The Agile–Stage‐Gate Hybrid Model: A Promising New Approach and a New Research Opportunity

Agile development methodologies have been widely employed in the software industry, where they have been found to yield positive results. But can these new methods, with their new tools such as sprints, scrums, burndown charts, and backlogs, really be integrated with the traditional and popular Stage‐Gate approach and then applied to physical products? Initial but limited evidence suggests yes: Larger IT firms have already integrated Agile and Stage‐Gate and gained the benefits of both approaches; and most recently, a handful of manufacturing firms have employed this Agile–Stage‐Gate hybrid model for physical new products. And if recent evidence can be trusted, this new approach promises to be the most significant change to our thinking about how new‐product development should be done since the introduction of today's popular gating systems 30 years ago. The benefits of this hybrid model are a faster and more adaptive response to changing customer needs, better integration of voice‐of‐customer, better team communication, improved development productivity, and faster to market. A case example from a toy company, LEGO, is provided as an illustration. But there are negatives as well, and additionally, manufacturers must make modifications to Agile in order to adopt it successfully. Although initial results appear promising, much research is needed to explore this new Agile–Stage‐Gate hybrid model, and many research challenges remain.     

The drivers of success in new-product development

Why are some new products so successful and some companies outstanding performers in new-product development? The article identifies success factors from numerous research studies into NPD (new-product development) performance in industry. Three categories of success drivers have been defined. First, success drivers, that explain the success of individual new-product projects, are more tactical: They capture the characteristics of new product projects, such as certain executional best practices (building in voice-of-customer; doing the front-end homework; and adopting a global orientation for the project), and well as the nature of the product itself (a compelling value proposition, for example). A second category is drivers of success at the business level: They include organizational and strategic factors, such as the business's innovation strategy and how the firm makes its R&D investment decisions; how it organizes for NPD; climate and culture; and leadership The third category of success divers identified is the systems and methods the firm has in place for managing NPD, for example gating systems, Agile development approaches, and ideation methods. The details of each of these 20 success drivers, along with their managerial implications, are outlined in the article.     

Access regulation and geographic deployment of a new generation infrastructure

This paper addresses the impact of regulatory policy on levels of infrastructure deployment and derived welfare in the telecommunications sector. The model considers two potentially coexisting and partially competing technologies (the “old generation network” – OGN – and the “new” generation network – NGN). This framework allows us to show that the “regulation defining access charge in order to maximize infrastructure deployment” is strictly equivalent to the case in which “no regulation applies”. We also derive from the model that these two types of regulation induce higher social welfare, but lower numbers of NGN consumers, compared to the “ex post access prices” regulation. Finally, we show that the level of infrastructure deployment (as well as social welfare and number of NGN consumers) will be highest if both investment and access charge decisions are taken by the welfare maximizing regulator. This suggests that the social optimum will be achieved through a calls-for-tender process that includes deployment and access charge requirements.     

Front End Transfers of Digital Innovations in a Hybrid Agile-Stage-Gate Setting

Digital innovations often follow a more fluid innovation process and, therefore, require different ways of managing the front end of innovation. Agile as alternative to established front end management practices is often suggested, potentially combined with Stage-Gate, in what is called a hybrid Agile-Stage-Gate model, to reap the benefits from both. Implementing the hybrid model in the front end is however not sufficient for firms with separate Research and Development departments to succeed. In such organizations digital innovations still need to be transferred from Research, where the front end work on digital innovations takes place, to the Development department, where formal development actually starts. Yet, such front end transfers have been described as inefficient and ineffective. Realizing digital innovation front end transfers is likely even more challenging because of their fluid definition. In the absence of extant theory on front end transfers in such a setting, this research uses a case study approach to analyze the front end transfer experiences of the Research department of a firm in the lighting industry that is undergoing a transformation from traditional to digital lighting. The in-depth analysis of triangulated data on eight front end projects shows that Research struggles to transfer digital innovations to Development, because transfer practices in terms of management, scope, and synchronization, turn out to be inherently challenging in a hybrid Agile-Stage-Gate setting. Specifically, the results reveal that each transfer practice plays an intricate role in either facilitating (i.e., transfer management) or inhibiting (i.e., transfer scope and synchronization) front end transfers of digital innovations. The discovery of these opposing forces has important implications for novel theorizing on the use of Agile in the front end of digital innovation, transfer practices from Research to Development in a hybrid setting, as well as for theorizing about digital innovation management.     

