Professional Documents
Culture Documents
"Marketing hardly ever tell us which products they want and when
they do, they always want them yesterday."
"We badly need a few new products to see us through the next five
years."
"We've had product X for over two years — there's nothing can
touch it, yet nobody's out there trying to sell it."
"Customers are crying out for an improved version of product Y but
we can't see anyone working on it."
How often have you heard the above expressions of frustration?
Possibly they are so commonplace that you now accept them as a way
of life? When times are good it is easy to ignore the symptoms of
despondency — everyone is preoccupied with the present and the
future seems a long way off. When business becomes tight, horizons
shorten and the cumulative effect of irritations and general inade-
quacies of the system is to block or severely restrict innovation during
a period when it is needed most.
Of all the functional interfaces in the innovation process, the one
which is required to match product and market is the most vulnerable
to becoming a friction face. Clearly, it is the joint responsibility of R
& D and Marketing management, as guardians of the medium/long
term product offerings, to ensure that conflict is resolved before it
becomes a permanent feature of the company's modus operandi.
Problem Areas
The scope for contact between R & D and Marketing varies considerably within dif-
ferent companies and industries. Perhaps the ideal situation would be continuous
contact with no clearly defined interface and well developed channels of com-
munication. Unfortunately, few products and markets allow such stable relation-
ships to develop — they are continually in a state of flux, as are the organisations
and people who are required to operate in them.
Barriers to Product Innovation | 23
Organisational Design
In its simplest sense of the word an organisation is a collection of people possessing
various skills, values, attitudes and beliefs; required to work individually and in
groups; and to perform prescribed tasks. This normally involves the formation of a
management hierarchy vested with authority and responsibility to achieve a set of
aims and objectives. In order to do this effectively in a technological environment,
organisation design centres on optimising group size and the co-ordination re-
quirements of groups which are both specialised and interdependent. Before ex-
amining interaction between R & D groups and Marketing, it is worthwhile briefly
reviewing traditional organisation models and some of their managerial implications.
Superimposed on all the preceding marketing organisations may be the need for
decentralised operating divisions; regional representation, including export; com-
plex systems of account management related to one or more large customers and in-
termediaries; and sometimes the desire to consider whole industries and government
departments.
26 | European Journal of Marketing 16,5
Is Integration Possible?
Standing back from the mêlée, it would seem there is no single best organisational
design and no easy way to achieve integration. Few companies opt for revolutionary
change, most being prepared to modify their existing system through minor
reorganisation and loosening boundary constraints. Under these conditions, infor-
mal communication flows must be allowed to develop and where possible, co-
ordination and liaison skills visibly raised to the status level of functional skills.
It is often instructive to look back a few years and examine what has been said
about organisational design, particularly with respect to closer integration of the R
& D and Marketing functions: Lawrence and Lorsch[5] predicted that "one of the
critical organisational innovations will be the establishment of management posi-
tions, and even formal departments, charged with the task of achieving integration.
Moreover the integrative function will be on a par with such traditional functions as
production, sales, research and others." They presented a profile of the behavioural
characteristics of effective integrators with emphasis on competence and knowledge
rather than positional authority. This approach was thought to assist resolution of
interdepartmental conflict and disputes in R & D intensive companies where there is
high functional differentiation and strain on existing organisational forms.
Hayhurst and Wills[6] offered the concept of a Marketing Development Manager:
a co-ordinating role separated from operational activities and embracing
market/product planning, marketing research and the administration/control of
product development. Economic feasibility was said to be restricted to
medium/large companies, and they conceded that a split of this type may be
"creating a new, unfamiliar problem of integration in order to overcome a lesser
problem — that of persuading marketing executives to spend somewhat more time
thinking about the future in the course of an already integrated activity." Never-
theless, the notion of top-level integrators is a very appealing one, especially for pro-
ject oriented companies involved in sub-contract work and industrial consortia.
