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Logistics innovation
development: a micro-level
perspective
Alex da Mota Pedrosa
Center of Integrative Innovation Management,
Department of Marketing and Management,
University of Southern Denmark, Odense, Denmark

Vera Blazevic

Logistics
innovation
development
313
Received 10 March 2014
Revised 12 May 2014
19 November 2014
Accepted 19 November 2014

Institute for Management Research,

Radboud University, Nijmegen, The Netherlands and
Technology and Innovation Management Group,
RWTH Aachen University, Aachen, Germany, and

Claudia Jasmand
Imperial College London, London, UK
Abstract
Purpose The purpose of this paper is to investigate the microfoundations of customer knowledge
acquisition during logistics innovation development. Specifically, the authors explore the activities and
behaviors of employees with customer contact (i.e. boundary-spanning employees (BSEs)) to deepen
and broaden their knowledge about customers for the development of innovations.
Design/methodology/approach Qualitative research based on multiple semi-structured interviews
with BSEs of six logistics service providers was conducted to explore the deepening and broadening of
customer knowledge during innovation development. Data were analyzed for similarities and differences
in BSEs knowledge acquisition and their interactions with customers across six innovations.
Findings Results show that BSEs engage sequentially in deepening and broadening customer
knowledge throughout the logistics innovation development process. Yet, the specific sequence
depends on the type of innovation developed (customized vs standardized). Customer knowledge tends
to be deepened in one-on-one interactions, while knowledge tends to be broadened in interactions with
numerous and diverse customer firm members.
Research limitations/implications In general, this paper contributes to the understanding of the
individuals behaviors underlying organization-level phenomena, such as logistics service providers
customer knowledge acquisition.
Practical implications Findings illustrate that BSEs are well advised to concentrate on either
deepening or broadening their customer knowledge in a single stage of the logistics innovation
development process but switch between these two knowledge acquisition approaches from
stage-to-stage to leverage customer interaction.
Originality/value By investigating firms customer knowledge acquisition at the individual level,
this paper addresses the calls in the literature for more research into the microfoundations of
organizational phenomena.
Keywords Logistics innovation, Microfoundations, Knowledge acquisition,
Customer contact employees, Boundary-spanning, Broad knowledge, Deep knowledge
Paper type Research paper

Introduction
Services are increasingly important for the global economy and innovations are
essential for firms, such as logistics service providers (LSPs), to create new markets to

International Journal of Physical

Distribution & Logistics
Management
Vol. 45 No. 4, 2015
pp. 313-332
Emerald Group Publishing Limited
0960-0035
DOI 10.1108/IJPDLM-12-2014-0289

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address the demand for advanced logistics services (Flint et al., 2008; Hertz and
Alfredsson, 2003). Examples of such logistics innovations are self-service kiosks for the
delivery and pick-up of parcels or a 24/7 online system for ordering medical equipment
to be delivered directly to the point of use (e.g. operating room). Logistics research
has emphasized the need to enhance our understanding of logistics innovation
development to enhance LSPs innovation performance (Busse and Wallenburg, 2011;
Flint et al., 2008; Grawe et al., 2012). Furthermore, research shows that firms aiming
to develop logistics innovations to produce superior value must be able to identify,
acquire, and understand their customers needs (e.g. da Mota Pedrosa, 2012).
Accordingly, extant literature emphasizes the importance of firms customer
interaction during innovation development to increase adoption rates and enhance
firm performance (e.g. Flint et al., 2008; Wagner and Sutter, 2012; Blazevic and Lievens,
2008). Such customer interaction often becomes manifested at the micro-level of an
organization and acquiring customer knowledge depends on the actions and
practices of organizational members such as boundary-spanning employees (BSEs)
who are those individuals in firms who interact with customers (e.g. Felin and Hesterly,
2007). However, empirical research into how BSEs engage in acquiring customer
knowledge to fuel logistics innovation development is limited (Gupta et al., 2007; Melton
and Hartline, 2010).
Extant research into customer involvement in service innovation development has
mainly investigated organizational and project-level antecedents, such as knowledge
integration mechanisms (e.g. de Luca and Atuahene-Gima, 2007), types of acquired
external knowledge (e.g. Prabhu et al., 2005), and customer knowledge acquisition
processes (e.g. Flint et al., 2008). However, research into customer involvement has
rarely focused on the individual level, although research also emphasizes the critical
role of BSEs in leveraging a firms innovation performance (e.g. Flint et al., 2008). BSEs
are important in developing innovations because they are closest to the firms
customers and thus might serve as potential knowledge brokers (Atuahene-Gima, 1996;
Ordanini and Parasuraman, 2011). Thus, BSEs are often the employees who identify
customer needs first (Ordanini and Parasuraman, 2011). Consequently, investigating
BSEs engaged in acquiring customer knowledge during logistics innovation
development should help to reveal how and when BSEs can contribute to logistics
innovation development.
Furthermore, innovation literature focuses on the acquisition of deep and broad
external knowledge of firms as components of innovation and their distinct impact on
innovation performance (e.g. Wu and Shanley, 2009). For example, Prabhu et al. (2005)
and Laursen and Salter (2006) demonstrated that knowledge acquisition strategies,
such as deepening and broadening, influence firms ability to innovate. However,
little is known about how BSEs implement these two strategies at the customer touch
point to enhance firms innovation performance and how these two strategies are
interrelated. Thus, current research provides an incomplete understanding of external
knowledge acquisition during innovation development at the micro-level of the firm
(e.g. Vermeulen et al., 2007).
A better understanding of BSEs activities during logistics innovation development
is also relevant for our understanding of organizational-level phenomena, such as
customer integration in innovation (e.g. Hayland et al., 2003; Panayides, 2007), as it
helps to explain differences in organizational constructs (e.g. Felin and Hesterly, 2007).
Organizational members, such as BSEs, are creators of new knowledge and therefore
provide the microfoundation of organizational knowledge acquisition and creation

