From Cross-Functional to Rank-Spanning Radical New Product Development : An Analysis with Recommendations

While CEOs say that innovation is an important source of future growth for their companies, they devote more than twice as much time to financial planning as they do to new product development. Yet, in an environment typified by increased competition, change, and uncertainty, is it surprising if senior executives do not clearly understand what their roles should be in this process? While there is no one best way to organize new product development, firms do employ many of the same mechanisms. More significant however, is that the use of these mechanisms, and consequently, senior management’s involvement, is often markedly different based on how far-reaching of an innovation is being developed. In this paper, we contend that management’s role in radical new product development is to be fully engaged as part of a rank-spanning NPD team. Under this structure, management’s responsibilities include: 1. Designing an environment conducive to radical innovation. 2. Deciding which projects get done. 3. Nurturing the fledgling initiatives to ensure that those that are chosen are implemented well and with the appropriate amount of oversight. In addition,we provide details for each of managements’ responsibilities, and examples to demonstrate how leaders can integrate rank-spanning teams into their organization’s new product development efforts