Informing Early-Phase Technology Decisions in Paradigmatic Innovation

The innovation activities of a company facing paradigmatic change with regard to both technology and business model includes taking many decisions, where the information available, as well as the decision makers’ ability to understand this information, is limited. Technology decisions in the very early phases of innovation have been explored in a Scandinavian energy-utilities company facing exactly these paradigmatic changes.

In the company there are 5500 employees, with the major footprint in Denmark. The company has activities in the full energy value-chain including: production & trade of oil & gas, production & trade of electricity and sales & distribution to end-costumers. Their agenda is to shift from 15% sustainable energy and 85% fossil energy to 85% sustainable within 25 years.

At the same time, their business model has changed from energy planning to business development, thus increasing the focus on innovation drastically. Literature on decision making e.g. [Rasmussen, et al. 1991], often describes decisions in the very early innovation phases as “intuitive” and to be governed by “gut feeling”.

However, when an entire industry, in this case the energy sector, is forced to change their knowledge-world in such a radical manner, they start facing problems with making efficient decisions as knowledge generated through experience is mainly useful when the future mimics the past, which is not the case for such radical changes.

Therefore, a 3 year long research project within this industry has been initiated, with the purpose of generating an extensive understanding of the decision-making process related to assessing new technologies when designing radically new products and services for the market. It is expected that this understanding will enable further development of methods to improve the provision of knowledge and information required in the early phases of technology decisions.

This article reports on the first part of this project, and provides a descriptive model for understanding the complexity in the early phase intuitive decision-making process, answering the specific research question: How are decisions regarding technologies informed in the early phases of innovation, when dealing with paradigmatic “new to the company” knowledge fields? To explore the question, a case study; investigating the decisions made for radical new innovations, and the knowledge needed for supporting these decisions, was carried out.

The investigation is based primarily on document analysis, interviews and observations which were carried out at the collaborating company, and the results are presented in this article.