FULL TEXT - International Journal of Contemporary Management

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M. Zastempowski, Innowacyjny potencjał ukrytych mistrzów…
M. Zastempowski, The Innovative Potential of the Hidden Champions…
The Innovative Potential of the Hidden Champions
of the Polish Economy
Maciej Zastempowski*
Key words: innovation, sources of innovation, innovative potential, hidden champions
Synopsis: The concept of the hidden champions, developed by H. Simon, indicates that apart form
large transnational corporations there are also other groups of companies that operate behind a veil of
discretion which play a crucial role in today’s business. These companies are characterized by the
dominating or leading position they have on their narrowly defined global markets. The analysis of
their functioning and development in the twenty-first century indicates unequivocally that the two main
pillars of their excellent market position and competitive advantage are globalization and innovation.
The second pillar – innovation – forms the background for the considerations included in this paper.
This paper is also an attempt to distinguish the major resource constituents that build the innovative
potential of the hidden champions of the Polish economy.
The very title of the paper signals the two key areas that will be discussed in it. The first
of them is the concept of the hidden champions of the Polish economy, the second their innovative potential.
As regards to the first area, a mention should be made that the concept of the hidden
champions of the contemporary economy is taken form H. Simon’s works [Simon, 1999;
Simon, 2009]. Its essence may be described by the statement, according to which, the observation of the processes of the contemporary global business builds the formula that apart
from large transnational corporations there are also other groups of companies that operate
behind a veil of discretion which play a crucial role in today’s business. That group is referred to as ‘the hidden champions’ and consists of companies that escape various research
and analyses. The majority of the hidden champions are entities that belong to the sector of
medium-sized and small businesses. Except from being unknown (which is frequently the
effect of their conscious decisions), another characteristic is that they occupy dominating or
leading positions on their global markets. According to the assumptions of H. Simon’s concept, the company that falls into the ‘hidden champion’ category has the following characteristics [Simon, 2009, p. 35]:
- takes the first, second or third position on the global market, or the first position on
its continent – its market position is primarily dependent on its market share (or on
its relative share),
- its revenue does not exceed three billion Euros,
- it has got little popularity in the public awareness (it stays anonymous).
H. Simon also indicates that the hidden character of this category of companies is in clear
contrast to the position that they occupy on their markets. Their market share on the global
market is rarely below 50% and some of them have a market share reaching as much as 7090% of the market. On average, their market share is usually twice bigger than their largest
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Introduction
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Dr hab. Maciej Zastempowski, Nicolaus Copernicus University in Torun.
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competitors’ [Simon, 2009, p. 23]. The global list of the hidden champions developed by
H. Simon includes approximately 2,000 companies and is still growing [Simon, 2009, p. 39].
The second area discussed includes the concept of the company’s innovative potential. It
needs to be emphasized from the beginning that in the context of the hidden champions of
the contemporary business, innovation itself, as pointed out by H. Simon, constitutes one of
the pillars forming their competitiveness. The concept of the company’s innovative potential
is defined in a variety of ways in subject literature. Some definitions describe the concept
very narrowly, others define it as part of an extensive model of managing innovation
[Poznańska, 1998, p. 40; Żołnierski, 2005, p. 6; Cohen, Lewinthal, 1990, p. 128; Rothwell,
Zegveld, 1985, p. 50]. As regards to the resource-based theory of the company [Penrose,
2000; Prahalad, Hamel, 1990; Barney, 2001], the company’s innovative potential is understood as the resources that the company should have at its disposal in order to create and
commercialize innovations effectively [Popławski, Sudolska, Zastempowski, 2008, pp. 147151; Zastempowski, 2010, pp. 113-118, and 153]. In other words, this is a peculiar configuration of material and immaterial resources which, if built and developed properly, enable the
company to implement innovations on the market effectively.
At the junction of the two problems a question arises: ‘based on what resources and what
configuration of those resources do the Polish hidden champions build their innovative potential? Also, we may ask if that effects their high level of innovativeness. Answering the
questions is the objective of this paper.