(Argote and Ingram, 2000; Ordanini and Parasuraman, 2011). As such, logistics
innovation development succeeds only insofar as BSEs engage in the acquisition of
customer knowledge during each stage of the innovation development process.
This study seeks to investigate how and when BSEs engage in acquiring
customer knowledge, particularly in deepening and broadening this knowledge, during
the logistics innovation development process. Thus, it deepens and broadens our
understanding of the microfoundational processes of firms knowledge acquisition
relevant for logistics innovation development. Furthermore, our study contributes
to the scarce literature on innovations in the logistics service industry by
highlighting how BSEs contribute to LSPs acquisition of customer knowledge to
leverage innovation development.
The next section provides a review of the relevant literature on customer integration
in innovation development and knowledge acquisition strategies. Subsequently,
we describe our research methodology and the results of our analysis. Finally, we
highlight the studys theoretical and managerial implications, limitations and
recommendations for future research.
Literature review
A variety of firms operate in the logistics service industry. Some of those companies
just transport goods, while others offer more complex services such as warehousing,
assembling, reloading, and tracking of goods (e.g. Hertz and Alfredsson, 2003; Persson
and Virum, 2001). In the literature, companies offering more complex services are often
referred to as LSPs (Wagner and Sutter, 2012). Their activities often involve long-term
customer relationships and investments into equipment and employees to address
specific customer needs (e.g. Hertz and Alfredsson, 2003). Therefore, LSPs tend to offer
customer-specific logistics solutions (e.g. Wagner and Sutter, 2012).
LSPs increasingly face severe competition due to globalization and deregulation as
well as increasing customer demands, which forces them to develop innovations
(e.g. da Mota Pedrosa, 2012; Hertz and Alfredsson, 2003). Yet there is little research that
investigates innovation development in the logistics service industry (Busse and
Wallenburg, 2011; Wagner and Sutter, 2012). The few existing empirical studies on
logistics service innovation have separately investigated either the importance of
customers for LSPs in developing logistics innovations (e.g. Chapman et al., 2003; Flint
et al., 2005; Wagner and Sutter, 2012), or the importance of individuals for
organizational learning at LSPs (e.g. Panayides, 2007), or how to manage logistics
innovation processes (e.g. Busse and Wallenburg, 2011; Flint et al., 2005). Moreover,
innovation research has separately examined the relationship between firms
knowledge acquisition strategies and innovation performance. Although the
literature indicates the importance of customers and the acquisition of knowledge
for LSPs innovation success, there is very limited research on how the acquisition of
customer knowledge becomes manifested at the micro-level of the firm (Lane et al.,
2006; Panayides, 2007). Therefore, gaining a profound understanding of BSEs
activities and practices to acquire customer knowledge during the logistics innovation
development process is important.
Logistics innovation development process
While research into the logistics innovation development process and its phases is very
scarce (e.g. Busse and Wallenburg, 2011; da Mota Pedrosa, 2012), general agreement

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exists that developing logistics innovations is a dynamic process that develops over
time and requires firms to engage in different activities across different stages
(Busse and Wallenburg, 2011; Yadav et al., 2007), such as idea generation, concept
development, business analysis, and implementation stage. Accordingly, general
knowledge on a typical innovation development process also applies to developing
logistics innovation. The idea generation stage is a creative process that aims to
identify unfulfilled customer needs and, consequently, to develop ideas for new
products/services (e.g. Busse and Wallenburg, 2011; Yadav et al., 2007). The concept
development stage refers to the conversion of an idea into a concept of a logistics
innovation that can be launched (da Mota Pedrosa, 2012; Yadav et al., 2007). During the
business analysis stage, LSPs evaluate the potential success of a logistics innovation
to determine whether the development should be continued (Alam and Perry, 2002;
da Mota Pedrosa, 2012). Finally, the implementation stage refers to the launch of an
innovation and the exploitation of additional features to improve it (Blazevic and
Lievens, 2008).
Customers and BSEs integration in logistics innovation development
Recent logistics innovation research has stressed that service firms, such as LSPs, need
to increase their engagement in external knowledge acquisition to leverage innovation
development (e.g. Flint et al., 2008; Wagner and Sutter, 2012). Yet only a few studies
focus on customer interaction during the entire innovation development process
(e.g. Melton and Hartline, 2010). For example, they reveal that LSPs interact with
customers during the process and customers contribute to the process by taking on
different knowledge co-producer roles with the firm (e.g. Blazevic and Lievens, 2008;
da Mota Pedrosa, 2012). Overall, it seems that LSPs benefit from customer interaction
during innovation development (Flint et al., 2008; Wagner and Sutter, 2012).
BSEs are considered one of the most critical sources for acquiring customer
knowledge (Flint et al., 2008). However, empirical research into BSEs roles in logistics
innovation development is scarce (Ordanini and Parasuraman, 2011; Panayides, 2007)
and provides conflicting results ( Johne and Storey, 1998). Some studies reveal that
BSEs are reluctant to engage in innovation development as doing so tends to increase
their workload (e.g. Johne and Storey, 1998), whereas others show that BSEs serve as a
critical source in acquiring customer knowledge for logistics innovation (e.g. Flint et al.,
2008). Despite BSEs importance, we lack an understanding of how and when BSEs
acquire customer knowledge during logistics innovation development (Flint et al., 2008;
Gupta et al., 2007).
Knowledge acquisition strategies
Innovation literature indicates that a firms external knowledge acquisition strategy
influences its innovation performance (Katila and Ahuja, 2002; Laursen and Salter,
2006). In this context, previous research has focused on two knowledge acquisition
approaches deepening and broadening for innovation development (Katila and
Ahuja, 2002). Knowledge deepening relates to the amount of knowledge a firm detects
and assimilates in a specific area, while knowledge broadening refers to the number
of areas in which a firm gathers knowledge (e.g. Prabhu et al., 2005). Research
indicates that knowledge deepening enhances firms expertise in specific areas, which
contributes to the success of innovation development (Prabhu et al., 2005). Knowledge
broadening positively influences firms innovation performance because a broad

