Senior management attitude and commitment, project leader traits and behaviour,
as well as team member characteristics exert a strong inﬂuence on the
performance of innovation activities. Moreover, these have to be embedded in
an appropriate motivational context, using incentive mechanisms that foster
‘project ownership’ rather than ‘performance control.’
Incentive mechanisms fostering entrepreneurship and ‘ownership’
in innovative contexts therefore have to be related to the project process (Philips
goes as far as calling the project process a Business Creation Process rather
than a Product Creation Process) as well as to the overall success of the project
in the eyes of its customer (e.g. by providing substantive bonus-schemes for
the project members if they achieve a successful project result). These incentive
mechanisms have to stimulate project teams to remain attentive and open to new
insights and information originating outside the boundaries of the project team.
This openness is required to prevent the Not-Invented-Here syndrome from blurring
the project team’s boundary spanning activities.
Of course, as suggested in Figure 1, the complexity of the project (research
projects versus breakthrough, platform or derivative product development projects
as deﬁned by Wheelwright & Clark, 1992) has an important impact on
the relationships just described. More speciﬁcally, in the case of derivative
(i.e. highly incremental) projects, the performance relationships can be managed
in a much more structured and formalised way than in the case of a more ambiguous
research activity or a highly uncertain breakthrough project (where the product
is entirely new to the organization). For instance, in a breakthrough project,
creating ‘ownership’ may involve the development of highly visible
bonus schemes that give the project members signiﬁcant stakes in the
project’s success. For derivative projects this should not be the case.
Here the incentive system should evaluate such ‘classic’ performance
control criteria as the responsiveness and the timeliness of the project members’
activities to customer needs and approved schedules.
The involvement of external parties, more speciﬁcally suppliers and customers,
is yet another well-known determinant of new product development success (see
for instance Eric von Hippel’s research on the role of ‘lead’
users during the innovation process (1988)). The relative importance of their
impact varies depending on the party that obtains the highest returns from investing
in the innovation. Although this is a simple criterion, it may be hard to ﬁgure
out who will beneﬁt most from a particular innovation, certainly when
it pertains to emerging technologies and product platforms.
As can be seen in Figure 1, the structure of the market or the degree of competition
in the marketplace are other important parameters inﬂuencing the success
of the innovation journey. Turbulent market structures, marked by high degrees
of monopolistic competition, strongly moderate the ‘optimal’ organisation
of the innovation process. Examples abound, such as the case of Quantum Corporation
(1992). Quantum, active in the area of computer disk drive design and development,
experienced a turbulent, fast-evolving marketplace with ﬁerce competition
based on slightly differentiated product characteristics.