The Role of Managerial Cognitive Capability in Developing a Sustainable Innovation Ecosystem: A Case Study of Xiaomi

Abstract

Establishing a hub-based innovation ecosystem is an effective way for companies to cope with technological transformation and achieve sustainable development. While existing literature has explored how a hub firm develops or manages an innovation ecosystem, little attention has been paid to the strategic challenges in the development and management process. In strategic management, managerial cognitive capability has been proposed as a key factor that influences how firms make strategic changes and adapt to dynamic environments. Hence, from the perspective of managerial cognitive capability, this paper strives to investigate the development of an innovation ecosystem from the perspective of managerial cognitive capability. To do so, we conducted a qualitative case study of Xiaomi’s innovation ecosystem from 2010 to 2019. The research adopts an interpretive approach and finds that (1) the evolution of the innovation ecosystem can be divided into incubation, growth, and regeneration periods, with developing core products, related products, and unrelated products as respective focus; (2) under rapid technological and market changes, it is critical to match the managerial cognitive capability of the hub-firm with its innovation ecosystem; (3) building innovation ecosystems enables the hub-firm to achieve sustainable competitive advantages. The study builds a model for the growth of innovation ecosystems and enriches theoretical research on innovation ecosystems and managerial cognitive capability.