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Product Development – Senior Management Buy-In

Product Development – Senior Management Buy In


Ask anyone to identify the factors necessary for the success of continuous improvement initiatives — at least beyond small pockets of improvement — and almost without fail the list includes senior management buy-in.

Not so the case when it comes to generating ideas and new innovations, says new research by the Nielsen Co. In fact, its research suggests that just the opposite is true: Keep senior managers away from the creative process.

Nielsen, which examined the innovation practices at 30 large firms operating in the United States, discovered that companies with less senior-management involvement in the creative end of new development generated 80% better results than those with heavy senior management involvement.

While they don’t dispute senior management’s strengths and good intentions, they are often too quick to get involved in the creative process, especially when things are not going well, and their mere presence can stifle free-thinking and boundary-less ideas.

That’s not to suggest that senior managers should be entirely uninvolved. Their job is to manage the new process, not the ideas, the research indicates. New product development success comes down to two important principles — managing ideas lightly while managing the process.

Another finding sure to raise eyebrows is that innovation takes place best starting with teams at corporate headquarters. In fact, it turns out that having no corporate team at all is better than having a team on-site at corporate headquarters.

Nielsen backs its claims with this data: Firms with teams at corporate headquarters show just 2.7% improvement, compared with 4.8% from companies with no teams and 5.7% from companies whose teams are located away from the corporate headquarters.