6.7.1 Internal project management

Product development is people-driven, and therefore the most important aspect of managing for product development is to activate the product development team and to keep it going forward. This is the underlying energy that drives product development. By better managing and motivating people, the product development performance can improve markedly.

The product development team is a critical building block for the effectiveness and the efficiency of the project (Kuczmarski, 1996; Smith and Fowley, 2000). There needs to be the right mix of team members to give the knowledge for the activities and also the organisational capability for integrating the activities to create the knowledge for the required outcomes. These are multifunctional teams and they need full-time leaders. They are often called cross-functional teams, comprising members from various functions and with complementary skills (Cooper, 1999). A truer description is a multifaceted team, having a variety of skills needed in a specific project, but not necessarily related to the functional departments. In the team, there is a need for a variety of expertise and experience, as well as different perspectives on product development. Utilising interdisciplinary project teams whose participants are involved at the onset of a project can greatly reduce development time and improve the probability of success (Gevirtz, 1994).

The actual mix depends on the company and the project. There may be a core team as shown in Fig. 6.12, and then a surrounding team or supporting groups.

Fig. 6.12 The core product development team.
(- click to enlarge)

The core team conducts the activities but they are interacting continuously with the other members. People may move from the surrounding team as the project develops; for example in product design the person with marketing skills may be only an adviser, but in Stage 3: Product commercialisation will become a core team member. It is important that the knowledge and skills needed later in the project are identified, and people with these skills are included in the total team from the beginning.

As shown in Fig. 6.12, each member of the multifaceted team should share a common commitment to the project, with shared perspectives and shared values; being part of the team should be a responsibility that members are given by management. The team members need a mix of creativity and analytical problem-solving skills based on knowledge and experience. They are often individualistic because they have strong ideas on product development, but they need people skills to work in a team. This is not always easy to blend together but it can often be achieved with experience and good leadership.

The project leaders need skills in team-building and conflict resolution. They also need to be creative and good at problem solving; they need to be skilled product developers as well as organisers. In some incremental product development, organisation may be important; but as projects go towards radical innovation, it is the innovative thinker who can bring the team to effective product development. It is the role of the project leader:

     to ensure that the project progresses smoothly, meeting all
        interim objectives and targets on time and within budget;

     to make sure that the necessary resources are available when and
        where they are required;

     to act as the primary channel of communication between the
        project teams, senior management and any external organisations
        involved (Jones, 1997).

There are several issues to consider in the coordination and management of new product development teams (Holahan and Markham, 1996; Scott, 2000):

     Team structure, team size, membership composition of teams.

     Team leader selection, team management, team control and evaluation.

     Team operations, inter- and intra-team coordination,
        communication systems, team member access to project databases.

     Team reward structures, team motivation.

     Team training in teamwork and conflict resolution.

The project leader's actions in team management are shown in Table 6.4.


Table 6.4 Project leader’s team management

Setting up the project     · Identify the activities in the project with the team and set up a       coordinated project plan.     · Aid the team members in ensuring the appropriateness, accuracy and       efficiency of the techniques they choose for the activities.     · Set up a time and resources schedule for the plan. Managing the team     · Combine the knowledge and skills of the individuals into a combined       group knowledge and skills.     · Lead the creativity and problem solving in the group.     · Ensure communication within the group.     · Organise resources for the project.     · Plan and keep the project on the time schedule by cooperating with the       team.     · Continuously monitor the quality of the outcomes to ensure the       project's effectiveness.     · Keep within budget. Team outside communicator     · Communicate well with the functional departments.     · Relate the group's aims and the outcomes from the group's activities       with senior management.     · Track overall time and achievement lines.     · Be a strong group sponsor.

The leadership style of the project leader is important as it determines how project members perceive the working climate, learning possibilities and organisational effectiveness of the PD Process. Employee-centred, relation-oriented leadership appears to lead to a positive work climate and a better learning atmosphere in the project, compared with production-centred and change-centred leadership. Supporting innovative learning requires a willingness of the leader to share responsibility and joint experimentation as well as focusing on team objectives. To assemble people in a work group and define work tasks is not sufficient to get synergetic effects - the team must find the climate supportive, trusting and challenging (Norrgren and Schaller, 1999).

