Managing Innovation Champions: The Impact of Project Characteristics on the Direct Manager Role*

A key challenge for organizations seeking to improve the management of innovation lies in determining when to lend direct managerial support, and how much support, to those championing such projects. This research provides insights into the connection between project characteristics and the type and frequency of direct manager involvement. As such, it addresses the following research question: how does the level of project innovativeness, strategic relatedness, and resource requirements impact the level of empowerment of innovation champions and the sponsor or supervisor role played by managers? The research method involves a survey of 89 project champions from four divisions of large, multinational Korean companies. The results show that when innovativeness was high but projects were strategically related, there was greater project champion empowerment but also a more frequent managerial sponsor role. This suggests it may be best to allow innovators, who are close to the project's markets, technologies, and industry conditions, to have greater freedom over objectives and decisions. Yet they may also need the advice and support of their managers to function optimally under the highly uncertain conditions that characterize innovative projects. This combination of empowerment and a sponsor role, though appropriate for highly innovative projects, may also require high strategic relatedness, however. On the other hand, when projects are less strategically related and when resource requirements are high, the analysis suggests managers are more likely to exert control. Managers may therefore need to become more closely involved in decision making for costly ventures representing new strategic directions for their organizations. Overall, this research suggests that both empowerment and manager roles are relevant to the management of innovation. These results offer academic value in recognizing the nature of the direct manager role under different innovation project conditions. It further reveals a need for academics to recognize both the supervisor and sponsor roles in the management of innovation. For managers, the findings suggest that for organizations to effectively develop and commercialize innovations managers need to recognize when certain projects call for different levels and types of involvement.     

The budgeting process for R&D laboratories

The author had been associated with the writing of a short series of case studies into the process by which companies allocate their R&D budgets to individual departments or projects. A key question became the location of responsibility for determining the objectives of work under-taken in R&D, and also responsibility for the allocation of resources in R&D.
The cases revealed that decisions were taken by senior R&D managers at one extreme, and by marketing or production managers at the other, but also most often jointly between the functions with different weightings of authority. The parameter most clearly differentiating between the loci of responsibility was the project duration. This led to the development of a two dimensional diagram correlating the expected remaining duration of the project, with the locus of responsibility for its management.
It is expected that this model which fits current practice into a normative framework will enable organizations to review and adjust their present methods of coping with the complexities of R&D budgeting.     

Coordination of Design Supply Chains for Bundling Physical and Software Products*

Research on product development management has concentrated on physical products or on software, but not both. This article explores a special new product development (NPD) approach in which the internal development of core physical products is augmented by bundled and largely outsourced software features. We studied a medical device producer that has established a new medical information product group (MIPG) within their NPD organization to create software features that are bundled with their core physical products. The MIPG has conceptualized these software features as multiple software development projects, and then coordinated their realization largely through the use of external software suppliers. This case study centers on the question: how can firms effectively coordinate such product development processes? Our analysis of case evidence and related literature suggests that such product bundling processes, when pursued through design supply chains (DSC), are more complex than is typical for the development of streams of either physical products or software products individually. We observe that DSC coordination transcends the requirements associated with traditional “stage‐gate” NPD processes used for physical product development. Managers in DSC settings face a tension inherent to distributed work: keeping internal and external development efforts separate to exploit the design capabilities within a network of software suppliers, while ensuring effective delivery of a stream of bundled products. Many managers face this coordination tension with little, if any, prior knowledge of how to create a streamlined and effective DSC. Our research indicates that these managers need to make a series of interrelated decisions: the number of suppliers to qualify and include in or exclude from the DSC; the basis for measuring and modifying the scope of the suppliers' work; the need to account for asymmetric cost structures and expertise across the DSC; the mechanisms for synchronizing development work across elements of the DSC; and the approaches for developing skills—both technical and administrative—that project managers need for utilizing in‐house competencies while acquiring and assimilating design know‐how from external development organizations. When managers take a flexible approach toward these decisions based on a modular set of software development projects, they can improve their NPD outcomes through technical and organizational experimentation and adjust their own resource deployment to best utilize the suppliers' capabilities within their DSC.     

