Managing the innovation process of small and medium-sized enterprises: The important roles of reflecting and employee involvement

How does the innovation process of small and medium-sized enterprises (SMEs) unfold, and how do SMEs manage the innovation process? These are important questions to answer because the context of SMEs presented unique benefits and challenges for innovation to occur. In this study, we interviewed owner managers and senior managers of 31 Australian SMEs about their innovation process and analyzed the data using NVivo. We delineated 10 managerial activities during SMEs’ innovation process: listening, searching, problematizing, challenging, choosing, steering, inspiring, communicating, resourcing, and tracking. Furthermore, we found that SMEs develop a dynamic capability of reflecting based on these activities and rely on employee involvement to resolve the conflicts arising from them. This article enriches our understanding on how dynamic capabilities and employee involvement contribute to the innovation process of SMEs. JEL Classification: L2, M1, O3