Innovations in New Product Development and Marketing | Executive Chronicles
January 12 – January 14 – San Diego, California
Session: The A-Z of Executive Buy-In: Building a Business Case for Multiple
Stakeholders
Presenter: David Matheson, SmartOrg Inc.
Time: 4:00 pm – Tuesday 13 January 2015
Session Abstract:
Thirty-seven executives led by David Matheson, moderator and assisted by thoughtleader panelists from DuPont Pioneer, FulFlex, 3M, DIRECTV and Toyota participated
in an interactive session to identify ways in which innovators, finance and strategists
can effectively work together to achieve buy-in by recognizing and overcoming real or
perceived barriers to effective cooperation.
Take Away:
Avoid unfavorable consequences by understanding and dealing with misperceptions
among finance, executives, project management, marketing and R&D.
Best Practice(s):
 Identify counter-productive impact on innovation within each function
 Build communication and trust across functions
 Build a partnership based on openness.
 Focus on the difficult conversations around key decisions
Action Items(s) to Implement:
 Align the incentive structure to reward risk-taking.
 Avoid burdening innovative projects with need to justify ROI too early
Notes:
There are many biases among functions. For instance innovators and marketers feel
that management places too much overhead and accountability on things beyond their
control. Project management, they feel, is more concerned with monitoring vs. helping
and that they are frequently looking for predictability when there is a great deal of
uncertainty – particularly with truly innovative products.
Take Away:
The world of innovation and product development is fraught with uncertainty and
therefore sales, profitability and other financial measures cannot be reliably forecast
without dealing explicitly with uncertainty.
Please return your completed Chronicles notes to Sam Narisi at sam.narisi@frost.com | 212-402-1816
Innovations in New Product Development and Marketing | Executive Chronicles
January 12 – January 14 – San Diego, California
Best Practice(s):
 Teach everyone how to deal with uncertainty around projections about future
sales, growth, profitability, etc.,
 Provide analytic tools to evaluate business model factors when there is
uncertainty around such areas as market size, price, market penetration, time
and cost.
Action Items(s) to Implement:
 Provide training in ways to evaluate and deal with uncertainty
 Develop business plans that include ranges around factors that cannot be
forecast with certainty, for instance the size of a new market where the company
has little or no experience and marketing research is inadequate or not available.
Notes:
One of the most difficult challenges faced by many, if not most, companies is the need
to think about uncertainty. Companies tend to make broad assumptions about the size
of a new market, the sales that can be made within a year or so of introduction and
other factors that are impossible to forecast with any degree of accuracy. It has been
said that “there are no facts about the future,” which is another way of saying that it is
important to recognize that vague, often misguided assumptions can lead one into
making optimistic projections driven by political or management-imposed numbers. This
is one reason a high proportion of new products fail. Better to clearly recognize what
one does not know and develop a range of values that indicate downside risk and
upside potential.
Take Away:
Decisions are more often than not driven by fear. It is important to recognize that these
fears exist and do everything possible to address and minimize the impact of these
within each function.
Best Practice(s):
 Recognize that many, if not most, managers and executives (despite their titles)
have fears around their performance. And the consequence of their decisions.
 Recognize your own fears and how they may impact the decisions you make.
Action Items(s) to Implement:
 Get to know about the work of other functions, for instance if you are in marketing
get to know your counterparts in finance or R&D and their challenges, pressures
and fears.
 Develop relationships across the functions that involve your work, either through
approval levels or technical support.
Please return your completed Chronicles notes to Sam Narisi at sam.narisi@frost.com | 212-402-1816
Innovations in New Product Development and Marketing | Executive Chronicles
January 12 – January 14 – San Diego, California
Notes:
The executives in this session reviewed their perceptions of finance, executive
management, R&D/technical, marketing and project management, both within and
across functions. After identifying counterproductive behavior, participants addressed
reasons for counter-productive behavior, finding that a great deal of this behavior
derived from fear. Finance people were concerned that they were not highly valued;
they were thought of as gatekeepers; they were the front-line of bad news; and were
afraid of being fired. Managers were concerned with being held accountable for things
they could not control; becoming obsolete; over-running budgets and dealing with the
consequences. R&D was afraid of rejection; scope creep; having to perform with lack of
resources; changing priorities and lack of recognition. Marketing was afraid of missing
targets; pricing too high or too low; of rejection (“losing out if you don’t say YES”) and
failure (of all types).
Final Thought:
Innovation in new product development and marketing is a risky business for many of
the reasons cited above. The job can be threatening, depressing and full of fear given
the uncertainty around producing top- and bottom-line results, making forecasts when
the future is extremely uncertain but management is pushing to meet performance
goals. Obtaining the green light for new, risky projects is difficult. Unless a company
fosters an environment where the risks of innovation are recognized, failure is tolerated
and manages a portfolio of innovation to balance risk and reward there will probably be
disappointing results.
One executive team pointed to a single word that pretty much says it all: Trust!
Please return your completed Chronicles notes to Sam Narisi at sam.narisi@frost.com | 212-402-1816