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People:AKeytoInnovationCapability

By Scott J. Edgett  

 Top performing companies recognize that successfulinnovation is inherently complex.Below, Scott J. Edgettargues that no matter how much money a companyinvests,orhowefficient itmakes its internalprocesses,the companies that are the most successful atinnovation are those that invest significant time,effortandmoneyinpeople.

 

op performing companies the world over recognizethat successfulinnovationis inherentlycomplex.Theyworkhardtomasterthiscriticalcapabilityby

entrenchingthe four proven driversofsuccess thatcomprisethe Innovation Performance Framework®: Robustinnovation strategy, effective portfolio management, solididea‐to‐launch processes and established innovationculture. All four drivers are harmonized and workingtogethertosupportinnovationcapabilities.1In the end, however, no matter how much money a

company invests, or how efficient it makes its internalprocesses, success at product innovation comes down topeople: People from differing functions, varying skill sets,levels ofseniority,diverselocationsandyearsof experience–all working together and contributing to their company’sinnovationculture.

 

The theme among top performing companies is that good project management is considered a critical success criterion and it is supported with professional and experienced team leaders.

A recent benchmarking study of 211 companies assessed

thewaycompaniesorganizeand lead their innovationprojectteams in order to gauge how these two aspects of cultureimpact innovationperformance.2Organizationscanhavewelldefinedstrategies,effectiveportfoliopracticesand internalnew product developmentprocesses but howsignificantlydotheteamsthemselvesaffectperformanceresults?

HowProjectTeamsAreOrganizedThewaysinwhichprojectteamsarestructuredandleveragedare fundamental to product innovation success.3,4 This studyconfirmed this by showing that 90 percent of the topperformersmakesure that the functions required tomake thenew product a success are represented on the developmentteam. Only 48 percent of the poor performers followed thispractice (See Figure 1). Management of innovation teams inthesetopperformingcompaniesensurethattheirteamleadersand project teams are thoughtfully selected, deployed andmanaged.The study found that top performing product innovation

teamshaveanumberofcommontraits:• Each significant product innovation project has a clearly assignedteam.• Team members are selected based on resource availability andskills.• Team members represent the cross‐functional needs of the project; i.e.R&D,Marketing,Operations,FinanceandSupply Chain.Thedaysofsilonewproductdevelopmentaregone.• Key team members remain with the project from start to finish.• Teamsareaccountableforthesuccessoftheirprojects.• Teams are able to handle outside‐the‐team inputs and decisionseffectively.• Cross‐functionalcooperationandcommunicationisgood.• Each team has an executive sponsor to help when necessary.• Technology is leveraged so the team members can communicate effectively. This is more important when teams are not co‐located, such as with regional or global projectteams.

│This article appeared in The European Business Review │March - April 2014, pp. 10-12

©2015Stage‐GateInternational Page2Stage‐Gate®andtheInnovationPerformanceFramework®areregisteredtrademarksofStage‐GateInc.www.stage‐gate.com

 

By leading the logistics of the project and staying out of the more technical elements, the project manager can guide the development team objectively and make decisions that are best for the project and for the company’s broader business objectives.

HowProjectTeamsareManagedThe subject of team management ismuch debated, and this study was noexceptioninfindingthatcompaniesuseda variety of approaches for projectleadership. Seventypercentofthemostsuccessful companies, however, claimedtocarefullyselectteamleadersbasedonthe skills required to successfullymanage the innovation project. Thiscompares to only 23 percent of thepoorer performing companies. In‐depthcase studies were also used to gainfurther insight intowhatmakes projectteam management successful. Thecommon success traits that emergedwere:• Product innovation team leader is arespected professional career trackwith career development andtraining provided within 55 percentofbestperformers. This is thecasein only four percent for the poorperformers.

• Team leaders are carefully selected fortheirprojectmanagementskills.• Team leadersare trainedandskilled

at objective decision‐making regard‐less of their personal, emotional, ortechnicalattachmenttotheproject.

• There is a clearly identified teamleader who is in charge and

responsible for driving the projectfromstarttofinish.

• Team leaders remain with a projectthroughout the life of the projectversus changing leaders as theprojectprogressesthroughthe idea‐to‐launchprocess.

 The following company examplesillustrate varying approaches to projectmanagement. Although they representdiverse industries, the common themeamongtopperformingcompaniesisthatgoodprojectmanagement is considereda critical success criterion and it issupportedaccordinglywithprofessionalandexperiencedteamleaders.

Electro Scientific Industries, Inc.(ESI) isa leadingsupplierof innovativelaser‐based manufacturing solutionsfor the micro technology industry. AtESI a full‐time, experienced programmanager leads each new productdevelopmentproject.Bydrivingallthe involved functions to meet theproject’s objectives, the programmanager is responsible for the integrityoftheprocessattheteamlevel.Thisjobrequires a unique set of skills:toughness,fearlessness,andagoodlevelof comfort delivering both good newsandbadtomanagement.

One important distinction at ESI isthat the program manager is not thetechnical decision maker. By removinganytechnicalstakeintheprojectforthemanager the company allows theindividual to focus on the broadercross‐functional deliverables needed tobring a product successfully to market.At any given time ESI’s programmanagersareusuallyworkingontwotothreeprojects.

