Organizing R&D and Innovation

Question 1

Problems with R&D/production interface

Answer 1

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

Question 2

Solutions R&D/production interface

Answer 2

Suggested solutions:
▪ Overlapping development phases
▪ Matrix organization
▪ Cross-functional teams
▪ Proximity of relevant actors (premises, architecture!)
▪ Use of suitable communication technologies

Question 3

R&D/marketing interface

Answer 3

• empirical studies confirm high importance of interface
• characterized by conflicts between marketing and engineering personnel
• special efforts to achieve integration, collaboration, cooperation and harmony

Question 4

Souder R&D marketing interface

Answer 4

• differences in language and culture (business vs tech people)
• different objectives
• lack of trust in information from other functions
• lack of credibility of information source
• project success is strongly correlated with harmony in interaction

Question 5

Recommendations for R&D marketing interface (Souder)

Answer 5

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

Question 6

Cross functional development teams

Answer 6

By combining staff from all relevant functions in a development team, high cost and time advantages can be realized. This is why cross-functional development teams are a dominant form of organization in NPD
- 80% of firms use for 50% or more of their NPD projects cross-functional development teams