knowledge base provides firms with more flexibility and combination opportunities,
which enhances the ability to develop innovations (Wu and Shanley, 2009). While prior
research has predominantly considered acquiring deep and broad knowledge as two
distinct firm approaches (e.g. Prabhu et al., 2005), a few studies examined their joint
effect on firm or innovation performance (e.g. Katila and Ahuja, 2002). Yet we lack an
understanding of how employees, such as BSEs, engage in those knowledge acquisition
activities, which may reveal how both approaches are interrelated during innovation
development.
Although extant innovation research addresses external knowledge acquisition as
an organizational phenomenon, it originates from individual behavior (Felin and
Hesterly, 2007; Gupta et al., 2007). Nonaka and Konno (1998) discuss the hierarchy of
knowledge creation in that the individuals knowledge is embraced by the collective
once the individual joins a team. In turn, the teams knowledge is embedded within the
organization. Hence, the individual comprises the microfoundation of knowledge
creation within the greater context of innovation teams and the organization. Other
empirical studies show the importance of BSEs in innovation development because
they identify customer needs, triggering innovations and promoting and executing
logistics innovations (e.g. Panayides, 2007; Wagner and Sutter, 2012). Thus, BSEs may
serve a critical role in acquiring deep and broad customer knowledge during logistics
innovation development. Therefore, knowledge about the microfoundations that
matter for innovation success is necessary (e.g. Vermeulen et al., 2007). Without such
knowledge, research runs the risk of testing propositions that do not correspond
to the underlying theoretical concept. Therefore, we study how and when BSEs
engage in deepening and broadening customer knowledge during logistics innovation
development.
Methodology
With the aim to enhance our understanding of how and when BSEs engage in
acquiring customer knowledge during the logistics innovation development process at
LSPs, this research is of an exploratory nature which motivated us to adopt a
qualitative research approach (Strauss, 1990). Due to the theoretical gap in extant
research and the focus on interactions (e.g. customers-BSEs) and knowledge acquisition
processes and activities, interviews are useful for this study (e.g. Blumberg et al., 2005;
Maitlis, 2005). We conducted semi-structured interviews with BSEs to gain detailed
insight into how and when they deepen and broaden customer knowledge.
We used a multi-level process to identify logistics innovations that fit the aim of our
research. First, we selected LSPs listed in the top 100 logistics firms in Europe because
chances tend to be higher that large firms have BSEs who sufficiently engage in
logistics innovation activities. Second, an internet search was conducted to identify
those LSPs of the top 100 which had received innovation awards to ensure that
innovation is a key activity in these firms. Third, the resulting list of 20 LSPs was
discussed with two academic experts and two industry experts. They agreed that the
20 LSPs were well-known for their innovativeness. We contacted those LSPs to gauge
their interest in participating in this study and the existence of a suitable logistics
innovation. Finally, we identified six suitable logistics innovations for which the LSPs
agreed to participate in our study. LSPs that did not agree to participate in this study
mentioned sensitivity of their logistics innovation as a reason. Table I provides
a detailed overview of the actions which we took to ensure the transferability,
truth-value, and traceability of this research.

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Criteria
Transferability
Theoretical aim

318

Unit of analysis
Truth-value
Categorization and abstraction
Comparison and dimensionalization

Iteration

Refutation

Traceability
Justification of informant selection
(i.e. interview partners)

Table I.
Quality criteria
applied

Applied actions
Exploring the nature of BSEs knowledge acquisition and
corresponding BSE-customer interactions throughout the entire
innovation development process
The (direct and indirect) interactions between BSEs and
customers during the development of a logistics innovation
Interview data was analyzed by two independent researchers
The data was analyzed for similarities and differences in BSEs
knowledge acquisition and corresponding BSE-customer
interactions during the development of a logistics innovation
and across the six innovations
Results were organized in tables. The tables are available upon
request from the corresponding author
Emerging themes in the data were gathered in aggregate
dimensions in line with relevant literature (e.g. open innovation)
and labeled accordingly (deepening and broadening customer
knowledge)
All interviews were tape-recorded, immediately transcribed,
and sent back to the interviewees for review. Results of the data
analysis were discussed with interview partners

Specified selection criteria:

(1) BSEs had to be responsible for the innovation development
process or took over a key role throughout the development
process
(2) BSEs had to be knowledgeable about the logistics innovation
development process
(3) BSEs had to be experienced in customer integration during
innovation development
(4) BSEs had to suggest other suitable BSEs involved in the
logistics innovation development process
Data collection guideline
Based on preliminary insights gained during meetings with
managers responsible for innovations and literature, a semistructured interview guideline was developed and subsequently
tested (following e.g. Easterby-Smith et al., 2002). It addressed:
(1) Background of key informants (e.g. Could you please tell us a
bit about yourself?)
(2) The selected innovation (e.g. Could you describe the
innovation?)
(3) Innovation development process (e.g. Please describe the
development of the innovation)
(4) Customer knowledge acquisition (e.g. How did you interact
with customers to gain new knowledge [e.g. about their needs]
throughout the innovation process?)
(5) Additional key informants (e.g. Which colleague had an
important role during the innovation process?)
Changes in the research design and NA
data collection process
Sources: Based on da Mota Pedrosa et al., 2012; Halldorsson and Aastrup, 2003)

The participating LSPs differ in terms of size, industry specialization, and the type of
logistics innovation they offered. The identified patterns of BSEs customer knowledge
acquisition activities are rather general and unlikely to be a specific phenomenon
for a certain type of LSP or customer relationship. The six logistics innovations of the
participating LSPs, summarized in Table II, provide a good representation of logistics
innovation for several reasons. First, our sampling procedure ensures that we selected
firms that are well suited to study logistics innovation development and customer
integration. Second, all logistics innovations developed aimed to address demanding
market needs and to gain competitive advantage. Consequently, the innovations
attempted to address increasingly challenging customer demands, which require BSEs
to engage in intensive customer interactions to produce superior value. BSEs are well

