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Cultures That Support Product Innovation


Processes

Article in Academy of Management Executive August 2002


DOI: 10.5465/AME.2002.8540307

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Academy af Management Execulive, 20G2, Vol. 16, No 3

Cultures that support product


innovation processes
Avon R. Jassowalia and Hemant C. Soshittal

Executive Summary
Most managers know that organizational culture influences the firm's economic
consequences and recognize its important role in shaping product-innovation processes.
Highly innovation-supportive cultures are credited wifh fostering teamwork and
promoting risk-taking and creative actions that seem directly linked to effective new-
product development. Fostering highly innovation-supportive cultures in practice,
however, is easier said than done. From the voices of participants in new-product
development processes in high-technology organizations, we report what we have
learned about the distinctive features of highly innovation-supportive cultures in product-
innovation settings and propose how organizations might develop such cultures.

Managers and scholars have largely accepted the In this article, we provide real-life illustrations
notion that organizational culture is linked with of innovation-supportive cultures as they emerge
positive organizational results.^ There is growing in product-innovation settings and on deriving im-
evidence to suggest that cultures supportive of plications that can speak to the day-to-day reali-
new-product development processes in high-tech- ties of managers. The illustrations emerge from an
nology iirms (henceforth innovafion-supporfive exploratory, qualitative study of new-product
cultures] can foster creative, innovative, and initia- development processes we conducted in ten high-
tive-taking behaviors among participantsi.e., be- technology industrial manufacturing firms.'' In
haviors that are linked to advantageous new-prod- eight of the ten firms we examined, cross-func-
uct results.^ The literature is less clear about why, tional teams with representatives from R&D, pro-
despite the growing awareness of the culture- duction, and marketing groups serve as the prin-
innovation linkage, innovation-supportive cul- cipal structural mechanisms charged with making
tures have failed to proliferate in practice. new-product decisions and organizing the work-
This knowing-doing gap persists in part be- flow. By settings, we refer to the task environment
cause culture is often used as a catchall phrase to created by the web of relationships within and
describe the subjective, amorphous side of organi- between the core participants in these teams
zations that managers implicitly know about and the important contributors to the process, in-
even if many remain mystified about the precise cluding the leadership and senior management,
actions that can create the desired patterns of cul- multiple departments of the firm, and other key
tural beliefs, values, and behavioral norms in constituencies.
practice.^ Currently, for managers operating in the We begin by defining culture and briefly de-
complex, highly interactive settings in which new scribing how it emerges in the product-innovation
products are developed, conceptual and theoreti- settings we studied. Then we discuss how we iden-
cal developments offer little help except the belief tified innovation-supportive cultures in new-prod-
that culture and innovation are linked^something uct settings and briefly highlight their key fea-
which they already seem to know. What can help tures. Then we compare and contrast the artifacts
at this juncture are efforts to present the voices of of cultures we saw as more or less supportive of
managers involved in real-life product-develop- new-product development processes. Based on our
ment processes and concrete illustrations of exist- comparisons, we offer some observations that will
ing conceptual developments and research find- interest managers and scholars concerned with
ings about the culture-innovation linkage. fostering innovation-supportive cultures in the set-
42
2002 Jassawalia and Sashiital 43

tings where multiple technologies, talents, and as- cess. First, we identified product-innovation set-
pirations are integrated into new products ready tings that reported efficient and effective new
for the marketplace. product-development processes, i.e., settings that
had met or improved upon their budgeted time to
market and had met or exceeded their sales and
What We Mean by Culture marketing goals.^ Second, we examined several
Culture in product-innovation settings refers to the elements prevalent in their psycho-social environ-
social and cognitive environment, the shared view ment including values, beliefs, assumptions, and
of reality, and the collective belief and value sys- outcomes to determine the presence of an innova-
tems reflected in a consistent pattern of behaviors tion-supportive culture (see Figure 1). In two set-
among participants.^ While this view of culture tings that reported highly efficient and effective
and its apparent linkage with the behaviors of new-product development processes, we found be-
people is widely held, several key issues germane liefs and values favoring collaboration, creativity,
to managing culture in product-innovation con- and risk-taking deeply ingrained and readily ap-
texts remain unresolved. For instance, some re- parent in the behaviors of participants.^ These set-
gard culture as a separate, measurable dimension tings seemed populated with voting citizens enthu-
of the organization; others view it as inseparable siastic about and capable of articulating the clear
from the firm itself.^ Similarly, while some suggest
that strategies must emerge from a clear under-
standing of what the existing organizational cul-
ture will support, others argue that cultures can
and should be changed to implement new strate- Guiding values, beliefs, and assumptions of par-
gies and achieve new results.^ ticipants in innovation-supportive cultures:
A. Taking initiative and exhibiting creativity
and risk-taking are important and expected.
Some regard culture as a separate, B. All participants are capable of being trusted
measurable dimension of the in a co-creative endeavor and are important,
organization; others view it as equal stakeholders.
C. All participants (including leading custom-
inseparable from the firm itself. ers, key suppliers, and members of other
functional groups) are insiders and should
In the product-innovation settings we examined, be involved early in the product-develop-
culture emerges as an inevitable, collective cre- ment process.
ation of participants acting out their urges to com- D. Organizational change is energizing and
mune with others, make sense of their environ- refreshing. Change should be embraced
ment, define contingencies, and form a social rather than resisted.
order. It emerges from the participants' interac-
Behaviors;
tions with others directed at, among other things,
reducing the anxiety and uncertainty they feel A. Participants voice the clear sense of control
about their involvement in the product-develop- that they feel about their involvement in the
ment process. The decisions and actions of the new-product development process.
leadership and the senior management, and the B. Participants exhibit high levels of co-
topography and physical environment in which creative, collaborative behaviors.
participants find themselves, strongly shape the C. Participants show willingness to make
human interactions. From these interactions themselves vulnerable to feedback from
emerge, among other things, a shared view of re- others.
ality and a shared value system, i.e., an implicitly Related new-product outcomes:
or explicitly agreed-upon set of objectives, states New products from new technologies are de-
of affairs, behaviors, and outcomes that are veloped within time and cost budgets and
deemed more important, worthy, and preferred achieve market success.
than others.

