Organisational learning capability in SMEs: An empirical development of innovation in the supply chain

Thomas, Andrew et al. Article Organisational learning capability in SMEs: An empirical development of innovation in the supply chain Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Thomas, Andrew et al. (2017) : Organisational learning capability in SMEs: An empirical development of innovation in the supply chain, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 4, https://doi.org/10.1080/23311975.2017.1364057 This Version is available at: https://hdl.handle.net/10419/206001 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Page 1 of 20 OPERATIONS, INFORMATION & TECHNOLOGY | RESEARCH ARTICLE Organisational learning capability in SMEs: An empirical development of innovation in the supply chain Andrew Thomas, Peter Dorrington, Filipa Costa, Gareth Loudon, Mark Francis and Ron Fisher Cogent Business & Management (2017), 4: 1364057 Thomas et al., Cogent Business & Management (2017), 4: 1364057 https://doi.org/10.1080/23311975.2017.1364057 OPERATIONS, INFORMATION & TECHNOLOGY | RESEARCH ARTICLE Organisational learning capability in SMEs: An empirical development of innovation in the supply chain Andrew Thomas 1 *, Peter Dorrington 2 , Filipa Costa 2 , Gareth Loudon 3 , Mark Francis 1 and Ron Fisher 1 Abstract:Evidence that a company’s innovation performance, Knowledge Management capability, and its corporate and operational performance are inextricably linked has been the focus of numerous academic studies over recent years. Whilst a significant body of research exists focusing on learning at company level, little research exists on how supply chains learn and innovate in collaborative working environments. The aim of this paper is to determine the learning and innovation skills that emerged from a collaborative project with new developed supply chain. Its focus is on identifying how each organisation within the supply chain developed its Organisational Learning Capability (OLC) when the companies were tasked to collaborate and develop a new and innovative product. The companies had not previously worked with each other and so the project monitored the level of collaborative activity as well as innovative output from the collaboration. The results suggest that improved organistional learning capabilities led to increased levels of organisational innovation as well as improved supply chain collaboration. The paper concludes with the development of a Supply Chain Organisational Learning and Innovation Framework (SCOLIF) and the identification of a number of cultural dimensions which are considered useful for managers and engineers to consider when implementing innovation projects. *Corresponding author: Andrew Thomas, Cardiff School of Management, Cardiff Metropolitan University, Cardiff CF5 2YA, UK E-mail: [email protected] Reviewing editor: Shaofeng Liu, University of Plymouth, UK Additional information is available at the end of the article ABOUT THE AUTHORS Professors Thomas, Francis and Fisher are Professors of Operations Management in the Value Flow Centre at Cardiff Metropolitan University. Their research interests include: supply chain management, quality management, and production management. More specifically, their interests include; Lean management, Knowledge Management and understanding the issues around value and the perceptions of value in business. Dorrington, PhD, and Costa are senior researchers from Product Design and Research Centre at Cardiff Metropolitan University whilst Loudon, PhD, is a principal lecturer at the University. Their research interests include: innovation, creativity and design process management. More specifically, their research focuses upon Knowledge Management, the use of technology in assisting the creativity process and, user-centred design processes. Their articles have been published in International journals and conferences. PUBLIC INTEREST STATEMENT This research investigates the effect of intercompany collaboration and its impact on the Organisational Leaning Capability of the participant companies. The companies were tasked to design and develop a new and innovative product. The focus of research was in determining the level of learning that occurred between these supply chain companies and, whether the companies could collaborate effectively towards the development of a new and innovative product. The paper identified a number of key cultural dimensions that were seen as critical to the success of the project. The work also developed a Supply Chain Organisational Learning Innovation Framework that emerged from the collaboration. It is believed that the Framework will provide guidance and structured support to practitioners who intend to implement innovation based action learning in to their companies and supply chains. It is also aimed at extending the body of knowledge in the area of Knowledge Management and Innovation. Received: 17 July 2017 Accepted: 01 August 2017 First Published: 05 August 2017 © 2017 The Author(s). This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license. Page 2 of 20 Page 3 of 20 Thomas et al., Cogent Business & Management (2017), 4: 1364057 https://doi.org/10.1080/23311975.2017.1364057 Subjects: Engineering Management; Business, Management and Accounting; Industry & Industrial Studies Keywords: organisational learning capability; supply chain; innovation 1. Introduction Evidence that a firm’s innovation performance, knowledge management (KM) capability and its corporate and operational performance are inextricably linked has been the focus of numerous academic studies over recent years (Aboelmaged, 2014; Darroch, 2005; Yang, 2008). However, whilst much research has been developed in this area, the research has uncovered a complex interaction between these three key elements. For instance, Darroch’s work identified that knowledge management was a coordinating mechanism between that of innovation and company performance and stated that a firm with a knowledge management capability will use resources more efficiently and so will be more innovative and perform better. However, Aboelmaged explained that it was innovation performance that played the key mediating role between knowledge management capability and operations performance. He went on to highlight that managers needed to facilitate the dynamics of knowledge acquisition, sharing and application, and then utilise it to cultivate a better level of technical and administrative innovation performance, which in turn will result in favourable operations performance. Yang on the other hand deduced from their study that a company’s “learning orientation” had a significant interacting effect on long-term corporate growth. This therefore leads towards the theory that Organisational Learning (OL) (of which Learning Orientation is a key part of the theory) plays an important role in the improvement of operational performance in companies (Calantone, Cavusgl, & Zhao, 2002). OL is complementary to KM. Where KM focuses upon the planning, organising, motivating, and controlling of people, processes and systems in the organisation to ensure that its knowledge-related assets are improved and effectively employed, OL focuses upon embedding what has been learned into the fabric of the organisation (King, 2009). Calantone et al. also state that OL is associated with the development of new knowledge, which is crucial for firm innovation capability and firm performance Therefore, it is not surprising that the link between OL, Innovation and company performance is subject to much research and analysis. This paper will focus on the development of a Small and Medium Enterprise (SME)-based framework that facilitates the development of high-quality learning and innovation skills aligned to the innovation management process of the participating companies in a new collaborative supply chain. This framework emerged as a result of a twelve-month innovation project with four manufacturing SMEs which formed the collaborative supply chain. The paper will focus initially on highlighting and analysing the key literatures in the area of OL and Organisational Learning Capability (OLC) and will then move on to describing the project through a case study. The development of the Supply Chain Organisational Learning and Innovation Framework (SCOLIF) is presented and will show how the primary information obtained from the project merged with the existing secondary information on OL and OLC to create the structure of the SCOLIF. The paper closes with an analysis of the framework’s effectiveness in generating organisational innovation within a supply chain. 2. Background to organisational learning and organisational learning capability Research in the field of OL has been well developed by both practitioners and academics over the years. The link between Organisational Learning and manufacturing performance (and in particular supply chain performance) is identified in the work of Azadegan and Dooley (2010) in which they posit a strong positive link between the use of OL theory and resulting supplier innovativeness and manufacturer performance. Furthermore, academics have undertaken studies to explore the dimensions of OLC and, whether these dimensions impact upon Organisational Innovativeness (OI). The results of their work indicated that OLC significantly and positively influence OI within companies (Onağa, Tepecib, & Başalpc, 2014). Organisational Innovativeness can be considered for this paper as the adoption and application of new knowledge from external sources. Alexander and Childe (2013) focus on the transfer of knowledge between universities and businesses that are collaborating together as an example of OI. The findings of this work highlighted that successful Page 4 of 20 Thomas et al., Cogent Business & Management (2017), 4: 1364057 https://doi.org/10.1080/23311975.2017.1364057 knowledge transfer comes from the transfer of tacit knowledge and that tacit knowledge can best be transferred in this arena using a range of rich media channels. Academic theory around learning in organisations has traditionally been divided into two theoretical areas of literature namely: Organisational Learning (OL) literature and, the Learning Organisation (LO) literature (Chiva, Alegre, & Lapiedra, 2007). The former has focused on the learning process of an organisation and the latter on the factors that facilitate the process of becoming a learning organisation (Chiva, 2004). Focussing on the OL area, the literature around this subject attempts to analyse and determine whether and how a certain process of learning is being accomplished in organisations. OL thinking has developed over time and many perspectives have appeared. Chiva and Alegre (2005) identify two OL perspectives namely: the individual and, the social perspective. Chiva (2004) further explains that the individual perspective considers learning as an individual phenomenon and consequently understands