Practices that Support Team Learning and Their Impact on Speed to Market and New Product Success

Competition is fierce today. Businesses are feeling extreme pressure to innovate and do so quickly. If they take too long in bringing a product to market or make a mistake along the way, they can be preempted by a faster moving competitor. One technique gaining popularity to help companies compete is establishing learning teams—teams that create and use knowledge rapidly and effectively. But how do teams learn? By studying the learning practices of 95 new product teams, we have uncovered several factors that improve a new product team’s ability to learn, innovate faster, and be more successful. These factors include thoroughly reviewing project information, having stable project goals, and following a rigorous new product development process.     

Experiential Education In New Product Design And Business Development

We describe an experiential approach to teaching new product design and business development in a year‐long course that combines intensive project work with classroom education. Our course puts together up to six teams of graduate students from management and engineering who work on projects sponsored by individual companies. Student teams work with faculty from multiple disciplines and personnel from the sponsoring companies. The year‐long format and involvement with company personnel provide opportunities for students to gain hands‐on experience in a real product development project. Time constraints, coupled with students' determination to demonstrate what they can accomplish, stimulate teams to learn how to compress the design and development cycle. To help students generalize from their own projects to a wider universe of product design and business development phenomena, students participate continuously in constructive critiques of others' projects; and in presentations, case discussions and workshops that help them learn about the product and business development process itself. This article describes course objectives, syllabus, projects, sponsors, faculty, students and our course administration. In an effort to move towards a “paperless” course, we have put as much of the course material as possible on the World Wide Web; relevant websites are referred to in the article. At the end of the course each team presents a prototype and a protoplan to the sponsoring company in a final report, which in many cases includes suggestions for the sponsor on how to improve its design and development process. Students' positive evaluations, along with their comments, indicate that they are attaining their educational goals. Course projects have resulted in commercialized products, patents, continuing development projects in sponsoring companies, and placements for students. The course has generated public relations value for the units involved and for the university as a whole. © 2002 Elsevier Science Inc. All rights reserved.     

The Interplay of Customer and Product Innovation Dynamics: An Exploratory Study

The challenges of successfully developing radical or really new products have received considerable attention from a variety of marketing, strategic, and organizational perspectives. Previous research has stressed the importance of a market‐driven customer orientation, the resolution of market and technological uncertainty, and organizational processes such as cross‐functional teams and organizational learning. However, several fundamental issues have not been addressed. From a customer's perspective, a more innovative product tends to have uncertain benefits and requires customers to learn new behaviors. Customer preferences can, therefore, change as product experience and learning increase. From a firm's perspective, it is unclear how to be customer‐oriented under such dynamic preferences, and product strategies using evolving technologies will tend to interact with how customers learn about an innovation. This research focuses on identifying unresolved issues about these customer and product innovation dynamics. A conceptual framework and series of propositions are presented that relate both changing technology and customer learning to a firm's strategic decisions in developing and launching really new products. The framework is based on in‐depth interviews with high‐tech product managers across several sectors, focusing on the business‐to‐business context. The propositions resulting from the framework highlight the need to consider relevant customer dynamics as integral to a firm's product innovation process. Successful innovation strategies and future research challenges are discussed, and applications to better understanding customer needs and theories of disruptive innovation are examined. Several key insights for innovation success hinge on a broad, downstream orientation to customer needs and product innovation dynamics. To be effective innovators, firms must know their customers' customers and competitors as well as or better than their immediate customers do. Market research must extend downstream for a comprehensive understanding of customer needs dynamics. In the context of disruptive innovation, new dimensions of customer needs may become more valuable based on perceived downstream customer trends. Firms may also innovate on secondary needs because mainstream customers do not always give firms the design freedom to radically innovate on primary features. Understanding customer commitments and how they develop under evolving needs can help firms focus resources on innovative efforts more likely to be accepted by customers.     

Performance effects of top management team demographic faultlines in the process of product diversification

Expanding into new product areas is an important part of the growth strategy of many firms, but there is still more to learn about how it affects firm performance. We believe that as the top management team (TMT) is responsible for coordinating product expansion, looking there can yield valuable clues. We argue that diversification entails significant additional information processing and that this strains top managerial resources. We hypothesize that task‐related faultlines within the TMT may help it cope with product expansion while bio‐demographic faultlines may hinder it. We find support for these hypotheses on a longitudinal sample of 2,730 expansion steps made by 61 German firms between 1985 and 2007: task related faultline strength increases performance when diversifying, while bio‐demographic faultline strength decreases it. Copyright © 2012 John Wiley & Sons, Ltd.     

