Improving the Performance of New Product Teams: How a Team Manages Its Boundaries Can Affect Its Performance and, in Turn, the Duration of the Product Development Cycle
Deborah Gladstein Ancona, David Caldwell · Research-Technology Management · 2007
An increasingly competitive global economy, coupled with rapid technological change, has made improvements in new product development a necessity. Strategies of being first-to-market or a quick second are increasingly seen as the most effective approaches for competing with both foreign and domestic rivals (1). Proposed techniques for speeding up the development process are diverse, ranging from increased use of new technologies such as CAD/CAM, to changing the structure of the organization, to reorganizing the teams responsible for actual development and testing of the new product (2,3,4). What many of these techniques have in common is their attempt to improve the coordination among the different functions in the organization. A good deal of research (see 5) suggests that much of the delay in product development comes from the difficulty in coordinating the efforts of the various groups that must contribute to the development of a new product. Examples abound of the difficulties of ensuring that product designs can be easily manufactured, or of failing to include important information from marketing or sales and service early in the design process. Perhaps the most common approach for speeding up the product development process is the use of a team to design the new product rather than assigning the design and development work to a single individual. As products become more complex, it is no longer possible for a single engineer or scientist to complete a project alone. In addition, the use of a cross-functional team has the potential to improve inter-unit coordination, to allow for project work to be done in parallel, not just sequentially, and to reduce delays due to the failure to include the necessary information from throughout the organization (6). If new product teams are able to fulfill their promise of shortening the product development cycle, they must develop the ability to obtain information and resources from diverse sources both inside and outside the organization. Without detailed technical, market, political, and financial information it is unlikely that the new product will meet both customer needs and the expectations of others in the organization. In addition to simply collecting information from diverse sources, teams must also interact with others in the organization to negotiate delivery deadlines, coordinate or synchronize work flow, obtain support from upper levels of management, and smoothly transfer the ownership of the new product to manufacturing, marketing and other groups. What this suggests is that developing an understanding of how teams deal with other groups can have important implications for helping improve the performance of these teams. Boundary management is the process by which teams manage their interactions with other parts of the organization. It refers to lateral communications with other functional groups as well as with people farther up the division or corporate hierarchy. Boundary management not only refers to communications or interactions that the team initiates but also to how the team responds to input from others. In short, it describes the entire set of interactions a team must undertake in dealing with others upon whom it is dependent for information or resources or with whom it must coordinate to complete its assignment. How a team manages its boundaries can affect the team's performance. This article reports some general findings from a study of the boundary management activities of 45 new product teams in five high-technology companies (see box, next page). We will lay out the patterns of activities teams use to coordinate with other parts of the organization and indicate how these patterns can influence both the internal functioning of the team and its overall performance. Then we will conclude with recommendations for managers who wish to improve the product development process. Managing Across the Team's Boundary Before describing how team members interact with others, it is useful to know that the members of the 45 teams spend, on average, about 48 percent of their time working alone, 38 percent of their time working with other team members, and only 14 percent of their time working with outsiders. …