that organisations learn through individuals who learn (Senge, 1990). The social perspective however, considers learning as a social phenomenon and as such understands that organisations learn through communities and groups (Lave & Wenger, 1991). Advances in the area of OL show that organisations, and the people in them need to learn constantly through facilitating learning for all members of the company which in turn continuously transforms the company by way of its services, products and innovation which emerges from this learning process (Kumpikaite, 2008). The application of KM and OL specifically in SMEs is a complex and often misunderstood concept. Desouza and Awazu (2006) studied the application of KM in SMEs and found that the mechanisms to develop effective KM practises were very different in SMEs when compared to larger companies. A range of specific SME-related issues emerged from their work and include; resource constraints, loss of knowledge, failure to exploit external sources of knowledge. However, on a positive front, knowledge is disseminated quickly and directly through shorter communication channels thus providing SMEs with an advantage in the management and delivery of knowledge. This would therefore suggest that KM practices could be significantly enhanced in SMEs if it were possible to develop an efficient KM delivery mechanism to the resource-constrained SME whilst capitalising upon the pre-existing shorter and more efficient communication and dissemination mechanism available in SMEs. Whilst significant research has been undertaken in both the social and individual aspects of OL, the work has primarily focused upon individual organisations and, has by result measured the OL performance of individual companies and, the individuals within such companies. What this paper aims to do is to widen the scope of OL theory by developing key research around the concept of OL in an SME-based supply chain. It will consider the application of OL on manufacturing SMEs within a four-tier supply chain and will measure the OLC of the companies within the chain as well as attempt to identify the OLC of the complete supply chain. Furthermore, through the use of a case study approach, the paper will attempt to show how OLC and the organisational innovativeness of the supply chain are connected. The authors believe that this paper provides a unique contribution to knowledge and practice in that it is one of very few studies which describe the development of an KM/OL framework for the implementation of KM practices in to SMEs. 2.1. OLC and OI theory and literature Organisational Learning Capability (OLC) is seen as the source of competitive advantage and a key to future organisational success and, has been subject of a number of key studies (Chiva et al., 2007), (Jerez-Gόmez, Céspedes-Lorente, & Valle-Cabrera, 2005). OLC is defined as the organisational and managerial characteristics, practices, skills and factors that facilitate the organisational learning processes (e.g. generating, acquiring, disseminating and integrating information/knowledge) and, allows an organisation to learn (Jerez-Gόmez et al., 2005; Onağa et al., 2014). Furthermore, when considering the application of OLC specifically in SMEs, Salim and Sulaiman (2011) confirm the positive relationship between OLC and an SME’s innovation capability and operational performance. However, few case studies exist to show how Organisational Innovation and OL is developed and applied in SMEs. Table 1 provides a literature analysis of the key studies in OL and OLC in SMEs and shows that much of the literature is focused upon the identification of a clear and positive Page 5 of 20 Thomas et al., Cogent Business & Management (2017), 4: 1364057 https://doi.org/10.1080/23311975.2017.1364057 Table 1. Review of collaborative innovation in supply chain literature Author Methodology Applied Key Issues highlighted Contribution SC OL Inn Argote (2011) Research article identifying past, current and future research trends in OL Research outlines that OL will continue to develop in to the foreseeable future. The research in to OL is likely to advance through different disciplines and methods States that the future enhancement of OL will come from further empirical research in to the mechanisms of knowledge creation and organisational capabilities ✓ Bigliadi and Galati (2016) Survey of 157 Italian SMEs is undertaken to identify barriers towards the adoption Open Innovation in SMEs The study focuses upon the issue of Open Innovation specifically but highlights the critical nature of OL development as a key driver to achieve effective Open Innovation in companies Four main barriers are identified, namely, knowledge, collaboration, organisational, and financial/ strategic ✓ ✓ Chapman and Corso (2005) This work considers the growing importance of inter-company collaboration, and develops the concept of intra-company continuous improvement through to what may be termed collaborative innovation between members of an extended manufacturing enterprise (including supply chains). The work proposes the development of continuous innovation to work alongside continuous improvement strategy to be delivered through inter-company collaborations. Due to organisational and geographical separations between partners involved, SCs can hardly rely on established organisational and managerial mechanisms that support continuous improvement at company level The authors identify that there is still a substantial