Product Development Processes in the Nordic Paper Packaging Companies : an assessments of complex processes

Abstract: It is important for firms to continually develop their offerings as the business landscape develops in order to sustain their competitiveness (e.g. Schumpeter, 1934; Ansoff, 1979; Porter, 1985; Trott, 2012). In a context of globalization, rapid technology development and changing customer needs, the paper packaging industry is urged to enhance its product development activities (Hansen & Niskanen, 2007; Björkdahl & Börjesson, 2011). However, there is little research about paper packaging firms’ product development processes (ibid). Accordingly, this study assessed the product development processes of four Nordic paper packaging firms. This study took the contemporary theoretical perspective that product development is a complex, non-linear processes, which should be managed accordingly (OECD & Eurostat, 2005; Burns, 2005; Smith et al., 2008; Goffin & Mitchell, 2010; Trott, 2012). In particular, Goffin and Mitchell’s (2010) Innovation Pentathlon Framework was selected as a model to assess the firms’ product development processes. This framework comprises an innovation process that has three phases; idea generation, prioritizations and implementation. This innovation process is supported by the firms’ strategy as well as underlying human resources and organizational structures. Executives responsible for product development were interviewed using semi-structured interviews. Interview results were then analysed and compared with the Innovation Pentathlon Framework and literature. Findings were that the Nordic paper packaging producing companies have flexible and dynamic product development processes. Moreover, all executives consider that flexibility in running product development projects is vital. The four firms have different product development praxis. Nonetheless, components such as idea generation and product development phases are similar. All firms recognised that there is a need for enhanced investments in competences, people processes and team management. A key distinguishing feature of product development praxis was that some firms have a push oriented idea generating and prioritization processes while others have pull oriented processes. Involvement of customers varies among the companies accordingly. The assessment was that most firms could benefit from having a more diverse idea generating process, involving employees and customers in the prioritization process as well as focusing more on the value proposition. The study showed a difference in attitudes towards external actors. Some advocate that open innovation can provide firms with opportunities, although it requires competence in how to establish agreements and balance values etc. However, the findings also indicate that other actors in the industry are becoming more introverted, which may negatively affect the development of the sector and firms within it. Findings showed that firms’ business strategies were integrated in the product development process, although this was performed differently. The assessment found that a naturally integrated strategy can act as a facilitator for the products development, although too lose structures might lead to project drift. On the other hand, too controlled and strict processes might hamper the innovativeness, even though it secures the project alignment. The companies need to examine the effects of their approaches. Finally the study highlights the need for more knowledge about the complexity of running product development processes in paper packaging firms. Several areas for improvement are identified in the study, such as people processes and management, open innovation and customer involvement, flexibility vs. efficiency and the nature of flexible cultures. Further research is needed to understand what explicit components the management needs to address to master these areas.