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Leading global product development teams.

More and more firms face the need to access a critical resource for new product development--people who are dispersed around the world. Not only are these new-product developers separated by time and distance but they are separated by cultural and language differences as well. The challenge for their leaders is to integrate and coordinate these individuals and their activities by forming global teams of nationals from a variety of countries.

Like other types of product development teams, global teams experience the challenge of getting a diverse group of individuals from different functional areas to work together effectively for a finite period of time to accomplish specific project objectives. These teams must build trust among team members, meet schedules and adhere to budget guidelines.

Global product development teams face additional challenges, however: physical distance, cultural diversity, language barriers, and technological infrastructure differences. And, because global team members are from different countries, they are unlikely to know one another, may never meet or else meet infrequently, may be more or less fluent in the team's "common" language, and are likely to have strikingly different work, communication and decision-making norms (1).

In light of the critical role that global teams play in NPD, it is surprising that our understanding of how to manage them effectively has not kept pace with their increasing use. While this may simply reflect the difficulty of managing teams whose members are scattered across the globe, developing an appreciation of how to manage these teams is critical (2,3). Firms that fail to develop this capability may find themselves at a competitive disadvantage.

To close this gap in our understanding, we undertook a study that sought to understand why companies use global teams, the challenges that managers and project leaders face in leading global teams, and the practices that they use to do so successfully (See "How the Study Was Conducted," next page).

Global Team Usage

The managers we surveyed indicated that there were four principal reasons for using global teams:

1. To address global markets/customers by identifying common product platforms.--Two competing needs have driven the increasing use of global teams. On the one hand is the need to develop a global product, i.e., one that can be sold in a number of countries with little customization. As one respondent noted, "Product definition and market attractiveness needs to be global--the regional/country mindset must be replaced by global priorities." For these managers, the value of global teams lies in their ability to identify a common product platform that will appeal to customers in many different countries.

2. To identify and incorporate unique needs and requirements of local markets.--On the other hand is the need for products tailored to the unique needs and requirements of a local market. Because they are from different countries and cultures, the inputs and insights of global team members can be used to identify and incorporate the market needs and requirements of their different countries into a new product. The beauty of a global team is that, properly managed, these insights can not only be used to identify different needs, but to develop common product platforms. Thus, global teams can implement two different yet potentially complementary marketing strategies.

3. To capitalize on globally distributed "Centers of Excellence."--Global teams allow a company to leverage expertise that exists in different countries, rather than attempting to collect that expertise at a single site by relocating team members. Not only does this save enormous costs, but it also saves wear and tear on a team member's personal life.

4. To bring together dispersed resources.--By bringing individuals together "virtually," global teams allow companies to take advantage of lower manufacturing costs in one country, the central location of a distribution center in another, research skills in still another, and "on site" sales offices. And, because global teams need to meet face-to-face only on occasion, there is minimal disruption to day-to-day activities.

The Challenge of Leading Global Teams

Leaders of global NPD teams face two principal challenges: interpersonal and programmatic.

While the leader of any team faces a host of interpersonal challenge--including ensuring that members communicate with one another, building trust and motivating each member--the unique characteristics of a global team require a unique approach to meeting these challenges. Because global team members are not co-located, building relationships and trust and fostering collaboration through frequent face-to-face interaction is simply not possible. Yet, without trust and strong relationships, collaboration suffers and communication wanes.

At its most basic level, trust implies an expectation that someone will do what they have said they will do and that they are capable of doing it. Trust can exist among individuals even if they have never met, because of reputation, credentials and an inherent belief that

people should be trusted until they do something that brings that trust into question. However, this initial trust needs to grow if team members are to work together effectively over time to complete the project successfully.

Trust is often undermined by a lack of clarity regarding purpose and goals and by a lack of clarity about individual roles and responsibilities. When team members are unclear about goals and roles, for example, room is left for individuals to fashion them to suit their own needs and purposes at the expense of the other person.

One important means of building trust among members of global product development teams is to have them meet face-to-face at the outset of the project in order to discuss and agree to the project's goals and individual roles and responsibilities. We also found that engaging in social activities--going to the movies together, having dinner together, etc.--was a useful means of building trust. As one team member noted, "It's much easier to trust someone once you've looked them in the eye." Trust can also be built by: 1) having competent people as members of the team, 2) open communication in which team members share their views and thoughts but also listen to the views and thoughts of others, 3) being reliable and doing what you say you will, and 4) treating all team members equally.

