Original Study: Paradies, C. (2022): Too much on the plate? How Executive Job Demands Harm Firm Innovation and Reduce Share of Exploratory Innovation. In: Academy of Management Journal, Vol. 65, No. 2, p. 606-633.
The study in one sentence
This study shows how a top management team under high job demands negatively impacts the innovation outcome of a company.
Interesting for people who…
… want to learn what harms or supports a company’s innovation performance.
What to remember
Whereas most research has focused on the impact of personality or behavioral attributes of C-level teams, executive job demands are an overlooked situational factor so far. It’s understood as a mix of task challenges, performance challenges and executive aspirations. High executive job demands reduce the cognitive flexibility of a C-Level management team to see new opportunities and possibilities. They tend to stay with what is familiar to them, not dare to take much risk, centralize and control decision-making, and copy what is known as best practices of competitors, instead of investing in the new. Although job demands are in general very high for top executives, different job environments place different job demands on executives. The study delivers clear empirical evidence that the higher executive job demands are, the more they harm a company’s innovation performance. This is particularly the case for exploratory innovations, i.e. the long-term innovations that really create something new (versus the exploitative innovations that improve what is there). This effect is exacerbated by central decision-making, a control culture and missing diversity in the executive team. Interestingly, an innovation culture did not help. Only a high diversity in the executive team was actually able to weaken this effect.
The most insightful sentence
«Our findings show that executive job demands […] significantly and negatively influences a firm’s overall innovation and share of exploratory innovation.»
The most provocative sentence
«Executives under low job demands may also seek to create an impression that they are under high job demands; conversely those under high job demands may focus on conveying confidence and calm.»
Consequences for managerial practice
In todays’ culture of thinking “busyness” is a sign of importance and status, every executive should be very aware about the negative influence of high job demands on the company’s innovation outcome. Further, companies might carefully reconsider all their investments in an innovation culture, e.g. agile management. If a top management team is under high job demands, an innovation culture will not help. What seems to help instead is to diversify and broaden the top management team’s decision body. For example, by installing a strategic sounding or advisory board, consisting of internal and external stakeholders and experts that vary in their gender, age, expertise, tenure and perspective. This compensates for the missing cognitive flexibility in top management teams, allowing executives to see opportunities and take risks for exploratory long-term innovations.
Food for forward thinking…
If high-level executive job demands have a negative impact on a firm’s innovation performance, wouldn’t it be wise for companies to restrict the roles, responsibilities or engagements executives take on beside their management jobs? (E.g. founding start-ups, BoD mandates, etc.?) Or else include focus, attention and concentration tests in executive assessments? What are your experiences? Thank you for sharing!