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«STRIVING FOR PRODUCT DEVELOPMENT EXCELLENCE – LESSONS LEARNED FROM THE IMPLEMENTATION OF LEAN MANAGEMENT A thesis submitted to attain the degree of ...»

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Diss. ETH No. 22435

STRIVING FOR PRODUCT DEVELOPMENT

EXCELLENCE – LESSONS LEARNED FROM THE

IMPLEMENTATION OF LEAN MANAGEMENT

A thesis submitted to attain the degree of

DOCTOR OF SCIENCES of ETH ZURICH

(Dr. sc. ETH Zurich)

presented by

FLORIAN RITTINER

MSc MTEC, ETH Zurich born on 07.07.1984 citizen of Switzerland accepted on the recommendation of Examiner: Prof. Dr. Stefano Brusoni Co-Examiner: Prof. Dr. Roman Boutellier Co-Examiner: Prof. Dr. Maurizio Zollo

- II ACKNOWLEDGMENTS

Although in the end only a single name appears on the cover, writing a dissertation takes more than the effort and passion of an individual. It takes the support and companionship of family and friends to motivate in times of doubt and to share the joy in times of success.

I thank Prof. Stefano Brusoni for his advice, support and gentle pressure to conduct rigorous research, to eventually finalize my dissertation and to achieve the goals we set. I would also like to thank him for encouraging me to participate in numerous conferences and workshops at which I had the possibility to meet and learn from the very best scholars in our field. For a young researcher that was not only highly motivating, but sometimes also slightly daunting.

My thanks also go to Prof. Roman Boutellier, who has given me the opportunity to start with my doctoral studies at ETH Zurich and for being the co-referee of my doctoral thesis.

Further, I would like to thank Prof. Maurizio Zollo for accepting to be an external coreferee on my dissertation committee.

As mentioned before, it takes a great team to do good research, to develop and discuss ideas, to get feedback on papers, and so on. Thus I would like to thank my friends and

colleagues at the Chairs of Technology and Innovation Management at the ETH Zurich:

Amulya, Anja, Anna, Annina, Balint, Barbara, Daniella, Georg, Mareike, Martin, Monica, Nicole, Philipp, Philipp, Simge and Sonja. And the many others that helped in word and deed, and made my time as a doctoral student a great experience.

Last but not least, I am deeply grateful to my parents, Andrea and Andreas, who made all this possible by supporting and encouraging me along my way.

- III IV -

SUMMARY

Firms face ever increasing challenges in relation to new product development (NPD).

Product life cycles are becoming shorter, technologies are becoming increasingly complex, and customer requirements are becoming more demanding. As a consequence, firms need to streamline their development processes and involve specialists from within and outside the organization. To address these challenges, firms are experimenting with process management concepts such as lean management. However, the introduction of process improvement techniques to NPD can be difficult, since they often increase efficiency but at the expense of creativity. Hence, few firms manage to fully transform their NPD organization into a lean product development (LPD) organization.

This dissertation provides new insights into the multi-faceted process related to the adoption of management innovations. It focuses particularly on the learning processes underpinning the adoption of new managerial practices that result in transformations of existing capabilities. The thesis identifies two basic learning processes. The first, learning about tools, is related to the introduction of new managerial practices that depend on two distinct types of knowledge, namely improvement knowledge and process knowledge. In the context of this dissertation, improvement knowledge corresponds to knowledge about lean management and process knowledge relates to the idiosyncrasies of the NPD process.

The second learning process, learning about the system, comprises those processes that lead to the integration of different lean management tools into a coherent LPD system.

This integration process is driven by bottom-up learning which is triggered by internal feedback on the performance of the NPD process. Thus, it is suggested that existing topdown learning models of capability development could be complemented by a bottom-up learning process.

By providing insights into the nature and functioning of lean management tools in NPD, this dissertation provides advice that should be valuable to practitioners and could serve as a template for the introduction of successful LPD systems.

-VZUSAMMENFASSUNG

In der Produktentwicklung stehen Unternehmen vor immer grösseren Herausforderungen, wie kürzer werdenden Produktlebenszyklen, komplexer werdenden Technologien und steigenden Kundenanforderungen. Infolgedessen sind Unternehmen gezwungen ihre Entwicklungsprozesse zu verschlanken und sowohl interne als auch externe Experten einzubinden. Um diese Herausforderungen zu meistern, experimentieren Firmen mit verschiedenen Prozessmanagementkonzepten, wie zum Beispiel Lean Management. Da Prozessmanagementaktivitäten im Verruf stehen die Effizienz auf Kosten der Kreativität zu steigern, gestaltet sich die Einführung solcher Konzepte in der Produktentwicklung als anspruchsvoll. Tatsächlich gelingt es nur wenigen Unternehmen Lean Management erfolgreich in der Produktentwicklung einzuführen.





Diese Doktorarbeit beleuchtet unterschiedliche Aspekte der Einführung solcher Managementinnovationen. Insbesondere werden die der Einführung zu Grunde liegenden Lernprozesse analysiert, die indirekt zu einer Anpassung der Fähigkeiten im Unternehmen führen. Es werden dabei zwei grundlegende Lernprozesse identifiziert. Der erste Prozess, learning about tools, bezieht sich auf die Einführung von neuen Managementtechniken.

Dies hängt von zwei Arten von Wissen ab, dem Verbesserungswissen und dem Prozesswissen. Im Rahmen dieser Dissertation entspricht das Verbesserungswissen den Kenntnissen von Lean Management Techniken und das Prozesswissen dem Wissen um die Eigenheiten der Entwicklungsprozesse. Der zweite Lernprozess, learning about the system, umfasst die Prozesse zur Integration der einzelnen Techniken in ein zusammenhängendes Entwicklungsmanagementsystem, dem sogenannten lean product development system.