The unique characteristics of global teams also make program issues much more challenging. Program issues include keeping the project on schedule and within budget, finding adequate resources for the project, keeping project goals stable, and getting the project done rapidly.

Keeping a project on schedule and getting it done rapidly requires adequate resources as well as project focus and discipline. Focus and discipline are particularly difficult to maintain when team members are geographically remote. It is rare that a team member is able to devote 100 percent of his or her time to a single project. Often team members will work on two, three or even a dozen projects simultaneously. The pressures that global team members face from on-site managers can cause them to lose focus on their global project's schedule. Combined with the barriers of geographic distance, language and culture, it can be difficult to generate a sense of ownership of the project and a team orientation--both key to keeping projects focused and on time.

We identified four principal steps that managers can take to deal with the challenges just described and to lead global teams more effectively.

1. Meet Face-To-Face at the Beginning

Holding a one-or-two day face-to-face team meeting before the project begins is an effective way to improve project performance, the product's commercial success, and team morale. Surprisingly, meetings that lasted longer (one team met for 11 days) did not improve performance, commercial success or team morale (although they did improve time-to-market). The important point is that the team meets in the first place because these meetings provide the team with the opportunity to:

* Set project goals.

* Develop project plans.

* Define roles and responsibilities for each team member.

For any project to be successful, clear goals must have been identified. In global teams this is even more critical. When an NPD team is working together in the same building, goals can be clarified by simply gathering the team in a room for a meeting. But when the team is global, assembling the team in one location can take days or even weeks. Thus, ensuring that everyone is clear about goals is critical.

Successful managers used these initial global team meetings to ensure that the goals for the project were clearly understood and that there was a commonly-agreed-upon goal. Ensuring clarity of goals has been found to be one of the most important elements leading to project team performance and these initial face-to-face meetings are one of the few opportunities that global teams have to spend time being with each other, seeing each other, and interacting with each other.

Successful projects also require the team to develop schedules and milestones as well as define individual team member roles and responsibilities. This is particularly important for global team members in order to ensure that after they disperse they will know what they are supposed to do and will be held accountable for. Likewise, it is necessary that they be aware of and committed to the priorities of the project. The initial face-to-face team meeting can be a mechanism for gaining the necessary buy-in to the project plan and the roles and responsibilities of team members. Doing so can forestall disagreements and other problems on these issues later.

Finally, an initial face-to-face meeting is important in order for members to meet each other and establish policies for communicating and making decisions within the team. For example, the team might decide that certain types of information should be shared via e-mail while information related to an important project decision needs to be communicated via a face-to-face meeting, teleconference or video conference.

2. Meet for a Minimum of Three Days

While initial meetings of less than three days improve performance by clarifying roles, goals and responsibilities, we also found that longer meetings correlate with shorter time to market (4). Only by meeting for longer periods of time are global team members able to build relationships with other members and learn how to communicate with them, thereby developing trust. It is these behaviors that facilitate rapid product development.

In order for teams to function well together, they need to get to know one another and to form relationships that will lead to trust in each person and in each person's capabilities. The volume of interaction that takes place in traditional NPD teams makes it relatively easy for team members to get to know one another and develop relationships. In global teams, where face-to-face interaction is necessarily minimal, the initial meeting provides an infrequent and thus vital opportunity for team members to get to know one another. Building relationships and trust among members of global teams right at the start is important precisely because they meet face-to-face only infrequently. Without the initial meeting, team members lack the opportunity to build trust, and as a result may be reluctant to be as open with one another and to share nascent ideas (2).

Communication between and among team members is essential for building relationships. In teams working in the same building, it is likely that members know one another and that they have worked together previously. Additionally, all members operate within the same organizational climate, thereby forming similar values and norms. As a result, communication is easier and more frequent. By contrast, global team members are unlikely to know one another, to have ever met, or to have worked together on previous projects. And, because these team members live in different countries, the probability is high that their values, norms, cultures, and ways of operating are vastly different thereby making communication more difficult.

By meeting for longer periods of time, global team members can develop trust, build relationships, and communicate effectively--all key to enabling project decisions to be made quickly and ideas and information to be shared continuously.

