interactions in new product development: how the nature of the npd process influences interaction...

J. Eng. Technol. Manage. 30 (2013) 384–401

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Journal of Engineering andTechnology Management

journal homepage: www.elsevier.com/locate/jengtecman

Interactions in new product development:
How the nature of the NPD process influencesinteraction between teams and management
Burcu Felekoglu a,*, Anja M. Maier b, James Moultrie c

a Industrial Engineering Department, Dokuz Eylul University, Tinaztepe Campus, Buca, Izmir, 35160, Turkeyb Department of Management Engineering, Technical University of Denmark, Produktionstorvet 2800Kongens Lyngby, Denmarkc Institute for Manufacturing, Department of Engineering, University of Cambridge, 17 Charles Babbage Road,Cambridge, CB3 0FS, UK

A R T I C L E I N F O

JEL classification:

O32

Keywords:

Interactions in new product development

New product development process

formality

New product development team

Top management

A B S T R A C T

Effective interaction across organisational boundaries is a critical

success factor in new product development (NPD). However, few

studies have investigated how different mechanisms enable

effective interaction across organisational and particularly hier-

archical boundaries.

This study explores how the formality of the NPD process influences

the nature of interactions across different organisational bound-

aries and specifically identifies interaction mechanisms used across

hierarchical boundaries. Cross-sectional interviews were con-

ducted in nine firms. Findings highlight that in firms with a

formalised NPD process, interactions tend to have a transactional/

managerial bias. In contrast, in firms where the NPD process is

flexible, interactions have a more social objective.

� 2013 Elsevier B.V. All rights reserved.

Introduction

Cross-functional teamwork, internal and external communication, inter-firm relationships,knowledge transfer, and senior management support are considered to be important issues that

* Corresponding author. Tel.: +90 2323017616; fax: +90 2323017608.

E-mail addresses: [email protected], [email protected] (B. Felekoglu), [email protected]

(A.M. Maier), [email protected] (J. Moultrie).

0923-4748/$ – see front matter � 2013 Elsevier B.V. All rights reserved.

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B. Felekoglu et al. / Journal of Engineering and Technology Management 30 (2013) 384–401 385

influence New Product Development (NPD) success (Brown and Eisenhardt, 1995; Ernst, 2002).Effective communication and interaction between different NPD stakeholders is consistently regardedas one of the most important success factors of NPD (Brown and Eisenhardt, 1995; Ernst, 2002;Knudsen, 2007).

NPD is an inherently multi-functional and multi-stakeholder activity. It is widely acknowledgedthat this multi-disciplinary nature makes interaction in NPD difficult to manage (e.g., Dougherty,1992; Leenders and Wierenga, 2002; Kyriazis and Massey, 2008). Each NPD project requirescooperation between people from various functions (Holland et al., 2000) as well as acrossorganisational hierarchies (Pinto and Pinto, 1990; Maier et al., 2008). Indeed, as a critical, but under-explored interface is the relationship between the NPD team and senior management (e.g., Neilsonet al., 2008; Bonner et al., 2002).

In the multi-disciplinary environment of NPD, each group can be viewed as having its own‘‘thought world’’, which creates ‘‘interpretive barriers’’ (Dougherty, 1992, p. 179). Cooperativeteamwork means that staff from different functions must span these boundaries by finding effectiveforms of interaction and communication. Recognising this challenge of crossing interdisciplinaryboundaries (Kleinsmann et al., 2010), there is little known about the types of interaction whichfacilitate effective relationships between groups having diverse interests and values (Jehn et al.,1999). Thus, while the importance of effective interaction in NPD is widely acknowledged (Brownand Eisenhardt, 1995; Ernst, 2002; Knudsen, 2007), few studies have so far attempted to investigatethe use of different mechanisms in enabling effective interaction across organisational boundaries inNPD.

In broad terms, a distinction is often made between ‘formal’ and ‘informal’ means ofinteraction between actors in a socio-technical system (e.g., Nadler and Tushman, 1987; Zahra andNielsen, 2002; Griffin and Hauser, 1996). Formal interaction is often driven by processes andprocedures, whilst informal interaction is typically based around face-to-face contact either insmall or large groups (e.g., Moenaert et al., 1994) or increasingly the use of social or electronicmedia (Leenders et al., 2003). Whilst there have been many studies exploring the interfacebetween marketing and R&D, few studies have explored the nature of interactions between seniormanagement and the product development team. This gap in knowledge emerges in the work ofRichtner and Ahlstrom (2010), who investigated the relationship between management controland knowledge creation in new product development. They concluded that whilst standard NPDliterature emphasises the importance of formal control, top management also must play a role as‘‘catalyst, integrators and encouragers.’’ Similarly, Bonner et al. (2002) found that managers canexert too much control and that there is a negative association between imposed process controlsand project performance.

Thus, our primary objective was to answer the following question:Q1: What are the interaction mechanisms used by key stakeholders?

To address this question, this study explores the nature of internal (within a firm, and not withsuppliers or external partners) interactions in NPD across functional and hierarchical boundaries, andspecifically the mechanisms used to facilitate those interactions.

This paper reports on a series of exploratory interviews with managers involved in NPD in ninecompanies. This study is exploratory and inductive, to the extent that we are not imposing or pre-determining a set of interaction mechanisms to respondents. Rather, respondents were prompted toidentify and describe the specific mechanisms which they felt were being utilised in their companies.Thus, we did not develop a model or classification of interaction mechanisms prior to the study, whichmight then be tested for validity, but instead we set out to build a classification or model based onresponses.

