Innovation Teams: an Empirical Examination of the Relationship of Team Climate and Development Strategies in Consumer Packaged Goods Industries

Abstract

Companies’ new primary source for sustainable revenue growth comes from creating new innovations, rather than from mergers and acquisitions. Companies are finding it difficult to align internal support for the innovative creativity of teams with standard operating procedures. This research aims to discover how innovative teams contribute to forming development strategies that CPG firms use to create new products. Dimensions of the Theory of Team Climate in Innovation (TTCI) offer insight on the dimensions of development strategy. Specifically, by integrating the theories, a proposed model identifies the innovation team’s impact on the firm’s development strategies. Such understanding has the potential to increase firm profits, lower innovation costs, increase innovation speed, and support innovation training. To empirically test this model, employees responsible for product development in the consumer packaged goods (CPG) industries were surveyed. Structural modeling techniques were used to analyze the data. Findings indicate support for using TTCI to explain the compressed development strategy. Theoretical contributions include: 1) extending TTCI and its associated measures into tangible products industries, 2) refining and adding to TTCI measures, 3) extending the development strategies theory into tangible products industries, and 4) adding to the measures for development strategy. Future research appears fertile for methods and measures used in this study, and managers in CPG will benefit from an enhanced understanding of how to better structure innovation teams in alignment with a firm’s development strategy