The benefits of getting involved: top management and new product development projects

From service sector companies to the IT giants on everyone’s lips, everybody relies on developing new products, in order to survive on the market and raise to the top. The challenge can be anything: coming up with a new flavour for a soft drink, or creating a sharing service. So what does the success of new product development depend on? Is it all about the creativity and skills of the engineers, just luck, or can you as a manager do something concrete about it?

Actually, the involvement of top managers in the process of new product development is seen as one of the most important factors for its success. An organization’s group of managers with official authority can make decisions that affect the process, or can even get involved directly. Based on 46 different studies, a review by Felekoglu and Moultrie (2013) clarifies which top managers’ behaviors are important for which aspects of new product development.

Where top management can make a difference

Those working in new product development projects say that top management involvement increases the success of the project, and support from top managers is beneficial in both small and medium enterprises. Indeed, several studies showed that top managers’ support for the project boosted its performance in terms of financial success, timely execution and design quality.

However, too much involvement from top managers is not always good: it can also be perceived as a barrier in some organizations, depending on people’s expertise and experience. For example, if the product is very technologically innovative, its success does no longer depend of the top management support. In this situation, managers might lack the technical expertise needed to assess the situation correctly, and might be too optimistic regarding the innovation process. So, the performance indicators where top management involvement can make a difference are more related to the management of the development process, and less to its outputs.

Not all involvement is alike

Top management involvement in projects of new product development can take different forms. Employees working in such projects see three ways in which top managers can support them.

First, support can be offered by the direct influence of top managers: through multifunctional senior management teams, steering committees, joint leadership, direct communication channels, and process champions.

Second, indirect influence can also represent support for the project, when top managers provide resources, participate in brainstorming, organize joint visits to customers, advertise internally the innovation, put in place knowledge management systems and offer learning opportunities.

Finally, top management can indirectly influence new product development projects by actions at the organizational level: defining the mission, goals and strategy of their company, as well as choosing some structural solutions over others. Through all these behaviors, top managers can support the processes of new product development in their organizations.

So which is most likely to be beneficial?

For answering this question, some studies looked at what managers of companies successful in new product development did, that other managers did not. It appears that top managers of successful companies were involved in the conception and implementation of new product strategies, while those in less successful companies limited their involvement to approving budgets and defining financial targets. In addition, the top managers in successful companies were powerful, responsible, experienced, enthusiastic and high-status business innovators. Finally, top managers’ commitment and accountability were also associated with the success in developing new products.

Takeaways for your practice

So, what can you do for the teams that develop new products in your organization? Surely, get involved is the answer. Do it directly, if your experience in the organization tells you this is something the project teams appreciate. Otherwise, start with an indirect involvement. See what the organization’s mission and goals imply for new product development activities, and if any changes would be desirable. But take immediate actions too: participate in some activities of the project team, such as customer visits and brainstorming. This will give you a better idea of the project and the work required for it, so then you can promote the innovation inside your organization and provide the team with the appropriate resources, so they perform better.

Questions:

How do you get involved in your company’s new product development projects?

Can you think of actions you take that represent indirect involvement and which were the consequences?

What can determine whether the involvement of top management is seen as helpful or as hindering?

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Reference:

Felekoglu, B., & Moultrie, J. (2014). Top management involvement in new product development: A review and synthesis. Journal of Product Innovation Management, 31(1), 159-175.

Find the original article here!