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Research methodology
The empirical part of the research, a fragment of which is presented below, was conducted in 2010 within a research project of the Ministry of Science and Higher Education,
no. N N115 008237 titled: ‘Immaterial values as a source of the hidden competitive advantage of the hidden champions of the Polish economy’ realized at the Faculty of Economic
Sciences and Management, Nicolaus Copernicus University in Toruń [Grego-Planer,
Popławski, Zastempowski, 2011].
Taking H. Simon’s definition of the hidden champions of contemporary business as
a starting point, a definition of the hidden champion of the Polish economy was developed. It
was proposed that such a company should meet the following criteria:
- it takes the first, second or third position on the European market and the position of
a leader on the Polish market,
- its revenue does not exceed three million Euros,
- it has got little popularity in the public awareness (it stays anonymous).
The main empirical research was conducted in cooperation with the Institute for Researching Public Opinion ‘Homo Homini’ Sp. z o.o. from Warsaw. The initial list of the Polish hidden champions included 71 entities – which was the intended target sample. Eventually, the research was based on a group of 41 Polish hidden champions. The respondents
were top managers from those companies (such as board presidents, board members, managing directors or executive directors).
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Empirical research results
In order to conduct the empirical part of the research, it appeared necessary to propose
a unique approach to the problems and a classification of resources possessed by the hidden
champions of the Polish economy. Therefore, for the purposes of the classification and
analysis of their innovative potential the whole of the possessed material and immaterial
resources were divided into the following six groups:
- physical,
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M. Zastempowski, Innowacyjny potencjał ukrytych mistrzów…
M. Zastempowski, The Innovative Potential of the Hidden Champions…
- reputational,
- organizational,
- financial,
- human and intellectual,
- technological.
Also, there were identified some elements within the analysed groups, that means the
possible constituents of the innovative potential of the hidden champions of the Polish economy. Attempts were made to define them in a way that would allow an incorporation of possible resource constituents identified by one of the six categories. It must be emphasised that
the analysis of possible constituents of the innovative potential of the Polish hidden champions was made with the assumption that, on the one hand, their list is not complete and some
other constituents worth researching could be added. However, on the other hand, the list is
extensive enough to form the basis for researching the innovative potential of the hidden
champions of the Polish economy.
During this stage of the main empirical research, the hidden champions surveyed, were
asked to evaluate the degree to which concrete constituents of the six resource categories
impact on the building of their innovative potential. The respondents evaluated the degree of
the impact according to the scale that is shown in Table 1. In order to determine the ultimate
direction of impact of each resource, the weighted arithmetic mean was calculated [Krzysztofiak, Urbanek, 1975, p. 167] and it was named as the impact factor S [Karaszewski, 2001, p.
304-305].
Tab. 1. The scale of the impact strength
5
4
3
2
1
It has a decidedly positive impact
It has rather a positive impact
It has no impact
It has rather a negative impact
It has a decidedly negative impact
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Source: elaborated by the author.
Therefore, it can be said that the innovative potential of the hidden champions of the Polish economy constitutes a specific configuration of tangible and intangible assets and is
composed of a few constituents and each one of them is essential. However, it must be underlined that the level of essentiality is not always equal. In such a situation, the company
should focus its power and resources only on some selected constituents while managing the
whole of its potential. Following that way of thinking, in the process of managing the building of the innovative potential of the Polish hidden champions it is really worth concentrating on its key constituents. Hence another question arises that needs to be answered: ‘what is
understood by a key constituent and how shall we determine it?’ A method that may be useful in the process of determining the number of key constituents may be the ABC method
based on the 20:80 principle stemming from the V. Pareto’ concept [Krajewski, Ritzman,
2002, pp. 601-602; Stevenson, 1999, pp. 565-567]. Within his concept, a general rule is that
20% of the system constituents determine 80% of the system effects [Martyniak, 1996, p.