LSP Short description of the developed innovation

Innovation

Customized

The innovation developed by company A provided the customer with a complete

logistics service for the entire value chain. With this innovation, company A was
able to offer a customized innovation which improved the customers performance.
The innovation enabled the customer to receive products just in time which could
be directly placed in the outlet stores without any further sorting. The innovation
also ensured the tracking of the delivered goods and compliance with EU rules of
actions 178/2002. The innovation also included a return shipment system to
comply with recycling requirements of the customers industry
The innovation developed by company B was a highly innovative outsourcing
innovation. It aimed to manage the outsourcing of logistics processes, customer
equipment, and employees. The innovation focused on involving the customers
top management and the affected employees throughout the entire outsourcing
process to ensure that all parties involved were aware of the benefit(s) the
innovation offered
Company C developed an innovation which focused on the healthcare sector, in
particular on the transportation of medical devices and drugs for a hospital. It
included an online ordering system via which the hospital could order drugs.
Medical equipment could be ordered 24 h a day and was directly delivered to the
operating room door. The innovation also included a centralized supply for sterile
instruments
The innovation of company D was developed for the chemical industry. The
innovation focused on the transport of time sensitive single car transports
throughout Europe. It offered their customers a great flexibility for their orders.
Trains could be ordered up to 2 hours before departure without any minimum
order quantity. In addition, a service team was available for customers to place
orders or to plan transportations, for example of dangerous goods, 24 hours a day
The innovation developed by company E offered a new way of receiving and
sending parcels. In particular, company E developed a kiosk at which endconsumers could pick up parcels 24 h a day, 365 days a year. Customers simply
needed to register for this innovation. The innovation enabled customers to freely
use their time instead of waiting for the delivery person (e.g. postman) by allowing
them to pick up or send parcels whenever they wanted. Customers were informed
via a text message when the parcel was ready to be picked up in the selected kiosk
The innovation of company F was developed for the automotive industry. It aimed
to reduce the costs and inefficiency of customers while improving delivery
reliability. The innovation consisted of 11 modules which customers could order
individually, such as aftermarket logistics, transportation management, inbound
logistics, and financial services

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Customized

Customized

Standardized

Standardized

Standardized
Table II.
Description of the
logistics innovations

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versed to acquire customer knowledge from studying customer behaviors and opinions
(Flint et al., 2008).
In total, three to four BSEs were interviewed per LSP regarding their activities in the
development process of the selected logistics innovation. All interview partners had a
key role in the development process during which they were actively engaged in the
acquisition of customer knowledge. The interviews lasted between 30 and 90 minutes,
all of which were conducted in person and took place at firm sites. Any questions that
still remained were clarified through telephone interviews at a later time. A sufficient
period of time between the interviews with key informants allowed for new
relevant aspects which arose during the interviews to be addressed (i.e. adjusting
the interview guide).
When analyzing the data, we moved from raw data to the identification of the
specific activities of BSEs to deepen and broaden customer knowledge throughout
the entire development process of each logistics innovation. We identified descriptions
of customer integration issues that arose during each stage of the development process
of each logistics innovation. Then the identified issues were analyzed regarding
how BSEs engaged in acquiring customer knowledge throughout the development
process. Contradicting statements within the same interview were also investigated.
The results were compared, and disagreements were solved through discussions.
We also searched for differences and similarities among the patterns of BSEs
customer knowledge acquisition (e.g. Miles and Huberman, 1994). We sought for
patterns in the interview data associated with BSEs activities in deepening and
broadening customer knowledge throughout the entire logistics innovation
development process. We investigated the individual logistics innovations for each
knowledge acquisition approach deepening and broadening and its dedicated
outcome. Afterwards, we iteratively analyzed the identified patterns across the
logistics innovations and developed a more abstract description of BSEs knowledge
deepening and broadening activities and outcomes. Subsequently, as suggested by
Miles and Huberman (1994), we organized our results in tables.
Results
Characteristics of deepening and broadening customer knowledge
The data analysis highlights that deepening and broadening customer knowledge are
important types of activities in which BSEs engage throughout the entire logistics
innovation development process. When deepening customer knowledge, BSEs first
acquired customer knowledge and then made sense of customer knowledge that
focused on similar issues. This knowledge acquisition behavior is consistent with
deepening knowledge as defined at the firm level, as it relates to the amount of
knowledge detected and assimilated in a specific area (Laursen and Salter, 2006;
Prabhu et al., 2005). Deepening customer knowledge mainly occurred in one-on-one
customer-BSE meetings rather than in meetings or workshops attended by several
customers. During one-on-one meetings with customers, BSEs tried to tease out, for
example, customers future needs and expectations and demands regarding a potential
logistics innovation. While BSEs acquired unique customer knowledge in this way,
they did not tend to discuss this knowledge any further or identify other issues with
customers. Instead, customers self-assuredness and confidence in their specific needs
and future challenges created a situation in which BSEs believed they understood the
acquired customer knowledge. BSEs predominantly deepened customer knowledge
when meeting customers top managers rather than when meeting customer employees

