New research reveals the impact of leadership on new product development.
When an up-and-coming company is rushing a new product to market, must it sacrifice creativity in the process? Monica Yang, PhD, professor and management department chair, wanted to find out.
The result was “Creative Process Engagement and New Product Performance: The Role of New Product Development Speed and Leadership Encouragement of Creativity,” published in the June 2019 issue of the Journal of Business Research.
The article—co-authored with Cong Cheng, PhD, who studies small- and medium-sized businesses at Zhejiang University of Technology in Hangzhou, China—showcased some interesting discoveries about how companies can improve new product development. “We all have a false perception that the more a company engages in creativity, which can be a very time-consuming process, the more it slows down new product development speed,” said Dr. Yang, who has earned awards and fellowships for her research on innovative business strategies in China.
Companies in developing economies are anxious to compete with those in more established countries. But while they become adept at moving quickly, innovation has often seemed to lag behind. “We wondered if speed was a trade-off for innovation,” Dr. Yang explained, “or if speed was necessary in terms of new product performance. Our research shows that by focusing on creativity, the speed of new product development is shortened, not increased.”
The researchers worked with a sample of 245 tech companies of all sizes based in China. Some were privately held, while others were owned by the government. “There’s a reason we chose tech companies,” said Dr. Yang. “They have pressure on them to create new things, and to create them quickly.”
First, she and Dr. Cheng divided the product development process into three key steps— problem identification, information research and coding, and idea generation—then examined how each step was affected by a company’s desire to bring its product to market as quickly as possible.
Not all components of creativity ended up having equal impact on new product development, they learned. In fact, idea generation clearly contributed the most. “Any company that wants to innovate in new product development but only has limited resources should pay more attention to idea generation,” Dr. Yang said.
The role a company’s leadership plays in promoting creativity was also surprising. The researchers expected that encouragement from above would have a positive effect on all three components of creativity, which turned out to be false. “Leadership support is crucial, especially for problem identification and information research and coding,” Dr. Yang noted. “But to increase speed of idea generation, having strong leadership support is not enough.”
The reason for the difference is “counterintuitive,” something Dr. Yang and her colleague intend to study in the future. However, she cautioned business leaders not to read too much into the finding. “Don’t throw leadership support out the window,” she said. “This support is still very crucial for the first two parts. We just did not find it strongly improved the speed of idea generation.”
This is the second article Dr. Yang and Dr. Cheng have written together—the first, “Enhancing Performance of Cross-Border Mergers and Acquisitions in Developed Markets,” was published in the Journal of Business Research in 2017. Dr. Yang believes their work is filling in a gap in the field. “Most of the existing literature in this field has been about developed countries,” she said. “For developing countries, there’s a unique situation. That’s what we’re looking at.”
Her advice for business leaders seeking to promote creativity? Embrace a culture of innovation and provide employees with the institutional support they need to think outside the box.
Cheng, Cong, and Monica Yang. “Creative Process Engagement and New Product Performance: The Role of New Product Development Speed and Leadership Encouragement of Creativity.” Journal of Business Research, vol. 99, June 2019, pp. 215-225.
Cheng, Cong, and Monica Yang. “Enhancing Performance of Cross-Border Mergers and Acquisitions in Developed Markets.” Journal of Business Research, vol. 81, Dec. 2017, pp. 107-117.