Charge Up Your New Product Development Teams
Identify the characteristics of high-performance product development teams and the conditions that do and do not lead to them.
Posted on: 11/2/2003
Firms that aggressively pursue new product introductions increasingly use cross-functional teams in the development phase. These product teams, made up of people from different functional areas in the firm, are, in theory, ideal for the task. While the benefits of these diverse teams have been widely circulated, the mere formation of the cross-functional team hardly guarantees success. For all of their benefits, these teams have significant hurdles to overcome—differing priorities, conflicting perspectives, varied processes and reward systems that do not encourage cross-functional working.
Still, a few teams perform exceptionally well. Sometimes dubbed hot, these teams move beyond integration and cooperation into the realm of true excitement and a drive for exceptional outcomes-the stuff of managers' dreams. But what is the nature of high-performing teams? What charges them? More importantly, what conditions create a working climate in which these teams thrive? Are there decisions that project managers can make that will foster or hinder team chemistry, which ultimately leads to time compression in product development?
We sought the answers to these questions with a survey of 141 new product development project managers from a wide range of consumer goods industries. These project managers told us about team structure, climate issues and product performance. Two facts about these teams are very clear from this data-there is a range of charged behavior and the more charged the team, the better the product's performance in the market.
What Charges Teams?
New product teams are charged when they are enthusiastic and jointly
driven to develop superior new products. We have found charged teams to
have distinctive characteristics:
- Enjoyment and excitement in the task
- Commitment to the goal of a truly superior product
- Open information sharing
- Free challenge of ideas and perspectives
- Cooperation
And don't underestimate the fun factor! Highly charged teams demonstrate a sense of excitement about the job that allows them to weather and work through normal delays and minimize lulls. And this translates into work that moves at a rapid clip, new ideas and approaches, and a team that sees the task as a challenge rather than a burden.
Put together, the above factors lead to the development of superior new products that are brought faster to market and thus outperform others in the marketplace.
What Leads to Charged Teams?
Our findings suggest that both the structure of the team and several
significant climate issues contribute to the development of charged
cross-functional product development teams.
1. Individual evaluations and rewards are tied to team performance rather than to the members' functional areas. Shared rewards increase the likelihood of cooperative attitudes and help reduce the effects of the biases and stereotypes toward other departments that team members bring to the table. Highly interdependent teams seem to feel freer to challenge issues and push against the status quo.
2. There is a sense of interdepartmental connectedness in the firm. Firms that have greater formal and informal communication between departments are more likely to have charged teams. Connectedness is known to reduce conflict, improve the quality and quantity of communication overall, and enhance the espirit de corps of employees. In turn, team members bring fewer biases to the task. Moreover, a climate of open communication can make it easier for teams to access resources and expertise from different parts of the organization.
3. Teams have a direct line to consumers in the early stages of product development. Frankly, consumers are a good source of new ideas and can provide a needed reality check for new products. More importantly, exposure to the actual users of the products tends to drive up team members' commitment to the job. The more real the problem seems, the harder the team will work for a solution. Satisfaction becomes more relevant when there is a face on what might otherwise be an anonymous customer base.
4. There is significant competition in the market. External threats help build a sense of unity in the team. Moreover, the time pressure from competitors keeps the task moving at an excellent pace.
What Does Not Lead to Charged Teams
In addition to the four conditions that do charge teams, we discovered a number of things that do not
charge them. Managers and project leaders can make efforts to create
conditions that create charged teams. This involves not only focusing
on the above, but also by treading carefully with regard to a number of
related issues.
Although commonly assumed to be strongly beneficial to team performance, we found that physical proximity does not charge teams. The availability and easy use of a number of telecommunications and Internet options may be reducing the need for physical proximity.
Also, there is no guarantee that long-standing teams will evolve into charged teams. We have concluded simply that teams either have it or they do not. Giving a less effective team more time to resolve a problem will not make the team more effective or the outcome better in the long run.
Additional Results
We expected that having senior management actively encourage the new
product development team to take risks would create a climate in which
novel ideas are valued and actively sought. It does not. We assumed
that when teams are given the green light to be risky, they will choose
to do so, but that may not be the case given that the cost of failure
is so high. We also discovered that a firm's implementation of total
quality approaches has no effect on team dynamics, although it does
have an impact on product performance because of the firm's overall
attention to detail in production and delivery systems. Thus, it will
be incorrect for managers to assume that product development teams will
get energized because the firm practices total quality management.
Conclusion
It is clear from the study's results that the dynamics of
high-performing teams are quite complex. While adopting a
cross-functional approach is a good step in the right direction, it is
clear that the structure of the team and the climate in which it
operates are critical factors to its success. In a firm comfortable
with the open exchange of information among departments, interdependent
teams, who have access to end users early on and throughout the design
process are more likely to exhibit the combination of behaviors that
lead to more successful products. Furthermore, hot teams tend to thrive in hot or competitive markets.
One particular issue that teams and project managers can address immediately, in conjunction with or independently of other changes, is access to the customer. In their drive for speed, firms often minimize or even eliminate the role of customers in the process. Clearly, this is not advisable. With the wide availability of new sources of information from consumers (e.g., proprietary interactive websites, chat rooms, e-mails), product development teams that operate in isolation from the market are missing out on opportunities for a more productive and exciting experience.
Charged teams do create better products. The results have highlighted several factors that can contribute to energized teams whose members enjoy the task, share information freely, challenge each other, are committed to the task and cooperate to overcome their biases against individuals from other departments.