lack of empirically grounded contributions and theories on the concept of continuous in an inter-organisational learning ✓ ✓ Chiva (2004) Through secondary data analysis the author highlights fifteen factors that facilitate organisational learning. These factors are then tested on employees working within Spanish SME tile manufacturing industry to validate the secondary research findings Four companies are analysed against the fifteen factors that facilitate Organisational Learning. From this, the combinatory factors are identified across all four companies and, differences between the factors are discussed and analysed. The work then outlines through case study development how the factors are further analysed and then validated in four ceramic tile manufacturing companies 15 key facilitating factors of OL identified namely: experimentation, observation, risk acceptance, heterogeneity, dialogue, training, delegation, teamwork, worker improvement, leadership, learning, management structure, knowledge, humour, creativity ✓ ✓ Chiva et al. (2007) The study proposes then validates a measurement scale that aims to capture an organisation’s capability to learn, based on a comprehensive analysis of the facilitating factors for learning.SME companies in the ceramic tile industry are used Data is collected from eight Spanish ceramic tile manufacturers. The survey was addressed to shop floor workers. A total of 157 valid questionnaires were obtained, Using confirmatory factor analysis, the construct measurement model was tested and the scale was validated The organisational learning capability scale consisting of 14 items grouped into five dimensions: experimentation, risk taking, interaction with the external environment, dialogue, and participative decision-making is proposed and tested ✓ ✓ Chiva and Alegre (2005) This paper investigates the relationship between organisational learning capability and job satisfaction. SME companies in the ceramic tile industry are used A case study approach is proposed and the analysis of the findings of 157 questionnaire responses from eight companies in the Spanish ceramic tile industry was undertaken Through a statistical analysis of the questionnaire responses, a strong positive correlation is made between OLC and Job Satisfaction ✓ (Continued) Page 6 of 20 Thomas et al., Cogent Business & Management (2017), 4: 1364057 https://doi.org/10.1080/23311975.2017.1364057 Author Methodology Applied Key Issues highlighted Contribution SC OL Inn Desouza and Awazu (2006) Study in to the application of KM in a small range of generic SMEs through questionnaires and interviews Research found that the mechanisms to develop effective KM practises were very different in SMEs when compared to larger companies. The principles that are effective for developing KM in larger companies are unsuitable for small companies Barriers and drivers for KM in SMEs include: resource constraints, loss of knowledge, failure to exploit external sources of knowledge. However, knowledge is disseminated quickly and directly through shorter communication channel ✓ Feller, Hirvensalo and Smeds (2005) This research develops a theoretical approach on how and what partner companies in an R&D collaboration relationship can jointly learn to improve their R&D processes The authors test the effectiveness of the use of the SimLab business process simulation method in the context of collaborative process innovation. The main finding of the case study is a set of direct process improvements that the case companies have developed during the projects undertaken Methodological triangulation is applied: by using the business process simulation method as well as interviews from two-case studies, a set of process improvements for the collaborative R&D process of the case companies is developed ✓ Nasab (2016) Research investigates the effect of inter-organisational learning on the operation of innovation in the supply chain of Sapco company Quantitative analysis which seeks to find a correlation between inter-company learning and supply chain innovation. Provides an effective model of research in the study Statistical analysis validates the hypothesis that inter-company learning improves the level of supply chain innovation. However, a deeper analysis of the main causal relationships is not provided ✓ ✓ ✓ Opengart (2015) Through secondary data analysis and reviews of key literatures, analysis was undertaken of collaborative SCM and OL theory to identify overlapping themes Findings indicate multiple themes in common between collaborative SCM and the Learning Organization. Research suggests to approach SCM with the framework of the Learning Organisation to encourage those principles to drive behaviour Focused upon secondary data analysis. Author recommends empirical research should be conducted to investigate and quantify advantages of this approach/perspective. Proposes the concept of the “learning chain” ✓ ✓ Salim and Sulaiman (2011) Quantitative analysis of 320 manufacturing SMEs. Study considers whether OL has a positive effect on promoting innovativeness and in turn, whether this innovation supports improved company performance The work shows that both hypotheses (OL supports innovation and, Innovation supports improved company performance) are supported and that OL is a driver of growth in manufacturing companies Identifies possible causal relationship between OL and firm performance. Work is survey based and does not show how SMEs engage in OL and