This paper is organised as follows. First, a brief overview of literature relating to interaction infirms, and specifically interaction in NPD is presented, in order to more explicitly state the gap inknowledge that this paper is aiming to address.

Next, the rationale for an interview based approach is explained, followed by details on theinterview process and company selection. Results are then presented before concluding with aframework articulating the different types of interaction mechanisms used in different contexts.Finally, implications for theory and practice are discussed.

B. Felekoglu et al. / Journal of Engineering and Technology Management 30 (2013) 384–401386

Interactions in NPD

Cross-functional integration is acknowledged to improve NPD performance (Swink et al., 2006), byenabling improved interaction (Barczak et al., 2009). Indeed, NPD is an activity which demandsespecially high levels of interaction across both functional and hierarchical organisational boundaries.

Interactions between staff that relate to product development can be considered as intra-functional, inter-functional or hierarchical. In general, intra-functional interaction happens amongstthe core design team, with most interaction occurring at a technical level, to discuss engineeringsolutions and interfaces. Inter-functional interaction is common at a middle-management level,between project managers, development managers, marketing managers and production managers.This type of interaction is of a more tactical nature, to consider plans of an immediate nature thatinfluence different functional domains (e.g., launch planning, integration to production etc.). Theimportance of effective interaction and integration between team members from different functionalgroups has led to many studies on the issue. Past research on internal interactions in NPD investigatedcommunications within a single functional group such as R&D (Allen, 1971); between dyadicfunctional groups such as R&D and marketing (e.g., Gupta et al., 1985; Griffin and Hauser, 1996; Perkset al., 2010), R&D and manufacturing (e.g., Crittenden et al., 1993); and between a variety of functions(e.g., Brettel et al., 2011; Pinto and Pinto, 1990; Song et al., 1997).

A common theme in this work is the distinction that can be made between formal and informalinteraction. Zahra and Nielsen (2002, p. 395) discussing the integration of R&D and manufacturingnote that integration ‘‘significantly influences the number and radical-ness of a firm’s new products . . .

Importantly, formal coordination is more important for technology commercialisation success thaninformal coordination.’’ Griffin and Hauser (1996) explored the interface between marketing and R&D.They observed that ‘‘several researchers . . . suggest that informal contact often substitutes for formalnew product processes’’ (p. 205) and that ‘‘some research has shown that using a formal process canlead to improved development outcomes’’ (p. 209). However, they did not seek to explore themechanisms that might be used as a means of communicating in either formal or informal contexts.Kyriazis and Massey (2008) for example discuss communication frequency, quality, directionality andopenness in NPD and identify that both formal and informal communication has a positive effect onNPD success. But the communication mechanisms used are not explored.

Moenaert et al. (1994) also explored the marketing – R&D interface, but this time focusing on themechanisms for communication. They described ‘formalisation’ as the extent to which rules andprocedures are followed. However, whilst explicitly exploring the communication interface, theyprimarily address its ‘effectiveness’, rather than the mechanisms which might be used in a moreoperational sense. They do however note that ‘‘project formalisation and decentralisation, good inter-functional relations . . . increase communication flows between R&D and Marketing. However, onlyproject formalisation and the quality of the interfunctional climate were found to have a significanteffect on project success’’ (p. 41).

In summary, the majority of studies exploring interaction within NPD focus at a dyadic levelbetween two disciplinary functions (e.g., R&D and marketing). Furthermore, they address the ‘quality’of interaction, rather than the mechanisms by which interactions take place. An exception is Ruekertand Walker (1987) who explored specific types of interaction mechanism between marketing andother functional units (e.g., face-to-face, telephone, written and group meetings). Again, theydistinguish between formal and informal channels and demonstrate that formalisation results inincreased levels of communication. However, the variety of means of communication has changedsignificantly since 1987, with the emergence of inter alia email, intranets, social media and web basedmethods (Hossein and Sawyer, 2013).

Hierarchical interactions

In comparison, hierarchical interactions (between senior management and product developmentteams) are little explored, despite top management involvement being frequently cited as a criticalNPD success factor (Moultrie et al., 2007; Rubenstein et al., 1976). In most cases, hierarchicalinteractions are channelled through an appointed representative, probably the project manager. At a


senior level, this might include the whole executive board of a firm, or in a larger organisation, a subsetof this group with responsibility for product development. These interactions tend to be of a morestrategic nature, often with an emphasis on review, authorisation and control. Literature alsohighlights the importance of understanding the complex interactions between senior managementand employees (Pincus et al., 1991). However, perhaps surprisingly, comparatively few studies haveexplicitly focused on this critical interaction interface in NPD (e.g., Ancona and Caldwell, 1992).

McDonald and Eastlack (1971) work was among the first attempts to explore top managementinvolvement in organisations. They identified that top management involvement was selective inorganisations that were most successful in their NPD activities. In these organisations topmanagement was involved in the formulation and implementation of new product strategy. In theless successful organisations, top management involvement was limited to approving budgets andspecifying/reviewing financial targets. They also concluded that the major barriers to successful NPDhave motivational and organisational roots; creating an innovative climate, encouraging risk taking,improving internal communication and removing organisational barriers to innovation. In commonwith these organisational issues, Harmancioglu et al. (2007) observed four specific top managementroles: idea generator, planner, orchestrator, and gatekeeper.