It’s in the Mix: How Firms Configure Resource Mobilization for New Product Success

This paper aims to deepen the understanding about when and how the mobilization of resources through strong and weak ties in a focal firm’s network can affect new product success. It addresses two significant gaps in the literature. While prior research has advanced the understanding of how factors around tie strength, resource mobilization, and environmental characteristics relate to new product development, it has yet to offer a more holistic understanding of the interconnected structures and the interplay among these factors. Furthermore, limited insights exist about how firms could utilize resource mobilization approaches in different environmental contexts to enhance new product success. Building on resource dependence theory, this paper contributes to prior work by adopting configuration theoretical considerations and performing an empirical investigation to identify necessary and sufficient conditions for new product success. Based on data from a survey of 354 managers from manufacturing and services firms in the United Kingdom, the study conducts a configurational comparative study based on fuzzy‐set Qualitative Comparative Analysis to examine configurations of strong‐tie and weak‐tie resource mobilization approaches within particular environmental contexts for new product success. The findings reveal alternative, equifinal configurations for new product success, and add to the existing body of work by connecting the notions of network ties, resource mobilization, and context dependence, as well as by developing an integrative framework to explain the interplay of remote and proximate conditions for new product success. For management practice, this study offers guidance in describing and diagnosing business contexts that enhance new product success, and in identifying resource mobilization action repertoires to capitalize on these contexts.     

Subcontracting,Posted Migrants and Labour Market Segmentation in Finland

Using evidence from the shipbuilding and construction industries in Finland, this article shows how trade union responses to the introduction of migrant workers can be conditioned by product markets. Growing numbers of ‘posted workers’, or intra‐European Union work migrants employed via transnational subcontractors, are segmenting the labour market, by competing with domestically domiciled workers whose employment is more tightly regulated. In Finland, the construction worker's union has had a far more assertive and successful approach to enforcing wage norms than the union in shipbuilding. This appears to be related to the greater exposure of shipbuilding to international product market competition.     

Organizational Learning and New Product Introductions

Organizational learning widely is believed to be important to competitive performance of companies. The purpose of this article is to examine how organizations learn from their experiences in new product introductions. Theory suggests that organizations will display a “competency trap” that reduces their ability to learn from organizational experience. Often initial success can cause a firm to rely on a single or a few experiences to develop routines, discounting later experiences. Therefore it is expected that organizations will have trouble learning from experience. The theory was tested by examining all new product introductions in the U.S. shampoo industry from 1974–1987. The dynamic nature of the business—the average brand survives about two years—made this an attractive research venue. Using the econometric technique of survival time modeling, a model was fitted of survival of brands as a function of organizational experience and organizational experience squared. The model also included controls for financial resources available to the firm and the level of first year's advertising. The model confirmed the general hypothesis that firms' brands are less successful the more experience they have. This study interprets this as evidence of a competency trap in new product introductions. The results broadly are supportive of the hypothesis that organizations find it harder to learn from experience as experience grows. Untangling the source of this problem is a goal of further research. For practice, the article suggests caution to brand managers in experienced companies. There is no guarantee that firms grow in their ability to build brands; results here suggest the opposite. Formal reviews of the new product, its process, and its performance by senior managers for lessons learned is desirable. Management of individuals and organizations may facilitate learning from experience. For managing individuals, often product success brings about a reassignment of successful personnel; care should be taken to insure that individuals' learning is captured by the new product organization before reassignment. On the organizational level, formal brand management may be a highly effective method for managing an ongoing stable of long‐lived brands but may be a poor choice in a dynamic market like shampoo. Companies may explore new organizational structures and departments to conceive and to develop new products since the skills required for managing ongoing brands may be different from creating new ones.     

