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.
Before discussing the study and its conclusions, we need to consider how we measure NPD success. Often a project is judged successful if 1) the product meets performance, cost, and quality objectives, 2) project cost objectives are met, and 3) schedule targets are met (commonly referred to as the “triple constraint”). While those are obviously important, it misses the point of why new products are developed in the first place: to satisfy customer needs better than competitive products and generate revenue and earnings growth for the firm. Market success is not guaranteed just because a new product meets the performance targets, project cost was on target, and the schedule was met. Maybe the definition for the new product was just not what the market wanted or needed. On the other hand, a new product might be a year late, but when it is introduced, is wildly successful in generating revenue and earnings growth. Another factor often ignored is the impact on the team. How satisfied was the team with the project? Were they supported by management? Did they advance knowledge that will be helpful long-term? Job satisfaction goes a long way in fostering employee engagement and long-term market and financial success.
What about the study? The author looked at the role of three sources of stress: role ambiguity (e.g., the team is confused about expectations), team conflict, and the pressure for performance. The goal was to see how these affect job satisfaction and NPD performance. Also investigated was how job satisfaction relates to NPD performance. NPD performance was defined in terms of meeting project budget/schedule targets, producing a product with acceptable product quality, and a product that is successful in the market.
Conclusions based on this study and my own observations include:
1) Managers should strive to reduce role ambiguity by defining team behavior expectations in order to increase job satisfaction.
2) While there was no evidence that a high pressure to perform leads to low job satisfaction, in my experience that will depend on how management supports the team and NPD in general. How is the team judged, for instance, when a project fails for reasons outside of the teams control? What if the definition was wrong? Is management clear about project risk during the definition phase?
3) Management should minimize those things that lead to low job satisfaction as that will help improve NPD effectiveness.
4) A little team conflict and pressure to perform does have a positive impact on NPD effectiveness. This spurs creativity and a sense of urgency.
What is your experience as it relates to stress and NPD effectiveness? Do you agree with the conclusions above? How do you measure NPD effectiveness?
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