130-134]. A mention must be made that the 20% indicated refers not to constituents selected
freely but only to the most important ones. Consequently, based on the above concept,
firstly, the resources examined were ranked according to their impact factor S (from the resources with the strongest impact factor to those with the weakest one), and, secondly, there
were identified the key constituents of the innovative potential of the Polish hidden champions that were researched. In the analysed group (with the total of 144 resource constituents)
29 items made the 20%. However, due to the fact that the 29 th position was occupied by three
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constituents with the same indication (S = 4.07), ultimately, 31 items were classified as key
constituents. The results obtained are shown in Table 2.
Tab. 2. Key constituents of the innovative potential of the hidden champions of the Polish
economy
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
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21
22
23
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24
26
27
28
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25
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29
Possessing unique abilities
Possessed machinery and equipment
Education of employees
Scope of the internationalization of the
company’s activity
Knowledge, experience and skills of engineering staff
Knowledge of foreign languages among
managerial staff
Knowledge and skills applied in developing
new technologies
Flexibility of the organizational structure
Knowledge of customers’ needs, preferences
and behaviours
Ability to predict changes in customers’
needs, preferences and behaviours
Knowledge and skills of R&D staff
Modern technical equipment in R&D units
Flexible machinery
Knowledge and skills of managerial staff
Ability to gain and apply knowledge
Possessed and cumulated knowledge (patents, protected intellectual property, commercial secrecy, etc.)
Company’s reputation
Employees’ creativity
Ability to predict changes on the serviced
markets
Knowledge and skills applied in creating
new products
Acknowledged quality of the company’s
products
Size of the R&D budget
The company’s financial potential
Attitude of managerial staff towards innovation
Knowledge of the current situation on the
serviced markets
Leadership skills of managerial staff
Possessing loyal customers
Level of technical culture among employees
Knowledge and skills of staff responsible for
managing the product
Technological
Human and
intellectual
Financial
Organizational
Reputational
Constituents
No.
Physical
Resources
X
S
4.54
4.46
4.44
X
X
X
4.41
X
4.41
X
4.34
X
4.34
X
4.32
X
4.32
X
4.32
X
X
X
4.24
4.24
4.24
4.22
4.22
X
4.22
X
4.20
4.20
X
4.20
X
4.17
X
X
X
X
4.15
X
X
4.15
4.12
X
4.12
X
4.12
X
X
4.10
4.07
4.07
X
4.07
X
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M. Zastempowski, Innowacyjny potencjał ukrytych mistrzów…
M. Zastempowski, The Innovative Potential of the Hidden Champions…
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31
Possession of the company’s own R&D unit
Technological advancement of applied technologies
X
4.07
X
4.07
Source: elaborated by the author on the basis of the research results.
Analysing the above results it must be noted that the first three key constituents of the innovative potential indicated by the Polish hidden champions includes the possession of
unique abilities, possessed machinery and equipment, and the education of employees. The
next key constituents were the scope of internationalization of the hidden champions’ activity, and knowledge, experience and skills of the engineering staff. Knowledge of foreign
languages among managerial staff, as well as knowledge and skills applied in developing
new technologies, are also perceived as important. The last three of the first ten of the key
constituents of the innovative potential indicated by the surveyed Polish hidden champions
obtained the same evaluations. These were flexibility of the organizational structure, knowledge of customers’ needs, preferences and behaviours and ability to predict changes in customers’ needs, preferences and behaviours. Other essential constituents of innovative potential include knowledge and skills of R&D staff, modern technical equipment in R&D units,
and flexible machinery. The next three constituents obtained the same indications and these
were knowledge and skills of managerial staff, ability to gain and apply knowledge, and
possessed and cumulated knowledge. Similarly, the further three constituents (company’s
reputation, employees’ creativity, ability to predict changes on the serviced markets) had the
same indications. The knowledge and skills in creating new products was also found important. In the opinion of the Polish hidden champions the following areas are also important:
acknowledged quality of the company’s products and size of the R&D budget. The key constituents also include the company’s financial potential, attitude of managerial staff towards
innovation, and knowledge of the current situation on the serviced markets. The leadership
skills of managerial staff constituent was also emphasized. The last of the key constituents of
the innovative potential of the Polish hidden champions were possessing loyal customers,
level of technical culture among employees, knowledge and skills of staff responsible for
managing the product, possession of the company’s own R&D unit and technological advancement of applied technologies.
