Co-locating NPD? The need for combining project focus and organizational integration Nicolette Lakemond * , Christian Berggren Department of Management and Economics, Linko ¨ping University, SE-581 83 Linko ¨ping, Sweden Abstract Most studies of new product development practices focus on comparisons of individual projects, to identify factors contributing to their success or failure. This paper builds on an in-depth field study of the interaction of one single NPD project with the organizational context of the firm. The project typified many recommended practices for new-design projects: a co-located, cross-functional project team, close collaboration with external system suppliers, a hard-driving project manager and strong top management support. However, when evaluated in their organizational context as to their consequences for other on-going projects, these attributes turned out to have a deeply ambivalent character. By combining results from the case study and evidence from the literature several implications for NPD-organizing are suggested: the value of alternating co-location and physical separation according to the requirements of specific project phases; to take project duration into account in location decisions; and to address both interaction within the project and mechanisms for its interaction and integration with other departments and projects. q 2005 Elsevier Ltd. All rights reserved. Keywords: New product development; Cross-functionality; Co-location; Interaction; Integration; Organizational embeddedness; Temporal embeddedness; Case study 1. Introduction Studies of new product development practices have been a vital research field since the early 1990s and the publications by Clark and Fujimoto (1991), Wheelwright and Clark (1992), Clark and Wheelwright (1995), and Nishiguchi (1996). A search at the ABI/Inform database at the end of October 2004 resulted in a list of 174 articles in scholarly journals on the combination cross-functional/ product development [citation and abstracts] 1996–2004. A large number of studies have generated important insights regarding specific NPD practices and how they can contribute to or restrain project success under varying circumstances (for an overview see Brown and Eisenhardt (1995); Gerwin and Barrowman (2002)). Most new product development (NPD)-studies focus on comparisons of single projects, and key factors explaining their success or failure. Success is commonly measured as reduction in development time (Gerwin and Barrowman, 2002) although there are studies, which include other indicators such as cost, manufacturability, and product survival (Liker et al., 1999; Swink et al., 1996; Swink, 1999; Thieme et al., 2003). This paper will take a different track. By concentrating on one single project in its complex interaction with the organizational context of the firm, it purports to demonstrate the ambiguous consequences of several recommended NPD success practices and suggest ways in which these practices may need to be considered in relation to various contingency factors. 2. Literature review on product development practices Before presenting the case, we will provide an overview of relevant results from the research in new product development. In a meta-analysis of studies of new project practices, Gerwin and Barrowman (2002) found that overlap and interaction of activities, use of formal tools and methods, and team leaders with strong influence in the organization had a positive effect on performance, both when measured as development time and as rate of goal Technovation 26 (2006) 807–819 www.elsevier.com/locate/technovation 0166-4972/$ - see front matter q 2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.technovation.2005.04.004 * Corresponding author. Tel.: C46 1328 2525, fax: C46 13 281 873. E-mail addresses: nicolette.lakemond@eki.liu.se (N. Lakemond), christian.berggren@eki.liu.se (C. Berggren).