Innovation practices ✓ ✓ Spicer and Sadler-Smith (2006) Quantitative analysis of 294 small and medium manufacturing firms with five hypotheses being tested against the learning orientation scale Study raises the potential for a causal relationship between organisational learning and performance, in which a higher order learning orientation (double loop learning) can be identified as a driver of a firm’s growth and the success of its operations Identifies the causal relationships between OL and firm performance. Identifies that higher order (double loop learning) was a key driver in company growth ✓ ✓ Table 1. (Continued) (Continued) Page 7 of 20 Thomas et al., Cogent Business & Management (2017), 4: 1364057 https://doi.org/10.1080/23311975.2017.1364057 connection between OL and its impact on supply chain effectiveness and innovation. In addition, other academic studies identify the key features of OL and OLC whilst some develop instruments for effectively measuring OLC performance (Chiva et al. 2007). Wang and Ahmed (2003) identify five key features for OLC namely; individual learning, the learning process, culture, knowledge management and continuous improvement. Likewise, Barlow and Jashapara (1998) focus more specifically upon the issue around inter-firm partnering and the impact that this partnering has on OL. Chiva and Alegre (2005) identify five key dimensions to OLC, they are: (a) Experimentation, (b) Risk taking, (c) Interaction with the external environment, (d) Dialogue and (e) Participative decision-making. It is from here that Chiva and Alegre develop the OLC criteria further in to developing an effective instrument for measuring OLC (Chiva & Alegre, 2009). A structured literature review of key KM and OL texts is described in Table 1. A review of the key literatures in the area identifies that little research exists in the practical implementation of OL and, the empirical development of a supply chain-oriented model for OL development in manufacturing supply chains. Whilst significant information exists on the positive correlation and connection between OL and innovation and company performance, the knowledge base around the design and implementation of KM/OL models and the practical implementation of such models in to SMEs is very light. Therefore, this paper will provide a contribution in this area through the development of a SCOLIF. The key findings of the literature review are: • Wang and Ahmed (2003) identify five key features for OLC namely; individual learning, the learning process, culture, knowledge management and continuous improvement. • Chiva (2004) identifies five key facilitating factors of OL identified namely: experimentation, risk acceptance, interaction with the external environment, dialogue, participative decision-making. • Focus on the delivery of high-level learning through double-loop learning methods (Spicer & Sadler-Smith, 2006). • Desouza and Awazu (2006) identify a number of SME-based dimensions for developing KM in SMEs. These dimensions are: resource constraints, loss of knowledge, failure to exploit external sources of knowledge. • Argote (2011) states that the future enhancement of OL will come from further empirical research in to the mechanisms of knowledge creation and organisational capabilities. • Barlow and Jashapara (1998) outline the importance of inter-firm partnering on successful OL development. Author Methodology Applied Key Issues highlighted Contribution SC OL Inn Wang and Ahmed (2003) Secondary data analysis of key literature in Organisational Learning Authors redefine the concept of OL by the inclusion of radical innovation and creativity as key features of a new OL approach Identify 5 key features for OLC namely; individual learning, the learning process, culture, knowledge management and, continuous improvement ✓ ✓ Yu, Jacobs, Salisbury and Enns (2013) This study investigates the relationships among internal integration, external integration (i.e. with customers and suppliers), customer satisfaction, and financial performance using survey data collected from 214 manufacturing firms in China The results suggest that OL improve internal integration within supply chains (shared values etc.) and significantly influences external integration, (customer / supplier integration). Supplier integration is significantly and positively related to financial performance The study positions the benefits of integration as accruing from learning and financial performance being correlated to information flows. The work outlines the strength of OL in delivering improved supply chain performance ✓ ✓ Table 1. (Continued) Page 8 of 20 Thomas et al., Cogent Business & Management (2017), 4: 1364057 https://doi.org/10.1080/23311975.2017.1364057 The identification of these key features will assist in the development of the initial SCOLIF (which will be the basis for the creation of the research framework). Focusing upon the development of the SCOLIF as the focal point of this study, the aim is to design, develop and implement a framework which allows for the development of high-quality learning and innovation skills aligned to the innovation management process of a new collaborative supply chain. Validation of the framework will be through monitoring and measuring the growth in OLC as the companies progress through the innovation project, identifying the key stages within the innovation/learning process that enabled the supply chain to develop its learning capability. The paper will return to