Workplace flexibility and new product development performance

Case studies

Workplace flexibility and new product development performance

The role of telework and flexible work schedules

Does teleworking work impede or support innovation within project teams? While face-to-face interaction will always be important, recent Dutch case studies show that teleworking can drive innovative practices by enabling knowledge sharing within organisational teams and between organisational partners.

Team collaboration and high quality knowledge sharing are critical to developing insights which will lead to innovative products. Where do flexible work practices such as teleworking, flexible work schedules and the use of diverse communication channels (such as chat rooms, instant messages and teleconferencing) fit in? Do they hinder or promote teaming?

This study by Marja Coenen (Logica Working Tomorrow) and Professor Robert Wok (Radboud University Nijmegen) of five New Product Development (NPD) teams in two telecommunications companies found that the answer is not binary, rather it is a question of how these flexible work practices are used and when. In particular the study found that teleworking supports knowledge sharing if it is preceded by a more intense period of face-to-face contact to build trust. The researchers also found that knowledge which is more tacit rather than explicit (meaning it lies within a person’s mind rather than on a piece of paper) requires face to face contact to ensure it is exchanged, thus a project team in which all members work virtually for the entire project is likely to struggle with miscommunication and poor knowledge transfer. Finally, teleworking promotes increased contact between cross-functional teams and organisations which are not co-located, thus indirectly promoting knowledge sharing.

Aim

This paper aimed to explore the impact of telework and flexible work schedules on the performance of five New Product Development (NPD) teams, which were developing new products and services in two Dutch telecommunications companies. High performance requires knowledge sharing, cross-functional cooperation and inter-organisational involvement.

Method

The researchers selected two Dutch companies which had recently introduced telework and flexible work schedules with a firm-wide campaign to focus on output rather than presence, and five NPD teams within those organisations in which individuals were familiar with telework and flexible work schedules. Semi-structured face-to-face interviews were conducted with the diverse team members. The team comprised members from cross-functional areas as well as organisations outside the Dutch company. Interview data was supplemented by publicly available information (such as annual reports and media articles) to verify interviewee data.

Findings

The researchers’ key findings focus on the blend of teleworking and face-to-face contact, as well as the opportunity for higher levels of communication with members who are not co-located.

  1. Blend: Telework had no perceived negative impact on NPD performance, as long as it was complemented with face-to-face interactions, especially at the outset of the project and at critical moments. When it came to knowledge sharing in NPD teams, interviewees stated that it was essential to establish trust and personal relationships to enable effective virtual working relationships. An ongoing blend of face-to-face and virtual communication, albeit with the face-to-face contact reduced post the start-up phase, maintained high levels of knowledge transfer, including of tacit knowledge

  2. More communication: Telework, combined with diverse channels of communication (phone, email, chat, video conferencing) enabled greater levels of communication with team members from cross-functional areas, as well as third-parties outside the Dutch companies. This heightened level of communication expanded the knowledge base for project team members and thus assisted with efficient and effective innovation.

Interviewees expressed the view that telework should not completely replace face-to-face contact, as “physical contact is the richest, although telework could be used more … it is about the balance”. While technological infrastructure provides more opportunities for connectivity with those from within an organisation, as well as those who are external, the positive effects of telework and flexible work schedules on innovation are offset if they are not balanced with face-to-face interaction.

The impact of flexible work schedules on NPD teams and innovation was less direct and difficult to ascertain, with the researchers finding that flexible work schedules usually increase telework usage as a means of balancing team members various schedules (e.g. team members would reconnect online after hours).

Implications

The results of the case studies presented a positive argument for the use of flexible work schedules and telework on NPD projects. Telework was determined to have a direct impact on NPD performance as team members were able to use it as a substitute for face-to-face contact to fulfil knowledge sharing, cross-functional and inter-organisational involvement activities. Surprisingly, flexible work schedules had a more indirect impact, as they enabled telework, although the study did not find that an increased usage directly correlated with high performing NPD teams.

To enhance the team’s performance via telework, the interviewees agreed that it was important to establish face-to-face contact during the initial stages of relationship building with the team, as this foundation of trust is paramount to successful virtual working with others. Additionally, the participants in the study preferred a balance between virtual and face-to-face contact, rather than completely virtual working, emphasising that it is still important to maintain physical presence on a regular basis.

Finally, the research is noteworthy for the exposure it gives to the use of diverse channels of communication, providing team members with multiple options to facilitate communication more effectively.

For more, see Coenen M. and Kok R.A.W. (2014) Workplace flexibility and new product development performance: the role of telework and flexible work schedules, European Management Journal (2014, article in press), pp.1-13.

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