Product development cycle time for business-to-business products

For a number of years, firms have been implementing changes in the way they develop new products, changes that are targeted at reducing overall product development cycle times. And over the years, a number of academics have conducted research trying to understand the factors that are related to reducing new product development (NPD) times. But the question remains — just how long does product development generally take in absolute numbers? Information on how long product development takes is helpful to firms for planning and controlling the flow of products into the marketplace and in determining resource needs for NPD. Other than anecdotal data pertaining to particular projects that have been commercialized by particular firms, very little hard data have been reported on this topic. This article analyzes data to quantify average cycle times for physical goods commercialized by business-to-business (B2B) firms. The data are a subset of a much larger data set from the Product Development & Management Association's (PDMA) Best Practices research. The analysis presents average product development cycle times for four different types of projects (new-to-the-world, new-to-the-firm, next generation improvements and incremental improvements), presents evidence of the lack of a relationship between cycle time and success and looks at factors that are associated with differences in the length of product development cycle times.     

The Role of Information Technologies in Enhancing R&D–Marketing Integration: An Empirical Investigation

The effective integration of research and development (R&D) and marketing contributes to the development of successful new products. Barriers such as physical separation of R&D and marketing, goal incongruity, and cultural differences hamper the cross‐functional cooperation. However, it may not be either possible or desirable to eliminate the cross‐functional integration barriers in practice. Previous research findings suggest that information technology (IT) can be used to reduce the negative impact of the barriers. This paper examines the moderating role of communication technologies (ITc) and decision‐aiding technologies (ITd) in improving the R&D–marketing integration in new product development. The empirical findings from analyzing data on 171 new product development projects suggest that both IT systems can be used to reduce the negative impact of physical separation, goal incongruity, and cultural differences on R&D–marketing integration. However, effectiveness of the two types of IT differs. While IT_c appears to be more effective than IT_d in overcoming the constraint of physical separation, IT_d is more effective than IT_c in reducing the negative impact of goal incongruity and cultural differences. IT_c is found to have the strongest effect on reducing the negative relationship of physical separation and integration, a less strong effect on cultural differences, and a weak effect on goal incongruity. Conversely, IT_d is found to have a strong effect on goal incongruity. These empirical findings provide guidelines for project managers using a specific IT to address a specific integration barrier. If the major barrier is physical separation, IT_c is the best solution. On the other hand, if the major barrier is goal incongruity, IT_d is the best solution. In addition, it is important for management to note that IT requires more than simply installing computer hardware and software. In addition to investing in those “hard” improvements, project managers should strive to create a supportive “soft” environment by consistently improving members' IT experiences and familiarity. In the process of the continuous development of IT, state‐of‐the‐art technologies should be introduced in a timely manner and be made accessible to all team members. Finally, project managers should frequently observe their industry peers' IT usage to keep up with advances.     

What determines the scope of the firm over time and around the world? An Asia Pacific perspective

“What determines the scope of the firm?” is a fundamental question in strategy research. We argue that a new generation of diversification research needs to address the extended question: What determines the scope of the firm—both product and geographic—over time and around the world? This article has three goals: (1) to increase awareness among researchers on the necessity to add the much needed but often neglected time and geographic dimensions by introducing a new typology in diversification research, (2) to review how Asia Pacific research, including articles in this Special Issue, has contributed to our global understanding along both dimensions, and (3) to advance an institution-based view on diversification strategies that has largely been propelled by Asia Pacific research.     