Illustrating the Culture-Innovation Linkage FIGURE 1


Distinctive Elements of Highly Innovation-
We derived practical illustrations of the culture- Supportive Cultures in Product-Innovation
innovation linkage by following a three-step pro- Settings
44 Academy oi Management Executive August

sense of control they felt about their involvement liefs, and values to define their behaviors.'^ In so
in the new-product development process. We la- doing, they provide illustrations in support of
beled the culture of these two settings as "highly ideas about the culture-innovation linkage and of-
innovation-supportive." These cultures contrasted fer a possible explanation for the pervasive and
sharply with those we found in two settings that enduring trends in the creative, risk-taking, and
reported not just significantly slower development innovative behaviors of participants In these prod-
times but also a failure to meet sales expectations. uct-innovation settings. Second, because these ar-
Despite senior management mandates and the tifacts can be managed, i.e., new stories, rituals,
rhetoric of change, these settings promoted think- and physical symbols can be shaped and adopted
ing and behaviors that favored the status quo. Dis- and old ones discarded, what we learned should
satisfaction with poor information exchange, unco- stimulate thinking among those concerned with
ordinated activities, and unequal distribution of shaping and managing culture and influencing
power figured strongly in the responses of partic- the creative behaviors of people in enduring ways.
ipants. We labeled the culture of these settings as
"low innovation-supportive."
Contrasting Highly Innovation-Supportive and
Low Innovation-Supportive Cultures
In two settings that reported highly
efficient and effective new-product Stories
development processes, we found beliefs Narratives of critical incidents and corporate my-
and values favoring collaboration, thologies are important because they hold mean-
creativity, and risk-taking deeply ing both at the literal and metaphorical levels.
They provide important clues about the firm's core
ingrained and readily apparent in beliefs and values which, in turn, set behavioral
the behaviors of participants. expectations for people.''' Stories told and retold
(i.e., new iterations in which meanings often
Third, we identified and examined in depth the change) in highly innovation-supportive cultures
cultural artifacts of these contrasting product-inno- in our study became part of the corporate myth-
vation settings. We did so because the study of arti- ology. They are essentially about change and uni-
facts is central to scholarly writings on organiza- formly highlight the failure of the old and the suc-
tional and other cultures.'" This interest stems from cess of the new. In particular, the stories allude to
the notion that cultural artifacts are observable signs the terrible old days of a functionally divided or-
that can be used to decipher the unseen, complex, ganization and "over-the-wall" workflows in which
and often interactive elements of cultures such as each functional group finished its part of the new-
beliefs, values, and assumptions. In turn, cultural product process and flung their output to the next
artifacts including vocabularies, stories, rituals, and department. Stories highlight near-death experi-
physical symbols are expected to exert powerful in- ences, impending bankruptcies, loss of major cus-
fluences on shaping values, beliefs, and desirable tomers, and dramatic revivals. Two companies we
behaviors among participants. Scholars have taken studied with cultures high on innovation, High-
a variety of approaches to the study of cultural arti- Auto Inc. and High-Jet Inc. (fictitious names),
facts. For instance, some have examined cultural are described in Figure 2. A manager representing
artifacts without any specific interest in their linkage the production function from High-Auto Inc., and
to product-development processes.^' Others have closely involved in new-product development for
specifically addressed the culture-innovation link- 25 years, explains:
age by examining artifacts of cultures associated
with effective innovation.'^ Oh ... the old way . . . we almost went bank-
What we learned from the comparison of cultural rupt here. Back in the middle '80s . .. we had a
artifacts and discuss in the rest of this article can product that we tried to launch . . . that almost
be useful for two reasons. First, artifacts shed light busted us. Because there was no team, it was
on the social environment in which these inno- throwing it [all decision-making and work
vation-supportive values, norms, and behaviors flows] over the wall. It was late, everybody
emerge. They tell us about the cognitive and social had their own agenda, everybody had their
environment in which participants (a) think about own little domain. Everything was frag-
and make sense of the settings in which they find mented and nothing was coming together.
themselves and (b) draw meanings, develop belief And the customer was about ready to say,
and value systems, and use these meanings, be- "Hey, we'll go someplace else."
2002 jassawalla and Sashittal 45

team skills as well. The managing director of the


High-Auto Inc. produces automobile transmis- High-Jet product group that we studied describes
sions and components (sales over $1 billion and his efforts to flatten the organization's hierarchical
over 3400 employees). New product-related structure and carefully select department heads
cross-functional teams were formed at the urg- and leaders who possess both technical and inter-
ing of a customer (one of the big three U.S. auto personal skills in the following way:
makers). The team leader was carefully selected
by senior management to lead the new-product I really flattened the organization and have
development process. put new people in most of the positions to get
people more involved in being team players.
High-let Inc., a division of a larger industrial The technical skills of how to do your job are
organization, manufactures jet engine compo- important, but so is how to work as a team.
nents (divisional sales over $51 million and 470
divisional employees). High-Jet is in the process He also recounts stories about actions he took to
of shifting its focus from the defense to the com- overcome resistance to change and sell the con-
mercial aviation industry. The division is further cept of teamwork among diversely qualified par-
split into two product groups, and interviews ticipants. The implied moral of these corporate sto-
were conducted in one of the two product ries highlights the importance of openness and
groups. The managing director of this product trust, early involvement of all participants in new-
group was carefully, deliberately building a product decision-making, and the emphasis on in-
team-oriented organization. tense information sharing.
Highly successful implementation of non-tradi-
tional ideas against great odds and amidst skep-
FIGURE 2
ticswhich eventually create true believers and
Two Innovation-Supportive Cultures adherentsis the stuff of corporate mythologies in
highly innovation-supportive cultures. The leader
from High-Auto Inc. tells the story of how a new
Narratives of critical incidents and idea that initially met with skepticism was even-
corporate mythologies are important tually accepted across the organization:
because they hold meaning both at the
literal and metaphorical levels. They When it came time to implement the product
provide important clues about the firm's out on the floor, to actually put it into place, I got
core beliefs and values which, in turn, radios for everybody. All the major functions
had radios, 2-way radios. And that was some-
set behavioral expectations for people. thing that was never done here before. And
[people said]... if will not woik, it can't work,
Stories recount personal initiative directed at we've nevei done that. Well, I went ahead and
taking risks, breaking old rules, spanning func- did it. Now, they won't give up the radios.... We
tional boundaries, building shared responsibili- were asked to do the job one month early by our
ties, and eventually developing a shared under- customer. We did.
standing. They recount the datedness of old views
and the problems associated with functional-hier- In contrast, stories told by managers of firms we
archical organizations that inevitably cause par- studied with low innovation-supportive cultures are
ticipants to focus on their narrowly defined func- about individualistic, competitive people engaged in
tional areas. They outline the processes by which accusations and finger-pointing. Two companies
participants learn new ways of thinking and adopt with cultures low on innovation, Low-Mech Inc. and
new ways of taking actions. Participants narrate Low-Electric Inc. (fictitious names), are described in
stories about the promises (or performance guar- Figure 3. Stories from these firms are about partici-
antees) they make to external constituencies (e.g., pants in new-product processes acting out scripts on
marketing manager making promises to custom- self-promotion and self-protection in hierarchical,
ers) based on their in-depth understanding of other status-conscious organizations. Narrators attribute
participants' concerns and capabilities. successes to themselves, failures to others. Stories
These stories show how the original emphasis make the tellers appear virtuous and others silly and
on selecting and preparing participants with tech- ineffective. Stories are spun around inter-departmen-
nical skills has changed to a new emphasis on tal competitiveness, negative stereotyping, and ac-
preparing participants with interpersonal and tions designed to gain senior management's favor. In
46 Academy of Management Executive August

