We all know that culture influences business outcomes more than any other variable. Great strategies must be translated into effective business plans and implemented at the operational level. Yet, if there is a breakdown in communication as a result of cultural conflict, a great business strategy can fail mightily.
Having an open, accepting cultures paramount for success in innovation. The ability to “fail” allows new product development (NPD) teams to take risks. Without risks, there is no opportunity for innovative growth. And, of course, growth drives learning.
If you’ve read this far, you’re probably thinking, “Yes, culture impacts innovation success, but what do I do about it?” The answer is that every organization must adapt their NPD process to their culture. When there is a logical match between organizational culture and the NPD process, strategic goals for innovation are readily achieved.
Different Organizational Cultures
Culture is an unwritten set of rules that dictate how a group of individuals interact. At a societal level, Asian cultures are known for group consensus while American and European cultures are better known for independent actions. There is no right or wrong culture; however, people’s behaviors will reflect the dominant culture.
The Prairie Dog Culture
Prairie dogs share a lot of their living space with other prairie dogs. They mostly live underground within a complex network of tunnels. Yet, a sentinel is posted who alerts the group to a threat at which point, the entire community responds as one – diving into the tunnels for safety.
The Lion Pride Culture
Lions, on the other hand, are fairly solitary animals in the wild. Lion prides have a hierarchy that leads to the paternal head. As in the movie, The Lion King, the head lion might make poor decisions, but the rest of the pride follows. Similarly with a good decision, the pride follows along obediently.
Everything In-Between Culture
Of course, between the extremes of a prairie dog clan and a hierarchical lion pride are the vast majority of organizational cultures. Some companies lean more heavily to one side than the other. Yet, every organization has a distinctive culture that encourages (or discourages) innovation.
Culture and the NPD Process
One of the biggest challenges of Agile implementation for tangible product development, and in large corporations, is cultural change. The Agile philosophy pushes decisions to the lowest levels in an organization. However, many senior executives are threatened by their perceived lack of involvement in these day-to-day decisions. They wonder how they can take responsibility for profit and loss, if they don’t control each and every decision.
Of course, this lack of trust results in a hierarchical decision framework. From an innovation standpoint, these organizations find it impossible to adopt Agile processes. Instead, fear of failure results in a review- and approval-heavy staged-and-gated processes. It’s not unusual to see “half-gates” in these organizations, as senior leaders micromanage the decision points.
In my experience, hybrid NPD processes like WAGILE and Lean NPD, are excellent transitions for hierarchical organizations investigating improvements in speed-to-market. WAGILE (read more here) is a great NPD process when the product managers have close communication and interaction with end-users and customers. Lean NPD is a better approach for organizations that innovate in B2B or wholesale markets, relying on market research external to the core development team.
Culture is the Crown of Innovation
Culture not only drives strategy, but culture dictates the innovation process. Risk-averse organizations are challenged to transition to Agile, regardless of their desire to do so. Instead, adopting a hybrid waterfall-Agile NPD process allows the organization to design and deliver new products quicker, cheaper, and better while building on internal strengths.
Want to learn more? Join the PMI CBC chapter on 17 May for a brief discussion of Project Management in New Product Development. Register here for this free event. Also join our monthly Product Development Lunch and Learn webinar on 13 June at 12 pm Central Time to learn more about Project Management for NPD Processes. Register here.
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