Designing Visual Recognition for the Brand*

The present paper examines how companies strategically employ design to create visual recognition of their brands' core values. To address this question, an explorative in‐depth case study was carried out concerning the strategic design efforts of two companies: Nokia (mobile phones) and Volvo (passenger cars). It was found that these two companies fostered design philosophies that lay out which approach to design and which design features are expressive of the core brand values. The communication of value through design was modeled as a process of semantic transformation. This process specifies how meaning is created by design in a three‐way relation among design features, brand values, and the interpretation by a potential customer. By analyzing the design effort of Nokia and Volvo with the help of this model, it is shown that control over the process of semantic transformation enabled managers in both companies to make strategic decisions over the type, strength, and generality of the relation between design features and brand values. Another result is that the embodiment of brand values in a design can be strategically organized around lead products. Such products serve as reference points for what the brand stands for and can be used as such during subsequent new product development (NPD) projects for other products in the brand portfolio. The design philosophy of Nokia was found to depart from that of Volvo. Nokia had a bigger product portfolio and served more market segments. It therefore had to apply its design features more flexibly over its product portfolio, and in many of its designs the relation between design features and brand values was more implicit. Six key drivers for the differences between the two companies were derived from the data. Two external drivers were identified that relate to the product category, and four internal drivers were found to stem from the companies' past and present brand management strategies. These drivers show that the design of visual recognition for the brand depends on the particular circumstances of the company and that it is tightly connected to strategic decision making on branding. These results are relevant for brand, product, and design managers, because they provide two good examples of companies that have organized their design efforts in such a way that they communicate the core values of their brands. Other companies can learn from these examples by considering why these two companies acted as they did and how their communication goals of product design were aligned to those of brand management.     

Analogies and Mental Simulations in Learning for Really New Products: The Role of Visual Attention

Really new products (RNPs) create new product categories or at least significantly expand existing ones. The development of RNPs is a strategic priority for most companies. However, 40% to 90% of new products fail, often due to consumers' lack of understanding of product features and benefits. Learning strategies, such as analogical learning and mental simulation, can help consumers understand the benefits of RNPs and thus may contribute to the successful development of marketing campaigns. Moreover, the presentation format of marketing communications is likely to influence consumers' understanding of the product. Pictorials have the potential to convey novel information without overloading the decision maker and thus may be a more efficient way to present information about RNPs than words. This paper contributes to a better understanding of consumer information processing in learning for RNPs. Study 1 examined the impact of (1) learning strategies (analogical learning vs. mental simulation) and (2) presentation formats (words vs. pictures) on product comprehension. Study 2 used an eye‐tracking experiment to assess how respondents' visual attention patterns may affect product comprehension. Study 1 showed that the use of words in marketing communications for RNPs is generally more effective to enhance product comprehension than the use of pictorials. However, the video glasses were a notable exception as the combination of mental simulation and pictures yielded a high comprehension level for this product. This suggests that the use of pictorials may be appropriate to convey information for products of a more hedonic as opposed to utilitarian nature. Study 2 used a combination of eye‐tracking measures and self‐reports to help illuminate the cognitive processes at work when consumers learn new product information. The results suggest that an increase in attention to an element of the advert can account for one of two underlying processes: (1) an increase in comprehension; or (2) a difficulty to understand product information which may result in consumer confusion. This study adds evidence to a growing body of literature that demonstrates the power of learning strategies such as mental simulation and analogical learning in preparing consumers for new product acceptance. The use of visual stimuli contributes to the debate on the effectiveness of words versus pictures, seldom applied in a new product development (NPD) context. These findings are integrated into a discussion of the managerial implications and the potential avenues for future research in the area.     

How Experienced Product Innovators Organize

It seems that reorganizing the product development function is a common and regularly administered solution to any perceived new product malaise. It's as though new product managers keep seeking some perfect form of organization that will lift their work to new levels of success. This article helps with the search. Axel Johne believes that experience can be a good teacher so he examined how experienced product innovators organize, in comparison to firms which are not so experienced. His results are interesting to all managers who wonder how product innovation can best be managed.     

What is the function of a figurine? Can the repertory grid technique tell?

Teaching design and product development at upper secondary school level in Sweden is a matter of interdisciplinary considerations. Education in product development, at this level, prepares students for further studies and career in engineering or industrial design. Knowledge of artefacts is an important element in the education. In coherence with the visual and rhetorical strategies characterising the knowledge field, students learn how to develop an idea to a final product. In this study twelve engineers and industrial designers, professionals representing the knowledge field of product development are studied regarding their interpretations of eight pre-selected artefacts. Data is collected and analysed using repertory grid technique. The aim of the study is to examine whether/what we can learn from the informants’ experiences and knowledge that is relevant to education in design and product development at upper secondary school level. Findings show that four of the artefacts appear to be carriers of attributes that reveal the interviewees’ definitions of the artefacts’ functional nature. From these findings it is shown that the interviewees’ definitions of concepts concerning aesthetics/decoration and function can be seen as cultural expressions. How the repertory grid technique is used in this particular study is thoroughly described and the results relevance for education is discussed.     

