The NPD process in Beta was structured around five phases: Concept, Feasibility and Planning, Design, Qualification, and Pre-production (see Chapter 7, Sections 7.3 and 7.4). The organization of the NPD process in Beta reflects the stage-gate system (Cooper, 1990; 1996 – see Chapter 2, Section 2.5, for a review of this system). The stage-gate system is a process management tool, a roadmap or a template, which introduces a “gating mechanism, featuring a series of rigorous go/kill decision points or “gates” throughout the process” (Cooper, 1996, p. 471). During project Kappa, the passage from each stage to the next was checked and monitored through the phase checklists, namely, the lists of mandatory deliverables in terms of tasks to be accomplished or documents to be prepared. In particular, members of senior management, who function as a team of gatekeepers, were in charge of tracking and verifying that the deliverables were accomplished at each phase review, and also that the cost, technical functionality and time performance (Atkinson, 1999) of the new product were in line with the targets, prior to approving the closure of the current stage and the beginning of the next.
The stage-gate process for project Kappa (see Chapter 7, Sections 7.3 and 7.4 for a more in-depth review of this empirical process at Beta) reflects a firm process, structured
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around predetermined stages, each having a specific procedure to follow (the formalised NPD process – illustrated in Figure 7.1), rules to comply with (fulfilment of cost, time, technical requirements targets on the PDD and checklists to be signed), a predetermined report to be produced and updated (the project report – see Figure 7.2), as well as fixed periodic meetings to be arranged (design review meetings in Phase 3 and monthly active
project global meetings). These fixed and firm arrangements of the NPD process were
considered to be important for the success of the NPD process since they provided fixed points of structured review of its performance, in terms of time, cost, technical functionality of the new product. However, too much attention placed on formal processes and structures can reduce the uncertainties and discourage the flexibility and the creativity that contexts of innovation both entail and need in order to provide opportunities for innovation (Kamoche and Cunha, 2001). In the remainder of this section, it is demonstrated how this formal process (Tatikonda and Rosenthal, 2000; Kamoche and Cunha, 2001), in particular the firmness of its accounting constraints, namely, the cost targets on the PDD and the predetermined review meetings, contributed to making the NPD process of project Kappa more flexible. This was made possible by adapting to changing situations and new opportunities as they arose (Abernethy and Lillis, 1995) and, moreover, by engaging with the rationale for innovation (desires, intentions and motivations underpinned by the multiple purposes and ends for innovation) in order to facilitate the unfolding of the process of innovation that characterised project Kappa. Therefore, this study aims to provide the answer to the first research question, as follows: how does accounting engage with firmness and
flexibility in processes of innovation in new product development?
During project Kappa, the desires and the intentions of the project leader to adopt the new technologies for Kappa inspired questions from the other individuals involved in the project who were moved by different interests regarding the development of Kappa (see Chapter 7). The questioning and interactions caused further discussions between the project leader and other staff on the team, who were moved by their motivation to fulfil their functional interests since they were in charge of developing the new product Kappa. The staff often drew upon accounting figures and the failure to meet the cost target of the new product (a firm constraint of the NPD process) in order to challenge the unfolding innovation and stimulate further and different ideas for the new product. This happened, for instance, in Phase 2 of project Kappa, when the manufacturing
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engineer, quality engineer, the sourcing manager suggested amendments to the positioning of some components and to the cover of Kappa (see Chapter 7, Sections 7.4 and 7.7) and in Phase 3, when the first prototype of Kappa became available.
At times the desires and intentions of the project leader and the motivations of other staff (such as the sourcing manager) were revealed to be “in-tension” (Busco and Quattrone, 2016) and this led to discussions which resulted in the reinforcement of innovation objectives as intended by the project leader. This happened in Phase 3, when the second version of the prototype became available (see Figure 7.5; see also Chapter 7, Section 7.5). In other instances outlined in detail in the previous chapter, the tensions (e.g. between the project leader and the sourcing manager and the quality engineer) resulted in additional opportunities for thinking of better technologies to adopt for the new product, and made the process for innovation flexible to change. This happened in Phase 3, when the third version of the prototype was available (Figure 7.6, see also Chapter 7, Section 7.5).
In acknowledgement of the firmness of the cost targets of the NPD project and the resultant tensions among the various interests that resulted, it emerged that the firmness (Kamoche and Cunha, 2001) of the accounting constraints within the NPD process led the individuals involved in the NPD team to think flexibly (Kamoche and Cunha, 2001) about solutions for the new product in development. This enabled and at times enhanced the innovation featured in the new product Kappa. Furthermore, as observed in Chapter 7, Section 7.8, during project Kappa the project leader “absorbed” (Kamoche and Cunha, 2001) the accounting targets of the NPD process within his changing desires and intentions, without considering them as actually constraining innovation. Consequently, the accounting targets induced the project leader to further discover, in greater detail, the technical aspects, challenges, alternatives and potentialities for innovation. Furthermore, the other individuals involved used accounting targets to support and defend their functional concerns and interests (see Chapter 7, Section 7.5) for further developing and advancing Kappa. During project Kappa, the accounting targets were seen as an opportunity for innovation as they stimulated the project leader’s creative ideas and generated tensions with other staff, which facilitated discussions that also led to new possibilities for innovation. This, in turn, facilitated creativity, a prerequisite for innovation. Furthermore, practicing accounting to fulfil the firmness of the cost targets
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allowed the project leader to avoid the error of pursuing too many creative ideas, stemming from his desires for innovation, which could have lead led him to neglecting the feasibility of Kappa and ultimately may have undermined the commercialization of Kappa, if the cost targets of the product had not been respected (Busco et al., 2012; Davila and Ditillo, 2013).
So, how does accounting engage with firmness and flexibility in processes of
innovation in new product development? To conclude, the answer to the first research
question is articulated as follows. At Beta, accounting practices allowed the individuals involved in the NPD process to sustain and move forward, in a flexibly way, with the unfolding of the NPD process. This facilitation was given by accounting practices which provided constraints, which both facilitated making choices and allowed individuals and the team to adapt to the changing situation and new opportunities for innovation as they arose (Abernethy and Lillis, 1995). This happened through the firmness of project Kappa, specifically through the accounting constraints that stimulated the rationale for innovation, i.e. the desires, intentions and motivations for innovation that were at stake, by establishing the challenges in the form of cost over runs which created tensions among the team. Underpinning these challenges and tensions were accounting practices which revealed and flexibly triggered new possibilities for innovation. At Beta it became evident that both firmness and flexibility stemmed from accounting practices and accounting information inscribed in project reports. The new opportunities for innovation featured in product Kappa were discussed in cross-disciplinary collaboration (Nicolini et al., 2012) among the actors involved (each with their desires, intentions, and motivations for innovation). In these spaces the flexibility for innovation was triggered by the firmness of the cost targets.
8.3 Research Question 2: How does accounting engage with the rationale for