Coviello - abstract
Research in marketing has shown that the customer portfolio influences new product development (NPD) outcomes for younger and smaller firms. Little is known, however, about the composition of that portfolio and the roles customers take in NPD. This is particularly so for major innovation, a context in which customer involvement is generally regarded as difficult and even inappropriate. In this article, an inductive process method is used to study how six major innovations are developed for B2B markets by young and small firms. First, a non-conventional approach to NPD is identified; one where customers participate throughout the process. These results are used to develop a taxonomy that links ten customer participation roles with five different NPD activities. Second, three types of capabilities relevant to developing major innovation are identified by comparing the NPD process of the projects that succeeded with those that failed. While all six firms demonstrate some level of both ordinary and dynamic capabilities, those with successful innovations are distinguished by a capability that is effectual and entrepreneurial rather than adaptive. Since entrepreneurial behaviour is not restricted to new or small firms, the authors discuss implications for research and NPD practice, informed by insights from the entrepreneurship literature.