Who is governing whom? Executives,governance, and the structure of generosity in large U.S. firms

We examine how organizational structure influences strategies over which corporate leaders have significant discretion. Corporate philanthropy is a strategic activity commonly managed through a specific, differentiated organizational structure—the corporate foundation—that formalizes and constrains the influence of individual senior managers and directors on corporate strategy. Our analysis of Fortune 500 firms from 1996 to 2006 shows that characteristics of senior management and directors affect corporate philanthropic contributions. We also find that organizational structure constrains the philanthropic influence of board members, but not of senior managers, a result contrary to what existing theory would predict. We discuss how these findings advance understanding of how organizational structure and corporate leadership interact and how organizations can more effectively realize the strategic value of corporate social responsibility activities.     

Upper management control of new product development projects and project performance

While some degree of freedom and flexibility is an essential ingredient to productive cross‐functional NPD teams, upper‐managers are faced with the challenge of instituting effective control mechanisms which head projects in the right strategic direction, monitor progress toward organizational and project goals, and allow for adjustments in the project if necessary. But too much or the wrong type of control may constrain the team's creativity, impede their progress, and injure their ultimate performance. Therefore, this study examines formal and interactive control mechanisms available to upper‐managers in controlling new product development (NPD) projects, and the relationship between these mechanisms and NPD project performance. Formal output and process controls are examined which consist of the setting and monitoring of outcomes, such as goals, schedule and budgets, and of processes and procedures, respectively. This study also looks at how the effectiveness of these control mechanisms may be contingent upon the degree of innovativeness in the project and the degree to which the project is part of a broad product program. In addition, the use of formal rewards for achieving team performance as opposed to rewards for individual achievement is investigated. Lastly, interactive controls are examined which consist of upper‐managers interacting directly with project members in the development of strategy and operational goals and procedures prior to the start of the project, and upper‐managers intervening in project decision‐making. Questionnaire data are collected on 95 projects across a variety of industries. The findings suggest that while NPD projects teams need some level of strategic direction concerning the objectives to be accomplished and the procedures to be followed, upper‐level managers can exert too much control. In particular, the findings showed a negative association between the use of upper manager‐imposed process controls and project performance. The findings also indicated that the degree to which upper‐managers intervened in project‐level decisions during the project was negatively related to project performance. However, the results showed support for the notion that early and interactive decision‐making on control mechanisms is important for effective projects. In particular, early team member and upper‐management involvement in the setting of operational controls, such as goals and procedures for monitoring and evaluating the project, was positively associated with project performance. This study provides additional insight into our understanding of upper‐management support in new product development. The study suggests that upper‐managers can over control with the wrong type of controls, and suggests effective ways of implementing participative and interactive control mechanisms.     

Models in action: how management models are interpreted in new product development

This paper studies the use of product development management models. Through an interpretive research approach based on in-depth interviews with 22 middle managers in two product development organizations, five ways of conceiving projects, project management and the role of models are identified – administrative, organizing, sense giving, team building and engineering – all representing different perspectives on – and ways of using models. The findings question essentialist views of models, common in the literature, as either normative guides for action or symbolic tools decoupled from action. Instead, the study indicates a large variety in the use of models mediated by the user's conception of the situation and the model. The study highlights the communicative role of models as boundary objects, enabling coordination of and communication about different conceptions of the development task. Rather than contributing to behavioral standardization (an implicit assumption that underlies most formal models), this study suggests that models support cognitive standardization by providing a common set of concepts and a framework that may be drawn upon in making sense of complex product development projects.     

