The R&D/production interface: Problems
- Symptoms:
- Development cycles are too long and too expensive
- Late, unplanned changes in product design
- Reasons:
- Rigid sequential development process with little overlapping
- High uncertainty when defining cost and time targets
- Too little flow of information between functions
- Strategic objectives of top management not clear
True use of resources in classical development process: VS PLANNED
The R&D/production interface suggested solutions
Suggested solutions:
Overlapping development phases
Matrix organization
Cross-functional teams
Proximity of relevant actors (premises, architecture!) Use of suitable communication technologies
The R&D/marketing interface Marketing and Manufacturing?
“R&D designs the product, marketing sells it and then manufacturing builds it.“
“Manufacturing is supposed to make up engineering delays and meet whatever promises are made by sales and marketing.“
Marketing and engineering?
- Many empirical studies confirm the high importance of the R&D/marketing interface for innovation.
- However, this interface is often characterized by conflicts between marketing and engineering personnel.
- Special efforts have to be made to achieve integration, collaboration, cooperation, and harmony.
Study findings
- Study by Souder (1988):
- – Data for 289 product development projects at 56 manufacturers of
- consumer goods and capital goods
- – Firms chosen by random draw
- – Projects (“nearly“) chosen by random draw
- – Written and oral survey
- – Core variables:
- • Technical result
- • Commercial result
- • Quality of interaction between R&D and marketing
- In the majority of cases (59%), disharmony characterized the interaction between R&D and marketing.
How does “lack of harmony” come about according to Souder`s study?
- Differences in language and culture (technical vs. business people)
- Different objectives
- Lack of trust in information from other functions
- Lack of credibility of information source
Recommendations for innovation management (Souder):
Organization:
Split larger projects in sub-projects
Early integration of both functions in innovation process Clear definition of competencies
People:
Open discussions about conflicts and interface problems
Support contacts between individuals
Integrating task force of management
Effectiveness of integrating mechanisms
- Cross functional teams
- decrease thought worlds, cooperation
- Relocation and physical facilities design
- cooperation, integration
- Personnel movement across functions
- problem solving, information utility
- Informal social networks
- decrease thoughts worlds
- Incentives and rewards
- cooperation
- formal integrative management process
- integration, cooperation
- ict (intranet, video conferencing)
- integration
Marketing and R&D Dilbert
Cross-functional development teams
By combining staff from all relevant functions in a development team, high cost and time (to market) advantages can be realized. This is why cross-functional development teams are a dominant form of organization in NPD
A model to explain team performance
Stage-setting elements and enablers have an indirect effect on team performance because they influence the behavior of the team members
Why Managing researchers
- Provide autonomy
- Share of time devoted to personal projects - Celltech 10%, 3M 15% and Google 20%
- Agree/assign goals and let individual choose approach
- Intrinsic motivation (‘fun and enjoyment from task itself): Reward individual and group success primarily through ‘intrinsic’ methods
- Status, recognition
- Matching people to tasks
- Reasonable goals and flexible deadlines (but not too flexible)
- Sufficient resources (but not too much)
- Tolerate bootleg projects – often ‘pre-research’ projects
- Tolerate experimentation and failure
- Fail fast and often
Architecture and communication
Allen (1977) examined the effect of spatial distance on the communication and cooperation of employees in a firm
Aggregation of communication distances and intervals:
- Result: only within the first 30 meters, distance plays a role for the frequency of communication, i.e. communication only takes place with those colleagues which are closest
- Communication between groups is significantly lower than within a group
Spatial proximity: Effects
Traditional architecture is a linear sequence of offices which maximizes the separation distance:
- Corridor with separate rooms.
- What results is a building architecture in H form, N form, Z or W form to enable window access for all staff - this is problematic, since it may lead to considerable isolation of employees
- An option would be to position walks alongside the outside walls (with windows) of buildings, and to put common rooms (library, meeting rooms) with windows and general manager offices in the centre of the building, possibly with an inside opening of the building
Effect of vertical segregation I
- Empirically, it is found that vertical separation has a more negative effect on communication and cooperation than horizontal separation (Peters, 1969)
- But many factors may have an influence on this order (location of staircases and elevators, accessibility of these)
- Allen’s basic idea:
- [Box]
Effect of vertical segregation II
How many storeys are necessary to minimize the separation distance between occupants?
Result: a 1-storey building would be optimal for a surface below 10000 m2 to minimize separation distance, otherwise, a 4-storey building with an elevator would be needed
Summary
- The interfaces R&D/production and R&D/marketing are beset with problems
- Communication and cooperation between different functions is key to solving these issues
- Cross-functional development teams result in an intra-group structure where different functions are integrated in one group
- Appropriate architecture and spatial settings for the work of a cross- functional development team further increase the quality of communication/cooperation and project success
