Autonomous Teams and New Product Development

An autonomous team is an emerging tool for new product development (NPD). With its high degree of autonomy, independence, leadership, dedication, and collocation, the team has more freedom and stronger capabilities to be innovative and entrepreneurial. Several anecdotal cases suggest that autonomous teams are best when applied to highly uncertain, complex, and innovative projects. However, there is no empirical study to test such a notion. Moreover, autonomous teams are not a panacea, and implementing them can be costly and disruptive to their parent organization. When should this powerful, yet costly tool, be pulled out of the new product professional's toolbox? This paper attempts to answer this question. The objective of this study is to explore under which circumstances an autonomous team is the best choice for NPD. Based on contingency and information‐processing theories, autonomous teams are hypothesized to be more effective to address projects with: (1) high technology novelty and (2) radical innovation. To test these hypotheses, the relative effectiveness of four types of team structures: autonomous, functional, lightweight, and heavyweight are compared. The effectiveness measures include development cost, development speed, and overall product success. Vision clarity, resource availability, and team experience are the controlled variables. The empirical results based on the data from 555 NPD projects generally support the research hypotheses. Relative to other team structures, autonomous teams are more effective in addressing projects with high technology novelty or radical innovation. The results also suggest that heavyweight teams perform better than other teams in developing incremental innovation. These results provide some evidence to support contingency and information‐processing theories at the project level. Given the importance of the development of novel technology and radical innovation in establishing new businesses and other strategic initiatives, the findings of this study may not only have some important implications for NPD practices but may also shed some light on other important topics such as disruptive innovation, strategic innovation, new venture, corporate entrepreneurship, and ambidextrous organization.     

Product Development as Core Competence: How Formal Product Development Practices Differ for Radical,More Innovative,and Incremental Product Innovations

Although universally recognized as an important consideration in building product development (PD) competency, the effect of a firm's ability to vary its PD practices to develop winning products has been given scant attention in large‐scale, multiorganizational, quantitative studies. This research explores differences in formal new PD practices among three project types—incremental, more innovative, and radical. Using a sample of 380 business units, this research investigates how development practices differ across these three classes of innovation with respect to the formal PD process, project organization, PD strategy, organizational culture, and senior management commitment. Our results diverge from several commonly held beliefs about formal PD processes and the management of radical versus incremental innovations. Our results indicate that radical projects are managed less flexibly than incremental projects. Instead of being an offshoot of less strategic planning, radical projects are just as strategically aligned as incremental projects. Instead of being informally introduced entrepreneurial adventures, radical projects are often the result of more formal ideation methods. While these results may be counterintuitive to suppositional models of how to radical innovation happens, it is the central theme of this research to show how radical innovation actually happens. Our findings also provide a foundation for reexamining the role of control in the management of innovation. As the level of innovativeness increased, so too did the amount of controls imposed—e.g., less flexibility in the development process, more professional, full‐time project leadership, centralized executive oversight for new products, and formal financial assessments of expected NP performance.     

Social networks and a new venture's innovative capability: the role of trust within entrepreneurial teams

This paper examines the effects of social networks and trust on a new venture's innovative capability. The concept of social networks is studied as the configuration of internal and external social networks for entrepreneurial team members. This study collected information about 112 technology-based entrepreneurial teams from the 65 research-based incubators in Taiwan. The results indicate that both internal and external social networks have marginally positive impacts on a new venture's innovative capability, and trust within the entrepreneurial teams is found to be as important a moderator for the relationship between external social networks and innovative capability. Moreover, results reveal that a higher level of trust between entrepreneurial team members can reduce the external social networks spanning the boundaries of the new venture and therefore may cause a 'not invented here' syndrome which will reduce its innovative capability.     

Market Learning and Radical Innovation: A Cross Case Comparison of Eight Radical Innovation Projects