Stories reflect the resentment participants feel


Low-Mech Inc. is a manufacturer of industrial toward the dominant functional groups' control
machines (sales over $300 million and over 1400 over new-product decisions despite the formation
employees). The organization's structure is of teams and toward senior management's actions
functional-hierarchical and vertical. Most de- that highlight the unequal stature of participants.
partment heads are promoted from within the In Low-Mech Inc., for instance, stories tell the var-
organization. New employees with fresh per- ious ways in which R&D fails to initiate teamwork
spectives are largely absent in the upper or to involve representatives from production or
echelons, and the status quo is rarely ques- other groups in their decision-making. The manu-
tioned. Every new-product team leader is an facturing department head from Low-Mech Inc.,
R&D appointee. representing the only newly hired person with ex-
perience in other firms, complains:
Low-Electric Inc. produces electrical construc-
tion materials (sales over $250 million, employ-
ees over 1500). R&D and engineering, without Because I'm trying to drive some fundamental
much interface with production or marketing changes and because I am critical of the way
groups, traditionally managed new-product de- some things are being done, there is a clash
velopment. Because senior management was and resistance. There's certainly not a good or
aware of declining customer focus in the firm, real solid team relationship there. I think that
recent changes include institution of project R&D wants very strongly to maintain the status
management tools and marketing-led new- quo. They want to be controlling. Some of them
product initiative (via teamwork). are ... not necessarily resentful [about having
to share power] but are resistant to other parties
doing some project management roles.
FIGURE 3
Two Low Innovation-Supportive Cultures
general, the stories revolve around the theme: I am Stories are also rich with evidence of mindless-
right, they are wrong. The product manager from ness in the social environment, i.e., senior man-
Low-Mech Inc., who serves as the marketing repre- agement's and team-leaders' failure to harness
sentative in the new-product team (over thirteen the unique talents and insights of participants
years in the firm and over three years in current and their demonstrable insensitivity toward the
position), describes R&D's failure to listen to custom- breadth of concerns represented in the setting. For
ers in the following way: instance, the design engineering department head
from Low-Electric Inc., expressing the resentment
I think R&D can be so driven from a non-cus- he feels about the mindlessness displayed by the
tomer satisfaction standpoint that they lose team leader, notes:
sight of what their job is all about and that's
satisfying customers.... Give engineers a set of
[New product-development processes would
problems and they'll work their way through it,
and as soon as they come out with the very first be] smoother if they [i.e., the team leader and
fix, they'll stop and say, "Okay! [rubbing his the functional group he represents] knew the
hands together] Design's done. It is going to processes better and the limitations of the
work everywhere." And you might say, "Well, processes; and if they knew the effect on other
the problem came from Brazil and you fixed it, departments of changes in certain demands
but I have another problem here on the same and certain [customer] requirements. Some-
part, and this one came from Korea, and I can times we have to spend quite a lot of time
tell you that your fix for Brazil won't work from working on something and get something that
Korea." And they look at me and say, "But it's will work ... and sometimes it [the leader's
the same part. It's got to work." idea] just doesn't pan out. Sometimes . . . up
front you know it's impossible and it's going
to be very very costly and time-consuming to
Stories that managers from low pursue, and yet you have to pursue it and find
innovation-supportive cultures narrate out down the road that it really isn't that im-
are about individualistic, competitive portant. . . . It would have been nice if they
people engaged in accusations and had known what it would cost and compare
that to the importance of the feature. We
finger-pointing. could have saved a lot of time.
2002 jassawalla and Sashittal 47

