I recently read about a study by Nielsen Co. about the affect of senior management on new product development. They studied the practices at 30 package-goods marketers and found that those with the greatest new-product success rates (which they calculated by measuring the percent of revenue coming from new products) were those with the least senior-management involvement in the creative process.
In fact, companies with less senior-management involvement in the new-product process actually generate 80% more revenue from new products than those with higher levels of senior-management involvement, according to Nielsen.
"While we don't dispute senior management's strengths and good intentions, they are often too quick to get involved in the creative process, especially when things are not going well and their mere presence can stifle free thinking," said Tom Agan, senior VP-managing director of Nielsen.
Unfortunately, very few senior managers (Steve Jobs at Apple being one notable exception) actually have the necessary experience in marketing and new product development to be effective at the micro level.
Of course, it has always been a tricky balancing act for senior managers to determine what constitutes too much or too little involvement in the creative process. But this is the first study I have seen which supports what many of us have intuitively believed for years -- that less senior management involvement in the creative process may produce more profitable results.
Of course, this is a study that may have greater relevance to more mature markets like the US, where staff have more experience and are less fearful of management reprisals for honest miscalculations – making them more emboldened and willing to take risks to achieve great things. In Russia, however, where decision-making power is restricted to a select few, it would be a rare company that would endorse the level of independent creative thinking this study espouses. And to be fair, Russian staffers will also need to rise to the occasion by pushing the envelope and presenting more imaginative thinking to their superiors. Only employees who act responsibly will be given greater responsibilities.
But Russia's autocratic organizational structure and often uninspired workforce aside, what should senior management's role be when developing a new product, or a new marketing campaign, or a new sales strategy?
In my opinion, three things:
1. Management should, with staff input, establish fair criteria for success (and then back out of the room);
2. Management should build a supportive, but non-interfering environment in which the creative process can be nurtured (with reasonable reporting intervals);
3. Management should guarantee that the infrastructure and necessary resources for implementation of the creative result will be available if it meets the criteria established (failure to ultimately deliver the idea to market is a sure way to kill future creativity).
Unfortunately, all too often the creative process becomes an attempt to meet the expectations of management rather than the aspirations of the marketplace. Time and again, good ideas are watered down or, worse, abandoned entirely for safe, predictable, hackneyed concepts all because some VP stuck his nose in where it didn’t belong. Will studies like these convince companies to rethink the role of senior management when it comes to creativity? Let’s hope so.