The core team has a combined aim and also a plan for the project. Teamwork is essential - members need to have shared values and shared knowledge. Continuous, open, communication leads to an effective and efficient team. Regular meetings are needed to update each other on the individual activities, analyse and compare the results, develop new ideas and keep the project on track. Ideas and results need to be shared and people must feel free to criticise constructively. This core team needs to stay close to the functional departments and to consumers, customers, raw material and equipment suppliers. It needs strong connections with organisations in the distribution chain, and other outside agencies such as consultants and research establishments. Product development is not a closed internal system and team members have to learn how to communicate with the outside and at the same time keep the new knowledge in the project confidential.

There are three important factors to consider in managing the team:

    1. Education and training of the team.

    2. Over-confidence of the team.

    3. Cultural and societal background of the team.

Education and training of the team is important (Cooper, 1999). The team needs knowledge of the PD Process and also the general and specific knowledge needed for the various activities. Team members may be lacking in knowledge of the PD Process, its decisions, outcomes and activities. When people have neither education nor experience in product development, it is not sufficient to have a PD Process on the internal computer network to which they can refer. They need a training course on the PD Process in the company, with examples of past projects as illustrations. The project leader needs an advanced course on ensuring effectiveness and efficiency of the PD Process. The specific and the general knowledge varies according to the project and the person's part in the project, and therefore the educational level of the team members varies a great deal from the young scientist with a PhD to the process worker with many years of experience. If there is not the capability and knowledge for a particular activity such as market research, technical research or consumer research, either team members will need to have further education or the capability will have to bought from outside.

Over-confidence can be a problem in managing product development (Cooper, 1999). There appears to be a tendency in some companies and with some product development personnel to say we do not need to do that activity - we know it all. Sometimes this may be true, but many times it just shows a lack of knowledge. There appears to be little training, and indeed little research, in judging what knowledge is essential to a project, yet lack of knowledge combined with over-confidence is related to a high risk of failure. Any dropping of critical activities needs to be made in full awareness of the risks and costs involved. For incremental product change, there is often a situation in which:

     extensive tacit and explicit knowledge of the product category exists;

     the marketing strategy and plan need only minor changes from project
        to project;

     the production knowledge is known and in use within the company;

     the production capacity exists with little need for change to
        production method.

In this case, the team can consider dropping activities such as scale-up of processing, research for the market strategy and large-scale test marketing. But in radical innovation, where there can be little of this specific knowledge in the company, there can be real dangers in dropping activities such as business analysis before launch and test marketing of the new product with its new production and marketing methods.

The cultural and societal environment also affects the organisation and working methods of the product development team. There can be differences in the general society and also among different types of companies so that what is necessary for product development management in one environment may not be applicable in another.

Souder's research in various countries in the world identified differences, for example in comparing the USA and Sweden.

In the USA, the degree of commercial success was related, in both familiar and unfamiliar markets, to marketing proficiency, development proficiency and customer service efficiency. But three measures were significant for US unfamiliar products but not for US familiar products - technical skill adequacy, R&D/marketing integration and project manager competency. In the more innovative projects, there was a greater need for technical skills and for a strong interrelationship between the technical and marketing development. In these, usually large projects with a lot of unknowns, there was a need for innovative and adaptable project management.

For Scandinavian product development, R&D/marketing integration and project manager competency were not related to product success for both familiar and unfamiliar products. This was probably because US-type integration processes and project manager roles may be relatively less important in Scandinavian companies, where collaboration among individuals may be more spontaneous, informal and internally motivated. Their relatively low importance is consistent with the egalitarian Scandinavian cultural emphasis on solidarity and cooperation (Souder and Jenssen, 1999).

In comparing Japan and the USA, Souder and Song (1998) identified the greater Japanese belief in technical expertise in product development; which may be related to the culture - the Japanese culture emphasises the position of the technologist, the US culture places more emphasis on the manager. So in deciding on product development project management, it is important to recognise not only the level of innovation - incremental against radical innovation, but also the cultural background of both the company and the society surrounding it.

Successful management of the product development project requires careful consideration of the company's internal and external environments. Practices that have proven successful in one company and one society may not be directly transferable to another company in another society.

The product development project needs to be managed in ways that promote the use and the development of each individual's knowledge and skills, and also encourage the coordination among the individuals. The means for managing this may vary from company to company, but they need to be researched so as to obtain the optimum capabilities for the company's product development.