A more recent study by Richtner and Ahlstrom (2010) investigated the relationship betweenmanagement control and knowledge creation in new product development. They again distinguishedbetween formal and informal control mechanisms, noting that too little control can be negative, as theteam lacks feedback, whereas too much direction can lower team performance. They describe formalmechanisms as including ‘‘written specifications, approval, checking and phase-gates, whilst informalmechanisms are based around ‘‘personal involvement’’ (p. 1008). They conclude that whilst standardNPD literature emphasises the importance of the formal elements, top management also must play arole as ‘‘catalyst, integrators and encouragers.’’ However, again they do not explore the specificmechanisms by which these interactions might be observed. They do though generalise their findingsto suggest that top managers should not exercise detailed control in the early phases of a project, andinstead offer facilitation. At the later phases of the project, more emphasis might be given to moreformal approaches.

Bonner et al. (2002) investigated the relationship between formal (e.g., schedules, goals, budgets,processes, procedures) and interactive control mechanisms (e.g., direct interaction) used by topmanagement and NPD project performance. They found that managers can exert too much control andfound a negative association between imposed process controls and project performance. Indeed, theycommented that ‘‘Projects that are subjected to detailed a priori, process requirements by uppermanagers are associated with delays, cost overruns, lower product performance and lower teamperformance’’ (p. 242). In a more recent study, Carbonell and Rodrı́guez-Escudero (2011) investigatedthe direct effect of managerial control on NPD speed and found a significant positive effect.

Other studies have explored more generally the interactions between top management and genericbusiness functions (e.g., Savaneviciene and Stankeviciute, 2011). In this context, Simons (1994)concluding that new managers often use formal control systems (information based routines andprocedures) as levers of change. Such formal systems were found to be useful in overcomingorganisational inertia, to communicate new agendas and to structure implementation.

A common theme through all of these studies has been the contrast between formal and informalmeans of interaction. If these notions are considered in the specific context of NPD, then theseinteractions are most likely to be influenced by the nature of the NPD process as the mechanism forintroducing formality (Engwall et al., 2005). Thus, in order to explore the mechanisms of interaction, itis likely to be fruitful to also consider the nature of the NPD process in the firm.

Formalised and flexible NPD processes

Generic models of the NPD process claiming to achieve ‘best practice’ and increasedcompetitiveness have been the focus of academic research for more than 25 years (Markhamand Lee, 2013). These models are often typified by sequential steps interspersed with checkpointsor ‘gates’ (Cooper, 1979; Wheelwright and Clark, 1992; McGrath et al., 1992), each having checklistsof tasks to be completed (Clarkson and Eckert, 2005). Typical stage gate processes emphasise the


importance of effective pre-development activities, involving all disciplines from marketing tomanufacture (Cooper, 1994). As a framework for managing NPD, stage-gate or phase-reviewprocesses tend to emphasise a linear progression of activities (Barczak et al., 2009, p. 14) whichimposes a formalised structure for management. Eckert et al. (2013, p. 92) defined formality in thecontext of design processes as ‘‘strictly adhering to rules or conventions.’’ While this linearstructure ‘‘provides a simple and effective representation of the structural logic and flow’’ it doesnot reflect ‘‘the dynamic behaviours and relationships’’ of various stakeholders (McCarthy et al.,2006, p. 441). Thus, formal processes have been demonstrated as being very successful in stableenvironments, when ‘‘. . . all information about potential design choices is known or can bediscovered during concept development’’ (MacCormack et al., 2001, p. 134). But, under conditionsof uncertainty, firms often find it difficult to obtain ‘accurate and timely information’ (Calantoneet al., 1997). It is argued that in conditions of uncertainty, a more flexible process is necessary andthe primary benefits of the sequential stage gate process are inappropriate. Indeed more recently,Cooper recognises that processes often need to become more fluid, adaptable, focused and flexible(Cooper, 2008).

Thus, whilst the dominant logic for much of the last 25 years has been towards the formalisation ofsequential processes, alternative approaches have also been proposed, although they are generallyless widely implemented. Quinn (1985) described the NPD process as an incremental (flexible), goal-oriented, non-linear and interactive learning process where managers keep many options open untilenough concrete information becomes available. From this perspective, NPD operations involveiterations (Leonard-Barton, 1988) and the process is less structured but more dynamic (Cheng and vande Ven, 1996). This ‘contingent’ view of NPD process recognises the necessity of a flexible and tailoredprocess which takes the context into account (MacCormack et al., 2001).

It is through the lens of these two ‘caricatures’ of the NPD process (formalised and flexible) that wewill analyse the way in which interactions in NPD take place (Fig. 1). We recognise that in many firms,the reality is somewhat more nuanced and encompasses aspects of both formality and flexibility.However, it is hoped that this simplified distinction will help to illuminate different behavioural andmanagerial practices.

Research questions

In summary, it is evident that interaction is important and that surprisingly, little is known aboutthe types of mechanism used to enable these interactions. Thus, this study seeks to address thequestion:

Q1: What are the interaction mechanisms used by key stakeholders?

Recognising that there are both formal and informal means of interacting, we also wished tounderstand whether companies tend to adopt one dominant means of interacting; i.e. whether theyutilise more formal mechanisms or whether informal interactions dominate. Thus, we also set out toanswer a secondary question:

Q2: How does NPD process formality influence interactions between teams and management?