Why history matters: Micro-and macro-foundations in a corporate de alio spinoff

Much of the discussion surrounding dynamic capabilities has focused on mature and established corporate enterprises escaping core rigidities. Less understood is the role of dynamic capabilities in corporate spinoffs that represent a category of de alio (“from others”). These firms offer a novel context when investigating dynamic capabilities, as they are technically “new” firms yet demonstrate a level of establishment due to privileged access to resources from a corporate parent. We explore how incubation and attachment to a parent influences tacit and explicit transfer of resources and supports sensing and seizing in the early growth corporate de alio spinoff, promoting opportunities for transformation as the spinoff matures. Through an analysis of a longitudinal, empirical, illustrative case, we integrate Garnsey's Penrosean-inspired Theory of the Early Growth of the Firm with Teece's dynamic capabilities framework to illustrate how micro- and macro-foundations of dynamic capabilities unfold in a corporate de alio spinoff during incubation and following spinoff. This study builds an understanding of how corporate de alio spinoffs can more successfully navigate ambiguity by leveraging dynamic capabilities, the foundations of which emerge in a parent entity.     

Adaptive marketing capabilities,dynamic capabilities,and renewal competences: The “outside vs. inside” and “static vs. dynamic” controversies in strategy

Three streams of strategic thought, (1) the “adaptive marketing capabilities” works, (2) the “dynamic capabilities” view, and (3) resource-advantage (R-A) theory, are converging on the view that, in today's dynamic, hypercompetitive, global economy, strategy must focus on firms' constantly renewing themselves in the marketplace. In turn, these three streams have implications for the controversies over whether strategy's focus should be “outside-in or inside-out” and whether strategy should be static or dynamic. This article addresses the three streams of strategic thought and the two controversies by (1) explicating their nature, (2) showing how strategies related to them have evolved through time, and (3) pointing toward the controversies' resolution. The article argues that all theories of strategy assume a theory of how competition works. In turn, theories of competition are housed within disciplinary research traditions. Therefore, understanding the controversies in contemporary strategy is furthered by understanding both the theories of competition that underlie each strategic approach and their respective research traditions.     

Strategic concepts as micro‐level tools in strategic sensemaking

Research Summary: The purpose of this article is to illuminate the role of concepts in strategic sensemaking. Based on a longitudinal real‐time study of a city organization, we demonstrate how the concept of “self‐responsibility” played a crucial role in strategic sensemaking. We develop a theoretical model that elucidates how strategic concepts are used in meaning‐making, and how such concepts may be mobilized for the legitimation of strategic change. Our main contribution is to offer strategic concepts as a missing micro‐level component of the language‐based view of strategic processes and practices. By so doing, our analysis also adds to studies on strategic ambiguity and advances research on vocabularies. Managerial Summary: Our analysis helps to understand the role of strategic concepts, that is, specific words or phrases with established and at least partly shared meanings, in an organization's strategy process. We show how adopting the concept “self‐responsibility” helped managers in a city organization to make sense of environmental challenges and to promote change. Our analysis highlights how such concepts involve ambiguity that can help managers to establish common ground, but can also hinder implementation of specific decisions and actions if it grows over time. We suggest that under environmental changes, development of new strategic concepts may be crucial in helping managers to collectively deal with environmental changes and to articulate a new strategic direction for the organization.     

A service design perspective on the stakeholder engagement journey during B2B innovation: Challenges and future research agenda

