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Despite the growing diversity of customer needs, little empirical evidence would guide managers to leverage customer need diversity (CND) for radical innovation. Building on the knowledge-based view and dynamic capabilities, the authors explore relationships among CND, strategic flexibility, big data analytics capabilities, and radical innovation performance. With 308 survey responses from innovation managers, the authors find that CND impacts radical innovation performance via (1) mediation through strategic flexibility and (2) moderation by volume, variety, and velocity capabilities associated with big data analytics. The moderation effects of volume and velocity capabilities are positive and negative simultaneously, depending on the purpose for which CND is utilised. Therefore, to leverage customer need diversity, firms need to build strategic flexibility and exercise caution when utilising big data analytics capabilities.

Use big data to leverage customer need diversity for radical innovation