Exploration and exploitation activities for design innovation

This paper focuses on design innovation: that is, the development
of products that are new in terms of products’ appearance, the
emotions products evoke, and/or the way they enable customers
to express their identity. Although prior research acknowledges
the importance of design innovation for product and organisational
performance, studies on how to manage design innovation
are relatively scarce. The present study attempts to fill this gap by
investigating design innovation and its management in terms of
the degree of exploration and exploitation activities and
designers’ decision freedom when developing new offerings. We
collected data on projects in which external design consultancies
were actively involved during the development process (n = 83).
For each project, we surveyed both the external senior designer
and the project manager at the client’s side. Our results suggest
that exploration activities enhance design innovativeness, and that
design innovativeness results in better market performance.
Furthermore, we find that exploitation activities moderate the
relation between design innovativeness and process performance:
when exploitation activities are high (low), design innovativeness
results in better (worse) process performance. In addition, we find
that when designers have decision freedom, the positive relation
between exploration activities and design innovativeness is
enhanced. However, our data also suggest that design innovativeness
has a negative (positive) influence on market performance
when designers have high (low) levels of decision freedom.