without managerial authority. BSEs and customers top managers typically met in
one-on-one meetings to ensure that information exchanged could be kept confidential.
When broadening customer knowledge, BSEs acquired and made sense of a large
variety of customer knowledge. This knowledge acquisition behavior is similar to
broadening knowledge as defined at the firm level, which refers to the number of areas
in which a firm gathers knowledge (Laursen and Salter, 2006; Prabhu et al., 2005).
Broadening customer knowledge usually occurred during customer-BSE meetings and
interactions where numerous customer representatives were present. During these
interactions, BSEs aimed to acquire diverse opinions and perspectives on current
customer challenges. Furthermore, the diverse and sometimes contradicting knowledge
which BSEs acquired led to intensive discussions between BSEs and customers or
colleagues holding customer knowledge. Hence, it sparked further discussions with the
partners and internally in the firm. Moreover, in several meetings, BSEs tended to
interact with different customers at the same time to develop solutions together with
them. Customer knowledge broadening also occurred in meetings where a variety of
customer representatives, such as managers and blue-collar workers, were present.
By interacting with customer employees from different hierarchical levels, BSEs
aimed to acquire diverse knowledge to develop a more holistic understanding of
customers current needs.
Sequence of deepening and broadening customer knowledge activities
Our results revealed that BSEs engaged in different sequences of deepening and
broadening customer knowledge depending on the logistics innovation they were
developing, namely customized vs standardized logistics innovations. Customized and
standardized logistics innovations reflect two ends of a continuum of logistics
innovation (Grawe, 2009; Lampel and Mintzberg, 1996). Customized logistics
innovations address specific needs and preferences of one single customer
(e.g. Wagner and Sutter, 2012). Their attributes and features meet the specific needs
of a single customer (e.g. Busse and Wallenburg, 2011). Conversely, standardized
logistics innovations address various customer needs at the same time and/or those
that are common to all targeted customers, and hence, they are not adjusted to the
specific requirements of a single customer (Lampel and Mintzberg, 1996; Wagner
and Sutter, 2012). Table III graphically illustrates the identified sequences of BSEs
deepening and broadening customer knowledge activities during the entire innovation
development process of customized and standardized innovations.
The BSEs of LSPs A, B and C which developed customized logistics innovations
engaged in deepening customer knowledge activities during the idea generation stage
and implementation stage but switched to broadening customer knowledge during the
concept development stage. In one-on-one discussions with customer managers during
the idea generation stage BSEs acquired specific customer knowledge to develop a
specific logistics innovation idea. However, for converting the idea into a concept BSEs
needed broader knowledge of the customer environment in which the innovation would
be used. Hence, BSEs developing customized innovations switched to broadening
customer knowledge by talking to numerous customers representatives (e.g. manager,
blue-collar worker) and observing them to acquire diverse customer knowledge and
perspectives on identified issues. During the implementation stage BSEs again
engaged in one-on-one meetings with top managers and carefully listened to selected
customer employees affected by the innovation. By doing so, BSEs complemented and
deepened prior knowledge and verified the specific current and future customer needs

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, Broadening customer knowledge;

, deepening customer knowledge

The observation of and interaction

with several customers enabled
BSEs to develop a rich
understanding of customers
current needs. However, the
acquired customer knowledge was
not specific enough so that BSEs
struggled to develop a single
service idea

Standardized
service
innovation:
LSP D
LSP E
LSP F

Notes:

BSEs talked to numerous

customers to obtain different
information and perspectives on
the issue in focus. They also
observed various customers to
identify new combinations of
needs. Customers also engaged in
workshops to develop solutions
jointly with BSEs
One-on-one discussions served as
the platform where customers put
forward their understanding of
suitable innovation ideas. However,
BSEs only acquired a few insights
which were new, though still
helpful to specify the innovation

BSEs engaged in discussions with

customer top management to
acquire specific information. Each
interaction was different but aimed
to identify similar issues which
served as the basis on which the
innovation idea was developed

Customized
service
innovation:
LSP A
LSP B
LSP C

Table III.
Patterns of BSEs
customer knowledge
acquisition
throughout the
development process
of customized and
standardized
logistics innovations
Concept development

BSEs did not

interact with
customers

BSEs did not

interact with
customers

Business
analysis

BSEs organized one-on-one

meetings with a few selected
customer top managers to verify
specific needs. Due to increased
trust among BSEs and customers,
the flow of information increased.
In addition, BSEs carefully listened
to the needs of the customers
affected by the innovation
BSEs provided customers with
information about the innovation
on several occasions. Nevertheless,
BSEs were also very attentive
regarding information customers
provided. During meetings, BSEs
also verified how the newly
identified needs related to the
existing customer knowledge.
BSEs also invited customers to test
the innovation

Implementation

322

Idea generation

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relating to the innovation. Overall, performing both types of customer knowledge

acquisition activities throughout the entire innovation development process helped
BSEs to identify and address the most commonly agreed-on needs while they also
developed a general understanding of the specific customer needs.
In contrast, BSEs of LSPs D, E, and F which developed standardized logistics
innovations engaged in broadening customer knowledge during the idea generation
stage and the implementation stage and switched to deepening customer knowledge in
the concept development stage. Observing and interacting with several customers
during the idea generation stage enabled BSEs to increase their knowledge of current
customer needs, although it also provided them with contradicting customer
knowledge. The imprecise, undefined nature of customer knowledge and customers
requirements often resulted in increased organizational uncertainty, which has also
been documented in extant literature (e.g. Johne and Storey, 1998). Thus, for all BSEs
developing a standardized logistics innovation, it was necessary to reduce
unpredictability by engaging in one-on-one discussions with selected customers to
acquire further customer knowledge that complemented existing information
necessary for the concept development. When approaching the implementation
stage, all BSEs acquired a variety of customer knowledge through conversations
and observations. They also verified to what extent the identified needs related to
known customer requirements. In summary, predominantly focusing on broadening
customer knowledge during standardized innovations enabled the development of a
rich understanding of customer needs, but deepening customer knowledge seemed
necessary to help BSEs identify those features that customers considered as most
important and consequently to develop successfully the standardized innovation.
Idea generation stage
Deepening knowledge. Meetings with customers top managers enabled the
identification of a logistics innovation need and prompted BSEs of LSPs A, B, and C
to perform activities that deepened customer knowledge during the idea generation
stage. For example, LSP As BSEs met one-on-one with the customers top managers
to discuss the performance and improvement areas of offered services, but they did not
expect to be contracted to develop a logistics innovation. As LSP As business
development manager explained, In a private meeting, a top manager suddenly asked
Jacob [Chief Executive Officer of LSP A] to develop a new procurement logistics
service. He did not expect that. Prior research has already proposed that customers
often stimulate innovation (e.g. Flint et al., 2008), but has not revealed that BSEs have to
pick up and promote these ideas within the firm.
Because top managers expressed their future needs in a self-confident way, BSEs
did not discuss or try to make immediate sense of the stressed needs during these
interactions. Instead, they organized additional one-on-one meetings with other top
managers to identify how they view their firms near future and determine whether a
logistics innovation could support their business strategy in the same way as described
by the managers they talked with at first. The top managers of LSPs A, B, and C
emphasized the same need for a more flexible transportation system with the same or
higher service quality. BSEs tried to motivate their customers top managers to express
their specific idea of a highly valuable logistics innovation, but the managers did not
provide many details and remained rather vague in their descriptions. Consequently,
BSEs generated ideas for an appropriate logistics innovation on their own. In line with

