Managing program impacts in new product development: An exploratory case study on overcoming uncertainties

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Highlights

  • Collective sensemaking enables understanding and extending program impacts.

  • Financial and non-financial impacts are made collectively by the program personnel.

  • Collective sensemaking helps defining and overcoming uncertainties & ambiguities.

  • The qualitative study relies on in-depth access to a large-scale NPD program.

Abstract

New product development (NPD) programs are designed to implement innovation strategies in a coordinated way. Managing program impacts in a multi-project setting is insufficiently covered in research and increasingly challenging in practice. This paper explores program impact management practice. The paper focuses on NPD program impact management as a joint effort where program stakeholders collectively identify, make sense of and overcome uncertainties and ambiguities to create and enhance the program impact. The qualitative study relies on in-depth access to a large-scale NPD program in the machine manufacturing industry. The results show that program impact includes several financial and non-financial aspects and is made jointly and separately by the program organization, thus involving different uncertainties and ambiguities. Through collective sensemaking, knowledge about the program impacts may be strengthened, and the impacts may be extended beyond immediate benefits.

Introduction

“No one comes, you see, in a couple of years, with a money briefcase bringing what [achieving a certain NPD program objective] is worth, telling: ‘here is the million’” (Product management, 18-03-2014).

Programs are considered as entities of multiple projects that enable achieving business benefits (Levene and Braganza, 1996, Pellegrinelli, 1997) in the interface between single projects and organizational strategy (Shao and Müller, 2011). New product development (NPD) programs can be considered as vehicles for implementing innovation strategies as single NPD projects within programs that are meant to be managed effectively to ensure the delivery of successful new products. However, assessing and managing the benefits attained from NPD programs are challenging and the total program impact is still poorly understood (Winter and Szczepanek, 2008, Shao and Müller, 2011, Shao et al., 2012). The total impact of the NPD program refers to the total (lifetime) effect on the value to the stakeholders involved, typically the company and its customers, including both financial and non-financial impacts (Martinsuo and Killen, 2014, Shao and Müller, 2011, Shao et al., 2012). There are numerous uncertainties affecting the multi-project setting (e.g., Petit and Hobbs, 2010, Korhonen et al., 2014, Martinsuo et al., 2014), stemming from the multi-project characteristics and context (Martinsuo, 2013).

The practice of managing program impacts has been addressed in the literature to some extent (Shao and Müller, 2011, Winter and Szczepanek, 2008). However, it is unclear whether and how program management tools will actually support program execution to ensure the best possible impacts (Shao and Müller, 2011). One of the starting points to this paper is the contrasting finding that although a systematic use of the highly sophisticated tools and program models is suggested (Jaafari, 2007), the systematic use of the models does not necessarily yield optimal organizational performance (Pellegrinelli, 2011). Hence, social processes of sensemaking may be required to understand and respond to the multi-project management requirements in its dynamic context (see e.g., Thiry, 2002, Christiansen and Varnes, 2009, Martinsuo, 2013, Martinsuo et al., 2014).

Because the existing research provides only partial and indirect reflections on managing NPD program impacts, there is a need for a detailed examination of managing NPD program impacts in practice. Although some studies address the practice of managing program impacts as an integration issue at different levels, they primarily focus on the antecedents of impacts (not the impact realization itself), and they mostly focus on organizational change programs (not NPD). Moreover, studies on multi-project organizing (e.g., Petit and Hobbs, 2010, Korhonen et al., 2014) have highlighted uncertainty as an issue to be managed, but previous studies do not cover how ambiguities, or the lack of understanding in general should be dealt with in NPD programs.

The goal of this paper is an increased understanding of managing program impacts in practice – particularly in multi-project NPD programs – and the identification of social mechanisms promoting program impacts under uncertainty and ambiguity. The focus is on three research questions: 1. How and where are (strategic) impacts managed during an NPD program? 2. What kinds of uncertainties and ambiguities emerge as part of the program? and 3. How do personnel make sense of and seek to overcome the ambiguities and uncertainties when managing the program impacts?

The study will extend previous portfolio-centric and single-project-oriented research with a focus on strategic NPD program impact management. The paper is built on an exploratory case study of a large-scale NPD program setup to implement a global technology leader's innovation strategy. The paper thus contributes to the understanding of the activities underlying program impacts, and a wide range of challenges experienced, discussed and overcome when managing a program's impacts. Uniquely, the case study deepens the discussion on program impact management to the social processes of sensemaking related to program impacts. This paper suggests that by understanding the social processes of sensemaking, the mechanisms underlying program impacts may be better understood and the related ambiguities managed.

Section snippets

Program impacts in general

Programs are defined as entities of multiple projects, aiming at achieving a set of major benefits that are more than just the sum of the projects they consist of (Pellegrinelli, 1997, OGC, 2003, Nieminen and Lehtonen, 2008). The foundations of program management differ from those of project management (Artto et al., 2008), and program management needs to be considered more broadly than in terms of merely managing large projects (e.g., Lycett et al., 2004). Pellegrinelli (1997) identifies

Research design

This study explores program impact management in a real-life R&D context. An exploratory, qualitative case study was conducted in a global technology leader company that offers its customers machinery and after sales for demanding production purposes. A case-study design was chosen to enable an in-depth analysis of a relevant and not yet well-known phenomenon (e.g., Yin, 2009). The choice of the case company was based on the researchers' interest in a highly demanding, yet typical engineering

Definition and multifacetedness of the program's impact

Despite the seemingly clear target setting of the NPD projects and the overall program, the desired outcome of the NPD program implies a complex set of sub-targets. Based on the data set, there are several different impacts that are desired from the NPD program. At the same time, it is relatively difficult to trace which particular sub-targets should be met to reach the desired impacts. Additionally, it is not exactly clear as to how to prioritize these sub-targets.

Overall, different function

Discussion

This paper has sought an increased understanding of managing program impacts in practice, particularly in NPD programs. The results suggest that NPD program impact management takes place also between and above single project responsibilities and may take the form of collective sensemaking among the program personnel. In particular, different financial and non-financial aspects emerge in discussions at different levels, in different phases of the program. This should be taken into account in

Theoretical contributions

The findings of this paper suggest that by understanding the social processes of (collective) sensemaking, the antecedents and dynamics of (NPD) program impacts may be better understood and thus enhanced. More particularly, as an implication, an increased attention is required for the current and desired means for supporting NPD program impact management across program activities. The observed processes of collective sensemaking in the NPD program context serve as one example of such means. The

Conflict of interest

There is no financial/personal interest or belief that could affect the article's objectivity.

Acknowledgments

We are grateful to the case company, and the generous people in that firm, for granting us access to the fruitful data set. We also greatly acknowledge the funding granted by the Finnish Center for Technology and Innovation (TEKES) and the Academy of Finland (decision no. 250668), for completing this piece of research. Moreover, we are thankful to the Editor and three anonymous reviewers for their insightful comments on previous versions of the article.

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