Research approach

Interviews with twelve product development managers were conducted in nine manufacturingand technology companies. The interviews sought to explore interactions between differentstakeholders in NPD and in particular interactions of a managerial nature. The interviews also aimedto explore the particular interaction mechanisms used.

Flexible processFormalised process

Fig. 1. Spectrum from formalised to flexible NPD management.


Companies were specifically selected to represent two different approaches to managing productdevelopment. Approximately half the firms had a ‘formalised’ NPD process, whilst the others operateda ‘flexible’ approach. At the beginning of the interview, managers were asked to describe theirapproach to NPD and state whether they followed a formalised process (e.g., stage gate) or a flexibleapproach.

In selecting firms on this basis, we recognise that this paints a caricature that might not beappropriate in all circumstances. Indeed, Brattstrom et al. (2012) describe the balancing act thatcompanies face between mitigating uncertainty through systematic processes and stimulatingcreativity through allowable variation in these processes. Gilson et al. (2005) also report thatstandardised procedures and creativity might be complementary rather than contradictory.Recognising this limitation, we hope that this caricature serves to illuminate differences in practicebetween the extremes, rather than prescribe the extremes as the only viable approach. As our analysiswas not at a project level, but at the firm level, we did not seek to differentiate between incremental orradical projects, although this might also have presented interesting results.

We interviewed managers in nine firms, with a roughly even split between those who self-characterise as formal and those who view their approach as flexible. In practice, it is difficult to pre-select on this basis, especially as the dominant management approach is to formalise the NPD process.Thus, once we had secured sufficient interviews in firms where formalised processes dominate, wethen sought only firms whose approach was more flexible.

In selecting the firms, we also sought firms from different sectors and with a range of sizes. Three ofthe nine companies were large with more than 250 employees and six of them were SMEs with a rangeof employees between 21 and 180. For each company, descriptive information on the year offoundation and 2010 turnover values are given in Table 1. The average NPD process durations of thecompanies ranged from six months to five years. Companies, which indicated that they follow aformally documented NPD process, were considered to have a formal NPD process. Companies, whichindicated that they do not have any documented NPD process, were considered to have a flexibleprocess. The latter category also included companies which, whilst having a documented process,explicitly considered their NPD process to be unstructured.

The majority of the interviews were with a single respondent and thus special attention wasgiven to identifying knowledgeable interviewees who were able to provide a fair description of theinternal interactions in the NPD process. All interviewees were in a managerial role, either at aboard level (e.g., Technical Director, Head of Development, NPD Director) or in the developmentorganisation (e.g., project manager, NPD manager). Secondary data such as example documentswere also collected where possible. In companies B and H, multiple interviewees were present. Wedid not interview these respondents separately, as we were seeking a consensus about interactionsin NPD.

Table 1Interviewees and company details.

NPD

approach

Company Interviewee’s role Average

NPD duration

(Months)

Number of

employees

Year of

foundation

2010

turnover

(£M)

Flexible A � Operations Manager of the

Central Research Group

24–36 1700 1990 380

B � Technical Director 12–24 85 1984 10

� Project Manager

C � Technical Director 6–48 22 1985 2.2

D � General Manager 36–60 85 1909 1.7

Formal E � Research and Innovation Manager 12–36 1000 1965 32

F � Head of Development 6–18 85 1952 7.5

G � Engineering Manager 6–48 400 1990 52

H � NPD Director 12–36 180 2000 20

� Product Manager

� Project Manager

I � NPD Manager 18–30 21 1988 5.5

Intra-f unctionalInterac tion (R&D )

Inter-f unctionalInterac tion (R&D , Marke ting, Prod uction)

Hierarc hica l I nterac tion(Top management)

Fig. 2. ‘Raw’ diagram used for capturing data.


During the interview, interviewees were first asked to describe their NPD process, and to commenton its level of flexibility or formality. Here, a strong indicator of formality was the existence of adocumented process and especially adherence to external rules or standards (e.g., ISO 9000). Incontrast, a likely indicator of flexibility was a less rigidly documented process. In all cases, thecompany’s self-identification concurred with the independent views of the research team.

Next, interviewees were asked to describe the different interactions within the R&D team, betweenthe R&D team and other functions and between these parties and senior management. To capturethese insights, a graphical elicitation (Crilly et al., 2006) approach was used (Fig. 2). Unlike traditionalinterviews, where respondents answer a set of predetermined questions, a graphical approach is by itsdesign seeking to explore a phenomenon in a more open manner. Diagrams are widely believed to beeffective instruments of thought and a valuable tool in conveying those thoughts to others (Crilly et al.,2006). Diagrams are a useful means of capturing the thoughts of interviewees (Cheng and van de Ven,1996), especially when the intent is to build theory. In this case, interviewees were presented with thegraphic reproduced in Fig. 3.

A diagram was presented to the interviewee(s) and they were first asked to sketch the interactionsbetween different stakeholders within R&D, between R&D and other functions and between topmanagement and both R&D and other functions with respect to new product development. Next, theywere asked to annotate this further with the specific mechanisms used for communication orinteraction between the different parties. Fig. 2 shows an empty chart and Fig. 3 shows a completedchart.

