There is a range of organizational options for NPD projects. Firms must choose the appropriate mix of projects for their future product portfolio, which is indicated by the percentage of a firm’s development resources allocated to the various types of projects. Established firms spend the majority of their development resources on incremental innovation projects. Start-ups spend the bulk of their development activities on radical innovation projects. Start-ups are entirely focused on a single development project and successful outcome of the entire effort. Established firms have strong functional groups (i.e. engineering, marketing and manufacturing) with their specialization and a number of ongoing operating concerns as well as NPD project concerns. Innovation projects are complex and require input from many different parts of an organization. Project team organization and how well team members work together impact TTM and project success rates. The concept of multi-disciplinary project teams, with team members from different departments is embraced by the majority of businesses. The latest representation on multi-disciplinary project teams and iteration loops is shown. In the literature there are four types of development team structures identified to develop new products. These four types of development teams are,
Functional team structure is traditionally found in large firms, where people are grouped by discipline and led by a functional manager (i.e. engineering, marketing, and manufacturing). The goal and activities of the different sub-functions and functions are set by defining specifications agreed to by all parties at the start of the project. Primary responsibility can move from one function to the next as time passes. Managers tend to control resources and performance of the activities. Experts are involved to solve specific problems; they develop knowledge which could be used in other projects also. A weakness is that the activities need to be sub-divided on independent tasks in order to make them possible; this sub-division is difficult to make. There is also a lack of overall project coordination and integration. To create something “new” is difficult if people are very specialized since it is unlikely that specialists will change their developing scope, rather they design what is best for the defined parameters in their area of expertise, mostly incremental changes in product development.
In the lightweight team structure approach the appointed people reside physically in their functional areas, but each functional organization designates a liaison person to “represent” it on a project coordinating committee. A “lightweight project manager” coordinates the whole project. This is a modification of the “functional team structure” since the “liaison” project activity is extra to normal responsibilities. But the lightweight project manager is an additional function not found in the “functional structure’. This project manager has considerable expertise but limited influence in the organization. The people of the functional divisions report to their bosses, not to this ‘lightweight project manager”. Besides, the lightweight managers do not have power to re-assign people nor to reallocate resources; they monitor.. This type of team has the same strengths and weakness as the “functional structure”; moreover there is one person responsible for the project with a clear general view of the whole project. Thus improved communication and coordination are the added strengths of a lightweight team structure. The main weakness is the low power of the project manager.
Heavyweight team structure is where the project manager has direct access to and responsibility for the work of all those involved in the project, normally senior managers in the organization. They are at the same level or outrank the functional managers. Thus they have expertise, experience and significant organizational influence. Besides, these managers have primary influence over the people working on the development effort and supervise their work directly through key functional people on the core teams. Often, the core teams (their functional working fields) are dedicated and physically co-located with that heavy weight project leader. Main differences with the lightweight project managers are higher level of coordination and duration of responsibilities; extensive span of coordination responsibilities; working level contact with engineers; direct contact with customers; multilingual/multi-discipline skills; role in conflict resolution; marketing imagination/concept champion; influence in engineering, marketing and manufacturing.
Autonomous team structure also refers to the “tiger team”. People from multi- disciplinary areas are formally assigned, dedicated and co-located to the project team.
The project leader is a heavyweight in the organization and is given full control over the resources contributed by the different functional groups. This team starts with a “clean sheet of paper” and is not required to follow the company organizational procedures and practices. They are allowed to create and are free to operate. They know they are held completely accountable for the outcome of the project. The main strength of the autonomous team structure is “focus”. People concentrate completely on making the project successful in a rapid, efficient and multi-disciplinary way. The autonomous team structure is good for more radical new product and process development. They create “unique” products for the future portfolio of the business units. Their success lies in selecting the right people to participate and they attract and select team participants much more freely than the other project structures. Disadvantages are that they focus on new product and process development while not enhancing what already exists at the organization (existing materials, designs and relationships). Weakness is that senior managers delegate more responsibility and control to the tiger team and heavyweight project leader than under any of the other organizational structures. Since the heavyweight project leader has complete control over the project small corrections are difficult to remediate. Thus trust between senior management and autonomous team is implicit.
Source: Wheelwright, 1992, ‘Revolutionizing Product Development“.
Source: Cooper, 2004, “Benchmarking best NPD practices Part 1: Culture, Climate, Teams, And Senior Management’s”.
Source: Cooper & Sommer, 2016, “Agile-Stage-Gate: New idea-to-launch method for manufactured new products is faster, more responsive”.
Source: Edgett, 2014, “People: A Key to Innovation Capability.“.