Does customer input play the same key role in every successful new-product development (NPD) project? For incremental NPD projects, market information keeps the project team focused on customer wants and needs. Well-documented methods exist for obtaining and using market information throughout the stages of an incremental NPD project. However, the role of market learning seems less apparent if the NPD project involves a really new product—that is, a radical innovation that creates a line of business that is new not only for the firm but also for the marketplace. In all likelihood, customers will not be able to describe their requirements for a product that opens up entirely new markets and applications. To provide insight into the role that market learning plays in NPD projects involving really new products, Gina Colarelli O'Connor describes findings from case studies of eight radical innovation projects. Participants in the study come from member companies of the Industrial Research Institute, a consortium of large company R&D managers. With a focus on exploring how market learning for radical innovations differs from that of incremental NPD projects, the case studies examine the following issues: the nature and the timing of market-related inquiry; market learning methods and processes; and the scope of responsibility for market learning, and confidence in the results. Observations from the case studies suggest that the market-related questions that are asked during a radical innovation project differ by stage of development, and they differ from the questions that project teams typically ask during an incremental NPD effort. For example, assessments of market potential, size, and growth were not at issue during the early stages of the projects in this study. Such issues came into play after the innovations were proven to work under controlled conditions and attention turned to finding applications for the technology. For several projects in the study, internal data and informal networks of people throughout relevant business units provide the means for learning about the hurdles the innovation faces and about markets that are unfamiliar to the development group. The projects in this study employ various techniques for reducing market uncertainty, including offering the product to the most familiar market and using a strategic ally who is familiar with the market to act as an intermediary between the project team and the marketplace.     

The Role of Future‐Market Focus in the Early Stages of NPD across Varying Levels of Innovativeness

The concept of future‐market focus (FMF) arose out of the debate about firm size and incumbency in the face of radical or disruptive innovations, and has been demonstrated to have a positive correlation with radical innovation (RI) success. This study examines the relationship between FMF and the processes used in the early stages of NPD for four types of innovation projects: incremental innovations, technological breakthroughs, market breakthroughs, and radical innovations. We found that the future‐market focus of a project team can influence the early stage processes used in a new product innovation project, and does so differentially across levels of innovativeness. In particular, the concept generation process, understanding of market needs, and screening decision criteria are different for low‐ versus high‐FMF projects and there are differences based on the level of innovation. In addition, we found that radical innovation projects rated low in FMF are markedly different than the radical innovation projects described in prior studies.     

Learning from leading-edge customers at The Sims: opening up the innovation process using toolkits

Recently, toolkits for user innovation and design have been proposed as a promising means of opening up the innovation process to customers. Using these tools, customers can take on problem-solving tasks and design products to fit their individual needs. To date, arguments in favor of this new concept have been limited to the idea of satisfying each user's needs in a highly efficient and valuable way. The aim of this empirical study is to extend our knowledge of how users deal with 'the invitation to innovate' and how attractive individual user designs might be to other users. In studying the users of toolkits for the immensely popular computer game The Sims , we found that (1) users are not 'one-time shoppers'– in fact, their innovative engagement is rather long-lasting, continuous, evolving, and intense. We also found that (2) leading-edge users do not merely content themselves with the official toolkits provided by the manufacturer. They employ user-created tools to push design possibilities even further. (3) Moreover, individual user designs are not only attractive to the creators themselves; instead, certain innovative solutions are in high demand among other users. Based on our findings, we discuss how toolkits and their users might add to the process of innovation in general. We argue that toolkits could serve as a promising market research tool for guiding a firm's new product development efforts. Furthermore, toolkits may serve as a crèche for interested but inexperienced users who could evolve into leading-edge users over time. These innovative users might then be integrated into more radical product development efforts.     

The Role of Suppliers in Market Intelligence Gathering for Radical and Incremental Innovation*

Drawing on transaction cost economics theory, this study addresses the following research questions: (1) Does supplier involvement in market intelligence gathering activities have a greater impact on innovation success in predesign or commercialization activities? and (2) Does supplier involvement in market intelligence gathering activities have a greater impact on success in radical or incremental product innovation? Hypotheses are tested using both subjective and objective measures of success from a study of 205 incremental and 110 radical new product development projects. Results from the estimation of a two‐group path model suggest that this theoretical framework is useful in providing guidance as to when product developers should emphasize the gathering of market intelligence through suppliers. Consistent with conventional wisdom, the findings suggest that supplier involvement in market intelligence gathering activities are positively related to success in incremental innovations across predesign and commercialization activities. However, supplier involvement in market intelligence gathering activities is found to have no significant impact on market share and is negatively associated with perceived product performance in radical innovations in predesign tasks. Also, while there was no significant difference in market share for supplier involvement in market intelligence gathering activities between radical and incremental innovation in commercialization activities, supplier involvement in these activities did have a greater impact on perceived product performance in radical innovation than it did in incremental innovation. Although current practice suggests that teams allocate fewer resources to the gathering of market intelligence through their suppliers during predesign activities in incremental innovation projects compared with radical innovation projects, the findings in this study suggest that they should do the opposite. Shifting resources allocated for engaging suppliers in market information gathering activities in predesign activities from radical innovation projects to incremental innovation projects could increase the return on these investments. Alternatively, these resources currently allocated to the gathering of market intelligence through suppliers in predesign activities of radical innovation projects could also provide greater benefits if allocated to commercialization activities of radical innovation projects, where they have the greatest positive impact.     

