Core capabilities and core rigidities: A paradox in managing new product development

TLDR

Core capabilities comprise technical, managerial, and skill clusters that are deeply rooted in values, yet they can also generate rigidities that impede innovation in new product and process development projects. The study investigates how managers can leverage core capabilities while avoiding the hindering effects of core rigidities in such projects. The authors analyze twenty case studies from five firms to illustrate the interaction between core capabilities and development projects.

Abstract

This paper examines the nature of the core capabilities of a firm, focusing in particular on their interaction with new product and process development projects. Two new concepts about core capabilities are explored here. First, while core capabilities are traditionally treated as clusters of distinct technical systems, skills, and managerial systems, these dimensions of capabilities are deeply rooted in values, which constitute an often overlooked but critical fourth dimension. Second, traditional core capabilities have a down side that inhibits innovation, here called core rigidities. Managers of new product and process development projects thus face a paradox: how to take advantage of core capabilities without being hampered by their dysfunctional flip side. Such projects play an important role in emerging strategies by highlighting the need for change and leading the way. Twenty case studies of new product and process development projects in five firms provide illustrative data.