3. Increase the Quantity and Quality of Communication.

The amount of communication among team members influences the nature and strength of the relationships within the team which, in turn, impacts team morale and project performance. In traditional teams, the physical proximity of team members allows for all types of communication to occur frequently: personal and impersonal, formal and informal. Within global teams, it is very easy for individuals to lose touch with the team and the project as a consequence of being out of sight.

Language differences make it even more imperative that frequent communication and extensive information sharing occur. Thus, it is critical to increase the amount of communication within global teams if they are to be successful.

Increasing communication can take many forms, the most preferred of which is face-to-face meetings. One respondent noted that their company made a point of holding these meetings at different locations, not just in the United States, in order to rotate convenient hours and sites for different members of the team. Although face-to-face meetings provide a means of processing a great deal of very rich information (1), our study indicates that the frequency of face-to-face meetings during the course of a project was not directly related to increased performance. Regular, even weekly, teleconferences, or even one-on-one telephone conversations can be equally effective--provided the product development team had held an initial face-to-face meeting lasting three days or more. While few companies indicated that they used videoconferencing to share information, we have found in our prior research that many companies have discovered that videoconferencing does not live up to its billing as a substitute for face-to-face meetings (5).

What came through clearly from our respondents was the need for interactive communication among team members and the need to ensure that they had the necessary data and information available to them about customers, competitors and other market information, technical specifications, changes in technical requirements, technical difficulties, and project milestones, priorities and deadlines. Respondents emphasized that team members needed to be informed about information critical to project design and implementation so that the best decisions could be made in a timely manner.

Unfortunately, cultural and language differences can make communication of any kind difficult. Often multiple communications back and forth among team members is necessary to ensure that all understand each other's views and agree on what is to be done next. E-mailing complex or detailed documents in advance of teleconference calls can also provide team members who are less fluent in the language with the time to process the information and understand it more completely. Seminars on the cultural values and behaviors of the different nationalities represented on the team can also help team members understand one another better. Team members can be taught about specific behaviors they should display (or not display) in order to begin to build relationships with their colleagues from other countries (2).

4. Hold Project Progress Meetings.

Holding progress meetings throughout the duration of the project has a positive impact on overall project performance. Meeting face-to-face at these meetings can be very useful in helping to resolve difficult issues that might be acting as roadblocks to project completion and success. On average, our respondents met face-to-face 3.5 times during the course of the project. Not meeting at all can prevent the resolution of conflicts and other roadblocks, while meeting too often is expensive and time-consuming and negates the benefits of global product development. Thus, project teams will often use virtual meetings for progress updates.

Regular progress updates are important for:

* Keeping the team focused on project goals.

* Maintaining commitment to the project and its goals.

* Enhancing motivation.

* Maintaining relationships.

Although setting and articulating clear goals at the beginning of a project is important, it is also critical to ensure that team members remain focused on and committed to the goals throughout the project. With any team, the length of the project as well as its nature can cause team members to drift off-course and become unsure of project goals. When an NPD team is working in the same building, face-to-face formal meetings can be scheduled relatively quickly to re-confirm the focus of the project and re-affirm team member commitment. Informal discussions can also be planned and implemented quickly to steer particular team members back on-course and gain their renewed commitment. With global teams, the absence or infrequency of face-to-face interactions and pressures from being on multiple projects and reporting to multiple bosses makes maintaining focus and commitment more difficult. Frequent progress updates via teleconferencing, e-mail or videoconferencing can provide team members with the opportunity to discuss project goals, clear up ambiguities and re-confirm their commitment to the project.

It is also important that team members be enthusiastic about their project. Enthusiasm breeds commitment which, in turn, can lead to timely and effective project completion. In traditional NPD teams, the continual face-to-face interaction among team members and between team members and the project leader can act as a motivator for the team. Working side-by-side with team members, knowing that you are all in this together, and being able to discuss project problems and resolve those problems quickly can be highly motivating. By contrast, the physical and psychological isolation of global team members can cause these individuals to lose their enthusiasm for their project and thus reduce their motivation to continue working on it. Moreover, this isolation can lead to team members suppressing any problems or disagreements they might have with others or with the project itself. Frequent project progress meetings can address these issues by bringing team members together, even for a short time, thereby enabling team members to resolve conflicts and roadblocks and reminding them of their role in the project and the purpose of the project.