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.     

Capabilities development and deployment activities in born global B-to-B firms for early entry into international markets

This paper sets out to understand how entrepreneurial founders of born global firms acquire, transform and deploy new knowledge resources for early internationalization. Adopting a dynamic capabilities view and using a sample of high-tech B-to-B firms, we report that the new firm's early entry into international markets is executed through three transitionary phases. Founders transform the operational capabilities they endow to the firm, develop dynamic capabilities for use in opportunity exploitation, and deploy these to develop knowledge-intensive products that they take to chosen niche markets. The paper contributes to the B-to-B global marketing literature by uniting it with born global and INV internationalization research, and elucidating the three phases through which founders manage early internationalization. The roles played by entrepreneurial founders and particular capabilities are discussed.     

Using users: When does external knowledge enhance corporate product innovation?

Prior research on corporate innovation highlights the importance of accessing external knowledge from other firms and universities. However, survey evidence indicates that product users are perhaps the most important source of external knowledge. We build on existing theory to identify the conditions under which user knowledge contributes to corporate innovation and when the benefits will be greatest. Using a panel dataset of medical device companies and their collaborative efforts with innovative physicians, we find evidence that inventive collaborations with users enhance corporate product innovation and that the benefits are greatest in new technology areas and in the generation of radical innovations. Copyright © 2013 John Wiley & Sons, Ltd.     

Network board continuity and effectiveness of open innovation in Swedish strategic small-firm networks

Increasing adoption of open innovation as an alternative route to research and development necessitates the development of new ways to organize innovation, as well as reassessment of existing ways. Much like traditional corporations that subscribe to the closed innovation paradigm, novel organizational arrangements targeting open innovation, such as small-firm networks, employ boards to effectively manage joint research-and-development activities. These boards are similar yet different from traditional corporate boards; as such, they may have different requirements for proper functioning. We use 5-year longitudinal data on 53 Swedish strategic small-firm networks to investigate how the boards should be organized to help improve the innovative status of network participants. We expand the set of tools available for effective organization of the boards' operations and emphasize the effects of network board continuity (rates of renewal) on network members' innovative performance. We argue that the relationship is curvilinear (U-shaped) and demonstrate that it is more pronounced in larger networks.     

Leveraging Social Networks to Develop Radically New Products

In this article, the authors consider the nexus of social networks and radically new products. These new products are so innovative that they forge new product categories, and social networks might be particularly fruitful in their development, dissemination, and help to foster growth and acceptance. Several social networks concepts are brought to bear on these issues, from the class diffusion model, to current considerations of lead users and emerging ideas about crowdsourcing. In particular, the classic diffusion model provides parameters to reflect innovative consumer behavior, and it is suggested that, in complement to studies that seek customer traits to identify innovators, social network concepts and indices of degree, betweenness, and closeness centrality are very well suited in identifying customers embedded in social networks whose relational ties are indicative of their likely influence and stature. Next, lead users are considered in the specific context of health care, and it is suggested that online forums provide numerous benefits to customer patients as well as opportunities to health‐care providers. Next, the dynamics of social networks are considered as they apply to cutting‐edge ideas about crowdsourcing, movements that companies are exploring to be radically open to customer feedback and suggestions. This article closes with an example of a novel appeal that bridges social networks and radically new products—the challenge of solving societal difficulties, from food scarcity, to environmental pollutants, to weather patterns, to discovering treatments for cancer or other medical conditions.     

The impact of network configurations on value constellations in business markets — The case of an innovation network

A growing body of scholars are advocating a better understanding of how value is created in business networks, rather than merely in business relationships or at the level of single actors. Among such networks, innovation networks, i.e. the configurations of strategic entrepreneurial nets aimed at improving the effectiveness of innovation performance, have come under scrutiny in the business marketing literature. However, research that explicitly connects value considerations with innovation network configurations is still in its infancy, with empirical evidence being notably scarce. This study is aimed at identifying if and how network configurations affect value constellation aspects in business networks, in terms of value recipients and value outcomes. We interviewed key informants representing 46 high-technology entrepreneurial firms co-located in an innovation network (Daresbury Science and Technology Park — UK). Our study identifies that different network configurations can co-exist in the same overall network; these, nevertheless, are not alternative independent structures, but rather they interact with each other through actors spanning their boundaries. Our study thus provides an understanding of network configurations relating to specific value consequences, but also provides evidence relating to the interactions between different configurations. By doing this, we establish a bridge between a business marketing and a strategy perspective on value in networks. Important managerial implications and implications for policy makers also emerge from our study.     