Social Rituals The difference [here as compared to previous


new-product projects] is it's a multi-functional
Social rituals are formally or semi-formally organ-
team and we have equal say in what hap-
ized, regularly scheduled activities that engage
pens. Because everything's by consensus.
people in specific information sharing and more so
You've got people off the shop floor that are
in specific actions. We examined cultural rituals
helping to design and determine what kind of
because they channel people's focus and energies
machines we buy. It's incredible. I mean,
toward social, interactive tasks and goalsand
those are the people who have to use 'em, for
are often the venues in which stories are told and
God's sakes. Their involvement is critical.
values are influenced.'^
We've learned that.
An intensive schedule of formal meetings for
sharing information, exchanging and developing Regularly scheduled training programs, and par-
ideas, expressing disagreement, and managing ticularly those held under the auspices of Total
conflict are the most common rituals in highly in- Quality Management (TQM) initiatives that en-
novation-supportive cultures. The meetings help gage all organizational members, emerge as pow-
ensure that diverse voices are heard and dis- erful rituals for building cohesion, focus, and a
cussed in open forums and that a shared under- collective commitment to new-product quality. In
standing emerges among participants. Frequent both high innovation-supportive iirms (High-Jet
meetings engender a culture of inclusion and help Inc. and High-Auto Inc.), special workshops are
participants overcome us-versus-them thinking. held to improve the human-interactions skills of
participants. In High-Auto Inc., the leader person-
An intensive schedule of formal meetings ally sought and was provided with leadership
training. In Mid-Tech Inc., a company with a mid-
for sharing information, exchanging to-high innovation-supportive culture, a training
and developing ideas, expressing session called Managing Change conveys senior
disagreement, and managing conflict management's commitment to innovation over the
are the most common rituals in highly long term and reduces the resistance that can
innovation-supportive cultures. emerge during the implementation of new ideas
(see Figure 4 for a brief description of Mid-Tech
Inc.). In each of these three firms, senior-manage-
In High-Jet Inc., formal staff meetings are held ment- sponsored rituals including formal meet-
twice a monthone to discuss the financial as- ings, training workshops, and off-site team-build-
pects of ongoing projects and the other to discuss ing retreats send clear messages to participants
new business and new product opportunities. that (a) teamwork is important, and (b) intensive
These meetings are called by the managing direc- investment of time and energy, and acquisition of
tor and include all department heads. They sym- new ideas and skills that support teamwork, are
bolize the importance that senior management expected. The marketing manager from High-Jet
places on cross-functional discussions and inter- Inc. (over twenty years of previous experience in
actions at every stagefrom the birth of a new engineering) notes:
idea to market introduction. These meetings create
a sense of shared purpose and emphasize the need
to draw input from all interested parties before What helped us a lot was TQM. We followed
moving forward. all the recommendations, and probably the
Rituals in highly innovation-supportive cultures
often include customers, suppliers, re-sellers, and
internal stakeholders (such as union representa- Mid-Tech Inc. is a division of a larger high-
tives and machine operators) who are defined as technology organization and manufactures ra-
partners. Observing a diverse body of people dar systems (about 1000 divisional employees,
within the organization involved with key suppli- over $250 million in sales). Their core technology
ers, customers, and resellers in highly focused was initially directed toward products for the
problem-solving modes sends powerful messages defense industry. Currently, the organization is
about organizational priorities to participants as attempting to develop applications for civilian
well as peripheral observers. The manufacturing markets.
manager from High-Auto Inc., describing the cul-
ture of inclusion and the emphasis on seeking in-
put from stakeholders and building consensus in FIGURE 4
the frequent meetings, notes; A Mid-to-High Innovation-Supportive Culture
48 Academy oi Management Executive August

best one was to train the executive manage- Those kinds of education [from workshops]
ment of the organization . . . formally train don't sink in when they're such a small part of
them all in TQM principles and team build- your job. [The dominant department's head]
ing. And those people [senior managers] con- has often mentioned that he wants [his peo-
ducted the training seminars for the rest of ple] to get more involved with what we do and
the organization. And that tells everyone that learn more about what we do ... But to learn
management takes this seriously. You better anything significant in the other field is going
learn this stuff; we're not just going through to cost time, and nobody's got the time for that
the motions. kind of education. [I've h a d ] . . . some very,
very frustrated engineers come to me just
overwhelmed. So [the workshops and meet-
In low innovation-supportive cultures, in contrast, ings are] a nice ideal, and it's one that's
the new-product process is highly ritualistic in talked about and promoted verbally here, but
form but not in substance. Even though people go there isn't any way of doing it. Unless we
through the motions and participate in senior- work two shifts, one for education and one to
management-sponsored rituals, few sustaining get the job done.
improvements in thinking, learning, or doing oc-
cur. For instance, the new-product process in Low-
Mech Inc. is rich with senior management rhetoric, Hence, despite the seemingly common structure of
mandates, and prescriptions for behaviors. Meet- rituals, i.e., meetings, training programs, and for-
ings are inordinately dominated by R&D and are mal sessions for information exchange, they serve
heavy with distrust, paranoia, and lack of confi- contrasting functions in high and low innovation-
dence in others. Participants cheer aloud but whis- supportive cultures. In the former, rituals serve to
per, "That can never happen" under their collective galvanize opinions from open discussions, slaugh-
breaths. The project director's words suggest that ter sacred cows, test previously untested conjec-
meetings are held less for synergistic cross-fertil- tures, and air differences. Rituals allow members
ization of ideas and more for creating opportuni- to span conceptual boundaries, create a team
ties for senior management to monitor progress identity, and define their behaviors in information-
and provide what they see as necessary advice: rich, high-trust environments. In the latter, rituals
tend to emphasize the pecking order and clear
differences that exist in the stature of participants
There might be some times where quality and, worse yet, reinforce existing micro-cultures
[department] doesn't feel like they're being and breed resentment.
heard, or manufacturing doesn't feel like
they're being heard. They [manufacturing]
have been cut short on time to procure parts
for manufacturing and they made an issue of Physical Symbols
it [at the meeting] so that other managers Physical and material symbols include layout and
would also be made aware of it. Typical- design of the work environment, the displayed doc-
l y . . . [it is for] information gathering and also umentation, and other concrete objects that signify
to let our management know where we are, the organization's priorities and desired behaviors
what kinds of problems we're incurring, and of its members.'^ The topography and layout, cou-
maybe also so they can give some direction pled with the artifacts of highly innovation-
and make suggestions on how we might han- supportive cultures, symbolize free choice, equal-
dle certain things. ity, and entrepreneurial energy. For instance,
participants from High-Auto Inc. carry wallet-
sized, laminated mission statements that they
In low innovation-supportive cultures, in developed during the initiating stages of team
contrast, the new-product process is development. The leader explains:
highly ritualistic in form but not in
substance. Each team has a mission statement. We [the
team] came up with our mission statement.
Everybody's got a copy of that. We got it re-
In Low-Electric Inc., the rituals of meetings and duced and laminated so people can carry 'em
workshops are imposed by the dominant func- around in their planners. And I pull these out
tional group and resisted by other participants. in meetings. And it got so that people would
The design engineering department head notes: pull them out. If there was some conflict or
2002 jassawalla and Sashittal 49

something, people would go, "Hey, our mis- the high priority that senior management places
sion statement says this and this and this." on product innovation. The team leader notes:

