NEW PRODUCT MANAGEMENT
Chapter 14
Development Team Management
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Options in New Products Organization
1. Functional: work is done by the various departments, very little project focus.
- Usually a new products committee or product planning committee.
- Does not lead to much innovation.
2. Functional Matrix: A specific team with people from various departments; project still close to the current business.
- Team members think like functional specialists.
- Departments call the shots.
3. Balanced Matrix: Both functional and project views are critical.
- May lead to indecision and delay.
- Many firms are making it work successfully.
4. Project Matrix: Team people are project people first and functional people second.
- People may drive the project even against department’s best wishes.
5. Venture: Team members pulled out of department to work full time on project.
These are listed in increasing projectization, defined as the extent to which participants see themselves as committed to the project.
Other terms are lightweight vs. heavyweight: “heavier” means greater projectization.
Figure 14.1
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Examples of Venture Teams
- Lockheed’s “Skunkworks” was spun outside of the company so that researchers could concentrate on key innovation targets.
- BMW sent designers from California and Munich to their “Bank” design center in London to learn Rolls-Royce culture and develop the Phantom.
- The BMW Z4 sport coupe was similarly designed by a dedicated venture team.
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Difficulties with Venture or Matrix Structures
- Many firms have moved back to a more lightweight approach after finding venture teams were difficult to establish and/or manage.
- Matrix structures are notoriously difficult to manage, can get very complex, and can incur high overheads (where does first priority lie, with the team or the function?)
- In the extreme, matrix structures can even be detrimental to innovation.
- Encouraging cooperation among team members is most important.
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Considerations when Selecting an Organizational Option
- High projectization encourages cross-functional integration.
- If state-of-the-art functional expertise is critical to project success (e.g., in a scientific specialty such as fluid dynamics), a functional organization might be better, as it encourages the development of high-level technical expertise.
- If individuals will be part of the project for only a short time, it might make more efficient use of their time if they were organized functionally. Industrial designers may be involved in any given project for only a short time, so different projects can simply draw on their expertise when needed.
- If speed to market is critical, higher projectization is preferred as project teams are usually able to coordinate their activities and resolve conflicts more quickly and with less bureaucracy. PC makers often use project teams, as they are under severe time pressure.
Figure 14.2
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Integrated Product Innovation in a Functional Organization: Toyota
- Toyota retains a functionally based organization, while successfully integrating product innovation, by doing the following:
- Stressing written communication across functional areas.
- Close, mentoring relationship for new hires.
- “Chief engineers” are lead designers on new car projects; teams of engineers fill in the details.
- In-house training, with rotation through different functional areas.
- Simple, straightforward work processes.
- Design standards promote predictability.
Who Are the Team Members?
- Core Team: manage functional clusters (e.g., marketing, R&D, manufacturing)
- Are active throughout the new products process.
- Ad Hoc Group: support the core team (e.g., packaging, legal, logistics)
- Are important at intervals during the new products process.
- Extended Team Members: less critical members (e.g., from other divisions)
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Building a Team
- Establishing a Culture of Collaboration
- Team Assignment and Ownership
- Empowered product champion
- Selecting the Leader
- A good general manager
- Selecting the Team Members
- Core and extended team members
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Roles and Participants
- Project Manager
- Leader, integrator, mediator, judge
- Translator, coordinator
- Project Champion
- Supporter and spokesperson
- May be the project manager
- Enthusiastic but play within the rules
- Sponsor
- Senior executive who lends encouragement and endorsement to the champion
- Rationalist
- The “show-me” person
- Strategist
- Longer-range
- Managerial -- often the CEO
- Spelled out the Product Innovation Charter
- Inventor
- Creative scientist
- “Basement inventor” -- may be a customer, ad agency person, etc.
- Idea source
Figure 14.3
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Myths and Truths About Product Champions
The Myths:
- Champions are associated with market successes.
- Champions are excited about the idea.
- Champions get involved with radical changes.
- Champions arise from high (or low) levels in the firm.
- Champions are mostly from marketing.
The Truths:
- Champions get resources and keep projects alive.
- They are passionate, persuasive, and risk-taking.
- Champions work in firms with or without formal new product processes. Champions are sensitive to company politics.
- Champions back projects that align with the firm’s innovation strategy.
Figure 14.4
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Managing the Team: New Product Process Implementation
- Clarity of goals: Ensure shared vision, common focus, and excellent communication across team members.
- Ownership: Team members can make a difference; their identity is tied to the project outcome. Provide rewards and recognition.
- Leadership at senior and team levels: Senior management visibly supports new products; team level leadership can be support, facilitation and encouragement.
- Integration with business processes: the inputs and outputs of all upstream activities are linked to new product development; facilitated by central business process organization.
- Flexibility: in terms of number of projects underway, length of time devoted to each stage, etc.
Figure 14.5
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Issues in Team Management
- Cross-functional interface management
- Overcoming barriers to market orientation (information flow across functional areas)
- Ongoing management of the team
- Team compensation and motivation
- Monetary vs. non-monetary rewards?
- Process-based vs. outcome-based rewards?
- Closing the team down
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Common Rewards to Motivate Teams
- Project completion celebrations
- Opportunity to work on a bigger and more meaningful project
- Writeup in company newsletter
- Plaques and pins
- Award dinners
Source: CPAS 2003 study.
