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.

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Design Management
VIZO Workshop

“Design makes the Difference”
Brussels, Belgium - 29/30 November 2002

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