The mission-statements-in-wallets serve as powerful Another thing we did was we brought a house
symbols of collective ownership, commitment, and trailer in, we put it right in the middle of the
focus. They reflect the sense of involvement and be- factory floor, and it was our launch center.
longingness that participants feel toward new-prod- Launch control. Anything to do with the
uct initiatives. In addition to developing their mis- launch of this product was centered out of
sion statement, the cross-functional team from High- that trailer. We had our daily meetings there,
Auto Inc. has drawn and conspicuously displayed its we had our problem meetings, we had sched-
product-development process chart. Drawn in the uling updates ... everything was done out of
shape of a wheel, it shows the linkages among par- that trailer. And the trailer stayed for four
ticipantssignifying the high level of information months out on the floor. Ii anybody wanted to
exchange that occurs, the nearly flat structure, and communicate with anyone about the project,
the absence of a pecking order. they went to that trailer.
Similarly, the layout of the organization holds
much symbolism in highly innovation-supportive In low innovation-supportive cultures, the topogra-
cultures. Co-location, to the extent that people in phy and layout symbolize division, distrust, and
each department exist in close human contact with the lack of interest in cooperation. For instance, in
people from other departments, is common. In Low-Mech Inc., R&D is housed in a separate build-
High-Jet Inc., the functional department heads ing over a mile away from the one shared by the
share adjacent offices in ways that maximize their marketing and production departments. All meet-
interactions. In Mid-Tech Inc., the leader insists on ings are held in the spanking new R&D facility,
co-locating team members for the duration of the symbolizing their dominance in the new-product
new product project. In High-Auto Inc., the leader process. The conversations that occur during the
organizes off-site retreats to ensure that partici- "meeting after the meeting," i.e., the grousing
pants located in different facilities have the oppor- among manufacturing and marketing representa-
tunity to know each other. The distinctive synergy tives during the drive back to their offices, undoes
we find in highly innovation-supportive cultures most of the dispassionate meeting of minds that
appears to result largely from the conscious reduc- occurs during the formal meeting. The spatial dis-
tion of distance, both spatial and perceptual, tance also contributes to the negative stereotypes
among participants. that each function develops about the other. The
marketing manager from Low-Mech Inc. explains:

The layout of the organization holds Right now we're separated by a mile, which
much symbolism in highly innovation- could be the other end of the earth for all that
supportive cultures. matters. . . . You can't just go into an engi-
neer's office . .. and say, "Look at this prob-
lem." So the only time that we really go over
The two-way radios used by the new product to see them is when we have a leal problem.
team from High-Auto Inc. to ensure real-time con- The only time engineering sees Joe is, "Okay,
tact between members at all times have become a Joe's got a problem." So, now when you put
powerful symbol of collaborative teamwork. The Joe into the meetings, it's like, "Oh, it's that
electronic umbilical cord they have developed over complainer."
radio frequencies, to ensure that high levels of
information and idea sharing occur, sends power- In sum, it is hard to make a case that product-
ful messages about the connectedness among par- innovation settings with highly innovation-
ticipants and the priority attached to rapid, seam- supportive cultures produce different results be-
less information exchange. Additionally, during cause of readily apparent differences in the talents
the final phase of the new-product process, the and aspirations of their participants. The distinc-
leader has set up a trailer on the production floor, tive artifacts of highly innovation-supportive cul-
conspicuously titled Launch Control Center, which tures provide, on the other hand, one explanation
functions as the nerve center for the new-product for the somewhat dramatic differences that exist in
team. In addition to housing new-product-related participants' belief and value systems and behav-
documentation and serving as a meeting place ioral patterns, and for the differences in the new-
exclusively devoted to participants, it symbolizes product outcomes they produce.
Academy oi Management Executive August

Learning about Highly Innovation-Supportive interactions are complex, occur simultaneously,


Cultures and at multiple levels.^^ We identify three types
of interactions and day-to-day interventions, and
In this discussion, we highlight practical insights expect that more will emerge as the issue of
about cultures drawn from the collective voices of building innovation-supportive cultures attracts
managers as they speak to the issues of leadership more discussion. These three are the interactions
In the turbulent, highly interactive context in between (a) multiple subcultures and new val-
which they function. We aim to stimulate thinking ues, (b) participants' implicit and explicit knowl-
about fostering innovation-supportive cultures in edge, and (c) the emerging culture, the setting,
practice and provide additional illustrations of ex- and the new-product strategy.
isting ideas in the culture, leadership, and organi-
First, for instance, leaders are called on to man-
zational-change literature.'''
age the intense interaction among subcultures and
their own values.^^ Participants bring a smorgas-
CuJfure and Leadership bord of talents, orientations, values, allegiances,
and aspirations to the product-innovation setting.
Cultures in product-innovation settings are the They are required, however, to discard old and
collective creation of all participants. Cultures learn new ways of making sense of their environ-
emerge as much from the bottom-up choices made ment, develop shared values, and adopt new be-
by participants as they do from top-down decisions haviors as a result of interacting with others. Suc-
of leaders. As scholars have noted in other con- cess in creating highly innovation-supportive
texts, cultural transformation relies on leadership cultures may be attributed in large part to the
as well as the willingness and the capacity of leaders' ability to (a) understand the context-
participants to manage their anxiety about specific nature of subcultures and the sensemak-
change, trust others, discard old and adopt new ing process of participants even as they foster high
value and belief systems, and learn new behav- levels of information sharing and interactions, (b)
iors.^^ The importance of technically trained and understand how subcultures interact and evolve
interpersonally skilled leaders, who possess the into new social environments, and (c) infuse their
autonomy to shape the culture of product-innova- own vision and values into their interactions with
tion settings and the product-innovation process, participants so that new meanings are drawn, new
however, is hard to overemphasize.^^ In our sample values are internalized, and new behaviors are
of firms, leaders play a critical role because they learned.23
(a) carefully select participantsbased on their
beliefs that not all organizational members will Interactions between multiple subcultures can
function effectively in product-innovation settings; be managed in several ways. For instance, the
and (b) overcome the often choking influence of leader from Mid-Tech Inc. places all participants
existing norms and focus and channel resources to in the same office and requires them to follow a
new-product processes, even when existing power seating chart that forces design engineers from
coalitions within the firm tend to regard new ac- R&D to sit next to production engineers. He says:
tivities as quasi-legitimate, threatening, and/or
undeserving of resources. While grass roots-level The first thing you gotta do is physically co-
transformation in values and behaviors seems locate these guys away from the functional
possible without leader encouragement, we find groups and managers. Our functional manag-
participants less likely to gain legitimacy for their ers and functional folks are located on the
new-product activities or to access resources with- second floor of this building. This team is
out strong leadership.^o locked away in a room on the first floor, all
co-located, and the more you can do that, the
better off you are. Because that gets them
away from mother telling them what to do
The Interactive Context of Culture Change and gets them out on their own where they
Highly innovation-supportive cultures emerge in have to think about what to do for themselves.
product-innovation settings not as much from the
sustaining power of one or a few actions of lead- Explaining how he created a venue for cross-fertil-
ers as they do from the intense, formative, and ization of subcultural norms to occur, he further
error-prone interactions that leaders are called notes:
on to manage on a day-to-day basis. Highly in-
novation-supportive cultures elude all but a We're making sure that as much of this pro-
select few organizations largely because these totype is built on the manufacturing floor as
2002 jassawalla and Sashitta! 51

