Supporting Digital Innovation Projectsat Manufacturing Companies : Using Managerial Controls and Formal Development Processes

Abstract: Digitalization affects all industries, there among the manufacturing industry where the majortransformation can be mentioned as the fourth industrial revolution. Manufacturing companieswho are experts within their traditional area often perform minor incremental improvements,however, companies embracing digitalization consequently also perform more radical innovations.Incremental and radical innovation require different management, hence, does also digitalinnovation. The project was carried out at two manufacturing companies, the Pulp Comp and theTool Comp, who both had expressed initiatives within digital innovation. Thereby, this thesis aimsto create an understanding of how to support digital innovation projects at manufacturingcompanies using managerial controls and formal development processes. By identifying possibleinfluencing factors, such as success factors, obstacles and challenges, the thesis will providemanagers with knowledge in how they can support digital innovation projects. To achieve that, 27semi-structured interviews were conducted with project members and people with a generalknowledge within the two companies’ projects. A total of five projects were investigated. Aliterature study was also performed to create a theoretical framework, that together with the codeddata from the interviews were used to make an analysis to answer the two research questions.Additionally, a discussion is presented that concerns for instance, how employees at differentpositions use different managerial controls and how crucial it can be to balance the use ofmanagerial controls. Finally, a conclusion with general managerial implications is presentedregarding how managerial controls, attention and formal development processes can supportdigital innovation projects at manufacturing companies. Two main results from this study are thatit has shown to be necessary to combine different controls to get successful result and the formaldevelopment processes might need a more dynamic, iterative and parallel approach.