规范项目工程《质量监督通报》之浅析——西气东输“南京二条管线工程”质量监督的实践与探索

针对石油天然气产建工程和长输管道工程建设分散、点多、面广、线长的特点,就工程质量监督站如何履行政府质量监督职能、加强基层项目监督机构的建设、加强责任主体各方质量管理、促进工程质量提高进行了探讨。结合石油天然气长庆工程质量监督站冀宁监督项目部承担西气东输干线和后续支线项目工程,从规范《工程质量监督通报》的角度阐述了创新质量监督工作模式在西气东输“南京二条管线工程”质量监督实践中取得的监督效果。     

Managing the Sources of Uncertainty: Matching Process and Context in Software Development

There is increasing interest in the literature about the notion of a contingent approach to product development process design. This interest stems from the realization that different types of projects carried out in different environments are likely to require quite different development processes if they are to be successful. Stated more formally, a contingent view implies that the performance impact of different development practices is likely to be mediated by the context in which those practices operate. This article provides evidence to support such a view. Our work examines whether projects in which the development process matches the context achieve superior performance. We focus on two sources of uncertainty that generate challenges for project teams: platform uncertainty, reflecting the uncertainty generated by the amount of new design work that must be undertaken in a project; and market uncertainty, reflecting the uncertainty faced in determining customer requirements for the product under development. We develop hypotheses for how these sources of uncertainty are likely to influence the relationships between a number of specific development practices and performance. We then test these hypotheses using data from a sample of 29 Internet software development projects. Our results provide evidence to support a contingent view of development process design. We show that in projects facing greater uncertainty, investments in architectural design, early technical feedback, and early market feedback have a stronger association with performance. The latter relationships are influenced by the specific sources from which this uncertainty stems: platform uncertainty mediating the impact of early technical feedback and market uncertainty mediating the impact of early market feedback. Our results also indicate that while greater uncertainty is associated with making later changes to a product's design, this practice is not associated with performance. Our findings suggest that managers carefully must evaluate both the levels and sources of uncertainty facing a project before designing the most appropriate process for its execution. In particular, they should explore the use of specific development practices based upon their usefulness in resolving the specific types of uncertainty faced. Importantly, these decisions must be made at the start of a project, with purposeful investments to create a process that best matches the context. Reacting to uncertainty ex‐post, without such investments in place, is unlikely to prove a successful strategy.     

Orchestrating corporate social responsibility in the multinational enterprise

Research Summary: Multinational enterprises (MNEs) invest significant resources in corporate social responsibility (CSR), but their attempts to build a global “social brand” may clash with the execution of operational strategies at a subsidiary level. Using a game-theoretic model, this research addresses the complex interplay of different contingencies that shape the coordination and control challenges facing MNEs when they implement global CSR strategies, including brand spillovers, the risk of public scandals caused by irresponsible behavior, the size of the MNE network, as well as the roles played by nongovernmental organizations and altruistic managers. Challenging the view of CSR as insurance against lapses of responsible conduct, our model shows that investment in social brands helps avoid irresponsible practices across the MNE network, thereby inducing subsidiaries to “walk the talk.” Managerial Summary: Global social brands are increasingly valuable to multinational enterprises (MNEs), which makes the control and coordination of responsible behavior across their network of foreign subsidiaries a relevant managerial challenge. Indeed, lapses of responsible conduct at the subsidiary level often generate reputational damage at the multinational level. This research explores several mechanisms that help MNEs manage this coordination and control challenge. First, it shows under what conditions MNEs can leverage their investments in social brands to induce responsible practices across their global network. Second, it illustrates how MNEs can exploit collaborations with nongovernmental organizations to reduce the costs of coordinating and controlling their subsidiaries. Finally, it identifies conditions under which MNEs benefit from hiring altruistic managers to run their subsidiaries.     

The Decision to Exploit an R&D Project: Divergent Thinking across Middle and Senior Managers

Research and development (R&D) generates projects, but the question often remains: which projects should be exploited? Building on the innovation, strategy, and managerial cognition literatures, we use a conjoint field experiment to collect data on 4032 decisions made by 126 R&D managers to test how project attributes, strategic context, and managers' characteristics influence innovation exploitation decisions. Using hierarchical linear modeling, we find that (1) experience impacts project exploitation decision policies of middle managers more than senior managers, (2) divergent thinking across middle and senior managers increases with experience, and (3) experienced middle managers diverge from experienced senior managers in their decisions to exploit opportunities by placing greater emphasis on strategic context (relative to competitors and fit within the portfolio) and lesser emphasis on uncertainty (technological and demand). These findings have implications for the strategy and innovation literature.     

