The strategy field has suffered from a lack of a theory of strategy creation. Strategy scholars have not ascertained the processes by which value-creating new strategies are most likely to emerge, the preconditions for emergence to take place, and the management actions that can encourage that emergence. In this study, the processes of strategy creation were examined. The focus was on eight firms, six of which had a record of successful new-strategy creation. The methodology described in Eisenhardt ("Building Theories from Case Study Research," 1989) was used.; The study produced several key findings. First, organizations that innovate repeatedly do so through routines that specifically support such innovation. In other words, while ways of innovating differ enormously from one organization to the next, each successful innovator innovates through similar processes repeatedly. Appropriate strategy innovation routines are a key precondition for innovation. Second, the most entrepreneurial of the innovators, those who follow a style that the study designates as "Cauldron" innovation, innovate through routines that more closely resemble the routines of improvizational artists (e.g., jazz musicians) than they do the more bureaucratic innovation routines that had previously been reported in the literature. Third, effective strategy innovation routines (SIRs) in each of the highly innovative firms had emerged through a three-phase process: (1) Unfreeze; (2) Begin innovating either through managed organizational change or by encouraging innovation processes to spread from an innovative unit within the firm; (3) evolve reliable innovation routines. The management behaviors required for success in each of these three phases were fairly clear. Fourth, the most successful innovators allowed innovation routines to emerge through the informal three-phase process but then added some formalism so the people of the organization could understand the routines clearly.; This research suggests that managers who wish to enable their companies to innovate effectively can promote the emergence of continuing innovation through similar three-phase processes followed by similar degrees of formalization.
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