possible. In the past, there would be a large


tendency to build this prototype in the engi- Tacit Knowledge. Refers to the deeply held
neering lab. We're saying we're not going to knowledge developed from a lifetime of experi-
do that here. We must build it on the manu- ence and learning that is often difficult to artic-
facturing floor with manufacturing people in- ulate and transmit entirely in clear, understand-
volved and get their input. We have invited able language. For instance, it relates to what a
some of those assemblers to our design re- marketing manager just knows about the multi-
views [in the team meetings]. We've tried to faceted complexities of building relationships
invite people off the factory floor, who will be with customers, that others without similar ex-
assembling things, to come and critique our periences are unlikely to know or readily under-
design. And the closer we get to this stage, stand when articulated in simple language.
the more and more we're going to do that so
we gradually get them to take ownership for Explicit Knowledge. Refers to that fraction of
this design and product. deeply held knowledge which managers can
translate into clear words and transmit to oth-
ers. It is a fraction because managers clearly
Second, we find leaders called to manage the in- know more about their areas of expertise than
tense interactions between participants' tacit and they can articulate to others.
explicit knowledge (see Figure 5 for definitions). By
interaction, we refer to the process by which par-
ticipants in product-innovation settings (a) articu-
late and make explicit to others their deeply held, FIGURE 5
tacit knowledge about their areas of expertise and Tacit and Explicit Knowledge
discuss their core values and aspirations, (b) in-
tensely exchange explicit information in ways that
expand their way of thinking, informed by the di- Third, once senior management sets new techno-
verse talents, knowledge bases, and aspirations logical directions for product innovations and com-
that exist in their settings, and (c) integrate the mits to organizational change, leaders are called
new, emerging, explicit knowledge into their tacit on to manage the intense, day-to-day interactions
understanding of the new-product task.^'* For high between the culture (i.e., the cognitive and social
levels of tacit*->explicit interaction to occur, effec- environment and its belief and value systems), the
tive leaders foster a social environment of integrity emerging new product strategy (i.e., technology-
and trust in which participants feel comfortable and product-related objectives and resource-
seeking clarifications, testing their understanding, deployment choices), and the setting (i.e., partici-
proposing risky ideas, offering dissenting opin- pants, structure of decision-making, and work-
ions, and making themselves vulnerable to feed- flow). The culture, strategy, and setting emerge
back from others. The tacit-^explicit interactions together from an interactive, mutually adaptive
largely determine the extent to which participants context (see Figure 6). Effective management of the
make use of others' knowledge, build on others' three-way interaction ensures that (a) change in
creative insights, and harness the synergistic po- one is matched by congruent changes in the oth-
tential of product-innovation settings. Explaining ers, and (b) each factor remains flexible enough to
how he uses an intensive schedule of formal meet- accommodate change, concrete enough to attract
ing rituals to ensure high levels of tacit'^explicit continual resource commitment from senior man-
interaction, the leader from High-Auto Inc. notes: agement, and stable enough for participants to
develop a sense of continuity, belongingness, and
emotional commitment to the product-innovation
[In the current NPD process] there's constant process.
meetings with the team, there's constant Clear practical lessons emerge from these in-
meetings with the current functions out there sights. First, senior-management efforts to impose
on the [manufacturing] floor, there's constant the new-product strategy or the working of the
meetings with the union to make sure they're product-innovation setting may get in the way of
aware of what's going on. There's constant the co-evolution and effective new-product devel-
meetings with the [senior management] ex- opment. We saw clear evidence of such imposi-
plaining to them what is happening with the tions in the low innovation-supportive cultures in
program. As we get closer to launch this our study. Second, academic attempts to isolate
product, there are more and more frequent structure and strategy from their cultural context,
meetings. and assess their independent, unique impact on
52 Academy oi Management Executive August

CULTURE
(Beliefs, value systems, assumptions dominant in the social
and cognitive environment reflected in a consistent pattern of behaviors)

NEW-PRODUCT STRATEGY PRODUCT-INNOVATION SETTING

Objectives about technology, Structure and the apparatus for


products, customers, and making decisions and organizing
markets, and choices about workflow, the participants,
deploying talents, energies, and systems and processes for
time, and other resources. resource allocation, managing
information, and assessment.