The Role of Departmental Thought Worlds in Shaping Escalation of Commitment in New Product Development Projects

The debate over whether and how thought worlds of different departments (especially marketing and research and development [R&D]) affect managers' decision-making behavior in new product development (NPD) is ongoing. A key challenge of these decisions is to deal with deteriorating NPD projects, which are often subject to escalation of commitment (EoC), with many firms wasting billions of dollars by throwing good money after bad NPD projects. However, understanding departmental thought worlds and their role for EoC in NPD could help firms stop this profusion. Thus, this research provides answers to the question of how thought worlds affect managers' tendency toward EoC in NPD decision-making—both in general and under certain project characteristics. To do so, we conducted four studies based on real-life scenarios with 460 highly experienced NPD managers from marketing and R&D, thus ensuring high validity and reliability. Our research is the first to explore the impact of thought worlds on EoC, thereby detecting that the importance of managers' thought worlds for shaping EoC varies with the NPD project's characteristics. Thus, depending on the specific project situation, different types of managers may be more or less capable of making proper NPD decisions. Moreover, results show that belief updating serves as a respective key mediator. Doing so enriches the theory by showing that managers' thought worlds can substantially influence a major mechanism (i.e., belief updating) of coping with cognitive dissonance. Finally, post hoc tests reveal departmental differences in EoC behavior between marketing and R&D that vary with a project's characteristics. These results imply that firms need to carefully consider who is in charge of making decisions on NPD project continuance in different project situations.     

Exploring New Product Development Project Review Practices*

Most organizations use new product development (NPD) processes that consist of activities and review points. Activities basically solve problems and gather and produce information about the viability of successfully completing the project. Interspersed between the development activities are review points where project information is reviewed and a decision is made to either go on to the next stage of the process, stop it prior to completion, or hold it until more information is gathered and a better decision can be made. The review points are for controlling risk, prioritizing projects, and allocating resources, and the review team typically is cross‐disciplinary, comprising senior managers from marketing, finance, research and development (R&D), or manufacturing. Over the past four decades, research has greatly advanced knowledge with respect to NPD activities; however, much less is known about review practices. For this reason, the present paper reports findings of a study on NPD project review practices from 425 Product Development & Management Association (PDMA) members. The focus is on three decision points in the NPD process common across organizations (i.e., initial screen, prior to development and testing, and prior to commercialization). In this paper, the number of (1) review points used, (2) review criteria, (3) decision makers on review committees and the proficiency with which various evaluation criteria are used are compared across incremental and radical projects and across functional areas (i.e., marketing, technical, financial). Furthermore, the associations between these NPD review practices and new product performance are examined. Selected results show that more review points are used for radical NPD projects than incremental ones, and this is related to a relatively lower rate of survival for radical projects. The findings also show that the number of criteria used to evaluate NPD projects increases as NPD projects progress and that the number of review team members grows over the stages, too. Surprisingly, the results reveal that more criteria are used to evaluate incremental NPD projects than radical ones. As expected, managers appear to more proficiently use evaluation criteria when making project continuation/termination decisions for incremental projects; they use these criteria less proficiently during the development of radical projects, precisely when proficiency is most critical. At each review point, technical criteria were found to be the most frequently used type for incremental projects, and financial criteria were the most commonly used type for radical ones. Importantly, only review proficiency is significantly associated with performance; the number of review points, review team size, and number of review criteria are not associated with new product performance. Furthermore, only the coefficient for proficiently using marketing criteria was significantly related to new product program performance; the proficiency of using financial and technical information has no association with performance. Finally, across the three focal review points of the NPD process in this study, only the coefficient for proficiency at the first review point, (i.e., the initial screen) is significantly greater than zero. The results are discussed with respect to research and managerial practice, and future research directions are offered.     

