Innovation persistence during economic crisis by Nigeria's construction contracting firms : an investigation of the critical success factors

Innovation is viewed by many as a driving force for sustainable economic and social change. However, it has been established that economic crisis impacts firm level innovations. The extent of the impact on firm level innovations differs widely across countries and industries. In the case of Nigeria, it has been argued that economic crisis has a disproportionate impact on innovation in the local construction industry. Indeed, the reaction of construction contracting firms to the incessant turbulence in the economic environment has been that of collective belt-tightening and general apathy to risk-taking. This apathy to risk-taking is the reason why Nigeria’s construction industry has been rated as having low disposition towards the adoption of innovative changes. While certainly risky, there are inherent merits in persisting with firm level innovation during economic crisis. Thus, the insistence that a difficult economic environment argues for more innovation, not to pull back and that firms should redouble their innovation efforts during economic crises. Indeed, the need to innovate during economic crisis does not stem just from the quest to succeed but also to survive. However, firms must get their approach to innovations consistently right during economic crisis. Therefore, the present study focuses on identifying and exploring the critical success factors that enable firm level innovation persistence during economic crisis. In order to do this however, it is imperative to identify and evaluate the factors that hinder firm level innovations during economic crisis as well as the merits of firm level innovation persistence during economic crisis. The study utilizes a sequential exploratory mixed method design to explore the research problems. The qualitative data for this study have been obtained through semi-structured interviews with ten (10) management level employees of five (5) selected innovation persistent construction contractors. The themes that emerged from the interviews are further tested through the survey of 83 mid-level professionals employed by 16 innovation persistent construction contractors. To enable an in-depth investigation of the research problem, the present study adopts a case study strategy. The study finds several factors that hinder firm level innovations during economic crisis. Notable amongst these are; unstable funding regimes, increased apathy to costs by clients, erosion of good organizational slack, rapid and incessant changes to clients’ needs and requirements, dearth of creative ideas and reduced appetite for risks. Furthermore, the merits of firm level innovation persistence as established in the present study are; increased revenues and profits levels, increased market share and brand loyalty, improved clients’ satisfaction and brand loyalty, improved operational and resource efficiency, a dynamic knowledge base for organizations and improved employee morale and brand loyalty. Finally, the study establishes that the leadership of the innovation process by the experienced client, the capacity to maintain strategic flexibility, the presence of an effective innovation system and a culture of market orientation are the critical success factors that enable firm level innovation persistence during economic crisis. The present study ultimately lends weight to the argument in support of innovation persistence during economic crisis by providing practitioners and researchers with the merits of firm level innovations persistence, the factors that constrain firm level innovations as well as the critical success factors for firm level innovation persistence during economic crisis