Innovation in business-to-business (B2B) contexts deals with highly dynamic, complex, and heterogeneous constellations of stakeholders with a diversity of goals, motives, and capabilities that further challenge successful management of B2B innovation processes and outcomes. Complex challenges, such as sustainability and digitization trends, push these B2B firms to embrace new innovation methods that help them manage disruptive change. Service design thinking has emerged as an innovation management practice emphasizing a human-centered innovation process of user interactions, creativity, and learning mindsets. In this article, we aim to evaluate the challenges and develop a research agenda on how service design can effectively enable stakeholders' engagement during the B2B innovation process. We argue that to advance service design opportunities for stakeholder engagement, we need to address the unique complexities and challenges of stakeholder engagement during innovation from a systemic and dynamic process perspective. From a systemic perspective, we zoom in on the building blocks of stakeholder engagement and address multi-level stakeholder engagement platforms (i.e., innovation networks). From a dynamic process perspective, we treat stakeholder engagement as an emerging process and zoom in on the temporal and relational connections and hybrid orchestration to allow for both structural and emerging stakeholder engagement during innovation. We develop a stakeholder engagement journey in which we integrate service and innovation stages and propose how service design activities can support and facilitate the aforementioned challenges and complexities. Finally, we identify concrete research questions and, accordingly, develop a research agenda for future research on stakeholder engagement in B2B innovation trajectories.     

Supplier evaluation as a new marketing tool

Sales people contacting potential industrial buyers are selling more than just a physical product or a service, they are selling the total benefits offered to the buying firm—the “augmented” product. (P. Kotler, Marketing Management. Prentice-Hall, Englewood Cliffs, NJ, 1976). In today's market, the product benefits that are critical in making a sale are those that a firm adds “to their factory output in the form of packaging, services, advertising, customer advice, financing, delivery arrangements, warehousing, and other things that people value” (T. Levitt, The Marketing Mode. McGraw-Hill, New York, 1969). The salesperson, however, may often err in the presentation of the “augmented” product to the customer due to lack of information on the buyer's needs. These errors are compounded by lack of knowledge about which dimensions of the “augmented” product give the competitive advantage to the firm. This article proposes a new role for supplier performance evaluation that can contribute greatly to the effectiveness of the industrial marketer.     

Market sensing,dynamic capability,and competitive dynamics

This is a research commentary to the following article:Hunt, S. D., & Madhavaram, S. (2019). Adaptive marketing capabilities, dynamic capabilities, and renewal competences: The “outside vs. inside” and “static vs. dynamic” controversies in strategy, Industrial Marketing Management, in press. https://doi.org/10.1016/j.indmarman.2019.07.004.     

The rise of IT services clusters in India: A case of growth by replication

The Indian IT services sector has grown from small beginnings at the bottom of value creation to a major player in the global information and communications technology (ICT) industry. It commands a 55% share in the global market for IT services. India's IT sector value proposition in terms of low cost with large supply of high quality talent is compelling. As a result, India has become the premier choice not only for outsourcing IT services by the developed-world's multinational corporations (MNCs) but also for locating their own Global In-house Centers (GICs), which simultaneously compete and partner with local firms. This gave rise to six additional clusters beyond the earliest, largest and robust cluster, Bangalore. The paper provides a review of relevant literature; develops a conceptual framework for evaluation of clusters; and presents data and analysis with respect to relative size, growth, specialization, MNC presence and connectivity to local firms through expatriates and returning Indians, ,innovation; and discusses adequacy of ICT infrastructure for future growth. Although there are clear signs that the Indian IT sector has been moving towards a regime of providing high-end value added services, the sector's value proposition – lower cost combined with a large supply of high quality talent – remains the single most compelling reason for the rise and growth of multiple export clusters. Thus the sector's growth appears to be a case of growth by replication rather than innovation. The paper concludes that the Indian IT sector's value proposition in terms of lower cost combined with large supply of high quality talent remains the single most compelling reason for the rise and growth of multiple IT services export clusters. While the old adage, “people follow jobs” still holds for large part of the labor force, there is little doubt that the sprawling IT services clusters in India - with more to come from Tier II and Tier III cities – indicate, in fact, that “jobs follow talent." Both local firms and the MNCs, through their GICs, are pushing the boundaries of location farther and farther to continue to leverage cost advantage and available pools of talent.     

