New product development 337
product activity is to encourage new ideas for
products not contaminated by the vested
interests of those managing the account busi-
ness. If, however, new product activity does
need to draw on experience of current tech-
nologies in current markets, then some link-
age with those managing the current business
is clearly beneficial.
Multidisciplinary teams, new products’
committees, new product teams, product
managers and new product managers are all
linked – some more directly than others – to
the existing line structures. Indeed Page’s
(1993) study showed that the line functions
most involved in NPD were marketing, R&D
and engineering. The various teams, commit-
tees or individuals may be given ‘part-time’
responsibility for NPD.
There is an inevitable tension between
the need for integration and existing authority
and responsibility lines. Due to this tension,
many firms will locate responsibility for NPD
in one function, and bring others in as and
when required. This, of course, raises prob-
lems in that development work may be in
conflict with the management of current busi-
ness. This would be manifested in time pres-
sures, whereby development work is
squeezed by existing product management,
stifled creativity, due to procedures in place
for existing products, and, finally, fresh busi-
ness perspectives may be lacking in people
who are expert in managing the current
business.
Alternatively, a post of new products
manager may be created in marketing or
technical departments. The part-time option
can suffer from time pressures and conflict of
roles as besets much matrix structures and,
worse, NPD can become something of a sec-
ondary goal. In addition, the individual new
product manager tends not to be interdiscipli-
nary, which forces negotiation with other
departments as opposed to collaboration. As a
result, there tends to be a ‘pass-the-parcel’
approach to the development project, which
gets shunted around from one department to
the next. Finally, this mechanism tends to be
low level with little leverage for important
resource decisions, leading to an incremental
approach to NPD and a new product commit-
tee. This is made up of senior managers from
salient functions, and has the purpose of
encouraging cross-functional co-operation at
the appropriate senior level. However, these
mechanisms may suffer from a remote per-
spective, as the line managers are not really
carrying out the task.
Location of new product activity inside
our outside existing functions requires a
trade-off. Since autonomous structures are
designed to allow the unfettered development
of new ideas, products with greater levels of
advantage, without much reliance on the
existing business, it follows logically that this
type of development is precisely what they
should carry out.
Once these autonomous units become
involved with what Johne and Snelson (1988)
call ‘old product development’, their inevit-
able reliance on those within the line function
may cause a conflict. In any case, perhaps the
efficiency of an autonomous unit to redevelop
current lines is questionable. Indeed, the
research by Olsen et al. (1995) showed that
‘organic, decentralized participative co-ordina-
tion mechanisms are associated with better
development performance.. .but only when
used on projects involving innovative or new
to the world concepts with which the com-
pany has little experience on which to draw’
(p. 61).
A number of companies’ stories highlight
this finding in practice. Guinness’ new busi-
ness unit and the development of Chrysler’s
Neon, a ‘sub-compact’, use what they call
‘platform teams’, which are autonomous
groups consisting of all the professionals
required to design and produce a new car, or
‘platform’.
This section has introduced some of the
complexities involved in designing mecha-
nisms which provide the appropriate balance
between creativity and innovation on the one