Innovation and cross-functional team differentiation for competitive advantage

What factors influence effective cross-functional team environments that spur the greatest innovations and competitive advantage? The authors of this study (.pdf) (focusing on manufacturing) determined that baldly implementing a cross-functional team approach is not a universal good. Notably, the authors found that cross-functional teamwork involving marketing may have a negative effect (the authors noted too, however, that this finding contradicts earlier studies). The authors conclude that companies should focus cross-functional teams on product design, development, and engineering so as to yield the highest gains in terms of innovation. I’ll posit that this finding can be applied to firms outside the manufacturing industry that are focused on software development and related product development activities.

Interestingly, this study (.pdf) concludes that many marketing departments exert positive influence on a firm’s overall market innovation in the following areas: advertising, relationship management, segmentation, targeting, and positioning. Marketing departments can influence product innovations through their overarching customer knowledge and insight into trends. Thus, a way to effectively involve marketing in cross-functional teams focused on software-related product development activities is to have the marketing team drive a voice of the customer ethos throughout the ideation and development process.

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