Contributing beyond the call of duty: examining the role of culture in fostering citizenship behavior and success in project-based work

Shifting goals, priorities and evolving customer demands require an exceptional effort, beyond the call of duty, on the part of employees to increase the likelihood for successful implementation of technologically driven projects. Our model posits that citizenship behavior, which captures individuals' behavior that goes above and beyond prescribed roles, effects project success and is influenced by the culture that exists in the project. We provide support for the model utilizing 222 participants in 71 product development, IT implementation and engineering projects, originating in firms from various industries in the United States using structural equation modeling. Owing to the constraints typically facing project managers, in terms of personnel availability and control over rewards, our findings suggest that project culture can be used by managers as an alternative lever to trigger employees' citizenship behavior, which in turn drives success. We provide valuable implications for individuals assigned to lead projects, who are concerned with aligning project culture with citizenship behavior, as part of their planning activities.     

From Experience: Linking Projects to Strategy

There is a dramatic rise in the use of project management as organizations shift to provide customer-driven results and systems solutions. Some implementations of project management have been successful, whereas others are spectacular failures. A common occurrence in many organizations is too many projects being attempted by too few people with no apparent link to strategy or organizational goals. Research and experience indicate that the support of upper management is critical to project success. This article reviews actions that upper managers can take to create an environment for more successful projects in their organizations. Specifically, the authors discuss practices for upper manager teamwork and offer a complete model for selecting projects that support a strategic emphasis. The article includes experiences from within Hewlett-Packard Company. © 1999 Elsevier Science Inc.     

Managing radical innovation: an overview of emergent strategy issues

Despite differences in definitions, researchers understand that radical innovation within an organization is very different from incremental innovation , and and that it is critical to the long-term success of firms. Unfortunately, research has also shown that it is often difficult to get support for radical projects in large firms [14], where internal cultures and pressures often push efforts toward more low risk, immediate reward, incremental projects. Interestingly, we know considerably less about the effective management of the product development process in the radical than in an incremental context. The purpose of this study is to explore the process of radical new product development from a strategic perspective, and to outline key observations and challenges that managers face as they move these projects to market. The findings presented here represent the results of a longitudinal (since 1995), multidisciplinary study of radical innovation projects. A multiple case study design was used to explore the similarities and differences in management practices applied to twelve radical innovation projects in ten large, established North American firms. The findings are grouped into three high-level strategic themes. The first theme, market scope, discusses the challenges associated with the pursuit of familiar versus unfamiliar markets for radical innovation. The second theme of competency management identifies and discusses strategic challenges that emerge as firms stretch themselves into new and unfamiliar territory. The final theme relates to the people issues that emerge as both individuals and the project teams themselves try to move radical projects forward in organizations that are not necessarily designed to support such uncertainty.A breadth of subtopics emerge within and across this framework relating to such ideas as risk management, product cannibalization, team composition, and the search for a divisional home. Taken together, our observations reinforce the emerging literature that shows that project teams engaging in radical innovation encounter a much different set of challenges than those typically faced by NPD teams engaged in incremental innovation.     

Networks and the Decision to Persist with Underperforming R&D Projects

Drawing on aspiration level theory and the networks literature, this paper develops a model toward decision makers' persistence with underperforming R&D projects based on the perceived properties of their personal network. The assumption is that positive feedback from network partners motivates persistence, and that this effect is multiplied when the decision makers' network is larger and denser, when network ties are predominantly strong, and when communication frequency within the network is high. The model is tested by a field experiment and conjoint methodology. Analysis of 1632 persistence decisions nested within 51 scientists responsible for R&D projects reveals that more positive feedback enhances persistence of underperforming R&D projects, and that this effect becomes stronger with increasing network size, network density, and communication frequency. These findings extend the project management literature by focusing on the social environment of the decision maker as one so far neglected factor in empirical studies on persistence decisions. Moreover, this study is among the first to investigate contingency relationships between feedback received from network partners and network structure. Finally, while most studies have emphasized that individuals and organizations can profit from their engagements in social networks, this paper suggests a potential dark side of networks by showing that networks can encourage decision makers to persist with their investment in an underperforming—and potentially failing—project. These results can help project managers involved in networking activities to better understand the effects of these activities on their decision policies, and thus draw better and more accurate decisions. Second, this study provides insights into how organizational strategy with respect to dissemination of R&D results and involvement of the organization's R&D managers in the scientific community influences the persistence of underperforming R&D projects, and thereby the organization's R&D expenditures. This can assist top managers to design financial controls and allocate financial resources to managers of underperforming R&D projects in line with the organization's networking strategy.     