Some senior executives have adopted the title Marketing Development Manager but
the biggest growth area has been in the number of middle level personnel with nar-
rower roles, carrying titles such as Liaison Executive and Project Co-ordinator.
Whatever the benefits of new titles and organisational designs on paper, ultimate
success is still bound up in the management of change in human relationships due to
accompanying technological and external environmental change. Argyris[7] sug-
gested that "administrative and information technology available to deal with com-
plexity" and "new requirements for organisation survival", were part of a revolu-
tion in organisational design. He saw the new organisational forms as basically
sound but "because of the methods used to introduce them and because of those us-
ed to maintain them, many of the unintended self-defeating consequences of the
older structures are reappearing."
Multidisciplinary Groups
An increasingly common occurence in companies attempting to break down barriers
between various functional units is the formation of ad hoc multidisciplinary teams.
These are based on the principle that specialists debating the same subject or pro-
blem stimulates interaction, and synergistic use of human resources leads to
Barriers to Product Innovation | 27
improved solutions.
Ideally, the make-up of groups and degree of structuring should reflect the range
of problems to be covered. For example, in certain circumstances such as creativity
sessions, it is desirable to impose minimal structuring on the group so that it can
spontaneously generate a pool of ideas for subsequent evaluation. The author's ex-
perience in this particular area indicates that providing members are carefully
selected for their willingness and ability to contribute to creativity and problem-
solving exercises, brainstorming techniques can be handled by most capable
managers. However, as the scope of the group extends further in the direction of
problem solving, other more sophisticated techniques, e.g., synectics, due to their
reliance on interpersonal relationships, problem redefinition and analogies, may re-
quire the assistance of trained leaders.
Some managers encourage the formation of multidisciplinary peer groups to
tackle cross-functional problems and the early exploration stages of product
development. The degree of autonomy allowed to these groups in deciding their way
of working and their expected life are important factors influencing efficiency.
Davis[8] described his observations on interactional patterns in egalitarian group
situations and found that members of freely interacting ad hoc groups rarely arrange
an optimal interpersonal structure to process efficiently the information demanded
by the problem. Firstly, he noted that group performance was seldom at the level of
its best member, and most often dropped below the base line describing optimal per-
formance. And secondly, below optimal performance resulted even when the task
and circumstances permitted allocation of sub-problems, but there was some benefit
from interaction directed towards establishing an affable atmosphere and a kind of
"social survival" value. This behaviour is often found in temporary groups,
especially those which are poorly briefed and lacking the cohesiveness of permanent
groups. According to Janis[9], where there is no clear-cut disagreement, consensual
validation replaces critical thinking resulting in an "illusion of unanimity". Davis,
however, holds out some future for the peer group approach in his comment: "A
group that remains in existence long enough to discover members' talents could
eventually organise far more satisfactory use of resources — namely, an intellectual
hierarchy that is correlated with members' skills".
This now raises the question of formal and de facto leadership and what happens
to ideas that have sufficient merit to warrant setting up a feasibility study or more
extensive project. Various writers have put forward ideas on project leadership,
sometimes under the guise of new venture groups, business teams or short-lived task
forces. For example, Schon[10] coined the name "product champion" and more
recently, Burns[11] introduced the notion of "natural knowledge leaders", who
could be coached in interpersonal relations and communications techniques.
Slocum[12] advocated that once the product concept has been clarified, the team
leader should be appointed from the members of the "exploration" group. Certain-
ly, the best start for a project group is the selection of a leader showing en-
trepreneurial skill coupled with some technical talent valued by the group — to in-
still a degree of legitimacy to his appointment.
Not all multidisciplinary groups are peer groups. In practice we find formal
groups made up of senior/middle managers, Marketing and R & D specialists and
28 | European Journal of Marketing 16,5
other co-opted members, delegated responsibility for screening and reviewing pro-
duct ideas worthy of further development. It should be noted that every time a pro-
duct is reviewed andmovedon to the next stage in the innovation process, there is a
potential discontinuity and additional people become involved. Here we are faced
with a dilemma: Should members of new product groups, so vital to the company's
future, be staffed by people on their individual skills or solely on position in the
hierarchy? In an imperfect organisation with senior and middle management posi-
tions inherited from previous regimes, it is often necessary to invite people who are
known "fence builders" and accept an off-optimum set of conditions. Not to invite
them might create an even bigger barrier to innovation later on.
