More Haste Less Speed? Iteration Speed of High-tech Products and Innovation Performance: A Perspective of Absorptive Capability Theory.

In the mobile internet era, customers can interact with firms more conveniently. It helps express customers' personalized demands and provides directions for firms' product innovation. It requires and promotes technological innovation in firms changing from the original firm-oriented linear management approach to the rapid demand-centric iteration model. For example, many software firms develop their products while operating them. Then, how should firm developers understand and project the iteration speed while employing the iterative innovation model? Can firms keep the innovation iteration speed while pursuing innovation speed by shortening their innovation cycle? And will it result in the fact of "more haste, less speed"? The further question is, in the industrial context of emphasizing speed, how can firms obtain the best effect of innovation by considering their own innovation process traits? In fact, the rapid iteration of product innovation means that firms dynamically learn the external knowledge, such as the customer knowledge and the empirical knowledge, through development in the process of testing to reduce trial and error costs and improve product performance. Existing studies focus more on how firms improve product innovation performance based on existing resources from a relatively static perspective, while ignoring that product innovation performance is also affected by the dynamic learning process in the external environment. From the perspective of dynamic learning process, the theory of absorptive capacity well elaborates the hidden mechanism of how firms make innovation through absorbing, transforming and utilizing external knowledge. This work systematically investigates the effect of product iteration speed on innovation performance. Moreover, the process factors will also influence the innovation effect through the dynamic process of learning from external knowledge. For example, products of different complexity levels lead to different levels of innovation complexity; also, there could be difference for firms' learning capability in different iteration cycles, which finally influence the rapid iteration effect. Therefore, combined with the process characteristics of product iteration, this paper also examines moderating effect of three factors that are most relevant to the product iteration innovation process on the mechanism of product iteration speed, including product complexity, the number of product iterations and the innovation iteration regularity. We obtained version data of 924 applications from 2011 to 2018 with Python, and gained the following results through the empirical study. (1) The product iteration speed has an inverted U-shaped relationship with the product innovation performance, indicating that it does not follow the law of the faster the better. But there is a peak value, exceeding by which, it will lead to the fact that haste makes waste. (2) Product complexity negatively moderates the effect of iteration speed on product innovation performance. As the number of iterations increases, the moderating effect of the product complexity will be attenuated. It suggests that firms need to consider the process characteristics in the product iteration innovation, particularly, when the product is relatively complex, firms need to consider reducing the innovation speed, which however can be accelerated appropriately with the accumulation of iteration experience. (3) The regularity of product iteration can positively moderate the impact of iteration speed on product innovation performance. Therefore, firms should attach importance to the innovation iteration rhythm, and thus ensure the effectiveness of iteration through learning external knowledge. This paper has made theoretical contributions to the research of product iterative innovation and the empirical research on the absorptive capacity theory and also provides detailed suggestions for firms which practice the iterative innovation model. [ABSTRACT FROM AUTHOR]