Building more entrepreneurial organizations through external innovation contests

Firms are increasingly adopting innovation contests to obtain ideas for new products and services from external parties, but many firms may not be suffi- ciently entrepreneurial to benefit from those ideas. Using an inductive longitu- dinal case study of three financial service firms, we explore the value of external innovation contests for less entrepreneurial and stagnant firms. Our findings indicate that stagnant firms indeed struggle to benefit from ideas gen- erated through external innovation contests. However, we also show that firms undergo a structural change process toward higher entrepreneurial orientation through such contests. In particular, they become aware of an organizational readiness gap and act on it by (i) developing entrepreneurial skills, (ii) collaborating with external partners, and (iii) adapting organizational design and governance. Based on our findings, we propose an original frame- work for a corporate entrepreneurial learning process triggered by the innova- tion contest experience