Performance of the group is further influenced by members' relative positions in
the hierarchy and the requirements of decision making. Among the complex
behavioural patterns in groups of this type are inhibitions due to pecking orders bas-
ed on authority; worry-minimisation and risk-taking (or avoidance) because deci-
sions are spread over several members; and the ever-present danger that the group
will be used to ensure ideas carrying a "political" element receive approval. There
are many examples of products demanding more than their fair share of resource
just because a top executive has attached his name to them. Similar irrationalities
also exist in peer groups, especially when product deletions are under discussion. R
& D and Marketing personnel alike often show marked reluctance to drop products
which have served the company well for many years and on which they as in-
dividuals have built their reputations. Sound quantitative market research is normal-
ly the only effective way to support product deletions.
A counter force to the top executive who pulls rank or puts indirect pressure on
managers to ensure an obstruction-free passage for his pet project, is the positive ac-
tion of the sponsor. He is not necessarily, as might be thought, the provider of
finance; but a senior executive who takes on the role of product/project protector.
Since new ideas are initially unstable and have to survive much scrutiny and criticism
before they take off, he is given the job of seeing they are not condemned to death
before receiving a fair hearing.
Mulkay[13] presented an interesting sociological view of innovation, suggesting
that the top and bottom of hierarchies are the most fertile areas for innovation. He
maintained that top research people with established reputations have very little to
gain from conformity and, within reason, some will permit themselves to indulge in
the occasional risky venture. At the bottom end, young researchers have nothing to
lose and everything to gain by challenging anomalies and pursuing a wild notion.
Serious error is more likely to receive sympathetic understanding than rejection and
can be explained away by the impetuousness of youth! Mulkay saw the middle-of-
the-range researchers as having little incentive to risk failure and they continue their
plodding way as they have always done. A similar, though more caustic, attack on
conformity was instigated by Raudsepp[14] who blamed despondency and faulty in-
terpretation of the democratic method inherent in group activity. He offered
guidance on creating constructive non-conformity, including: exposure of research
engineers to varied assignments, reward for extra effort and excellence, return to in-
dividualism and de-emphasis on committee decisions. It appears there is strong sup-
port for the multidisciplinary approach in providing a forum for ideas but when it
Barriers to Product Innovation | 29
market. Whether they can divorce themselves from the short-term operational
nature of their work will depend on the extent of formal marketing procedures and
how these are perceived to influence their selling task. In general, managers who
regularly provide information and have a hand in market/product development and
planning, will have favourable attitudes towards any activity which will secure their
long-term future. It also follows that they will be more committed to accepting the
later, less palatable, aspects of planning — namely implementation and control. The
same argument applies to R & D managers who have project deadlines to meet; and
salesmen who may be required to push particular products, introduce new products,
drop old ones and investigate new markets. People who have participated in the
planning and development process and committed themselves to it, are working to
the same set of rules.
An essential prerequisite of planning is marketing research, and it is in this area
that all functions can make a useful contribution. Any relevant source of informa-
tion which helps clarify the likely course of future events should not be ignored. In
particular, the nature of industrial markets makes advances in technology and con-
sideration of derived demand (knowing your customer's customer) of crucial impor-
tance. This implies recognition that marketing personnel are not the only people
with an antenna in the outside environment. In the words of Skinner[21]: "It
sometimes happens that the significance of an invention is appreciated by engineers
or chemists long before its effect is felt in the market. Close liaison with technical ex-
perts can therefore assist the marketing manager to predict the advent of alternative
products and to distinguish serious threats from false alarms."
