 9 15 15 15 3 13 13 13 15 13 14 13 6 6 12 12
30
1 16 7 7 3 3 10 7 10 10 2 4 5 5 1 7 2 4 13 13 4 13 6 7 4 12 10 13 13 13
28
1 16 2 10 7 7 10 3 7 10 5 4 1 7 8 2 4 13 13 4 13 6 7 13 13 13 4 12
29
1 10 10 7 7 3 3 10 7 10 4 5 5 1 7 7 2 4 13 4 13 13 6 7 13 13 13 4 12
32
1 10 2 17 16 7 7 3 3 10 7 10 4 5 5 1 7 8 2 4 13 13 4 13 6 7 13 13 13 4 12 10
29
1 7 9 17 7 9 16 7 10 9 9 7 10 4 5 5 1 7 18 9 9 2 4 5 5 4 5 6 7
32
2 2 1 10 17 7 7 11 3 10 7 10 5 5 4 12 1 7 2 4 13 13 4 13 6 7 13 13 13 4 12 10
31
1 10 2 17 16 7 7 10 7 10 4 5 5 1 7 14 8 2 4 13 13 4 13 6 13 4 12 10 7 13 13
31
1 10 10 16 7 7 11 10 7 10 4 5 1 7 2 4 4 3 3 13 13 13 6 7 13 13 13 4 1 12 7
27
10 1 10 7 10 7 7 3 3 4 5 5 1 7 2 4 13 13 4 13 6 7 13 13 13 4 12
29
1 16 2 7 7 3 10 7 10 4 5 5 1 7 8 2 4 13 13 4 13 6 7 13 13 13 4 12 10
26
1 16 7 3 7 3 10 7 10 4 5 1 7 4 13 13 4 2 13 6 7 13 7 13 4 12
32
1 17 2 2 16 7 7 3 3 10 7 10 4 5 5 1 7 2 4 13 13 4 13 6 7 5 13 13 5 4 12 10
34
1 7 9 2 17 7 16 7 3 7 10 9 9 10 4 5 5 1 7 3 9 9 2 4 5 5 4 5 6 7 5 5 4 10
29
1 17 10 7 7 10 7 4 5 5 3 3 1 7 8 2 4 13 13 4 13 6 7 13 13 13 4 12 10
2,897 events altogether
Notes. (1) The rst column reports the product number (from 1 to 90). (2) The column Year reports the year the product was entered in the catalogue,
or a decision was taken not to enter it in the catalogue. (3) The column Y/N reports whether the product was entered in the catalogue. (4) The
column Perf. reports sales performance: BS = best seller (actual sales > 200% aspirations); F = failure (actual sales < 50% aspirations); T = troop (actual
sales between 51% and 199% of aspirations). (5) The column Length reports the length of each product development process, measured as number
of sequential actions in each sequence. (6) The column Product development sequence reports the sequence of actions describing each product
development process (see Table 2 for interpretation of activities).

Salvato: Role of Ordinary Activities in Evolution of Product Development Processes

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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