John W. Mullins

Original ArticlesNew Product Development in Rapidly Changing Markets: An Exploratory Study

Abstract Rapid technological change can be both a blessing and a curse. For example, investors and firms of all sizes hope to reap the rewards that may arise from the apparent convergence of the computer, telecommunications, and entertainment industries. With the high level of uncertainty inherent to such rapidly changing markets, however, those potentially dazzling returns are counterbalanced by a daunting level of risk. John Mullins and Daniel Sutherland suggest that firms operating in such markets require NPD practices that can mitigate risk, manage uncertainty, and, of course, increase the likelihood of new product success. To gain insight into the NPD practices that can meet those challenges, they conducted in-depth interviews with managers who were directly involved in NPD projects at US WEST, Inc., a large, multinational firm in the telecommunications industry. The study focused on identifying practices that help the firm bring new products into rapidly changing markets quickly, efficiently, and effectively. A key objective of their study was to go beyond the basics—for example, the use of cross-functional teams—to identify specific practices that allow the firm to address the various levels of uncertainty that characterize its markets. They identify three levels of uncertainty that confront firms operating in rapidly changing markets. First, potential customers cannot easily articulate needs that a new technology may fulfill. Consequently, NPD managers are uncertain about the market opportunities that a new technology offers. Second, NPD managers are uncertain about how to turn the new technologies into products that meet customer needs. This uncertainty arises, not only from customers’ inability to articulate their needs, but also from managers’ difficulties in translating technological advancements into product features and benefits. Finally, senior management faces uncertainty about how much capital to invest in pursuit of rapidly changing markets as well as when to invest. The study identifies six practices that help the firm address the uncertainty and risk inherent in its rapidly changing markets. For example, market research in this firm’s NPD process focuses more on probing than it does on measuring. Involvement of prospective customers in idea generation and the use of prototypes early in the NPD process help the firm uncover customer needs and market opportunities. Large-scale, quantitative market research focuses primarily on determining market size and price points.

Situational strength – A framework for understanding the role of individuals in initiating proactive strategic change

This article brings together research perspectives on strategic change and organizational behavior to construct a series of theoretical propositions regarding the likelihood that a firm will undertake a change in strategy. Drawing on the concept of “situational strength”, it is argued that the personality traits of strategic decision makers interact with environmental conditions faced by the firm to influence the likelihood of a firm’s change in strategy. In weak situations, individual differences are likely to exert significantly more influence on the firm’s likelihood of undertaking a strategic change than in strong situations.

Early growth decisions of entrepreneurs: The influence of competency and prior performance under changing market conditions

The transition between the founding of firms and their first steps toward growth represents a critical juncture in the life cycle of new firms. An experimental study was conducted among a sample of 103 owner-operators of independent hardware stores, in order to examine the effects of their competency and their stores prior performance on their decisions to grow their business under changing market conditions. The results of the study indicate that prompt and vigorous actions to grow the business in response to market changes are more likely under the following conditions: A high level of competence in the firm combined with poor prior performance A low level of competence in the firm, combined with good prior performance These findings attest to the critical importance of competency building in new and small firms, as competency appears to facilitate responsive behavior to changing market conditions when the firms performance has not been favorable. Such competencies may go beyond technical competencies and may include the ability of firms to build relationships with current and prospective customers, which may help the firm anticipate and better understand customer needs. The results also indicate that the folklore about the vigorous responsiveness of entrepreneurs across all kinds of situations, and in the face of all sorts of adversity, may be misplaced or inaccurate. The varying patterns of responsiveness found in our study should provide food for thought, particularly for entrepreneurs who are fortunate to find themselves in positions in which the firms competencies are high and its prior performance good. Under such circumstances, our results show that a “fat cat” syndrome is likely to set in and undermine the responsiveness of the firm to changing market conditions. For public policy-makers, our results suggest that programs which support competence-building among entrepreneurs whose firms are struggling may play an important role in assisting them to respond to the changes they so frequently face in todays markets. Such programs, which may enhance survival rates of firms already in existence as well as encourage them to grow, may aid in job creation and in maintaining a robust economic environment.

Effects of organizational and decision-maker factors on new product risk taking

Abstract Using samples of evening MBA students having considerable managerial experience, two experiments were conducted, through which we explore the effects of organizational and decision-maker factors on managers’ new product investment decisions. Subjects were asked to choose among new product development projects having equal investments and expected values but differing degrees of risk. Riskier projects were chosen by managers whose organizationally imposed goals were based on aspirational versus survival reference points, whose prior project decisions had resulted in the accumulation of additional financial resources, for whom prior project outcomes were attributed to the manager’s guidance of the project versus competitive factors, and by managers whose propensities to take risks were higher. These results have important implications for the design and staffing of new product decision processes, for the creation of organizational cultures that foster new product risk taking, and for other organizational practices.

Stage 4: The Raging Debates

This article addresses the ongoing debates that have followed major curriculum change to a transdisciplinary, integrated core in the MBA program at the University of Denver: consistency within and across courses, alternative models of disciplinary integration, and the role of student course evaluations in a team teaching environment. The article concludes by sharing lessons learned from the experience and by offering advice to those who might also invest in major curricular change.

Seeing Differently, Acting Differently? New Venture Perceptions and Decisions of Managers and Successful Entrepreneurs

An experimental study was conducted in a sample of America’s most successful entrepreneurs and one of comparable large company managers to examine three research questions: Why do some individuals choose riskier ventures than do others? Do managers and successful entrepreneurs perceive new venture risk and potential differently? What accounts for differences, if any, in their decision‐making behavior? The findings are equally interesting for the effects we found and did not find. We found that differences in risk propensity and in situational factors like the market competencies brought to a particular venture influence risky new venture decision‐making; that perceptions of new venture risk and potential differ between managers and successful entrepreneurs, though in a direction opposite to that we hypothesized; and that individual differences, rather than group‐level differences, are primarily responsible for the degree of risk taken by managers and successful entrepreneurs. Taken together, our results call for further research at the marketing/entrepreneurship interface and research into differences between managers and entrepreneurs, using samples of highly successful entrepreneurs and comparable managers in established firms.

Measuring Up: Dashboarding for Innovators

“If you cannot measure it, you cannot improve it,” remarked Lord Kelvin in the 19th century. Organisations and managers have been heeding his advice ever since. But what does this mean for new ventures? John Mullins and Randy Komisar measure up.

Turn your industry upside down

Turn your industry upside-down by flouting the rules, say LBSs John Mullins and co-authors Barrett Ersek and Eileen Weisenbach Keller