This approach does not replace the need to record and transcribe discussion and comments, butprovides a structure around which such discussion might take place. Thus, when describinginteractions, interviewees were explicitly asked about the mechanisms used to support differentinteractions, even if they did not represent them explicitly on the diagram. The interviews aimed toidentify the nature of the interaction, the type of mechanism used and also its purpose. Therefore,participants were not presented with a pre-determined set of mechanisms and the results whichfollow are derived solely from the responses of interviewees. Interviewees were finally asked to givetheir overall thoughts on the effectiveness of the different interactions and the difficulties andchallenges they face.

All interviews were recorded and transcribed to enable analysis. For each company, interviewtranscripts were scanned and summarised carefully into categories based on the interview questions(Miles and Huberman, 1994). This categorisation was undertaken by the research team collectively,and in the process, alternative categorisations were explored and discarded before arriving at asolution which was felt to best represent the data. Draft reports were sent to each interviewee for a

Fig. 3. Diagram after an interview.


review to validate the accuracy of interpretation (Yin, 2003). Following this review process, draftswere revised based on the feedback and the identities were disguised to maintain confidentiality.Finally, a cross-organisational analysis was performed, comparing the categorised data to search forpatterns that cut across the nine companies (Eisenhardt, 1989).

Results

Interactions in firms with flexible processes

Company A

Company A is a large firm with a central research group and four product divisions. Productdevelopment is conducted with a process that is not formally documented but consists of four generalphases; exploration, refinement, technology development, and product development. During the firsttwo phases, time scales are not set or defined in detail. Project ideas come from cross-fertilisation andinformal talking with each other. The firm avoids imposing structure so that they can focus ondevelopment activities instead of having to spend too much time on activities that are solely driven bythe needs of the process. They describe this approach as a ‘‘low process intensive project managementsystem’’.

The main interaction mechanisms used in Company A are project wiki-pages, review meetingpresentations and prototypes. Each project has a wiki-page on the company intranet, which providesan overall project summary and key information related to the project status; people can easily addand cross-link information. Review meeting presentations include information on their progressagainst the plans, discoveries they made, patents they filed, and things they plan to do next. Inaddition, they have consistent interaction with the management and other divisions by primarilyinformal meetings and discussions. They also have three-monthly project review meetings andweekly progress meetings.


Company B

Staff in Company B believe that they are very ‘‘lean and nimble’’ in their NPD approach. They alsothink that in this small company a less flexible structure would inhibit their ability to produce newproducts quickly. The products are highly complex and new product introduction tends to be highlyturbulent, especially in the period before product launch, where a testing might result in significantnumbers of design changes. This iterative approach to design is believed to be not easily compatiblewith a highly structured process.

Company B has an electronic production library which is a folder on a shared drive.Everybody in the company has access to this. Any of the issued documents relating to productdevelopment activities are put in the production library so that everyone knows where the up-to-date copy is. The library is operated with strict version control. Another key interactionmechanism is the product specification, which provides the major reference point for continuousand informal interaction between senior management and team members. The project team alsomaintains a simple project plan (Gantt chart). Team members and project managers havefrequent informal meetings with senior management whenever they need advice or to checksomething.

Company C

The NPD process of Company C is flexible and driven by constantly changing priorities. The processis not documented formally. Development is initiated by a requirement coming from sales &marketing department, which is followed by a brief investigation of the potential market and a shortstudy to set the anticipated budget and specifications. This is followed by an experimental phase ifthere are any significant unknowns. Development concludes with detailed design including thecreation and evaluation of prototypes before product launch.

Like firms A and B, Company C also operates an electronic product directory which is a collection offolders related to their NPD activities. Everybody can access the directory, but certain documents canonly be changed under change note procedure. Other managerial interaction mechanisms include thecirculation (to management) of meeting minutes, specifications documents, design plans and a projectplan chart. There are weekly project meetings where senior management and team members cometogether, team members briefly describe what they are working on, and they discuss project progressin an informal way. The objective of these meetings is for two-way discussion on progress and for topmanagement to be aware of any issues as they arise in order that they might take action to address asappropriate.

Company D

Company D does not have a documented NPD process, but expressed an intention to document theprocess which is currently being followed in order that it is better understood across the business.Thus, they describe their approach as flexible, but wish to introduce greater formalisation in thefuture.

Company D utilises special ‘project rooms,’ where relevant project documents are attachedto the walls (e.g., Gantt charts, project reports, specifications, technical drawings andphotographs). Managerial interactions typically take place in front of these walls where boththe team and senior managers can discuss the material presented and interact with this evidence(e.g., sketch a line on the map and later update that line as the project progress). The CEOinstigated this approach, believing that effective communication must be two-way, and that thiscannot happen through a process which primarily articulates documentation as the mechanismsof interaction. Thus, there are regular project meetings, design reviews and a great many informalface-to-face conversations.

Interactions in firms with formalised processes

Company E

The NPD process of Company E consists of seven stages (idea funnel, scoping, planning,development, launch, mechanical review, and financial review) and six gates. Every major NPD project


follows the process. For each phase, there are a set of well defined deliverables, which have templatesand there are many checklists. Whilst providing structure, the company is aware that some staffbelieve the process stifles creativity and slows things down. Recently, they piloted a more ‘‘agile’’development process which does not require fully signed off checklists.

Managerial interactions are primarily facilitated through a number of documents (e.g., scopestatement, business plan, detailed business plan, project plan, functional specifications, initial launchplan, project plan and detailed launch plan). Before each gate review, the set of documents aresubmitted as a pack for the senior management to read and approve. In addition to gate reviewmeetings there are monthly and weekly project meetings, although these tend to operate at a morejunior or operational level.

