PART FOUR

DEVELOPMENT

McGraw-Hill/Irwin –
Merle Crawford Anthony Di Benedetto 9th Edition Copyright © 2008 by The McGraw-Hill Companies, Inc. All Rights
Development
Figure IV.1

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 Chapter 14

Development Team Management

McGraw-Hill/Irwin –
Merle Crawford Anthony Di Benedetto 9th Edition Copyright © 2008 by The McGraw-Hill Companies, Inc. All Rights
 Some Terms in New Products Organization

• Functional: People in business departments or

functional areas are involved, and product
development activity must mesh with their work.
• Project: The product innovation activity requires
people who think first of the project.
• Matrix: Two people are likely to be involved in
any piece of work: project manager and line
function head.

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 Options in New Products Organization
Figure
14.1

1. Functional
2. Functional Matrix
3. Balanced Matrix
4. Project Matrix
5. Venture
These are listed in increasing projectization, defined as
the extent to which participants see themselves as
independent from the project or committed to it.

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 Options in New Products Organization

1. Functional: work is done by the various departments, very little

project focus.
– Usually a new products committee or product planning committee.
– Does not lead to much innovation.
2. Functional Matrix: A specific team with people from various
departments; project still close to the current business.
– Team members think like functional specialists.
– Departments call the shots.
3. Balanced Matrix: Both functional and project views are critical.
– May lead to indecision and delay.
– Many firms are making it work successfully.
4. Project Matrix: High projectization, team people are project people
first and functional people second.
– People may drive the project even against department’s best wishes.
5. Venture: Team members pulled out of department to work full time
on project.

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 Operating Characteristics of the Basic
Options
Figure
14.3

Characteristic Functional <------------->Venture

Decision Power of Leader Low High
Independence of Group Low High
% of time spent on project by member Low High
Importance of Project Low High
Degree of risk of project to firm Low High
Disruptiveness of project Low High
Degree of uncertainty Low High
Ability of team to violate
company policy Low High
Independent funding Low High

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 Decision Rules for Choosing Among the
Options Figure
14.4

Score each on a scale of 1 (low) to 5 (high):

1. How difficult is it to get new products in the firm?
2. How critical is it for the firm to have new products at this time?
3. How much risk to personnel is involved?
4. How important is speed of development?
5. Will the products be using new procedures in their
manufacturing?
6. In their marketing?
7. What will be the $ profit contribution from each new item?
8. How much training do our functional people need in the
markets represented by the new products we want?
Rating: Below 15: functional matrix will likely work.
15-30: a balanced matrix will probably work.
Over 30: You need a project matrix or even a venture!
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 Another View:
Home Runs Vs. Singles

Characteristics of “home run” projects:

• Distance from regular business -- markets, technologies,
distribution system.
• Conflicts with regular business -- success will threaten people in
the organization’s regular business (production, sales,
technical).
• Major financial importance -- dollars, risk, or (especially) both.
• Timing -- a project that may be a “single” in normal times --
competition, market change, threatened acquisition, insecure
management team, shortage of new product projects.
(Do the opposite conditions make for singles?)
The more like a “home run” a project is, the more suited
to a more projectized organizational structure.
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 Considerations when Selecting an
Organizational Option
Figure
14.5

• High projectization encourages cross-functional integration.

• If state-of-the-art functional expertise is critical to project
success (e.g., in a scientific specialty such as fluid dynamics),
a functional organization might be better, as it encourages the
development of high-level technical expertise.
• If individuals will be part of the project for only a short time, it
might make more efficient use of their time if they were
organized functionally. Industrial designers may be involved in
any given project for only a short time, so different projects
can simply draw on their expertise when needed.
• If speed to market is critical, higher projectization is preferred
as project teams are usually able to coordinate their activities
and resolve conflicts more quickly and with less bureaucracy.
PC makers often use project teams, as they are under severe
time pressure. 14-10
 Who Are the Team Members?

• Core Team: manage functional clusters (e.g.,

marketing, R&D, manufacturing)
– Are active throughout the new products process.
• Ad Hoc Group: support the core team (e.g.,
packaging, legal, logistics)
– Are important at intervals during the new products
process.
• Extended Team Members: less critical members (e.g.,
from other divisions)

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 Participants in the Product Management
Process
Figure
14.6

• Project Manager • Strategist

– Leader, integrator, mediator,
judge
– Translator, coordinator
• Project Champion
– Supporter and spokesperson
– May be the project manager
– Enthusiastic but play within
the rules
• Sponsor
– Senior executive who lends
encouragement and
endorsement to the champion
• Rationalist
– The “show-me” person
– Longer-range
– Managerial -- often the CEO
– Spelled out the Product
Innovation Charter
• Inventor
– Creative scientist
– “Basement inventor” -- may be
a customer, ad agency
person, etc.
– Idea source
• Facilitator
– Enhance team’s productivity
and output

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 Myths and Truths About Product Champions
The Myths:
• Champions are associated with
market successes.
• Champions are excited about
the idea.
• Champions get involved with
radical changes.
• Champions arise from high (or
low) levels in the firm.
• Champions are mostly from
marketing.
Figure
14.7
The Truths:
• Champions get resources and
keep projects alive.
• They are passionate,
persuasive, and risk-taking.
• Champions work in firms with
or without formal new product
processes. Champions are
sensitive to company politics.
• Champions back projects that
align with the firm’s innovation
strategy.
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Guiding Principles in New Product Process
Implementation
Figure
14.8

Clarity of Goals and Objectives

Ownership

Leadership, at both senior and team levels

Integration with business processes

Flexibility

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 Issues in Team Management

• Team compensation and motivation

– Monetary vs. non-monetary rewards?
– Process-based vs. outcome-based rewards?
• Closing the team down

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Five Conflict Management Styles
Figure
14.10

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 Some Insights on Global Innovation From
Senior Executives
Figure 14.11

• Idea Generation:
– Leverage global knowledge.
– Source ideas from customers, employees,
distributors, etc.
• Product Development:
– Focus on incremental vs. home run breakthroughs.
– Share development costs.
– Use standardization to better manage global
operations.
• Commercialization:
– Early vs. late entrant decision.
– Consider local support/local partner.
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 Managing Globally Dispersed Teams

• Reasons for growth:

– Increasing product complexity
– Accelerated product life cycles
• Issues:
– Levels of language skills among team
members
– Physical distance among team members
– Cultural differences among team members

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