The marketing strategy of a project-based firm: The Four Portfolios Framework

The purpose of this paper is to address the simultaneous management of multiple business relationships and multiple projects in the marketing strategy of the project-based firm. The research question is: How can the essence and interdependencies between the portfolios of relationships and projects be conceptualized as the marketing strategy of a project-based firm? We address this question by constructing a framework including two portfolios of relationships and two portfolios of projects, and by discussing how these portfolios may be interrelated. Combining the approaches of relationship management in project marketing on the one hand and the management of project portfolios on the other contributes a novel viewpoint to project marketing.     

Individual differences, environmental scanning, innovation framing, and champion behavior: key predictors of project performance

Although increasing evidence points to the importance of champions for keeping product innovation ideas alive and thriving, little is known about how champions identify potential product innovation ideas, how they present these ideas to gain much needed support from key stakeholders, and their impact on innovation project performance over time. Jane M. Howell and Christine M. Shea address this knowledge gap by using measures of individual differences, environmental scanning, innovation framing and champion behavior to predict the performance of 47 product innovation projects. Champion behavior was defined as expressing confidence in the innovation, involving and motivating others to support the innovation, and persisting under adversity. Interviews with 47 champions were conducted to collect information about the innovation projects and the champions' tendency to frame the innovation as an opportunity or threat. Survey data were obtained from three sources: 47 champions provided information on their personal characteristics (locus of control and breadth of interest) and activities (environmental scanning), 47 division managers subjectively assessed project performance at two points in time, and 237 innovation team members rated the frequency of champion behavior. The results revealed that an internal locus of control orientation was positively related to framing the innovation as an opportunity, and breadth of interest was positively related to environmental scanning. Environmental scanning of documents and framing the innovation as a threat was negatively related to champion behavior, while environmental scanning through people was positively related to champion behavior. Champion behavior positively predicted project performance over a one‐year interval. Overall, the findings suggest that in scanning the environment for new ideas, the most effective source of information is the champion's personal network of people inside and outside the organization. Also, the simple labeling of an idea as a threat appears to diminish a champion's perceived influence and erode credibility in promoting an innovation. From the perspective of division managers, champions make a positive contribution to project performance over time, reinforcing the crucial role that champions play in new product development process.     

Managing complex programs: a review of major research findings

Managing large-scale research and development projects is without question a difficult task. Success is often dependent on the ability of the project manager to successfully cope with a myriad of unpredictable situations. To assist project managers, the authors review several of the most significant recent research studies to identify potentially useful insights for those charged with the administration of complex research and development projects. Specifically, five areas of research are examined, namely, (1) project manager leadership styles; (2) conflict management; (3) decision-making styles; (4) organizational design considerations and project authority; and (5) the relationships of the project team with the parent, client, and other external organizations.     

Using mean-Gini and stochastic dominance to choose project portfolios with parameter uncertainty

Although a variety of models have been studied for project portfolio selection, many organizations still struggle to choose a potentially diverse range of projects while ensuring the most beneficial results. The use of the mean-Gini framework and stochastic dominance to select portfolios of research and development (R&D) projects has been gaining attention in the literature despite the fact that such approaches do not consider uncertainty regarding the projects’ parameters. This article discusses, with relation to project portfolio selection through a mean-Gini approach and stochastic dominance, the impact of uncertainty on project parameters. In the process, Monte Carlo simulation is considered in evaluating the impact of parametric uncertainty on project selection. The results show that the influence of uncertainty is significant enough to mislead managers. A more robust selection policy using the mean-Gini approach and Monte Carlo simulation is proposed.