Company F

Company F follows a structured process which has three stages (proposal & feasibility definition,proof of principle & implementation and production introduction) and two gate reviews. Inaddition, there are monthly meetings of senior management and project managers during whichprogress is briefly discussed. They believe that this process helps to improve interaction betweendifferent functions, although not necessarily with senior sponsors. The documented process isrepresented as a sequential process but the interviewee believes that it is important not to take thistoo literally because there are ‘‘lots of things going around and lots of iterative parts in all of those

phases.’’ Thus, the process might be described as formal, but with potential for operating moreflexibly.

The main interaction mechanisms used in Company F include documents such as marketingspecifications, product specifications, development plan & risk, definition exit checklist document,monthly meeting template and production introduction sign off document. They also have electronicproject folders. People from various functions and senior managers come together at review meetings.In addition, senior management holds monthly meetings where they discuss the status of the projects.

Company G

Company G has a five-stage, six-gate review process (concept, architecture, detailed design, pre-production and production). They think that this process works well as a framework for long-termproduct developments but is overly bureaucratic for shorter projects as it is rigid and requires muchpaper work.

In Company G, documents such as cost models, requirements engineering structure, finance modelsand process flow diagrams are used in managerial interactions. They have regular review meetingswhere the core project team and executive team come together. Before these review meetings, thecore team is responsible for preparing all the required documentation. The expected output of thesemeetings is to sign off the project for continuation.

Company H

Company H follows a formal phase-gate process, introduced when the company grew to around 200employees. Before this, they communicated directly and had no need for procedures to supportinteractions. As the company grew they found that the change, from personal relationships toformalised interactions, was especially painful.

In Company H managerial interactions happen primarily through documents circulated from thedesign team to management (e.g., marketing requirements, product specifications and engineeringchange notes). In addition, there are both design review meetings and weekly project meetings, butboth of these happen at an operational level, and facilitate effective functional as opposed tohierarchical interaction.

Company I

As a medical device company, Company I follow a formalised process, but do so by necessity andregulation.

As in the other firms with formalised processes, interaction between project teams and seniormanagement is primarily conducted through documentation (e.g., requirements document, business


plan, design specifications, approval to launch document and quality plan). Company I also utilises adesign history database, where records of all documents are kept. They build up this electronic file asthey go through the process. This file is also used by the regulatory authorities to review theirproducts. Regular project meetings with formal presentations are also an important part of managerialinteractions.

Discussion and conclusions

In presenting this discussion, we will start with a summary of the key interactionmechanisms used in the various settings (Table 2). This is followed by a discussion of issuesthat arose. The discussion reflects our interpretation of the data set as a whole and we havenot aimed to allocate each observation to a specific data point from one firm. Specifically, we aimto understand how process formalisation influences interactions between management andteams.

We conclude by proposing a model of interactions. In so doing, we recognise that this model isexploratory and needs further validation, but believe that it raises some interesting issues about thenature of interaction between management and teams that might be used to form the basis of furtherwork.

Table 2Key interaction mechanisms.

Process type Company Company size Key interaction mechanisms

Flexible A Large Continuous informal meetings and discussions

Monthly project review meetings

Weekly progress meetings

Electronic project pages

Informal discussions for generating project ideas

B SME Electronic production library

Project related documents

Informal Meetings

Lean process allowing close continuous interaction between management

and team

C SME Electronic product directory

Project related documents

Informal weekly project meetings

Senior management and team members come together at weekly informal

meetings

D SME Project rooms with project documents attached on the walls

Regular project meetings

Informal face-to-face conversations

Informal interactions between senior management and team members

in project rooms

Formalised E Large Set of formal documents mandated by the process

Gate review meetings

Monthly and weekly project meetings

F SME Set of formal documents

Review meetings

Electronic project folders

Functional members and senior managers come together at review

meetings

G Large Set of formal documents

Regular review meetings

Core project team and executive team come together at review meetings

H SME Set of formal documents

Review meetings

Weekly project meetings

I SME Set of formal documents

Electronic design history file

Regular project meetings with formal presentations


Key interactions

The use of cross-functional NPD teams was common in all companies, irrespective of the approachto managing the process. However, the extent to which these teams interacted with seniormanagement and the mechanisms used vary significantly.

In all firms, intra and inter functional interaction is viewed as generally two way. However, in thosefirms with a more formalised approach, interaction with senior management tended to be uni-directional, with information passed from team to senior manager. These formally mandatedinteractions were often a pre-cursor to a gate review, and in some cases demanded significant effort onbehalf of the project manager to collate and present this evidence. In these formalised contexts, thereis less interaction in the opposite direction, from senior management to the development team andlittle bi-directional interaction with the exception of formal meetings (e.g., gate meetings) whereinteraction is two-way. However, this two-way interaction often takes the form of a ‘‘managerialinquisition’’ against which there is a team ‘‘defence’’ of project status. Thus, the nature of thisinteraction is essentially adversarial, with senior management adopting an audit-minded approachand seeking reasons ‘not to approve’.

Interaction mechanisms

As might be expected, a more formalised approach to interaction is generally more ‘‘document-oriented’’. In other words, interaction results from the documents mandated in the process and thisagain results in uni-directional interaction; the project team/manager writes a progress report andthis is then passed to the senior manager but there is little communication in the reverse direction. Apositive aspect of these formalised interactions is that they do happen. In less formalised contexts,where there is by design less of an audit trail of decisions, it is possible for the rationale behinddecisions to be lost.

