Want to Boost Innovation Success? R&D-Market Integration is Critical

This content relates to : NEW PRODUCT & SERVICE DEVELOPMENT

HIGHLIGHTS

Close integration of the R&D and marketing departments is critical for innovation success 

R&D-marketing integration can be enhanced via careful organizational design (e.g., physical proximity of the two departments)

Cultural characteristics such as joint reward systems and the availability of opportunities for R&D and marketing managers to know each other can also facilitate such integration 

Ashok Gupta

Professor Emeritus, Ohio University

Because innovation is a multidisciplinary process, it requires effective inter-functional coordination. In particular, integration of the R&D and marketing departments is critical to new product success. Against this background, this paper proposes a framework to understand three questions: (1) How much integration is required between R&D and marketing?, (2) How much integration is achieved?, and (3) How does integration affect new product success? 

With respect to the first question, the authors propose that the degree of integration required is a function of organizational strategy and perceived environmental uncertainty. Specifically, firms that prefer to be “first to market” i.e., prospectors, require a greater degree of R&D-marketing integration compared to firms that prefer a reactor strategy. In addition, the need for integration is greater when perceived environmental uncertainty is higher. 

In regard to the degree of integration that is achieved, the paper posits that organizational structure, senior management attitudes, and sociocultural differences between R&D and marketing managers are key determinants. Organizations with a lower degree of formalization and a lower concentration of power will achieve greater integration as will those characterized by greater employee participation in NPD decision making. 

Further, higher R&D-marketing integration is achieved when senior managers encourage risk taking by managers in the two departments and establish joint reward systems. Finally, similarities between R&D and marketing managers with respect to their professional orientation, tolerance for ambiguity, and the types of NPD projects they prefer to work on will motivate greater integration. 

The authors conclude by noting that the greater the gap between the desired and achieved level of R&D-marketing integration, the lower the likelihood of achieving innovation success. Therefore, senior as well as functional managers in the two departments need to ensure that adequate attention is devoted to achieving appropriate integration.  

The article was recognized as Top-5 Most Influential Academic Articles on Marketing Practice (Journal of Marketing 2021)

Author: 

Ashok Gupta, ’84 Ph.D. 

Professor Emeritus of Marketing, College of Business, Ohio University 

To learn more, read: 

Gupta, Ashok K., S.P. Raj, and David Wilemon (1986), “A Model for Studying R&D-Marketing Interface in the Product Innovation Process,” Journal of Marketing, 50, 7-17.