Microfoundations of dynamic design capabilities: An empirical analysis of "excellent" Italian design firms

This article investigates how managers of firms awarded for their design excellence build organizational-level design-related dynamic capabilities by selecting designers with specific individual capabilities and managing how and the extent to which users of the firms' products are actively involved in design activities. The following two types of dynamic capabilities were studied: user-centered design (UCD) and meaning innovation (MI). Data from a survey of managers of 106 Italian firms recognized for their products' "design excellence" during the 2011-2016 period were analyzed using a structural equation model (PLS-SEM). The results suggest that managers seeking to build dynamic UCD capabilities prefer designers with holistic thinking capabilities over those with ideation and envisioning capabilities and value user involvement throughout the design process. In contrast, managers seeking to build dynamic MI capabilities search for designers with holistic thinking and envisioning capabilities and avoid ideation capabilities. They also consider the value of involving users in the design process to be limited. This study is among the first to present the results of an empirical investigation of the microfoundations of dynamic design capabilities. Limitations of the research and prospects for future work are discussed. In particular, our findings point to the need for additional studies that further specify the routines and associated competencies that managers responsible for design employ to attract, nurture, integrate and exploit the micro-level capabilities required for UCD and MI. Given that some of these microfoundations were found to be differentially important, unimportant, or even detrimental to the development of either UCD or MI, an important remaining question is the extent to which, and how, a single firm can accommodate and effectively exploit both of these dynamic design capabilities.