FIGURE 6
Co-evolution of Culture, Strategy, and the Product-Innovation Setting

new-product development outcomes (such as the ity of these leaders to harness the power of cultural
effect of structure on development speed or costs, artifacts has much to do with the internalization of
and/or on profit from sales), may well overlook the new values among participants. The importance of
central impact of the interactions and the resulting understanding the multiple subculturesand the
synergies that we observed. impact of stories, rituals, and physical symbols in
The complexity of interactions occurring at mul- shaping the links between multiple subcultures,
tiple levels suggests that highly innovation- explicit and tacit knowledge, and new-product
supportive cultures are more likely to emerge strategy and cultureis hard to overemphasize.
when leaders focus on simultaneous rather than
serial change and regard it as part of what they do
on a day-to-day basis. The context of three-way Culture as a Frame of Reference
adaptations appears essentially kaleidoscopic,
with potential for a large number of permutations. Our findings reinforce the notion that in times of
Changes in any one, i.e., in the new-product strat- uncertainty and ambiguity engendered by changes
egy, the underlying values, the behaviors, the in- in new-product processes, organizational culture can
frastructure, or cultural artifacts, triggers changes serve as a powerful frame of reference for thinking
in others, often in unpredictable ways. Unless and actions. Even if senior management favors inno-
carefully managed, they can spiral out of control, vation, implementation of new-product processes is
leaving leaders powerless to effect meaningful, frequently impaired by their inability to alter core
sustained change. Among other things, the anxiety cultural values and beliefs. The culture shock that
caused by the prospects of dealing with unin- participants experienceas they struggle to elimi-
tended consequences of these kaleidoscopic nate the influence of old stories, rituals, and artifacts,
changes seems to paralyze the leadership in low even as they develop new ways of thinking about
innovation-supportive cultures and increase their managing new-product-related decision-making
reliance on controls and directives.^^ and work flows, and new ways of thinking about
interdependent, collaborative relationships with
othersstands out in sharp relief in the firms we
Highly innovation-supportive cultures are observed.
more likely to emerge when leaders A careful analysis of an organization's culture
focus on simultaneous rather than serial the deeply held, tacit beliefs and value systems
that lie at the core of organizational thinking and
change and regard it as part of what actionand an intimate understanding of its so-
they do on a day-to-day basis. cially constructed fabric rich with stories, rituals,
and artifacts can be helpful in developing mean-
Education and training programs are widely ingful ways to understand why participants in
used and recommended by leaders from our highly new-product processes behave the way they do.
innovation-supportive cultures. However, the abil- We believe that such analysis must occur. After
2002 jassawalla and Sashittal 53

achieving acceptable levels of product-develop- ducted in the second phase of our study. We interviewed forty
ment effectiveness, the challenge of developing managers involved in new-product development from ten mid-
to large-sized high-technology firms (at least one from R&D,
significantly higher levels of collaboration, cre- marketing, and manufacturing from each firm). We also inter-
ativity, and innovation appears to relate to the way viewed individuals identified by participants as important con-
in which the fuzzy, amorphous nature of culture is tributors, such as project-team leaders and division heads. To
integrated with the hard, cold analysis of technol- encourage candid answers, we guaranteed confidentiality. All
ogy, customers, markets, and competitors. In this participants were asked all of the questions in our interview
fuzzy realm of interpretations, beliefs, and value protocol, and mostly in the same order to enable comparison
across responses. The depth-interviews were formative to the
systems He the clues for differentiating wildly in- extent that we asked probing questions and sought clarifica-
novative participants that take quantum leaps in tions and examples from each participant.
creativity and innovation from those that are just The interviews, lasting between 90 and 120 minutes, were
plain adequate. tape-recorded and transcribed. For content analysis, we fol-
lowed the guidelines offered by Blumer, H. 1969. Symbolic in-
teractionism: Perspective and method. Englewood Cliffs: Pren-
Endnotes tice Hall; Bogdan, C. R., & Bikien, S. K. 1982. Qualitative research
ior education: An introduction to theory and methods. Boston:
' Pettigrew, A. M. 1979, On studying organizational cultures. Allyn & Bacon; Burrell, G., & Morgan, G. 1979. Socio/ogicaJ
Administrative Science Quarterly, 24 (4): 570-576; and Goffee, R., paradigms and organisational analysis. London: Heinemann;
& Jones, G. 1998. The character oi a corporation: How your Glaser, B., & Strauss, A, 1967, The discovery of grounded theory.
company's culture can make or break your business. New York: Chicago: Aldine; Miles, M. B., and Huberman, A. M. 1984. QuaJ-
Harper Business. ](a(ive data analysis. Newbury Park, CA: Sage; Miles, M. B., and
^ Zien, K. A., & Buckler, S. A. 1997. From experience. Dreams to Huberman, A, M. 1994. Qualitative data analysis. Newbury Park,
market: Crafting a culture of innovation, journal ai Product CA: Sage; Patton, M. O. 1990, Qualitative evaluation and re-
Innovation Management. 14(4): 274-287; and Frohman, A. L. 1998. search methods. 2nd ed. Newbury Park, CA: Sage; and Taylor,
Building a culture of innovation. Research TechnoJogy Manage- S. J., & Bogdan, R, C. 1984- /ntroduction to gualitative research
ment, 41(2): 9-12. Also see Kitchell, S. 1995. Corporate culture, methods: The search ior meanings. 2nd ed. New York: John
environmental adaptation and innovation adoption: A qualita- Wiley & Sons.
tive and quantitative approach, journal oi the Academy oi Mar- ^ For additional definitions of culture, see Detert, J- R., Schr-
keting Science, 23(3): 195-205; and Tushman, M. L., & O'Reilly, oeder, R. G., & Mauriel, J. J. 2000. A framework for linking culture
C. A. 1997. Winning through innovation: A practical guide to and improvement initiatives in organizations. Academy oi Man-
leading organizational change and renewal. Boston: Harvard agement Beview. 25(4): 850-863; and Schein, E. H. 1992. Organi-
Business School Press. The term innovation-supportive with zationa! culture and leadership. 2nd ed. San Francisco: Jossey
similar connotations was used earlier by Gayien, N. C, Keller, Bass.
C, &. Lyons, D. W. 2000. Unraveling the determinants and con- ^ For the epistemology of culture, see Denison, op. cit. For
sequences of an innovation-supportive organizational culture. quantitatively assessed dimensions of culture, see Hofstede, G.,
Entrepreneurship Theory and Practice, 25 (1): 59-76. Neuijen. B., Ohayv, D-, & Sanders, G, 1990. Measuring organiza-
^ For discussion of culture as a catchall term, see Denison, tional cultures: A qualitative and quantitative study across
D. R. 1996. What is the difference between organizational cul- twenty cases. Administrative Science Quarterly. 35(2): 286-316.
ture and organizational climate? A native's point of view on a For culture as inseparable from organizations, see Smircich, L.
decade of paradigm wars. Academy oi Management fieview, 1983. Concepts of culture and organizational analysis. Admin-
21(3): 619-634- istrative Science Quarterly. 28(3): 339-358.
'' We term our sample high-technology firms because they ' S e e Schein, E. H. 1990. Organizational culture. American
rely overwhelmingly on new products from new technologies to Psychologist. 45(2): 109-119; and Kanter, R. M. 2000. A culture of
remain competitive, employ a disproportionately larger number innovation. Execufive Excelience, 17(8): 10-11.
of scientists, engineers, and technically qualified people when For accelerated development time as an indicator of new
compared to other firms, and face higher levels of product product development efficiency, see Vesey, J. T. 1991. The new
obsolescence. See Von Glinow, M. A., & Mohrman, S. A. 1990- competitors: They think in terms of speed to market. The Acad-
Managing complexity in high technology organizations. New emy of Management Executive. 5(2): 23-33; and Kessler, E. H., &
York: Oxford University Press. Chakrabarti, A. K. 1996. Innovation speed. A conceptual model
Our exploratory study of new-product development was con- of context, antecedents, and outcomes. Academy oi Manage-
ducted in two stages. We aimed to explore, identify, and de- ment Review. 21(4): 1143-1164- For commercial success as an
velop meaningful ways of thinking about the important and indicator of new-product-development effectiveness, see
understudied human-interaction, team, and organizational is- Dougherty, D-, & Hardy, C. 1996. Sustained product innovation at
sues of new-product development based on the voices of man- large, mature organizations: Overcoming innovation-to-organi-
agers directly involved in the process. We initially conducted a zation problems. Academy of Management journal. 39(5): 1120-
literature review and a pilot study in which we depth-inter- 1153.
viewed six managers responsible for developing new products ^ See Frohman, op. cit.
from four high-technology firms. We asked them to discuss their ' See Detert, et al., op, cit., for discussion about the preva-
product-innovation-related thinking, actions, and interactions lence oi culture studies devoted to artifacts.
with others, and issues that they viewed as focal and problem- "For cultural artifacts without specific reference to product
atic. We content-analyzed their responses, revisited the litera- innovation, see Hofstede, G. 1991. CuJfure and organizations: Soit-
ture, and derived a set of research questions that were both ware oi the mind. London: McGraw-Hill; Martin, J. 1992. Cultures in
managerially relevant and understudied. organizations: Three perspectives. New York: Oxford University
Based on the research questions, we developed an interview Press; and Wuthnow, R., & Witten, M. 1988. New directions in the
protocol to guide and structure the depth-interviews we con- study of culture. Annuai Review of Socioiogy, 14: 49-67.
54 Academy oi Management Executive August