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this observation, Blazevic and Lievens (2008) stressed that customers often report
problem areas but do not propose specific solutions for them. However, the current
study provides further insight by revealing that BSEs engagement in deepening
customer knowledge triggered the generation of ideas for innovations.
BSEs efforts to involve customers top managers led to the development of deep
customer knowledge that highlighted similar future customer needs and entailed
detailed information about the future trends in the customers industry. At the same
time, the acquired knowledge was strategic in nature and, thus, did not reflect the
operational needs of the employees affected by the logistics innovation in their daily
work routines. In this regard, Maitlis (2005) already stressed that top managers have a
general understanding of firm issues but their perspectives do not reflect individual
customer stakeholders perspectives. Nevertheless, the BSEs used their acquired
knowledge to develop a logistics innovation idea that addresses the identified need on
their own.
Broadening knowledge. The BSEs of LSPs D, E, and F identified the need to develop
a logistics innovation by engaging in activities such as observing current habits and
behaviors and discussing them with customers in meetings, which led to broadening
customer knowledge. An important effect of broadening customer knowledge is that it
provides employees with greater flexibility in responding to environmental changes
(Volberda, 1996). For example, BSEs regularly made use of public sources, customer
databases, and internal operation reports to understand current customer needs. By
intensively and systematically examining these different data sources, BSEs were able
to acquire knowledge about how different customer groups used offered services and
how user-friendly they perceived them to be. As LSP Es Project Director described,
We observed via public sources [Internet] that the habits and behavior of people were
changing. People were less often at home. [] At that time, e-commerce emerged as a
really hot topic. We observed that these changes had dramatic effects on our business,
in terms of increasing numbers of non-deliveries. On the one hand, we had rising
handling costs and, on the other hand, customers started to be dissatisfied with our
logistics service. This was the point at which I realized that our customers needs had
changed. Although observing and being aware of general customer behavior, such as
customers daily routines, facilitates identifying needs (Leonard and Rayport, 1997), it
remains up to BSEs to interpret the diverse customer behaviors and to identify the need
for an innovation.
Because they were aware of changing customer needs, the BSEs increased their
efforts to acquire and make sense of a great variety of customer knowledge so that they
could identify the most essential needs. Therefore, the BSEs continued to examine
public sources, including statistical databases and newspapers, and meet with
customers to discuss ideas. They also engaged in discussions with their colleagues
holding customer knowledge, which enabled them to arrive at rough conclusions from
customer knowledge that, to some extent, was contradictory.
Both acquiring and interpreting diverse customer knowledge enables firms to gain
insights into current customer needs (Flint et al., 2008). The integration of multiple
customer perspectives offered a rich understanding of current customer needs but
also revealed that the BSEs of LSPs D, E, and F acquired contradicting customer
knowledge. Thus, although broadening customer knowledge provided a general
understanding of customer needs, the BSEs struggled to identify and develop a single,
concrete logistics innovation idea; instead, they developed a few vague ideas on their

own. Nevertheless, engaging in broadening customer knowledge facilitates the

exploration of innovation opportunities (Wu and Shanley, 2009).
Concept development stage
Deepening knowledge. Although the BSEs of LSPs D, E, and F struggled to identify and
develop a single, concrete logistics innovation idea, the acquired customer knowledge
did provide a common basis for future activities. Therefore, during the concept
development stage, BSEs activities were targeted to acquire customer knowledge
that complemented existing information which would facilitate the development of a
logistics innovation concept. For example, as the operations manager of LSP F
explained, We had a general understanding of our customer needs but we were not
able to pick one idea. Similarly, Andriopoulos and Lewis (2009) argue that employees
involved in innovation development become so interested in different issues that they
might miss the opportunity to develop an innovation.
The activities that LSP Ds BSEs undertook with a few selected customers offer an
example of deepening customer knowledge to supplement existing broad customer
knowledge. We invited a few customers and discussed a few vague ideas in one-on-one
meetings. We roughly presented them and asked customers what they thought about
[them]. The conversations were very good. We received very specific and detailed
suggestions [on] what to focus on (Key Account Manager of LSP D). Furthermore,
during these one-on-one meetings, the BSEs sought out customers opinions about the
unique selling proposition of the potential logistics innovation.
Although the BSEs of LSPs D, E, and F lacked detailed knowledge of the specific
customer needs, deepening customer knowledge during the concept development stage
seemed to guide and help them identify and pursue the most promising logistics
innovation ideas and to develop the corresponding concepts. The acquired customer
knowledge highlighted similar future customer needs for which BSEs needed to verify
the common relevance to a greater variety of customers. In such [one-on-one] meetings
customer managers always highlight that their needs are the important ones. Of course
the insights you receive are highly valuable, but you have to verify whether they are in
line with the current customer needs you are aware of (Head of Marketing Department,
LSP D). While the BSEs did not discuss discrepancies between specific customer needs
and the known common customer needs, a great deal of thought was required from
them. They needed to identify the major customer needs using the acquired deep and
broad customer knowledge and to convert the most promising logistics innovation idea
into a concept. Furthermore, the decreased uncertainty about customer needs increased
BSEs self-confidence in successfully developing a logistics innovation.
Broadening knowledge. The BSEs of LSPs A, B, and C acquired specific customer
knowledge during the idea generation stage during which they developed a single,
specific logistics innovation idea. However, these BSEs lacked a broader understanding
of various customer stakeholders needs to convert the logistics innovation idea into
a concept. Therefore, they engaged in broadening customer knowledge during the
concept development stage. For example, the Sales Manager of LSP C described,
You have to know everything of your customer or it is impossible to develop
a well-thought-out concept. [] The top managers information was important to
develop a service innovation idea. However, this only explains [] half of the story.
You have to understand the customer and how the customer works. The BSEs sought
out opinions from different customers about current practices and needs. They also

