Frame flexibility: The role of cognitive and emotional framing in innovation adoption by incumbent firms

Research Summary Why do incumbent firms frequently reject nonincremental innovations? Beyond technical, structural, or economic factors, we propose an additional factor: the degree of the top management team's (TMT) frame flexibility, i.e., their capability to cognitively expand an innovation's categorical boundaries and to cast the innovation as emotionally resonant with the organization's identity, competencies, and competitive boundaries. We argue that inertial forces generally constrict how TMTs perceive innovations, but that frame flexibility can overcome these constraints, increasing the likelihood of adoption and broadening the organization's innovation practices. We advance a theoretical model that relaxes the assumption that cognitive frames are static, showing how they become flexible via categorical positioning, and introduce a role for emotional frames that appeal to organizational members' sentiments and aspirations in innovation adoption. Managerial Summary Confronting a technological change is one of the most difficult challenges facing any incumbent firm. Technological transitions create pressure for leaders to reframe their mental models while continuing to develop existing capabilities and product category variants. Yet at key junctures in a product class and during technological change, a concrete definition of the firm's innovation boundaries and identity hold a firm hostage to its past. We show how a flexible cognitive frame—coupled with emotional framing—helps leaders and organization members become emotionally engaged in transformation efforts and, in turn, learn about executing nonincremental innovation over time. At technological transitions, perhaps there is no more important role for leaders than to expand their cognitive frames and to infuse these expanded frames with emotion.