'^ For cultural artifacts of product-innovation settings, see '^Frohman, op. cit.
Buckler, S. A., & Zien, K. A. 1996. From experience. The spiritu- ^''Dougherty, D., & Heller, T. 1994. The illegitimacy of suc-
ality of innovation: Learning from stories. Journal oi Product cessful product innovation in established firms. Organization
Innovation Management. 13 (5): 391-405. Zien & Buckler, op. cit; Science. 5 (2): 200-218. Also see Henderson, R., & Clark, K. 1990.
and Tushman & O'Reilly, op. cit. Architectural innovation: The reconfiguration of existing prod-
'^ Weick. K., & Roberts, K, 1993, Collective mind in organiza- uct technologies and the failure of established firms. Adminis-
tions: Heedful interrelating on flight decks. Administrative Sci- frafive Science Quarfeiiy, 35: 9-31.
ence Quarterly. 38 (3): 357-381; and Detert, et al., op. cit. ^' For simultaneously occurring organizational changes, see
'''Boje, D. M. 1991. The storytelling organization: A study of Brown, S. L., & Eisenhardt, K. E. 1997. The art of continuous
story performance in an office-supply firm. Administrative Sci- change: Linking complexity theory of time-paced evolution in
ence Quarterly, 36 (1): 106-126; and Martin, J., Feldman, M., & relentlessly shifting organizations. Adminisfrafive Science
Sitkin, S. 1983. The uniqueness paradox of organizational sto- Quarterly. 42 (1): 1-34.
ries, Adminisfrafive Science Quarferiy, 28: 438-453; and see
^^ Schein, E- H. 1996. Three cultures of management: The key
Buckler & Zien, op. cit.
to organizational learning. Sioan Managemenf Review. Fall:
'^ Pettigrew, op. cit; and Trice, H,, & Beyer, J. 1992. The culture
9-20; and Goffee & Jones, op. cit.
oi work organizations. Englewood Cliffs, NJ: Simon & Schuster.
^^ Saffold, G. S. 1988, Culture traits, strength and organiza-
'^Schein, E. H. 1988. Are you corporate cultured? Personnel
journal. 65: 82-97. tional performance: Moving beyond "strong" culture. Academy
''' Since our learning originates from our exploratory study, it oi Management Review, 13 (4): 546-558- Also see De Long &
should not be construed as a how-to primer on cultural change, or Fahey, op, cit.
as easily replicable conclusions that guarantee results in all prod- ^'' Nonaka, 1. 1991. The knowledge creating company. Harvard
uct-innovation settings. Similarly, since our findings emerge from Business Review, 69(6): 96-105. Also see Mascitelli, R. 2000. From
high-technology manufacturing firms, our learning speaks mostly experience. Harnessing tacit knowledge to achieve break-
to managers involved in developing high-tech product-service through innovation. Journal oi Product Innovation Management,
bundles, rather than to those involved in developing new services. 17 (3): 179-193.
'^ Floyd, S. W., 8E Lane, P. J. 2000. Strategizing throughout the ^^ Schein, E. H. 1993, How can organizations learn faster? The
organization: Managing role conflict in strategic renewal. challenge of entering the green room. Sloan Management Re-
Academy oi Management Review, 25 (1): 154-177. view. 34 (2): 85-112.

Avan R. lassawalla (Ph.D., Syr- Hemant C. Sashittal (Ph.D., Syra-


acuse University) is assistant cuse University] is professor of
professor of management at marketing at St. John Fisher Col-
the Jones School of Business at lege, Rochester, NY. His research
the State University of New interests relate to new-product
York at Geneseo. Her research development and marketing
interests relate to manage- strategy implementation. He has
ment of product-innovation published in several journals
processes and strategy imple- including the Journal oi the
mentation. She has published Academy oi Marketing Science,
in several journals including California Managemenf Review,
Organizafional Dynamics and Journal of Product Innovation
The Academy oi Management Management, and Organizafion-
Executive. Contact: jassawai ai Dynamics. Contact: 5asiiiffci@
geneseo-edu. sjfc.edu.
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