Radical innovation with limited resources in high-turbulent markets: The role of lean innovation capability

How do firms radically innovate with limited resources in high-turbulent environments? We examine this question via in-depth comparative case studies of ten start-up firms in diverse high-turbulent markets. Evidence shows that the perceived value of resources depends on two contextual factors: market type and business model type. More interestingly, firms that see resource limitation as an enabler rather than an inhibitor seem to have a distinct capability that we call lean innovation capability. It is defined as a distinct capability that reflects a firm's ability to experiment with ideas that meet core customer needs by constantly iterating the initial offering with the purpose of validating the learning through continuous market feedback to achieve sustainable performance. The three main qualities of these companies are (1) adopting abductive reasoning, (2) embracing a validity-driven approach, and (3) operating in the overlapping spaces of fundamental customer needs, business viability and technological feasibility. Lean firms adopt design-thinking methodology and act like bricoleurs, such as make-do by applying combinations of the available resources through rapid prototyping to new problems and opportunities in an experimental way. Briefly, lean innovation capability enables firms to manage limited resources by reconfiguring and reallocating existing resources, and, thereby, helps empower resource-limited radical innovation.