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observed various customers during their daily work to broaden customer knowledge.
Carefully observing customer behavior enables new combinations of needs to be
realized as soon as they appear (Urban and Hauser, 2004). In addition, BSEs talked with
various customers to acquire diverse knowledge and perspectives on their current
needs. We talked to a lot of people. No matter of position. That is the way to identify
the real customer needs. For instance, through this we got to know why every Monday
the incoming goods department was blocked (Business Unit Manager of LSP A).
Although these conversations provided BSEs with an overarching understanding of
various customers needs, BSEs also engaged in discussions with customers to jointly
develop solutions for identified issues. As the project manager of LSP B explained,
During meetings with workers and team leaders we explained what we were doing
and also asked them to work with us on a solution. This showed them that we were
really interested in their perspectives [] All these perspectives are important to
develop a sustainable innovation.
Because of the challenges the BSEs of LSPs A, B, and C experienced in transforming
the logistics innovation idea into a concept, they interacted with many customer
stakeholders. They primarily acquired a broad variety of information that would
complement and expand the existing deep knowledge. Deep and broad customer
knowledge seemed to enhance the BSEs combination opportunities to develop an
innovation concept that would meet the needs of all customer stakeholders affected by
the innovation.
Business analysis stage
Although the business analysis of an innovation concept is one of the most important
stages during innovation development (e.g. Alam and Perry, 2002), the results show
that the BSEs of all LSPs did not engage in any customer interactions to deepen or
broaden customer knowledge in this stage. Correspondingly, the Key Account Manager
of LSP D stated, No, in between [business analysis] we did not need to interact with
them [customers]. [] Because during the development, it is often too technical [e.g.
statistical analysis] for the customer and we already knew what we needed. In this
regard, the business unit manager of LSP B said, That is our job [business analysis].
It is important that customers are involved throughout the entire [logistics innovation]
process, but at some point you simply do not need their input. Studies in innovation
literature indeed demonstrate that customer interaction in certain stages can reduce
the effectiveness of the development process (Datar et al., 1996). Furthermore,
forcing customer interaction might reduce the efficiency of the innovation
development process.
Implementation stage
Although the BSEs of all six LSPs acquired much customer knowledge by deepening
and broadening their knowledge throughout the logistics innovation development
process, they sought out further customer knowledge during the implementation stage.
For example, the marketing manager of LSP D explained, At this stage you have to
validate whether you have been able to identify major customers needs.
Deepening knowledge. During the implementation stage, the BSEs of LSPs A, B, and
C acquired detailed customer knowledge in one-on-one meetings with a few selected
customer top managers to verify their specific needs. At the same time, there was no
need to discuss the acquired knowledge any further during these meetings because of

both parties expertise in the addressed issues. The head of the human resources
department of LSP B described it in the following way, The HR [human resources]
manager and I sat down together. Both of us had the same level of expertise. Each of us
frankly mentioned our needs and requirements to implement the logistics innovation.
Because of BSEs apparent efforts to consider the acquired knowledge, customer top
managers confidence in the logistics innovation increased, which motivated them to
share further detailed knowledge with the BSEs. A crucial point during the innovation
development process was the open communication which emerged. (Head of the
Human Resources Department of LSP B). Customers provide various hints in dialogues
(Urban and Hauser, 2004), as the business unit manager of LSP C described, During
these customer conversations, you realize quickly whether the customer would
accept the new service or not, and what will be expected, regardless of whether it was
explicitly stated or not.
The BSEs also invested a lot of effort to acquire specific knowledge from customers
affected by the logistics innovation. We organized consultation hours in which each
worker individually could highlight [his or her] needs and fears [regarding the
logistics innovation] (Director of a business unit of LSP B). The BSEs carefully listened
to these customers but did not discuss the few mentioned issues with them, nor did
they try to make them believe that everything would remain unaffected. A few
requirements that were commonly mentioned, however, triggered the BSEs to
engage in further one-on-one meetings with selected customer employees to gain more
in-depth insight.
Our findings are consistent with existing literature in that deepening customer
knowledge supports successful logistics innovation implementation (e.g. Flint et al.,
2008; Wu and Shanley, 2009). During implementation, the BSEs of LSPs A, B, and C
clearly focused on obtaining further information about those future customer needs
which they had already become familiar with during previous development stages.
Broadening knowledge. The BSEs of LSPs D, E, and F engaged in broadening
customer knowledge during the implementation stage. During an exhibition, for
example, the Key Account Manager of LSP D conversed with various existing and
potential customers to identify the features which the majority of them would expect
and which [were] not in the innovation. The BSEs were attentive to all mentioned
needs and tried to verify how they related to the customer knowledge they already
acquired. As the project director of LSP E explained, We decided to involve different
customers. Why? Because each person is different, and therefore you receive diverse
information. In addition, this helped us to distinguish between customer-specific needs
and general customer needs. Although the acquired variety of knowledge increased
the BSEs confidence in the previously identified and addressed needs, they sought out
further knowledge that went beyond customers expressed opinions. To do so, BSEs
offered various customers the opportunity to test the logistics innovation. We invited
several people and asked them to test different kiosks. We observed how they used
them. This helped us to fine-tune our kiosk and to get a feeling of its potential (Project
Manager of LSP E). Hence, broadening customer knowledge helps to better estimate the
potential of the innovation (Flint et al., 2008; Laursen and Salter, 2006).
By broadening customer knowledge, BSEs acquired a great variety of customer
knowledge that has been suggested to lead to representative knowledge being widely
applicable to different customers (Blazevic and Lievens, 2008). We found that the BSEs
of LSPs D, E, and F acquired a variety of customer knowledge through conversations