Document-led interactions appear to inhibit more socially oriented approaches. In less formalisedsettings, communication and interaction appears to be more bi-directional, with a greater prevalenceof ad-hoc meetings and informal discussions between the team and senior management. Theseinformal interactions might be driven by specific need or may be just part of the ongoing developmentculture.

These results point to a basic dichotomy in managing NPD that is hard to resolve. On one hand,product development is inherently risky and thus formality is necessary to enable management,control, authorisation and an audit trail of critical decisions. However, the very existence of formalisedprocesses seems to establish a control focused role for senior managers, where they see theirresponsibility starting and ending with the signing off of various documents prepared by teammembers.

On the other hand, it might be argued the greater the risk, the more important it is that informalinteraction takes place to ensure discussion and debate. But, this type of interaction is less prevalent infirms with a more formalised process. Thus, our evidence seems to suggest that a formalised processlimits rather than enhances the interaction between team level members and senior managers. Itshapes the dominant form of interaction and may prevent rich interactive relationships between teamand management.

Thus, there are two competing goals. Firstly, there must be ‘managerially oriented’ interactions.Secondly, ‘socially oriented’ or relational interactions must also take place. However, it is unclear howthe two competing goals might best be achieved; providing sufficient structure to enable managerialconfidence combined with adequate social interaction between team members, business functionsand especially between teams and senior management. It is this more socially oriented interactionthat results in clear understanding which in turn enables meaningful decisions regardingauthorisation.

To help explain this dichotomy, Fig. 4 presents a comparison of what we have termed ‘manageriallyoriented interactions’ and ‘socially oriented interactions’. Based on responses from interviewees, wehave noted the specific ‘purpose’ of each interaction mechanism. In the figure, a large ‘X’ indicates themost frequently mentioned purposes of use of the respective interaction mechanism. A smaller ‘x’

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Design rev iew X X X X X

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Informa�on exchange X X X X X

Coo rdina� on X X X

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Formal process In formal /flexib le process

Fig. 4. Summary of interaction approaches (X frequently mentioned, x less frequently mentioned).


indicates where an interaction mechanism is utilised for a purpose but to a lesser extent. For example,‘gate meetings’ primarily seek to enable control, authorisation, verification and project review. To alesser extent, they might also enable information exchange, problem solving and confidence building.Likewise, ‘formal reports’ are viewed as enabling verification, control, approval, and to a lesser extentinformation exchange.

As might be expected, no single interaction mechanism has a sole purpose, but it is possible toidentify the dominant purposes of each, as reported by the interviewees. To make this clearer, theshaded areas demonstrates where mechanisms have either managerial or more socially orientedpurposes.

Once again, the important distinction between the more formal ways in which managers andteams might interact (e.g., review meetings, formal reports) and the informal means (e.g., ad-hocconversations) is striking. However, as Bonner et al. (2002) noted, where interactions become overlytransactional then project performance might suffer as a result. This contrasts with Richtner andAhlstrom (2010) findings that too little control might be negative and too much direction can lowerteam performance.

The mechanisms used in these different firms highlights the underlying reasons why managerschoose to interact. Meyer et al. (2007) described the ‘‘4 purposes of management’’ as controlling(measuring, monitoring, evaluating), planning (setting and monitoring goals), organising (relation-ships to enable teamwork) and leading (motivating, coordinating and energising). Reflecting on thesemanagerial objectives, we can see that the more managerially oriented mechanisms fulfil themanagers need to control and plan. In contrast, the more socially oriented mechanisms are moreclosely aligned with both organising and leading. In practice, both are important. But, what is moststriking from this study is that when a firm employs a formal process, then the interactions areprimarily managerial (e.g., authorisation, review, control) with a view to providing managerialconfidence. Indeed, the NPD process typically sets out to describe the review, control andauthorisation process. It appears as though these interactions happen because they are mandated,rather than because they are necessary. In contrast, mechanisms which are more suited towards socialinteraction are less likely to be formally recognised as part of the NPD protocols. Previous research hasalso shown that the NPD process structure might affect the way interactions happen in NPD (e.g.,Chen, 2007; Ghobadian and Gallear, 1997).

Mana

geria

l inter

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tions

• Emphas is on review, authorisation and control

• Pri maril y driven through documentation & formal meetings

• Often one- way (tea m to manager)

• Authorisation and control based on informal interactions

• Senior management informed through formal and informal meetings

• Interaction for review an d problem solving

• Interacti on occurs through formal meetings

• Social interactions prevalent at functional level, but less so across hierarchical boundaries

• Interacti on for motiv ation and coord ination

• Dail y/weekly meetings and ad-hoc conversations dominate

• Prototypes and dr awings used

• Two way communication

Flexible processFormalised process

Fig. 5. Simplified model of interactions.


In the companies with either a highly formalised process or those with a highly flexible process, theproduct or system specification is a critical artefact, which enables both social and managerialinteractions. The specification is thus a critical interaction mechanism, in enabling coordination,supporting reviews and also playing a significant role in ensuring approval and project verification.Likewise, weekly meetings which have an emphasis on problem solving, as opposed to ‘go/no-go’decisions similarly play both an important managerial and social function. In contrast, the emphasison monthly project meetings and especially gate-meetings towards ‘go/no-go’ restricts their ability toenable communication, discussion, two-way information exchange or problem solving.

