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Autonomous Teams and New Product Development

Authors

  • Peerasit Patanakul,

  • Jiyao Chen,

  • Gary S. Lynn


  • The authors appreciate Richard R. Reilly for his valuable advice. The authors would also like to thank the editor, C. Anthony Di Benedetto and two anonymous reviewers for their constructive comments on the early version of this paper. The first two authors contributed equally to this research.

Address correspondence to: Peerasit Patanakul, Black School of Business, Pennsylvania State University, Erie, PA 16563 USA. E-mail: pxp25@psu.edu. Tel: 814 898 6107. Fax: 814 898 6332. Jiyao Chen, College of Business, Oregon State University, Corvallis, OR 97331 USA. E-mail: jiyao.chen@bus.oregonstate.edu. Tel: 541 737 6338. Fax: 541 737 6023.

Abstract

An autonomous team is an emerging tool for new product development (NPD). With its high degree of autonomy, independence, leadership, dedication, and collocation, the team has more freedom and stronger capabilities to be innovative and entrepreneurial. Several anecdotal cases suggest that autonomous teams are best when applied to highly uncertain, complex, and innovative projects. However, there is no empirical study to test such a notion. Moreover, autonomous teams are not a panacea, and implementing them can be costly and disruptive to their parent organization. When should this powerful, yet costly tool, be pulled out of the new product professional's toolbox? This paper attempts to answer this question.

The objective of this study is to explore under which circumstances an autonomous team is the best choice for NPD. Based on contingency and information-processing theories, autonomous teams are hypothesized to be more effective to address projects with: (1) high technology novelty and (2) radical innovation. To test these hypotheses, the relative effectiveness of four types of team structures: autonomous, functional, lightweight, and heavyweight are compared. The effectiveness measures include development cost, development speed, and overall product success. Vision clarity, resource availability, and team experience are the controlled variables.

The empirical results based on the data from 555 NPD projects generally support the research hypotheses. Relative to other team structures, autonomous teams are more effective in addressing projects with high technology novelty or radical innovation. The results also suggest that heavyweight teams perform better than other teams in developing incremental innovation. These results provide some evidence to support contingency and information-processing theories at the project level. Given the importance of the development of novel technology and radical innovation in establishing new businesses and other strategic initiatives, the findings of this study may not only have some important implications for NPD practices but may also shed some light on other important topics such as disruptive innovation, strategic innovation, new venture, corporate entrepreneurship, and ambidextrous organization.

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