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and observations. According to existing literature, an increased understanding of

customer needs facilitates the development of logistics innovations (Chapman et al.,
2003; Flint et al., 2008). We found that the acquired customer knowledge supported the
logistics innovation implementation in a better way if it was related to prior customer
knowledge. Identified customer needs not associated with known needs were not
considered priority needs; rather, they were considered as being issues that could be
incorporated only if necessary after the successful implementation of the innovation.
Conclusion
Contribution and implications
The theoretical contribution of this study is three-fold. First, the logistics literature has
started to investigate how logistics innovations are developed (e.g. Busse, 2010;
Flint et al., 2008; Wagner, 2012). By extending this growing literature stream in line
with the microfoundational innovation and knowledge literature (e.g. Vermeulen et al.,
2007; Felin and Hesterly, 2007), our study reveals BSEs patterns in deepening and
broadening customer knowledge for successful logistics innovations. The vast research
addressing logistics innovation development confirms that the acquisition of customer
knowledge is critical for the successful development of a logistics innovation (e.g. da
Mota Pedrosa, 2012; Wagner, 2012). However, an in-depth understanding of the
microfoundations organizational members activities and practices of customer
knowledge acquisition is lacking to date (Busse and Wallenburg, 2011). The literature
has indicated the need for enhancing our understanding of BSEs customer knowledge
acquisition behavior to enhance our understanding of logistics innovation development
(e.g. Lane et al., 2006; Panayides, 2007). Our study shows that deepening customer
knowledge tends to occur in one-on-one interactions with a few selected customers and
enables BSEs to identify unique, detailed insights into current and future customer
needs. When BSEs engage in broadening customer knowledge, they tend to interact
directly and indirectly with multiple customers and develop a rich understanding of
current and future customer needs.
Second, our study contributes to the innovation literature by revealing that, during
the business analysis stage, BSEs do not interact with customers and do not directly
acquire customer knowledge. This finding suggests that interactions with customers
and customer knowledge acquisition are not always beneficial in terms of efficiency
and effectiveness in logistics innovation development. A preliminary, but plausible,
explanation might be that the customer knowledge required in this stage is already
available within firms and can therefore be retrieved easily without any additional
costs which might be incurred by BSEs knowledge acquisition activities. Moreover,
this non-integration of customers might protect firms from sensitive knowledge
becoming public.
Third, this study identifies different sequences of how BSEs engage in deepening
and broadening customer knowledge depending on whether customized or
standardized logistics innovations are developed. This finding contradicts the
current view that the type of logistics innovation plays a negligible role for LSPs in
logistics innovation research (Busse and Wallenburg, 2011). The current study reveals
that firms logistics innovation orientations customized or standardized have
impact on BSEs activities and practices to acquire customer knowledge. Further, we
found key differences in the BSEs underlying patterns of acquiring customer
knowledge, which suggest that LSPs are capable of finding different ways to develop

successfully customized and standardized logistics innovations. Therefore, depending

on the contextual situation (customized vs standardized) BSEs employ different types
of knowledge creation. This finding is in line with Nonaka and Konno (1998) who also
discuss the importance of the organizational context on the type of knowledge creation,
i.e. explicit or tacit knowledge. The sequence of switching between deepening
and broadening knowledge can theoretically be compared to the processes of
multiple conversions between explicit and tacit knowledge, as both are dynamic
processes in which knowledge is exchanged and transformed. Hence, our process
model highlighting the sequence of broadening and deepening knowledge for
customized and standardized logistics innovation shows the actualization through
dynamic knowledge integration and conversion.
The findings of our study can be used by firms of the logistics service industry to
illustrate that BSEs might be well advised to concentrate on one activity of acquiring
customer knowledge in a single stage of the logistics innovation development
process but switch between deepening and broadening customer knowledge from stage
to stage to leverage customer interaction. Hence, BSEs should be allowed to concentrate
on one activity to acquire knowledge during one stage, while having the flexibility
to switch to the other activity in a subsequent stage. In addition, both types of activities
to acquire customer knowledge seem to be important at different stages of the
innovation development process, depending on the type of innovation developed
by the LSP. Thus, it is important that BSEs know from the beginning whether a
customized or a standardized innovation is or should be developed and to sensitize
them to the sequence of deepening and broadening knowledge that is most likely
to be applicable to the development process. In this way, BSEs can focus on the right
activities to deepen and broaden their customer knowledge during each stage of the
entire innovation development process.
Furthermore, we found that BSEs carefully evaluate the acquired customer
knowledge regarding its relevance for the logistics innovation and the type of
customer knowledge acquisition that is best suited for the next stage of the logistics
innovation development process. However, excessively engaging in deepening or
broadening customer knowledge might be counterproductive if one or the other
knowledge acquisition strategy is entirely disregarded (Prabhu et al., 2005). Therefore,
LSPs should motivate BSEs to reflect on the customer knowledge they acquired during
each stage of the innovation process and to engage in both deepening and broadening
customer knowledge throughout the process.
Limitations and future research
Although this study provides encouraging results, it faces some potential limitations,
which also provide avenues for future research. First, the findings of our study reveal
how BSEs engage in deepening and broadening customer knowledge during the entire
logistics innovation development process, depending on the type of innovation that is
developed. However, we cannot rule out that other factors, such as firm characteristics
or environmental conditions, have influenced our findings. Therefore, we invite future
research in this regard. One promising research question relates to the impact of
organizational capabilities, such as absorptive capacity (Cohen and Levinthal, 1990),
on BSEs knowledge acquisition patterns and activities, as they reflect organizational
learning capacity. A second limitation pertains to our focus on BSEs acquisition of
deep and broad customer knowledge. Customers interacting with BSEs also acquire
knowledge and have their learning goals, which may in turn impact BSEs knowledge

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acquisition due to the dyadic nature of interactions. Therefore, it would be valuable to

explore whether BSEs knowledge activities enable customers to acquire specific
knowledge, resulting in increased customer firm performance, and in which way
customers knowledge acquisition behavior enhances BSEs knowledge acquisition and
corresponding innovation performance. Overall, it seems that the field of logistics
and supply chain management would benefit from more behavioral research at the
micro-level of firms.
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About the authors
Dr Alex da Mota Pedrosa is at Department of Marketing and Management, Center of Integrative
Innovation Management, the University of Southern Denmark, Odense, Denmark. Dr Alex da
Mota Pedrosa is the corresponding author and can be contacted at: pedrosa@sam.sdu.dk
Dr Vera Blazevic is at Institute for Management Research, the Radboud University, Nijmegen,
The Netherlands; Technology and Innovation Management Group, RWTH Aachen University,
Aachen, Germany.
Assistant Professor Claudia Jasmand is at Imperial College Business School, Department of
Management, Imperial College London, London, UK.

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