Having recognised the need for marketing research, the next tasks are problem
definition, formulation of objectives and a pilot study, leading to a systematic data
collection programme. It can be seen that the marketing research process has aims
very closely allied to the early stages of the innovation process. Moreover, it focuses
on information for decision making; covering company strengths and weaknesses,
internal and external opinions on market opportunities, competitors' activities, etc.
Marketing research is one of the few objective ways of placing identified market
needs alongside internally generated product proposals. The research report pro-
vides a basis for co-operation — shared knowledge — and eliminates the risky and
expensive alternative of speculative product development, then searching for a
market.
Training
The question of training is at the heart of group effectiveness. Extract an individual
from his day-to-day routine and place him unprepared into a totally unfamiliar
situation and any number of reactions will result. In short, selection of group
members cannot be left to chance or at best, to some intuitive feeling that a par-
ticular person will survive. To eliminate shock and generally ease transition into the
broader role in which a participant might find himself, companies are at last
recognising the need for appropriate training courses. Through exposure to a variety
of experiential learning situations it is possible to train individuals to diagnose self-
behaviour, relate this to their effect on others and develop a range of interpersonal
skills of value in group work.
Barriers to Product Innovation | 33
There is a tendency in some companies to assume that team building and other
group development training is a below-Board level activity and that Directors are
sufficiently well rounded so as to make it unnecessary for them to be drawn into the
trainer's net. Clearly the Board's role as a supervisor of the company's affairs and
establisher of objectives and strategies, implies an obligation to recognise that in-
novation in its various forms demands commitment from all corners of the organisa-
tion, including the Board itself. It is reasonable to suggest that many of the barriers
to be dismantled at functional interfaces are also present at Board level. Team
building in this area would, therefore, seem essential because good work done at
other levels can be negated by poor decisions on the part of top executives.
Conclusions
As companies move further along the route towards market orientation, the
perspectives of R & D and Marketing must widen, and substantially overlap. Person-
nel from each function must be brought closer together through the formation of
groups and allocation of tasks; and by providing a climate conducive to social in-
teraction. Above all, the basis for interaction should be meaningful, and not con-
trived just because interaction of some kind is thought beneficial.
The multi-(and inter-) disciplinary group approach remains the most popular way
of breaching social barriers and cross-fertilising ideas. Properly managed, members
can retain their identities as specialists and contribute a great deal to new product
synergy. Many companies are also rediscovering the value of dyadic problem-
solving exercises and encouraging joint visits to customers, conferences and exhibi-
tions.
Throughout the innovation time period, many events can threaten group commit-
ment and delay commercialisation. This is partly to be expected, since companies
which have chosen to invest in R & D and bring themselves closer to the market have
shunned the pastoral life. A rough passage for new products is not inevitable but it
does mean that greater attention must be paid to information flows and managing
interfaces.
Managerial decision-making is carried out against a background of imperfect
knowledge of technology, markets and human behaviour. Enlightened managers
recognise that our understanding of barriers to innovation is equally imperfect, re-
quiring a combined preventative and curative approach. Preventative measures in-
clude applying realistic policies, procedures and criteria for new product develop-
ment; and ensuring that techno-commercial evaluation is supported by the best
available information. Curative measures are necessary to handle contingencies and
resolve any conflict that is almost certain to arise due to working in an uncertain en-
vironment. Each implies the training and appointment of people sufficiently capable
of diagnosing situations from both the business and human relations angle.
And finally, behavioural and communications blockages are not as freely discuss-
ed as they might be. If companies spending vast amounts of money on R & D and
Marketing were to allocate more resources to maintaining their organisations, then
most of the frustrations mentioned at the begining of this paper might be alleviated.
34 | European Journal of Marketing 16,5
References
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4. Mansfield, E., Industrial Research and Technological Innovation, Longmans, 1969.
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Review, November/December 1967.
6. Hayhurst, R. and Wills, G., Organisational Design for Marketing Futures, Allen & Unwin, 1972.
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Studies, February 1967.
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