Exploring How Peer Communities Enable Lead User Innovations to Become Standard Equipment in the Industry: Community Pull Effects

Literature on new product development indicates that on average around 40% of new products fail across different industries (e.g., Crawford, 1977 ; Crawford and Di Benedetto, 2008 ). Out of those that survive only few become widely accepted standard equipment in the industry (Utterback, 1996 ). Literature on entrepreneurship (e.g., Baron and Shane, 2008 ) and on innovation (e.g., Christensen, 1997 ) shows that such innovations often originate outside the boundaries of established firms. However, it is difficult to understand and analyze the exact source of such innovations and the entrepreneurial processes by which they are developed. It is therefore the aim of this study to shed light on how innovations become widely accepted by large segments of the market and specifically which demand‐side forces are at work. An approach suitable for pursuing this objective is to focus on those individuals who are on the leading edge with respect to an important market trend (lead users) and their respective peer communities. As little knowledge is available, an explorative case study design is applied, working with cases from two different industries, specifically the medical equipment and sporting equipment industry. A longitudinal research design is used, extracting data from multiple respondents and various other sources such as reports, publications, databases, or community web pages. The research framework takes a process perspective by following the entrepreneurial processes from invention to commercialization and diffusion. In this process, micro‐level variables at the individual and group level are analyzed as well as the barriers to be overcome by the individual innovator and the community. The findings show that communities play a central and active role in the entrepreneurial process. Community members provide valuable feedback on the overall potential of the lead users' ideas, participate by making concrete development contributions, acting as testers of the new products, and finally helping to diffuse the innovations inside and outside the community. We identify two pull effects on the part of the community: first, community members demand and facilitate the development of prototypes; and second, community members help to cross the chasm between first adopters and the early majority. This paper has various implications for entrepreneurship and innovation research. For entrepreneurship, this article points out peer communities as a specific kind of social network that plays a crucial role in entrepreneurial processes. For innovation research, this article emphasizes the interaction between lead users and their peer communities in the process of developing the next dominant product design.     

Exploring the Contributions of Involving Ordinary Users in Ideation of Technology‐Based Services*

Lead users have long been acknowledged as important contributors to the market success of innovative products and services. The ability of lead users to be such effective innovators has been ascribed to a combination of adequate technological expertise and superior knowledge of the user domain so‐called use experience. Drawing on the apparent success of lead users in innovation, many companies are now attempting to involve other types of users, namely, ordinary users, for ideation at the fuzzy front end (FFE) of new product and service development. However, ordinary users do not usually possess the technological knowledge of lead users, and the existing literature provides little guidance on how to manage such user involvement or its expected contributions. The purpose of the present study is, therefore, to contribute to scholarly knowledge regarding the benefits and management of user involvement during the ideation phase of innovation in technology‐based services. More specifically, the study investigates the contribution made in this respect by “ordinary” users, as opposed to professional developers. The research questions that are addressed are as follows: (1) What contributions do ordinary users make when involved in the FFE for ideation of new technology‐based services; and (2) how is the contribution of the users affected by their knowledge of the underlying technology? The study addresses these questions through a literature review and conceptual analysis of the involvement of users in innovation in mobile telephony, followed by an empirical study using a quasi‐experimental design in which the independent variable is the users' technological knowledge of the underlying mobile telephone system and the dependent variable is the quality of the created idea‐proposals from an innovation perspective. Various scenarios involving guided users, pioneering users, and professionals are investigated. The study finds that the users' knowledge of the underlying technology has an effect on their propensity to contribute with incremental or radical new ideas. The ideas from guided users tend to be more incremental whereas the pioneering users' ideas are more radical. Contrary to the users in the guided user scenarios, the users in the pioneering user scenarios have a propensity to produce ideas that challenge the prevailing dominant logic of the company; these ideas can be used to assist the company to think in new trajectories. The paper proposes that ordinary users should not be expected to contribute ideas that can be directly put into the new product development process; rather, ordinary user involvement should be regarded as a process whereby a company learns about users' needs and is inspired to innovate. The paper concludes that user involvement can actually be a stimulus for review of a company's business strategy.     

