Creating Ideas for Innovation: Effects of Organizational Distance on Knowledge Creation Processes

Innovation is to a large extent considered a social and communicative process, and input from other individuals potentially improves the generation of novel and valuable ideas also in the early stages of idea creation and development. Both colleagues inside organizations and external parties have frequently been proposed as important sources of information and knowledge within this part of the innovation process. Other contributions addressing social networks and innovation bring into focus the potentially negative effects that certain network structures may have on innovation, pointing to inconsistencies in received theory. In order to address these inconsistencies, an empirical study of ideation in a Swedish multinational firm was performed, taking into account two different knowledge creation processes – combination and in‐depth analysis – and their inter‐relationships with organizational distance between contributing individuals. Data was collected using a survey and was analysed using regression models. It was found that different levels of organizational distance correlate with different knowledge creation processes. In‐depth analysis occurred more often with employees' close colleagues, whereas the combination of existing ideas and information was more frequent in interaction with employees' close colleagues and with external parties. Both these interaction patterns were also found to be positive for the generation of patents, whereas no such relationship could be seen when individuals interacted with colleagues in other departments in the same firm. The findings have implications for theory on cognitive distance, and also suggest that management needs to facilitate different types of collaboration and networking when aiming to facilitate and support ideation, taking into consideration the type of innovation aimed for, as well as its supporting knowledge creation processes.