New Product Development (NPD) as a Key Business Process

Key Business ProcessA common misconception is that new product development (NPD) is strictly the responsibility of an organization’s technical staff who are typically part of the R&D or engineering functional group. Many senior managers or business owners, those responsible for the financial performance of their businesses, believe the following: “If only R&D could just deliver products faster, meet their schedules, work harder, and stop talking about project risk, then new products could deliver the growth necessary!” If that is how innovation is viewed in your company, then likely senior management does not understand either the nature of new product work or that NPD and innovation management in general are key business processes, not just an R&D function. Continue reading

How Project Risk Impacts Project Management in New Product Development (NPD)

Project RiskAn important aspect for driving success in new product development and by extension, long-term firm performance, is to maintain a balanced project portfolio (1). In other words, every organization needs to maintain a mix of different types of projects. From a technology standpoint, this would include for example new products which are extensions of existing technologies, products that exist currently in the market but are new to that firm, and finally more radical, new-to-the-world products. Overlaid on top of the pure technology considerations, other factors come into play. For instance, the nature of the market adds another dimension. Maybe the product will be introduced into a market that is very well understood by the firm. This might be especially true of a product extension. In the case of a product that is based on technology that is new to the firm, but is being supplied by a competitor for instance, the firm may or may not be familiar with those customers. Finally for a radical, new-to-the world product, it is more likely to be sold to a new customer base, or there may be little knowledge on exactly how the product will be used by customers once introduced. Continue reading