Dieser Integrationsprozess wird durch das Sammeln und Auswerten von Leistungsfeedback über die Entwicklungsprozesse angetrieben. Aufgrund dessen wird vorgeschlagen traditionelle Top-Down-Lernmodelle, um einen Bottom-Up-Lernprozess zu erweitern.

Diese Dissertation gewährt zudem detaillierte Einblicke in die Funktionsweise von Lean Management Techniken in der Produktentwicklung und kann daher von Führungskräften, die vor der Einführung ähnlicher Managementkonzepte stehen, als Vorlage eingesetzt werden.

–  –  –

2 Theoretical Background

2.1 Organizational Learning

2.2 Organizational Capabilities

3 Empirical Background

4 Research Design

4.1 Research Setting

4.2 Data Collection

4.3 Data Analysis

5 Summary of the Papers

5.1 Out of the Garbage Can? How Continuous Improvement Facilitators Match Solutions to Problems

5.2 The empire strikes back

5.3 Recent advancements in technology and the future of organizational learning research: A conversation with Professor Linda Argote

5.4 Optimal product development through continuous improvement

5.5 Lean innovation through set-based concurrent engineering

5.6 Workspaces for transdisciplinary collaboration

6 Overarching Contributions

6.1 Contributions to Theory

6.2 Further Contributions

–  –  –

7 Limitations and Future Research

8 Conclusion

9 References

Appendix I – Papers

10.1 Paper 1 - Out of the Garbage Can? How Continuous Improvement Facilitators Match Solution to Problems

10.2 Paper 2 - The empire strikes back

10.3 Paper 3 - The future of organizational learning research: A conversation with Professor Linda Argote

10.4 Paper 4 - Optimal product development through continuous improvement....... 127

10.5 Paper 5 – Lean Innovation through Set-Based Concurrent Engineering............ 135

10.6 Paper 6 – Workspaces for transdisciplinary collaboration

Appendix II – Curriculum Vitae

–  –  –

Table 2: Overview of the interviews (process management study)

Table 3: Overview of interviews (lean transformation study)

Table 4: Overview of observations (lean transformation study)

Table 5: Audience and main topic of the papers

Table 6: Overview of the papers of this cumulative dissertation

LIST OF FIGURES

Figure 1: General framework

Figure 2: Data collection periods

Figure 3: Focus of the papers

–  –  –

1 INTRODUCTION

Firms introduce new managerial practices to increase productivity, improve quality, and maintain competitiveness (Mol & Birkinshaw, 2009). This type of innovative activity is generally known as management innovation (Damanpour & Aravind, 2012), which Birkinshaw, Hamel and Mol (2008:825) define as “the invention and implementation of a management practice, process, structure or technique that is new to the state of the art and is intended to further organizational goals”. In addition to the original development of new managerial practices, the concept of management innovation also includes the successful implementation of managerial practices that are new to an adopting organization (Damanpour & Schneider, 2006; Mol & Birkinshaw, 2009). The list of management ideas that organizations have experimented with is long (for an overview: Birkinshaw et al.,

2008) and includes well-known quality improvement programs such as total quality management, six sigma, and lean management.

However, introducing new managerial practices can be difficult and not all firms are equally successful. For example, General Electric encountered more difficulties in the introduction of Six Sigma than did Motorola (Ansari, Fiss, & Zajac, 2010). Klein and Sorra (1996) argue that these difficulties are attributable either to the innovation itself, or to the implementation process. Given the success of Six Sigma in many cases, what distinguishes successful from less successful adoptions would seem to be the implementation process.

Researchers have identified different phases in this process (Damanpour & Aravind, 2012).

For instance, Hage and Aiken (1970) distinguish between evaluation, initiation, implementation, and routinization. These phases apply to different types of innovations.

What varies, however, is who initiates the implementation process. While technical innovations are often initiated at the operating core and follow a bottom-up implementation process, management innovation typically is launched at top management level and follows a top-down process (Daft, 1978). Senior management thus plays a decisive role in the implementation of a new management concept involving technical, cultural, and political challenges (Ansari et al., 2010; Canato, Ravasi, & Phillips, 2013). Despite these

-1omnipresent challenges, the implementation of management innovation has received much less attention than the implementation of technological innovation (Mol & Birkinshaw, 2009), and the literature on this area is in its early stage (Damanpour & Aravind, 2012).

This dissertation is a modest attempt to shine some light on the implementation of managerial practices and enhance understanding of the adoption process.

This doctoral research studies the implementation of managerial practices in the context of research and development (R&D). In particular, I look at five companies that introduced lean management tools and techniques in their new product development (NPD) in order to create a lean product development (LPD) organization. In so doing, these companies transformed their existing NPD capabilities into LPD capabilities (Figure 1).

Figure 1: General framework

Winter (2003:991) defines organizational capability as follows: “An organizational capability is a high-level routine (or collection of routines) that, together with its implementing input flows, confers upon an organization’s management a set of decision options for producing significant outputs of a particular type”. Consequently, transformation of an organizational capability involves acquisition, modification, and rejection of routines (Lavie, 2006). Thus, the concept of capability transformation provides an excellent framework to study management innovation since new managerial practices build on, modify, and complement existing routines rather than substituting for them. My interest is especially in the learning processes that facilitate the acquisition and modification of routines to enable the transformation of organizational capabilities and is

guided by the following research question:

What are the learning mechanisms that enable the transformation of organizational capabilities?



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