Innovation Capability in Project-based Organisations : Development and Validation of a Holistic Innovation Capability Assessment Framework (HICAF)

Abstract: Innovation is one of the most important factors behind today´s global economic growth and prosperity. In the current economic climate, increasing global competition and rapidly changing environment, an organisations ability to innovate is regarded as a key factor for success. It is widely accepted that creating new processes, products and procedures are vital for productivity and growth in all sectors. The literature on innovation measurements areas and utilities is voluminous and diverse. Assessing and measuring the complex conditions that influence a firm’s innovation capability is a challenging task, due to the inconsistency, inaccessibility, and complexity of measures. An integrative and holistic innovation capability assessment framework should include all aspects of innovation. This study attempt to address this gap, the lack of a holistic innovation capability assessment framework (HICAF) in project-based firms, by (a) reviewing the literature on innovation, innovation assessment, and measurement areas (b) through a qualitative case study exploring the factors promoting innovation in project-based firms (c) integrating the findings into a holistic assessment framework (d) generating items, in form of a statement, to address the underlying construct of each identified factor (e) applying the proposed framework within an organisation and statistically validating the instrument to achieve item homogeneity. Internal consistency reliability estimates have been utilized to produce a final framework consisting of 57 statistically validated items and eight theoretically grounded categories with 19 corresponding factors promoting innovation, also called enablers, in technology-orientated project-based organisations. In addition to the identified literature findings, the case study resulted in two new enablers, time management, and quality, which are not necessarily specific for project-based organisations, rather specific for the observed organisation. The performed case study is insufficient for determining whether there are any specific enablers for project-based organisations. The advantages of HICAF lies in its simplicity due to practical applicability in a large scale and facilitates managers to diagnose the organisation and recognize true symptoms to then apply appropriate treatment and remedies. A frequent application of HICAF can also help to study the effect of specific treatment and remedies in relation to innovation capability.