Organising for Innovation: Evidence from a Study among German Manufacturers
Innovation or new product development (NPD) activities are critical to the survival of manufacturing firms. Especially during the past decade, increasing market pressure forced the majority of companies to reinforce their innovation efforts. The quest for factors that determine the probability of innovation success has become a popular research direction and has lead to a significant number of publications. While these studies vary in terms of quality, breadth and scope, they tend to propose a limited set of factors that contribute to innovation success.
From a practitioner’s perspective, there has been a constant interest in those results that provide managerially actionable factors. Some prominent frameworks have gained more public recognition than others, such as the 7-S-framework or the EFQM framework for innovation. However, from a research perspective, only few insights and concepts have been adopted in practice. Among the success factors that are widely accepted, it is especially the idea of a process-orientation that has had the largest impact on today’s innovation practices. The presence of a formal NPD process or stage-and-gate system can be found in a majority of manufacturing companies of a certain size.
On the other hand, the authors contend that even though organisational aspects have been identified as one of the key areas needing attention, the underlying organisational structure and organisational measures to support innovation and NPD have been neglected. Research results show, for instance, that cross-functional teamwork, cross-functional responsibility and interfaces between departments are of critical importance. Other authors point out that sufficient horizontal communication leads to positive results; as well as that appointed leaders or “product champions” contribute to innovation success. Still, there is little evidence of how widespread these organisational measures are and how they can be combined with the innovation processes.
This paper will present the major findings of the study as well as some concluding remarks on the optimisation of the organisational design of future innovation processes.