 EXFOisaproviderofnext‐generation

test and service assurance solutions forwireless and wireline networkoperators, and equipment manu‐facturers in the telecom industry. AtEXFO,theprojectmanagerwholeadstheproduct innovation team is consideredto have an important strategic positionin the company. EXFO employees inR&D followoneof two tracks: technicalor managerial. The project managerposition ranks high on the latter track.Project managers usually have atechnical background but do notspecialize in a particular technology inthis role. They must provide objectiveguidance and maintain a disciplineddistance from technical details duringeachstageoftheprojectsothattheycankeep it moving efficiently. The projectmanager, responsible for approximatelyfive projects at any given time, helpsdetermine which deliverables areappropriate and how to apply processrules. By leading the logistics of theproject and staying out of the moretechnical elements, theprojectmanagercan guide the development teamobjectively andmake decisions that arebest for the project and for thecompany’sbroaderbusinessobjectives. 

Becton, Dickinson and Company(BD) is a global medical technologycompanythatmanufacturesand sells abroad range of medical supplies,devices, laboratory equipment anddiagnosticproducts.Thecoreteam

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leader at BD is seen as the general manager and chiefarchitect of the project and is ultimately responsible for itssuccess. Although most core team leaders come fromtechnical backgrounds, the organization increasinglyemphasizes filling this role with strong project managers.Thesemanagersaregivenextensivetrainingandmust:• haveprojectmanagementskills•bebusiness‐savvyandadeptatinterpersonalinteractions•handleresourcingandotherteamissues,and•createandmanageschedulesandbudgets.

Core teamleadersalsoreinforce thebusinessperspectivethroughout the product innovation process. Theycontinuously coordinate with leadership to report projectstatus, schedule appropriate project reviews, and provideinput into the other team members’ performanceevaluations. Core team leaders report to the programmanagement office and are considered the equivalent tofunctionalmanagersintermsofgroupingandcompensation.Dependingonaproject’scomplexity,coreteamleadersmightfocus on one project full‐time or work on several projectssimultaneously.

Senior management understands that if innovation is critical to achieving the company’s growth strategies, the best people need to be involved and supported.

Ashland, Inc. is a global specialty chemicals company.Unique among the best‐practice partners in this study,Ashlandallowstwotypesofprojectmanagementdependingon the business unit: management by a technical lead andmanagementbyadedicatedprojectmanager.ThetypicalnewproductdevelopmentprojectteamatAshland’sPerformanceMaterialsDivisionisheadedbyaleadchemist.Ideally,a lead chemist is only in charge of one project at a time toallow for full dedication and ownership of the project. Thelead chemist on a particular project is responsible formanaging all the teammembers and delegating tasks. TheleadchemistismentoredbyaSixSigmaMasterBlackBeltorBlackBeltand issponsoredby the technologygroup leader.Ashland’sPerformanceMaterialsDivisionemphasizeshavingproject leaders from science or engineering backgroundsresponsibleforthetechnicalexecutionofprojects.

One of Ashland’s other business units, Valvoline, hasprojectteamleaderswhoarenottechnicalexperts;theyareproject management experts. These general project man‐agers support a content leader specialist and take onmoreadministrative tasks.Theseprojectmanagers typicallyworkon 10 to 20 projects at one time. They are typically beinggroomed for leadership positions and must delegate tasks,facilitategroups,communicatewithsalesandmarketing,andbecustomer‐oriented. A common theme emerges from these best practicecompanies. They all ensure that the human side of theirinnovation projects is well managed. Innovation projectleaders have respected roles inside the organization. Seniormanagement understands that if innovation is critical toachieving the company’s growth strategies, the best peopleneed to be involved and supported. In other words,companies that are the most successful at innovation arethose that invest significant time, effort andmoney in theirmostvaluableassets–theirpeople. AbouttheAuthor

ScottJ.Edgett,Ph.D., isChiefExecutiveOfficeratStage‐Gate International and is internationallyrecognized as one of theworld's top experts inproduct innovation. A co‐author of eight booksand numerous articles, Dr. Edgett is a former

professor at the DeGroote School of Business at McMasterUniversityandisaFacultyScholarattheInstitutefortheStudyofBusinessMarkets ISBM atPennStateUniversity.For more information visit www.stage‐gate.com. or email:scott.edgett@stage‐gate.com References1. Edgett,S.J. (2014)“Innovation: ACriticalCapability”,TheEuropeanBusinessReview,January‐February,pp.28‐30.2. Edgett, S.J. (2011) New Product Development: Process BenchmarksandPerformanceMetrics,Hamilton:TheProductDevelopmentInstituteandHouston: American Productivity andQuality Center.More in‐depthand detailed case studies of the companies included in this study areprovided.3. Cooper, R.G. and Edgett, S.J. (2008) “Maximizing Productivity inProduct Innovation”, Research Technology Management, Vol. 51:2, pp.47‐58.4.Cooper,R.,Edgett,S.andKleinschmidt,E.(2004)“BenchmarkingBestNPD Practices – I: Culture, Climate, Teams and Senior ManagementRoles”,ResearchTechnologyManagement,Vol.47:1,pp,31‐43.

  

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