the issue of OLC development and measurement a little later in the text. Information will now be provided on the case study element of the work. 2.2. Supply chain and OI theory and literature A fundamental objective of this proposed collaboration is to develop high-quality innovation skills aligned to the innovation management process of the newly formed supply chain. Whilst the issue of supply chain integration and collaboration has been around for many years, most supply chain development is focused upon companies developing ad hoc approaches towards developing their supply chains. Furthermore, companies within traditional supply chains have little opportunity to develop products in a co-ordinated and collaborative manner where they are afforded the opportunity to enhance the product and process and align it to their specific core competencies (Ramanathan, Gunasekaran, & Subramanian, 2011; Scholten & Schilder, 2015). Accompanying these issues, the risk of entering a new market for companies (especially SMEs) is high, and often, even though they have novel technologies and approaches to add to these markets, companies often do not have the knowledge of the new markets or accompanying market skills to adapt to these new sectors. As such, it is easier for the companies to remain in their competence zone, even if facing tougher conditions (Spekman, Spear, & Kamauff, 2002). Organisations with transferrable technologies/skills/products to other sectors need a way of accelerating their knowledge of the new markets, and a “safe” way of entering that market, whilst still maintaining their core business (Ellinger et al., 2012). In order to facilitate the process of innovation, companies need to develop Knowledge Management capabilities (Aboelmaged, 2014). Armed with these issues, it is possible to identify the importance on ensuring that companies are able to collaborate and innovate as part of a larger community of learning where innovative products are developed in a less risky environment. Pooling of key technical knowledge and skills to co-innovate in the development of new products is essential and so the development of supply chains capable of rapidly innovating whilst acquiring new skills and knowledge is key to future performance and sustainability. Therefore, OL theory is linked to the issue of innovation and this paper will explore this interconnection. 3. Methodology This paper presents an applied research project which focuses on the development of a connected supply chain network of companies that work towards a shared vision; this vision will be to design, develop a new product whilst simultaneously creating a resilient and sustainable supply chain capable of breaking into a new market sector. The specific research question(s) being asked in this research programme were what is the nature of the supply chain collaboration and innovative activity that emerged from this project and, what were the key inter-company dimensions that enabled collaboration and innovation to take place. During this process of innovation and discovery, the respective OLC profiles were measured and a qualitative analysis was undertaken to determine whether there is a connection between the levels of innovation which emerge from the project and, the respective OLC profiles achieved by the new supply chain. As part of the project, a four-tier supply chain system was developed. This required the active involvement of four companies which had not previously worked together and who had very different skills and knowledge attributes. A feature of the research was to observe how each company collaborated in the project and, how they interacted and learned through the innovation which emerged from this project. The supply companies were targeted and selected by the project team as being a potential “good fit” with the project aims and objectives as well as having complementary and not competing technical skills so that the Page 15 of 20 Thomas et al., Cogent Business & Management (2017), 4: 1364057 https://doi.org/10.1080/23311975.2017.1364057 The composite OLC map shown in Figure 4 showed the overall OLC for the established supply chain (the innovation group). The results of this map were obtained by finding the median values from each of the individual company OLC maps and then moderating the resulting map with the other members of the facilitation team and innovation group to ensure that agreement was obtained from all in the team as to whether the composite OLC map accurately reflected the group dynamics after each workshop. Through analysing the composite OLC map, it is possible to identify a significant step change in performance after workshop 4. This was an important finding as it was at workshop 4 that the double-loop learning process was also introduced to the learning process. It is possible that the jump in the OLC scores may have been down to the adoption of double-loop learning but it is likely that it was this in combination with the strengthening team dynamics and greater levels of experimentation and trust being developed between the members that may have contributed to the improvement in the OLC scores after workshop 3. Also, it was observed that during workshop 4 and 5 that the level of innovation in the group jumped significantly where an additional and highly innovative product emerged from the group. Between workshops 1 and 3, the innovation group succeeded in producing a new patient sling which enabled a potential client to benefit