Guidance in Setting Rewards
- Drawbacks to totally financial rewards: lazy team members also benefit; reward may not match the value of the idea to the firm.
- Align reward structure to project characteristics: for less complex projects, tie reward to profit outcome; for riskier ones, tie reward to processes (procedures, behaviors, completion of phases).
- Consider milestone rewards to boost team spirit.
Team Rewards in Action
- TRW’s Project Elite: specific goals are set for team projects and for each individual; 10-25% of pay tied to accomplishing these goals.
- DuPont “360-degree” review process: team members evaluated by peers, subordinates, and supervisors.
- Motorola: rewards team behavior and not only results; rewarding only results leads to risk aversion.
Five Conflict Management Styles
Figure 14.6
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|
Conflict Management Style |
Definition |
Example |
|
Confrontation |
Collaboratively solve the problem to reach a solution the parties are committed to. |
Debate the issue, conduct customer interviews, generate possible solutions, find the one most supported by customers. |
|
Give and Take |
Reach a compromise solution that the parties find acceptable. |
Negotiate a set of features to build into the product, to keep the project moving ahead. |
|
Withdrawal |
Avoid the issue, or the disagreeable party. |
Team members with unpopular positions don't think it's worth the trouble, and back out of the decision. |
|
Smoothing |
Minimize the differences and find a superficial solution. |
Accommodate to the team members that are strongly committed to certain product features, for the sake of group harmony. |
|
Forcing |
Impose a solution. |
Project manager steps in and makes the decisions. |
Source: Adapted from David H. Gobeli, Harold F. Koenig, and Iris Bechinger, "Managing Conflict in Software Development Teams: A Multi-Level Analysis," Journal of Product Innovation Management, Vol. 15, No. 5, September 1998, pp. 423-435.
Closing the Team Down
Alternative strategies:
- Close the team out early; gradually bring in operating people to turn product back over to the firm.
- Team stays involved and prepares for the marketing (writes plan and trains people), but then turns the product over to the firm for launch. Key team players stay in close contact.
- Team actually markets the product and may even manage the product as a new company division (rare).
Virtual Teams
- Teams that are linked electronically using collaboration software.
- Can communicate despite geographic dispersion.
- Synchronous or asynchronous mode.
- Challenges:
- Team members comfortable with technology
- Performance measurement and control
- Poor fit with firm values or cultures
- Firms may couple traditional plus virtual meetings to avoid some of these issues.
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Managing Globally Dispersed Teams
- Reasons for growth:
- Increasing product complexity
- Accelerated product life cycles
- Multicultural group should lead to greater creativity and problem solving, as long as communication barriers can be overcome
- Issues:
- Levels of language skills among team members
- Physical distance among team members
- Cultural differences among team members
- Difficulties in competing design reviews
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Successful Virtual Global Teams
- Boeing: used Web-based systems to integrate rocket engine designers and partner firms across several locations worldwide.
- Xerox uses the Web to integrate designers in Rochester, NY, engineers in Shanghai, and manufacturing plants in Hong Kong.
- Ford uses global platforms to support multiple brands where each group does the engineering on one system for all vehicles (one group does, for example, the exhaust system for all cars sold globally on the same platform). Ford claims to have achieved 60% savings in engineering costs as well as successful launches.
- Digital’s global team has members in U.S. (several locations), Switzerland, France, and Japan; uses audioconferencing for early, casual discussion followed by computer conferencing at stages.
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Supporting Diversity in Global Teams
- Philips: job rotation where employees are sent to foreign locations and work in different functional areas, for a 5-7 year period.
- Schering: technical people are moved between research centers in Berlin and Richmond.
- Kao (Japanese chemical company) shuttles workers between Japan and Germany; does predevelopment of hair care products in Tokyo and development in Darmstadt.
Insights on Global Innovation From Senior Executives
- Idea Generation:
- Leverage global knowledge.
- Source ideas from customers, employees, distributors, etc.
- Product Development:
- Focus on incremental vs. home run breakthroughs.
- Share development costs.
- Use standardization to better manage global operations.
- Commercialization:
- Early vs. late entrant decision.
- Consider local support/local partner.
Figure 14.7
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Conflict Management Style Definition Example
Confrontation Collaboratively solve the
problem to reach a solution
the parties are committed to.
Debate the issue, conduct
customer interviews, generate
possible solutions, find the one
most supported by customers.
Give and Take Reach a compromise solution
that the parties find
acceptable.
Negotiate a set of features to
build into the product, to keep
the project moving ahead.
Withdrawal Avoid the issue, or the
disagreeable party.
Team members with
unpopular positions don't think
it's worth the trouble, and back
out of the decision.
Smoothing Minimize the differences and
find a superficial solution.
Accommodate to the team
members that are strongly
committed to certain product
features, for the sake of group
harmony.
Forcing Impose a solution. Project manager steps in and
makes the decisions.
Source: Adapted from David H. Gobeli, Harold F. Koenig, and Iris Bechinger, "Managing Conflict
in Software Development Teams: A Multi -Level Analysis," Journal of Product Innovation
Management, Vol. 15, No. 5, September 1998, pp. 423 -435.