For project success, it is also important that team members maintain their relationships with one another as it is unlikely that any team member can fulfill their role in the project in isolation. In traditional teams, the frequent interaction and communication among team members makes maintaining relationships easier than in global teams, even though conflicts can occur in any type of team. The infrequent face-to-face interaction, and geographical and psychological distance among global team members make periodic progress update meetings even more critical, particularly if done face-to-face. Regardless, project updates present individual team members with the opportunity to renew and expand their interpersonal relationships with other team members that, in turn, can impact on the success of the project.

Summing Up

Global teams offer an opportunity for companies to compete more effectively on a global scale. Given the importance ascribed to global teams as a mechanism for developing new products, there is a clear need for companies to find effective ways to manage these teams. Three actions are particularly critical to creating effective global teams: holding an initial face-to-face team meeting that lasts a minimum of three days, increasing the amount of communication among team members, and holding periodic progress update meetings. While the initial meeting sets the stage in facilitating communication, building trust and establishing interpersonal relationships, continual efforts to increase communication and project progress meetings serve to reinforce and expand these behaviors that are so crucial to effective cross-functional global new product development.

References and Notes

(1.) Edward F. McDonough III, Kenneth B. Kahn, and Abbie Griffin. "Managing Communication in Global Product Development Teams." IEEE Transactions on Engineering Management, Vol. 46, No. 4 Nov. 1999, pp. 375-386.

(2.) Edward F. McDonough III and David Cedrone. "Meeting the Challenge of Dispersed Team Management." Research * Technology Management, July-August 2000, pp. 12-17.

(3.) Edward F. McDonough, Kenneth Kahn, and Gloria Barczak. "An Investigation of the Use of Global, Virtual and Colocated New Product Development Teams." J. Product Innovation Management, Vol. 18, No. 2, March 2001, pp. 110-120.

(4.) Using correlation analysis, our survey results showed a positive, significant relationship between the number of days the team met at the beginning of the project and rapid global product development.

(5.) Edward F. McDonough III and Kenneth B. Kahn. "Using 'Hard' and 'Soft' Technologies for Global New Product Development." R&D Management Journal, Vol. 26, 1996, pp. 241-253.

How the Study Was Conducted

Employing a survey methodology, a three-page questionnaire was sent to a random sample of 1,156 members of the Product Development & Management Association. The questionnaire asked respondents to indicate usage, challenges and performance of various types of teams, including global teams. The cover letter requested that original recipients forward the survey to the appropriate individuals in the event they were not able to complete the questionnaire.

We received completed questionnaires from 109 companies. Of these, 60 firms had used or were currently using global teams for NPD. The majority of our respondents held the title of manager, director or vice-president and were from the functional areas of marketing, engineering or R&D. Most of the firms that responded were headquartered in the United States and came from a variety of industries, including medical instruments, computers and computer services, electronic measurement equipment, telecommunications, heating, ventilation and cooling equipment, adhesive and coating materials and systems, waste treatment, and building products.

--G.B. and E.F.M.

Challenges Product Development Teams Face

Traditional Teams

* Building trust

* Working to plan

* Meeting budget

Global Teams

* Building trust

* Working to plan

* Meeting budget

* Cultural diversity

* Language barriers

* Geographic distance

* Incompatible technological infrastructures

* Few face-to-face meetings

* Different work norms

* Different communication norms

* Different decision-making norms

Gloria Barczak is associate professor of marketing in the College of Business Administration at Northeastern University, Boston, Massachusetts. She has been conducting research on new product development for more than 15 years, and her current research focuses on global new product development and trust in NPD teams. She has consulted and conducted executive seminars with numerous companies on managing their NPD efforts. She holds a Ph.D. in marketing and innovation management from Syracuse University and an M.B.A. in marketing from SUNY-Albany.

Ed McDonough is professor of innovation management in the College of Business Administration at Northeastern University. For over 20 years, his research has focused on how companies effectively manage their new product development efforts. His current research interests involve managing global new product development and managing global and virtual NPD teams. He held administrative positions in two start-up companies prior to joining Northeastern in 1979 and has consulted with numerous companies on organizing and managing their NPD and innovation efforts. He holds a Ph.D. in organizational behavior and design from the University of Massachusetts, and an M.B.A. from Clark University.
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Title Annotation:Managers At Work
Comment:Leading global product development teams.(Managers At Work)
Author:Barczak, Gloria; McDonough, Edward F., III
Publication:Research-Technology Management
Geographic Code:1USA
Date:Nov 1, 2003
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