from greater safety and security when being lifted and also providing greater flexibility and support when the patient was seated. This output was significant and one which further enhanced the team dynamics especially at the early stage of the innovation process. However, it was agreed that the sling product only made an incremental improvement in product innovation. In order to drive for increased levels of innovation, workshops 4 and 5 were restructured and the facilitation team pushed the innovation group to focus more on step changes in innovation focusing upon double-loop learning where the participants’ own design/engineering experiences and knowledge were utilised much more and integrated in to the existing design frameworks. This work paid off and the team eventually designed and developed a sling configurator product. Figure 5 shows the jump in OLC scores following Workshop 4. Further analysis is needed here to identify whether any single key characteristic was responsible or whether it was a more complex integration of a number of characteristic. This product idea was taken to experts in an NHS Figure 4. Composite OLC map. Region 1 First innovation stage Incremental innovation Basic learning Single loop learning Region 2 Second innovation stage Incremental innovation Advanced learning & application Double loop learning Page 16 of 20 Thomas et al., Cogent Business & Management (2017), 4: 1364057 https://doi.org/10.1080/23311975.2017.1364057 Figure 5. Supply chain organisational learning and innovation framework (Final SCOLIF). Page 17 of 20 Thomas et al., Cogent Business & Management (2017), 4: 1364057 https://doi.org/10.1080/23311975.2017.1364057 rehabilitation unit who confirmed that the configurator was genuinely innovative and marked a significant level of innovation in the area. 5. Development of the SCOLIF Up to this point, the facilitator team and innovation group used the research framework as a means of testing the process. This was in essence a first stage SCOLIF and was produced through an analysis of key literatures of KM and OL. This initial framework provided the research model from which the case study could be developed. A final workshop (workshop 6) was set up at the end of the project to identify lessons learnt and best practice developed during the project. The innovation group and facilitation team focused on the initial SCOLI Framework and analysed it with a view of identifying further enhancements and improvements that could be made to the framework following the experiences obtained from its initial implementation. The updated SCOLIF is presented in Figure 5 and shows the nature of the flow between the workshop content and, its interaction with the enabling elements of the framework that sit outside the workshop programme. The team believed that the focus on specific company selection and the associated planning around individual learning and the learning process was a critical factor towards developing an effective project plan. Likewise, the KM and Cultural development stages of the SCOLIF were able to yield key outputs as the workshops progressed and the innovative ideas and enhanced learning amongst the group were achieved. Key factors such as improved trust and collaboration emerged from the attention to the KM and Culture factors. The team also identified the need for strong and effective feedback loops and the need for the co-creation of teaching and learning content so as to maintain interest and moment in the innovation group. The workshop detail was fleshed out and a schematic of the workshop content is provided within the body of SCOLIF. Chiva’s OLC criteria are used to measure and monitor the learning capability of the supply chain and the feedback loop from the OLC scores provides an accurate platform to adjust and improve the framework on a continuous basis and, to identify early onset of company failure (as seen in SME 3). 6. Conclusions To answer the initial part of the research questions namely what was the nature of the supply chain collaboration and innovative activity that emerged from this project? It was observed that there was a clear connection seen between the growth in the level of innovative activity undertaken by the newly formed supply chain company and the corresponding OLC scores calculated. Growth in confidence and trust amongst the team members resulted in greater experimentation and risk taking brought on by more effective and frequent communication between the team members. Improved participative decision-making driven by the closer communication and trust amongst the team resulted in more innovative designs emerging at each workshop. The OLC profiling approach was a good predictor of early stage company engagement. In this instance, the issues around company SME 3 losing motivation and failing to engage was identified very early in the project and whilst the company eventually withdrew from the project, it was possible to identify problems much earlier in the project and for the team to draw in a replacement company as a result of the OLC profiling. This project was able to achieve its aim of developing a prototype product from the collaboration between these companies. The project also yielded two distinct product innovations. Whilst the initial product lacked significant levels of innovation, the project management team was very happy to see the levels of engagement by the companies in the project and, the way in which communication systems, dialogue between