Business practices of highly innovative Japanese firms

Highly innovative firms are more competitive and achieve greater performance than their less innovative counterparts. Innovation orientation has been commonly used to assess an organization's innovative culture. To date, most innovation orientation research has explored its relationship with performance. However, the literature is unclear as to what innovative companies do differently to achieve superior performance. This study advances innovation orientation research by examining differing business practices of high versus low innovative Japanese firms. The various business practices include culture management, open innovation, analytics, innovation management software, crowdsourcing, design thinking, measuring innovation, stage-gate, and scientific discovery. Using data from 261 Japanese firms, this study finds that high innovators, as compared to low innovators, are more likely to engage in many of these business practices. Until this study, some of these business practices were not empirically shown to be correlated with high innovators, much less explored in the same study. This paper also offers a stepwise approach for executives seeking to enhance competitiveness via innovation. Specifically, executives should first look to creating an innovation orientation and subsequently implement such business practices.