This paints a somewhat black and white picture, and in practice the reality is blurred between thesetwo extremes. These examples provide some initial patterns of evidence for the use of certaininteraction mechanisms for different purposes. However, one should avoid making a clear-cutdistinction between interaction mechanisms which serve managerial needs and those which servesocial needs since an interaction mechanism may serve both aspects depending on how it is used.Weekly project meetings, for example, may serve both managerial and social needs. They may be usedas formal mechanism of ensuring informal interaction. Both formal and informal interactions areimportant, but as Eckert et al. (2013, p. 101) observed, ‘‘our observations of communication difficulties. . . reinforce the familiar point that easy, spontaneous informal interactions with colleagues to gaininformation or negotiate solutions are essential for the smooth running of design processes and thatfacilitating them is an important part of design management.’’

As a caricature, managerially oriented interactions are highly transactional, often based on uni-directional flows of information (from team to manager). In contrast, socially oriented interactions aregenerally not focused around critical managerial decisions and have a bi-directional flow of ideas andinformation. Fig. 5 presents a simplified model of interactions, highlighting the core differencesbetween the mechanisms used and their purpose in formal and flexible settings.

Contributions to knowledge

Through this study, we have added to existing knowledge on the nature of interactions betweenteam members and managers. Specifically, we have for the first time identified a possible relationship


between the way in which top managers are involved and the degree to which the NPD process isformalised.

It is evident that when a structured process is followed interaction between team level membersand senior managers is often limited to an exchange of documents. In this type of interaction, topmanagement takes a controlling, monitoring and approving role. Whereas, when the interactionsbetween team and senior management are interactive and continuous such as in the companiesfollowing a less structured process, top management play a greater role in leading and motivating.

The findings also show that mechanisms used by managers to interact with teams are notnecessarily fulfilling interests of both senior management and team members. They are biasedtowards the needs of managers, and arguably do not focus sufficiently on the information orcommunication needs of the teams. Furthermore, in satisfying these managerial requirements,formalised NPD process often demand the creation of large number of documents for formal reviewswhich were found helpful in fulfilling the need to control and approve, but are less helpful in enablingeffective social interaction. Indeed, considerable time and effort at a team level is committed topreparing reports and gaining getting managerial approval. While interactions within team levelmembers were mostly bi-directional, the interactions between team level members and seniormanagement were mostly one way from team to management typically through these formaldocuments.

The two approaches to NPD management are therefore better considered to be complementaryrather than alternatives to each other. However, it was evident from the interviews that it is stillunclear how practitioners can achieve structure while at the same time providing enough freedomand flexibility. Indeed, in the participating firms, it appeared to be an ‘either-or choice’, as opposed tothe ‘best of both’. As a result, there is perhaps a need to reconsider the underlying aims of a formalprocess and seek ways in which both managerial and social objectives might be instantiated in a moreformal manner. For example, if ‘formal reviews’ were replaced or augmented by ‘fortnightly breakfastmeeting’, then managers might not only remain aware of progress, but also might develop a two waycommunication with the team. This view is supported in an ongoing study1 at the Technical Universityof Denmark, where preliminary survey results show that the negative aspects of process formalisation(e.g., reduced innovativeness) might be mitigated by closer senior management involvement.

Implications for managers

These results point to some interesting and possibly controversial recommendations on how firmsmight manage their product development activities.

The NPD domain has been dominated for more than 25 years on the importance and primacy ofhighly structured development processes. It is possible though that these processes inhibit effectiveinteraction and managers might usefully question whether they are engaged sufficiently and not justin dealing with authorisation and control.

Top managers must work hard to develop new ways in which they interact with their developmentteams on an informal basis, to counteract the often over-emphasis on formalised interactions withmanagerial goals.

Processes too often emphasise interaction through documentation, rather than other media, withthe result that top managers focus attention on schedules and costs, rather than the product itself.Visual artefacts such as prototypes, sketches, design drawings and plans provide opportunities forengaging in discussion around the content of the project.

Limitations and future work

The model of interactions presented in this study is the result from an exploratory study with asmall sample of firms. However, we believe there is sufficient consistency across the sample to beconfident that our interpretation of the evidence is reflective of the situation in these firms. A largersample of firms would be needed to test the wider validity of these ideas. Within each firm, single

1 http://www.business.dtu.dk/Research/Projects/formalnpd.aspx.

http://www.business.dtu.dk/Research/Projects/formalnpd.aspx


respondent bias might also have influenced the results. We aimed to mitigate this limitation by carefulselection of respondent, but acknowledge this as potentially influencing results. In a broader study,data from senior managers, core team members and extended team members might expose furtherinteraction mechanisms.

Findings from this study offer several insights to inform the future research in this area. Futureresearch may specifically compare the effectiveness of the use of different interaction mechanisms onNPD performance. In addition, recognising the dominance of document-based formal processes, itwould be interesting to explore whether some forms of documentation enable more effective two-way interactions than others. Finally, this approach might be extended to include external interactionsincluding suppliers and external parties.

Acknowledgements

We would like to thank the participating firms for their time. We would also like to thank thereviewers of this paper for making many valuable suggestions and thoughtful comments.

Appendix A. Supplementary data

Supplementary data associated with this article can be found, in the online version, at http://dx.doi.org/10.1016/j.jengtecman.2013.08.004.

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