Wednesday, July 22, 2009

Playing Well With Others
How to improve the relationship between the marketing and R&D departments—and increase the chance of coming up with successful new products
WSJ, June 22, 2009

This is a very important article from our own at Kellogg. At the end of the article, I summarize a framework I have used effectively that break down the barriers defined herein for the implementaion phase of an offering.

"Why can’t marketing and research and development play nice?

Both functions are essential to developing successful new products. But the two departments don’t get along nearly as well as senior management thinks. .
How big is the gap? Huge. According to a survey we conducted, some 69% of senior managers described relations between marketing and R&D as collegial, but only 34% of mid-level managers saw the relationship that way.

When we asked staff in each department what they thought about the staff in the other, the comments were even more revealing. R&D employees complained that marketers give them poor data, that the marketing department is too insistent about certain product features or benefits, and that marketers are mainly useful in developing launch plans rather than in actually coming up with new products.
Marketing, meanwhile, had its own beefs: R&D doesn’t include marketers early enough in the product-development process; R&D doesn’t understand marketing, or what it brings to the process; R&D takes the credit when a product succeeds, and blames marketing if a product doesn’t sell.

Such complaints are hallmarks of a dysfunctional product-development process. Both marketing and R&D have indispensable roles to play, but neither can reach its full potential without the other. Companies where such divides exist are more likely to miss out on the kinds of breakthrough products and market-research discoveries that can drive growth and profits for years.

In what follows, we share our strategies for getting both sides to engage more productively from the earliest stages of a product’s development.

1. Make sure everybody recognizes the value that each department brings to the process—and how one side complements the other.
While R&D tends to focus on technical issues and hard data, marketing zeroes in on what customers want and how much they will pay. In essence, R&D staff should be masters of the art of the possible, while marketers should master the art of the valuable, or knowing what people want and will pay for.
Marketers are seldom equipped to solve technical problems. Similarly, R&D often can’t see the difference between what a product can do and what its potential customers actually want it to do. Even in cases where developers engage directly with customers, the ability to ask the right questions and generate reliable, robust market insights is a complex skill honed over years.
One can discover many things that are technically possible, yet may have little or no value. On the other hand, a company may identify a valuable customer need but lack the technical know-how to satisfy it.
The point is not that R&D can’t learn to think a bit like marketers. They should be encouraged to do so. But don’t expect either side to perform the other’s tasks exceptionally well.
To boost mutual awareness, a number of companies we interviewed require their R&D professionals to articulate and, if possible, quantify the value of their work in terms of what it means to the customer. This often brings R&D and marketers together early in a project. Some companies also encourage or even require marketers to be technically proficient enough to be partners with R&D.

2. If one department or the other is dominating a company’s process for developing new products, bring the two more into balance.
It’s surprising how often one side is in the driver’s seat. At technology-based companies, R&D tends to hold the upper hand. At consumer-goods makers, it’s marketing. Each situation has its disadvantages.
When marketing has too much control, it stifles the creativity of engineers, who often feel they don’t have the time or backing to think of things beyond what the marketers want. At one consumer-goods company, both marketing and R&D professionals agreed that because of an incessant drive to follow predetermined launch dates—dates that were typically dictated by marketing—product advances were only incremental. R&D had to forgo technical opportunities because it was so often under deadline pressure.
Conversely, where R&D is king, marketing often is called in only at the end of the product-development process, when it’s time to develop a launch plan. At one company we’re familiar with, a company planned a major product launch after nine of its competitors were already selling a very similar product. The company conceded that its product had no advantage over the others. This company clearly should have gotten marketing involved in the development process much earlier.
One of the best ways to bring marketing and R&D more into balance is to create cross-functional teams to discover unmet needs of current or potential customers. A collaborative approach helps both sides experience each other’s contributions, and ensures both are at the table from the beginning.

3. Have the two sides speak a common language.
This is crucial for the departments to work together. They need to be able to communicate with each other, especially when it comes to understanding how a potential product relates to a customer need.
At a major oil company where the marketing staff was often put off by highly technical reports from R&D, senior management began requiring R&D to base its reports for marketing and sales on how the proposed new technologies would specifically help customers. A cover sheet for all technical briefings was created that required the speaker to describe all of the critical points in layman’s terms. A lot of researchers at the company said they found this challenging at first, but over time it improved their ability to collaborate with colleagues in other functions, not just marketing. The approach helped others across the company better understand the company’s underlying technologies.

4. Get out of your silos—up to a point.
The natural inclination for either department may be to stay inside one’s silo. But that is counterproductive. For instance, when R&D teams are excited about new technological opportunities, they should reach out to other business units and let them know what they’re working on. They should be advocates for the direction they think a product or technology should take.
However, they shouldn’t become solely focused on fulfilling the wishes of the different business units, which are generally focused on what they can sell today and in the relatively near future. Because of the focus on quarterly results, it is difficult for most business units to devote substantial resources to opportunities that might not blossom for three or more years. The challenge thus is building a portfolio that supports the incremental needs of current businesses, as well as long-term growth opportunities.

5. Focus on the consumer.
When both sides are encouraged to think in terms of what customers want, it helps clarify thinking about product designs and how resources should be allocated. When engagement and thinking in terms of customer needs become routine, everyone has a common vision for what is being developed and why…….
…..When marketing and R&D together are truly focused on understanding and acting on customer needs, it makes both of their jobs easier and their results more productive.
A few years ago, General Electric Co. of Fairfield, Conn., started a line of kitchen appliances called the Café Series, for people who love to cook and entertain. Marketing helped develop the concept of kitchen as café; industrial designers and other technical staff gave the appliances—refrigerators, stoves, dishwashers and ovens—a look and features that incorporated the café concept. Both R&D and marketing spent time with consumers cooking in their kitchens and taking notes.
Companies most capable of bringing R&D and marketing together around what really matters to customers will build a powerful competitive weapon. It’s not easy. But if it were, there’d be no money in it.

Culture Clash
• The Situation: Different priorities and ways of thinking often create gaps in understanding between marketing and research-and development staff.
• The Problem: Such gaps often mean that one side dominates the development of new products, giving short shrift to the other. When marketing dominates, R&D can be under too much pressure to hit on breakthrough ideas. When R&D dominates, new products can lack marketable strengths.
• The Solution: Companies should help both sides learn to appreciate each other’s strengths, and encourage them to work closely together at the earliest stages of product development."

In my teachings and practice I deploy a framework called the Opportunity Map (developed by MacMillan and McGrath and described in their fabulous book the Entrepreneurial Mindset, HBR Press). One aspect of this framework is that it forces all functions involved in developing and marketing an offering to define the key uncertainties associated with the offering. So, the marketing and full capability (technical, manufacturing, delivery, etc.) uncertainties are defined and the implementation plan is designed to resolve the uncertainties iteratively. The common language among the functions is the uncertainties. If done correctly, this framework forces the functions to work together in defining a common workflow for a successful introduction and does not allow one to get far ahead of the other. It tends to brake down the silos and force the organization to be customer focused since there are always uncertainties associated with the customer.

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