Strategic repertoire variety and new venture growth: The moderating effects of origin and industry dynamism

New ventures (companies eight years or younger) face an important choice in attempting to achieve growth: Should they follow “strategic simplicity” by relying on a few similar competitive actions, or emphasize “strategic variety” by implementing multiple different competitive actions? Data from 140 new ventures in Spain suggest that new ventures benefit from pursuing strategic variety, especially when their industries are highly dynamic. Further, although new ventures in general gain from strategic variety in highly dynamic industries, independently owned ventures achieve higher growth rates than their corporate counterparts. Copyright © 2013 John Wiley & Sons, Ltd.     

Communicative skills that support value creation: A study of B2B interactions between customers and customer service representatives

Although interaction has been acknowledged as central in value creation there is still a lack of empirical studies on how value creation is accomplished in practice, and in particular how communicative skills support customers' value creation. The purpose of this paper is therefore to generate a deeper understanding of how customer service representatives' communicative skills in conversations with customers support customers' value creation. We argue that value creating processes correspond to customers' roles as “feelers”, “thinkers” and “doers”. Accordingly, value creation involves three interdependent elements, an emotional, a cognitive and a behavioral. Based on a qualitative research design, drawing on an empirical study of 80 telephone conversations between customers and customer service representatives in a business-to-business context, the paper demonstrates three communicative skills that are essential in supporting customers' value creation: attentiveness, perceptiveness and responsiveness. The findings show how employees, by means of these communicative skills support customers' value creation. Attentiveness supports cognitive elements of the customers' value creating processes, whereas perceptiveness supports value creation in terms of cognitive, behavioral and emotional aspects. Finally, responsiveness supports the customer's cognitive as well as behavioral value creation.     

<Emphasis Type="Italic">Tian-ren-he-yi</Emphasis> strategy: An Eastern perspective

Research on the business-environment dilemma has traditionally focused on strategies based on isolated, either/or mindsets, such as economically-oriented and environmentally-oriented strategies. Drawing on the cultural, philosophical, and intellectual traditions of China, we sketch the contours of a new holism-based strategic mindset, which results in a tian-ren-he-yi strategy. As an Eastern perspective, tian-ren-he-yi means “nature and mankind combined as one” or “nature-human harmony.” We leverage both qualitative and quantitative investigations to first identify the underlying mechanisms connecting tian-ren-he-yi strategy and firm performance, and then to compare the performance-enhancing potential of tian-ren-he-yi strategy with the two strategies based on the isolated mindset. Our analysis shows that when managing the business-environment dilemma, tian-ren-he-yi strategy has stronger performance-enhancing potential than either economically-oriented or environmentally-oriented strategies.     

The Internal Rate of Return Approach and the AIRR Paradigm: A Refutation and a Corroboration

This article shows that the internal rate of return (IRR) approach is unreliable and that the recently introduced average internal rate of return (AIRR) model constitutes the basis for an alternative theoretical paradigm of rate of return. To this end, we divide the paper into two parts: a pars destruens and a pars construens. In the “destructive” part, we present a compendium of 18 flaws associated with the IRR approach. In the “constructive” part, we construct the alternative approach from four (independent) economic intuitions and put the paradigm to the test by showing that it does not suffer from any of the flaws previously investigated. We also show how the IRR, as a rate of return, is absorbed into the new approach.     

Willingness-to-pay for natural,organic, and conventional foods: The effects of information and meaningful labels

Vague food labels and distorted product claims have persisted in the “natural” food industry, while organic claims can be certified by the U.S. Department of Agriculture (USDA). Using experimental methods and a sample of randomly selected subjects, we test food label and information treatment effects on subjects' willingness-to-pay (WTP) for organic, “natural,” and conventional foods. Random nth-price auctions are used to elicit WTP after subjects received one of five randomly assigned information treatments. We find large information effects, including asymmetric cross-market effects for natural and organic foods. Perhaps surprising is that organic premiums increase in response to subjects seeing the “natural” foods industry's perspective on its products. Demographics effects are also important. The results have practical implications for natural and organic food marketing and valuing products where there are vague claims about their attributes.