Openness and front end of innovation: does customer type matter?

Abstract

PurposeThis paper aims to study the moderating effect of customer type (business customers versus private customers) on the link between two forms of openness (cross-industry networks and customer integration) and two front-end innovation outcomes (a creative idea and a product definition), in the context of radical innovations.Design/methodology/approachAn agreement was established with the Statistical Office of the Basque Government. This agreement enabled us to access a reliable list of innovative companies in the region that constituted our sample frame. Questionnaires were collected by phone. The response rate was 41.6%, which led to a sample size of 189 firms. Structural equation modeling was used to analyze the data.FindingsThe study reveals that idea creativity is explained by different external drivers in business-to-business (B2B) and business-to-customer (B2C) settings. In B2B settings, customer integration is found to have no effect on idea creativity. For product definition, however, both the external drivers, namely, cross-industry networks and customer integration, matter, although the latter is more salient.Practical implicationsIn the search for creative ideas, managers of firms that serve business customers should focus on cross-industry networks, while those that serve private customers should concentrate on customer integration.Originality/valueMost previous quantitative studies on the front end have focused on internal drivers, and some of them use a mix of B2B and B2C data, which could lead to misleading conclusions.