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For high-technology firms that depend on new technology-based products, speed has become a source of competitive advantage. In the pursuit of accelerating new product development, many are entrusting product innovation to cross-functional teams, which often include not only representatives from multiple functional groups, but also from leading suppliers, customers, and re-sellers. The popularity of these teams has soared in recent years and they are credited with reducing errors, improving new product decisions, and effectively organizing workflow.1
Since the impact of cross-functional teams on new product development (NPD) processes is strongly influenced by their leadership, the literature is rich with insights about what effective leaders do in practice.2 We know, for instance, that effective new product team leaders:
clearly communicate the organization's expectations to team members,
foster high levels of communication within and outside the team, and create a climate that raises morale and energizes team members,
take responsibility for the team's goals, guide and share the team's burdens, and interface with key external constituents,3
enjoy high levels of autonomy and support from their superiors in the organization,4
a involve all functional groups from the initiating stages of the new product project,5 and
balance both technical as well as human interaction issues of the project and reduce destructive conflict.6
Why do these and other easily derived insights from the proliferating literature on teamwork and innovation not guard all new product cross-functional teams from poor leadership? Why do some team leaders exhibit these positive behaviors, but not all? Our recent study of NPD processes in ten hightechnology firms (see the Appendix), eight of which use cross-functional teamwork, shows that simple knowledge of what leaders ought to do does not produce an effective team leader. The transformation in team leaders' thinking, learning, and doing-and the similar transformation they affect within their teams-lies at the root of effective leadership, effective teamwork, and accelerated NPD processes.
Our study assessed the effectiveness of new product team leaders based on the extent to which they transformed:
The organization of new product decision-making and actions, and the resulting decrease in cost, increase in creativity and cross-functional collaboration, and acceleration in product innovation.
The interpersonal dynamics within the new product team, and the resulting increase in satisfaction with team membership, interest in collaborating with,...