team members and participative decision-making developed as the project progressed. This proved to be key to future workshop delivery and, coupled with innovations in double-loop learning and changes made in content delivery at the later workshops, a more innovative product resulted from the collaboration by the end of workshop 5. Page 18 of 20 Thomas et al., Cogent Business & Management (2017), 4: 1364057 https://doi.org/10.1080/23311975.2017.1364057 The project yielded the production of an empirically derived SCOLI Framework (Figure 5). This is seen as a unique contribution to the field of OL and, provides a blueprint for companies and academics to further develop knowledge creation and organisational capabilities (Argote et al., 2001). To answer the second part of research question namely; What were the key inter-company dimensions that enabled collaboration and innovation to take place?, through observation of the companies, it was possible to identify a number of “cultural dimensions” which assisted in the success of the project. These dimensions can be considered as a blueprint for other companies wishing to embark on similar projects. These dimensions are: 1. A specific and deep-rooted understanding of SME limitations and constraints to OL and, a single-minded group approach towards overcoming these barriers and limitations. 2. An open-minded team of collaborating members willing to accept and act upon advice. 3. A training programme consisting of co-created workshop content between the innovation group and the facilitation team aimed at maintaining project momentum and participant engagement. 4. Inclusiveness, the recognition that all personnel within the group/team make a contribution and that this can be encouraged by training together with involvement, to make these efforts more effective 5. The availability of flexible, intelligent and innovative human resources leading to increased creativity and innovation within the group. 6. The presence of excellent inter-personnel attitudes and communications leading to enhanced group dynamics and trust. 7. The application of an immersive and collaborative working environment and the empowerment of the team to self-organise 8. The use of simple and clear design and management principles to direct the innovation activities. 9. The establishment of key leaders and effective leadership in the innovation group. 10. Adaptability in the development of new skills and capabilities together with the adoption of a customer-focused company orientation. Shared learning and improved trust amongst team members. Engaging with a small network of SMEs has its problems. SMEs suffer from resource capacity problems and so the release of staff to attend workshops was a continuous issue, one that required excellent inter-communication skills and working relationships to be established between the facilitation team and the innovation group. However, the motivation created and the excellent team dynamics developed through the workshops meant that the innovation group drove the project forward with key members of the group emerging as natural leaders. This project was seen as a success in part due to the judicious selection of the project partners (Yoon & Song, 2014). The facilitation group undertook a substantial period of time to identify company partners who have both the technical capabilities to contribute effectively to the innovation process but also, the interpersonal skills and the ability to set up trusted relationships quickly. This was achieved through knowing each of the key participants in the companies well and taking a calculated risk in seeing if the team members would gel and function as a coherent group. Also, through a “reverse facilitation” approach, workshop content (and delivery of such content) was defined by the innovation group and delivered by the facilitation team. This allowed for Open Innovation group dynamics to emerge whilst the facilitation team were able to guide and manage the innovation process. The establishment of co-created knowledge delivery and acquisition was a key output of this project. Page 19 of 20 Thomas et al., Cogent Business & Management (2017), 4: 1364057 https://doi.org/10.1080/23311975.2017.1364057 This project has yielded some interesting and original research outputs relating to OL and innovation development in supply chains. However, the authors are aware that the research has a number of limitations in both its scope and approach to the research work. Firstly, the work has only been undertaken with a limited set of four companies. There will need to be further work with multiple innovation groups in the future in order to develop a body of knowledge that can help enhance the existing body of knowledge in this area. The authors have immediate plans to roll out this work in to other supply chains and innovation groups. Funding The authors received no direct funding for this research. Author details Andrew Thomas 1 E-mail: [email protected] Peter Dorrington 2 E-mail: [email protected] Filipa Costa 2 E-mail: [email protected] Gareth Loudon 3 E-mail: [email protected] Mark Francis 1 E-mail: mfr[email protected] Ron Fisher 1 E-mail: [email protected] 1 Cardiff School of Management, Cardiff Metropolitan University, Cardiff CF5 2YA, UK. 2 Product Design Centre, Cardiff Metropolitan University, Cardiff CF5 2YA, UK. 3 Cardiff School of Art and Design Cardiff Metropolitan University, Cardiff CF5 2YA, UK. 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