Conclusions
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The results obtained enable us to formulate the following general conclusions:
- the majority of the key constituents of the innovative potential the Polish hidden
champions are immaterial resources (26 out of the total of 31 key constituents belong
to that category),
- within the analysed groups, as seen from the perspective of building the innovative
potential of the Polish hidden champions, the first position was taken by human and
intellectual resources, the second by technological resources and then there were organizational, reputational, financial and physical resources, indicated.
- what must be underlined is the key role that knowledge plays in building the innovative potential of the Polish hidden champions. It occurs in almost half of the indicated key constituents of the innovative potential.
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Innowacyjny potencjał ukrytych mistrzów polskiej gospodarki
Koncepcja tajemniczych mistrzów gospodarki, autorstwa H. Simona, wskazuje, iż we
współczesnej gospodarce oprócz silnej roli odgrywanej w niej przez wielkie korporacje
transnarodowe, istotne znaczenie ma również nie szukająca rozgłosu w mediach
i pozostająca w cieniu grupa przedsiębiorstw, których cechą charakterystyczną jest zajmowanie dominującej, bądź wiodącej pozycji na swoich, wąsko definiowany, rynkach globalnych. Analiza ich funkcjonowania i rozwoju w XXI wieku, wskazuje dość jednoznacznie, iż
wśród dwóch głównych filarów ich doskonałej pozycji i przewagi konkurencyjnej wymienić
należy globalizację oraz innowacyjność. I właśnie ten drugi filar – innowacyjność - stanowi
główne tło niniejszych rozważań. W artykule, podjęto bowiem, próbę ukazania kluczowych
składników zasobowych budujących potencjał innowacyjny tajemniczych mistrzów polskiej
gospodarki.
Badania empiryczne, których fragment jest tu omawiany, przeprowadzone zostały
w 2010 roku w ramach projektu badawczego Ministerstwa Nauki i Szkolnictwa Wyższego nr
N N115 008237 pt. „Niematerialne wartości źródłem ukrytej przewagi konkurencyjnej tajemniczych mistrzów polskiej gospodarki” realizowanego w Wydziale Nauk Ekonomicznych
i Zarządzania Uniwersytetu Mikołaj Kopernika w Toruniu.
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Opierając się na teorii zasobowej przedsiębiorstwa przyjęto, iż jako potencjał innowacyjny traktuje się te zasoby, którymi przedsiębiorstwa powinny dysponować, aby skutecznie
kreować i komercjalizować innowacje. Innymi słowy jest to pewna konfiguracja zasobów
materialnych i niematerialnych, które w odpowiedni sposób budowane i rozwijane pozwalają
przedsiębiorstwu skutecznie wdrażać innowacje na rynku. Jednym z celów szczegółowych
projektu była próba identyfikacji tej specyficznej konfiguracji zasobowej u tajemniczych
mistrzów polskiej gospodarki. Jego realizacja pozwoliła na sformułowanie następujących
wniosków:
- zdecydowana większość kluczowych składników potencjału innowacyjnego tajemniczych mistrzów polskiej gospodarki stanowią zasoby o charakterze niematerialnym,
- wśród poszczególnych grup analizowanych zasobów na pierwszym miejscu znalazły
się zasoby ludzkie i intelektualne, na drugim zasoby technologiczne, zaś na kolejnych: organizacyjne, reputacyjne, finansowe i fizyczne,
- zdecydowanie należy także podkreślić kluczową rolę wiedzy w budowaniu
potencjału innowacyjnego tajemniczych mistrzów polskiej gospodarki. Jej przejawy
bowiem znaleźć można w blisko połowie wskazanych kluczowych składników
potencjału innowacyjnego.