The Role of Product Definition in Innovation Success-Part I

A key determinate of innovation success is a robust process for choosing and defining new products. This is part of the “fuzzy front end” and sets the stage for successful innovation. I have written extensively about the concept of the portfolio process (1), but in this two-part article I will focus on the role of a solid product definition in innovation success. Continue reading

Should Time-to-Market Be The Goal of New Product Development (NPD)?

Time to marketIf there is one universal desire of every senior manager responsible for the financial performance of any company, it might just be: “We need to get products to market faster!” It is perfectly understandable. Most companies rely on new products to help drive revenue and earnings growth, and what better way to improve financial performance than to get more new products, and faster? But is that always the best strategy? Many companies emphasize time-to-market, or cycle-time, at the expense of every other NPD goal. Much of the popular NPD literature has done a good job selling this as the goal of NPD, but there is a growing body of evidence that questions the link between this strategy and firm performance. Continue reading

Are Companies Becoming More Risk Averse in New Product Development (NPD) Decisions?

This is an important question to consider for any company engaged in new product development. Every project is unique. Product extensions tend to be lower risk while radical, new-to-the-market products are usually higher risk. While lower risk projects are easier to manage, higher risk projects might provide a much more significant payoff if successful. In today’s economy with fierce global competition, a focus on only lower-risk projects might not be the best decision for long-term company success. Continue reading

Measuring New Product Development (NPD) Success

SuccessThere are two important characteristics of new product development (NPD) that are underappreciated. First, NPD is one of, if not the most complex of all business processes. I speak from experience having managed an R&D organization in a mid-sized analytical instrument manufacturer in addition to previous roles in manufacturing, sales, marketing, and customer support. I have intimate knowledge of every business process and there is no doubt that NPD is the most complex. Second, not only is NPD complex, but it is arguably one of the most important of all business processes. New products are the lifeblood of any company, manufacturing or otherwise. Those who do it well prosper. Continue reading

Critical Aspects of Project Portfolio Management in NPD Success

Fuzzy Front End 2For those managing new product development, the “fuzzy front end” including project portfolio management remains a key challenge. A recent survey provides compelling evidence of just how difficult it is. In the 2012 Third Product Portfolio Management Benchmark Study, almost 70% of the respondents listed “too many projects for our resources” as their primary problem in managing project portfolios. In these difficult economic times, every organization has to become more effective at determining which projects to resource. The decisions made at the front end of the process drive success at the back end. Multiple surveys (1) find that best-performing firms derive about half of their sales and profits from new products. Continue reading

How Does Job Stress Impact NPD Effectiveness?

For those responsible for new product development, how job stress affects NPD effectiveness has important managerial implications. Most assume that some level of stress leads to improved performance, but there have been few empirical studies. A recent study published in the Journal of Product Innovation Management provides some useful insights. Continue reading