The Impact of Frictions in Routine Execution on Economies of Scope

Research summary: Based on a detailed database of a beverages producer‐distributor that expanded its product variety by leveraging its logistic network, we show that product diversification generates economies of scope and also higher operational costs. The result is an inverted‐U relationship between variety and productivity: When the firm offers few additional categories, productivity grows, but as the number of categories rises, the costs of executing the operational routines increase rapidly and productivity falls. The negative effect on productivity increases if the added product category is more dissimilar to previous ones, and decreases with learning from operational experience. Our results highlight how frictions at the operational level can limit the benefits of diversification, even in the absence of other sources of diseconomies, such as increased coordination needs. Managerial summary: One of the prevalent reasons for companies to expand to adjacent product lines is attaining economies of scope. However, such growth strategy also generates operational frictions, even if the day‐to‐day routines do not appear to change at all. Product diversity is disruptive for routine execution, as it requires coordination and exception handling, and may ultimately overcome any efficiency obtained from growth. We estimate the relevance of such operational friction using data from a beverages distribution network. When product variety is low, additional categories do generate efficiency, but after reaching a given threshold, friction prevails. We find that operational friction increases when products are more dissimilar, but is attenuated when workers learn from their own and other's experience. Copyright © 2017 John Wiley & Sons, Ltd.     

Learning across the life cycle: Experimentation and performance among the hollywood studio heads

Guided by notions from the literature on organizational learning, this paper investigates how product line experimentation and organizational performance change across the careers of top managers. Its subjects are the studio heads who ran all the major Hollywood film studios from 1936 to 1965. The study found first, that product line experimentation declines over the course of executive tenures; second, that there is an inverse U‐shaped relationship between top executive tenure and an organization's financial performance; and third, that product line experimentation is more likely to benefit financial performance late in top executives' tenures. These findings are consistent with a three‐stage ‘executive life cycle’. During the early years of their tenures, top managers experiment intensively with their product lines to learn about their business; later on their accumulated knowledge allows them to reduce experimentation and increase performance; finally, in their last years, executives reduce experimentation still further, and performance declines. Copyright © 2001 John Wiley & Sons, Ltd.     

Work with and implementation of new concepts for management of product development—experiences for the Swedish Manufacturing Industry

Extensive organizational changes in the management of product development work of industrial companies are currently taking place. Speediness (time-based competition) and/or 'high' quality (total quality) are emphasized and for this purpose concepts such as simultaneous, concurrent or integrated product development have been introduced. This paper describes a study of the importance of these concepts in 29 large Swedish manufacturing companies and how these companies deal with the implementation of the new product development concepts. In addition, three in-depth studies have been carried out to enable a more detailed study to be made of the effects of the product development work on time and quality variables.     

Successful branding of a commodity product: The case of RAEX LASER steel

In today's competitive business environment, industrial marketers must work harder than ever before to achieve some degree of differentiation for their products to avoid being viewed as a commodity. Many firms have sought to achieve this differentiation by branding their products. Branding, however, is more than simply putting the company's name on a product and broadcasting that name to its target audiences. For industrial products, branding is a multidimensional construct that includes not only how the customers view the physical product, but also the logistics, customer support, and corporate image and policy that accompany this product. This paper discusses how the Finnish steel company Rautaruukki was able to successfully incorporate these four components into their RAEX LASER steel, a brand specifically targeted for job shops who do laser cutting. The paper concludes with managerial implications and suggestions for how industrial marketers might implement their own branding strategy.     

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.     

Learning from openness: The dynamics of breadth in external innovation linkages

We explore how openness in terms of external linkages generates learning effects, which enable firms to generate more innovation outputs from any given breadth of external linkages. Openness to external knowledge sources, whether through search activity or linkages to external partners in new product development, involves a process of interaction and information processing. Such activities are likely to be subject to a learning process, as firms learn which knowledge sources and collaborative linkages are most useful to their particular needs, and which partnerships are most effective in delivering innovation performance. Using panel data from Irish manufacturing plants, we find evidence of such learning effects: establishments with substantial experience of external collaborations in previous periods derive more innovation output from openness in the current period. © 2013 The Authors. Strategic Management Journal published by John Wiley & Sons Ltd.     

Team control mode,workers' creativity,and new product innovativeness

Scholars of creativity and innovation argue that successful innovations originate from the creative ideas of workers. However, few studies have empirically examined how management mechanisms, such as the control mode adopted by the new product development team, may work together with workers' creativity to deliver a successful new product. Drawing on the theory of opposing action strategies of team innovation, we propose that different team control modes may work together with team members' creativity to jointly influence the innovativeness of teamwork outcomes. With survey data collected from different sources in new product development teams, we find that restrictive control can effectively help teams composed of very creative members to successfully develop innovative new products. Conversely, promotive control can effectively help teams composed of less creative members to deliver innovative new products.