A Comprehensive Model of Uncertainty Associated with Radical Innovation

Large established firms typically focus on enhancing their ability to manage their core businesses, with an emphasis on cost reduction, quality improvements, and incremental innovation in existing products and processes. To sustain competitive advantage over the long term, mature firms must in parallel develop radical innovations (RI) as a basis for building and dominating fundamentally new markets. Management practices that are effective in established businesses are often ineffective and even destructive when applied to RI projects because of higher levels of uncertainty inherent in the latter. Understanding the characteristics of RI projects and the nature of the uncertainty that pervades them is critical to developing appropriate managerial practices. This paper reports the results of a longitudinal study of 12 RI projects in 10 large established U.S.‐based firms. A qualitative, prospective design was used to collect and analyze data. Project team leaders, members, and sponsors for each project were interviewed repeatedly over five years. The analysis centers on the dimensions and characteristics of uncertainty that project teams experienced. The analysis of the challenges they confronted is used to construct a multidimensional model of RI uncertainties. The model identifies four categories of uncertainty as key drivers of project management: technical, market, organizational, and resource uncertainty. Each of these four categories is elaborated in the context of radical innovation and further distinguished via two additional dimensions: criticality and latency. These are substantiated through case based data. Implications for management skills, processes, and appropriate tools associated with radical innovation projects are discussed.     

The role of intermediaries in cross‐industry innovation processes

In this article, we investigate the role intermediaries play in the cross‐industry innovation process. Intermediaries are external institutions that support companies in their innovative activities. They are frequently used to bridge gaps between different industries. Our research focuses on the question of which capabilities an intermediary should have in order to achieve success in initiating a cross‐industry innovation. Our empirical base consists of a survey of 107 European manufacturing companies and an analysis of six collaborative cross‐industry innovation projects. The company survey is used to identify the capabilities an intermediary should have during each of the three phases of the innovation process. The cross‐industry projects, each of which involves a Swiss or a German industrial company and an intermediary, provide us with analyzable data. We conclude our study by identifying three types of intermediary: the innovation broadener, the innovation leverager, and the innovation multiplier.     

Synergies among Producer Firms,Lead Users,and User Communities: The Case of the LEGO Producer–User Ecosystem

While many firms today proactively involve users in their new product development efforts using a wide variety of methods such as the lead user method, firm‐hosted user communities, or mass customization toolkits, some pioneering firms are experimenting with the creation of sustainable producer–user ecosystems designed for the continuous exploration and exploitation of business opportunities. In this paper, the functioning of such ecosystems is studied with particular emphasis on the synergies they can yield. Based on an explorative and longitudinal multiple case study design, the producer–user ecosystem of the firm LEGO is analyzed, and three main actors in the ecosystem are identified: entrepreneurial lead users who aim to start their own businesses, a vibrant user community, and the LEGO company as the focal producer firm and facilitator for multiple user‐to‐user and user‐to‐producer interactions. Our study reveals three kinds of synergies: (1) reduced risk for entrepreneurial lead users and the focal producer firm, (2) the extension of the design space of the focal producer firm's products, and (3) the creation of buzz within the user community. Finally, the theoretical and managerial implications of our findings for innovation researchers and practitioners are discussed.     

The Social Network Position of Lead Users

The field of lead user research has seen a great deal of attention from academics and practitioners alike. However, we still lack a full understanding of the nature of users with high potential for innovation. In this paper, we employ a social network perspective on lead users. Increasing the realism of our research in three empirical studies with different empirical settings and methods, we provide robust evidence that lead users have a distinctive social network position: They exhibit an unusually high level of “betweenness centrality,” meaning that they are positioned as bridges between different social groups. This finding has two major implications for lead user theory. First, it consolidates seminal conceptual work on lead users and their embeddedness in social networks. And second, the findings extend and validate prior work on the social network perspective of lead users by combining theoretical insights from cognitive psychology, research on creativity, and network theory. As the social network positions of individuals can be mapped quickly and at low cost with modern Web mining tools, our findings may point to a new and readily applicable approach for the efficient and effective identification of lead users in real‐life projects, an aspect that is usually emphasized as the most crucial activity in lead user projects.     

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.