This paper investigates project management methods used during the execution phase of new product development projects. Based on prior field observations, organizational theory and product development literature, we pose hypotheses regarding the effectiveness of the project execution methods of formality, project management autonomy and resource flexibility. A cross‐sectional survey sample of 120 completed new product development projects from a variety of assembled products industries is analyzed via hierarchical moderated regression. We find that the project execution methods are positively associated with project execution success. Further, these methods are effective singly and collectively, suggesting that firms can “balance firmness and flexibility” in product development via appropriate execution methods. Surprisingly, the effectiveness of these methods is not contingent on the product or process technology novelty inherent in a given development project. The findings suggest that firms should adopt high levels of these approaches, and that a variety of projects can be managed using broadly similar project execution methods. The findings also suggest limitations on the application of organizational information processing theory to the context of product development projects. Directions for additional theory development are outlined.
Any firm that hopes to compete on the basis of innovation clearly must be proficient in all phases of the new‐product development (NPD) process. However, the real keys to success can be found in the activities that occur before management makes the go/no‐go decision for any NPD project. In other words, the most significant benefits can be achieved through improvements in the performance of the front‐end activities—product strategy formulation and communication, opportunity identification and assessment, idea generation, product definition, project planning, and executive reviews. Noting the inherent difficulty of managing the front end, Anil Khurana and Stephen R. Rosenthal discuss findings from in‐depth case studies of the front‐end practices in 18 business units from 12 U.S. and Japanese companies. They offer a process view of the activities that the front end comprises, and they discuss the insights that their case studies provide regarding key success factors for managing the front‐end activities. The case studies involved companies in industries ranging from consumer packaged goods to electronics and industrial products. Foremost among the insights provided by the case studies is the notion that the greatest success comes to organizations that take a holistic approach to the front end. A successful approach to the front end effectively links business strategy, product strategy, and product‐specific decisions. Forging these links requires a process that integrates such elements as product strategy, development portfolio, concept development, overall business justification, resource planning, core team roles, executive reviews, and decision mechanisms. The case studies suggest that firms employ two general approaches for achieving these links. Some companies rely on a formal process to lend some order and predictability to the front end. Other companies strive to foster a company‐wide culture in which the key participants in front‐end activities always remain focused on the following considerations: business vision, technical feasibility, customer focus, schedule, resources, and coordination. This cultural approach is more prevalent among the Japanese firms in the study; the U.S. firms tend to rely on formality of the front‐end process. The case studies also suggest that the front‐end approach must be compatible with the firm's product, market, and organizational contexts. For example, standardized approaches seem to work best for incremental innovations.
This article describes how service and manufacturing firms are different when it comes to innovation, based on a survey of firms in both sectors. Overall, four of the five hypotheses developed for comparative study of new offerings were supported by the analyses of 38 new products and 29 new services. First and foremost, there appear to be real differences between how manufacturing and services approach the innovation process, primarily because of the way organizations formalize development of new offerings in these two sectors. Manufacturing is more likely to report the need for new strategies and structures when products are new to the industry or new to the firm. However, services are more likely to convert novelty into success. Services are significantly more likely to have a short beta testing process and to exploit general manager (internally sourced) ideas for new offerings as an alternative to formal innovation structures. However, manufacturing and services exhibit a similar tendency to exploit customer (externally sourced) ideas for new offerings.The potential contribution of this study is to point the direction for future work in the nascent research stream of service innovation, highlighting areas where there appear to be fundamental differences between the innovation process in services and other sectors of the economy. Key differences appear to be the alternative ways services formalize the innovative process, the unique way services test customer concepts, and the combined role of general managers and professionals in the development process. These differences have managerial implications. Working closely with customers, service managers should proceed with their own unique approach to the innovative process, especially with respect to prototyping and beta testing. Senior managers in service organizations should participate in the ideation process for successful new service offerings, as part of their strategy-making responsibilities.
Ethnographic research, carefully planned and implemented, is an effective method for providing user-centered perspectives early in the product innovation cycle. This article contributes operational perspectives on ethnographic inquiry in general and, in particular, on its effective integration in the front end of the product development process. It also explores issues of cost-benefit analysis in deciding when and how extensively to employ this mode of inquiry in the product innovation context. Based on a review of ethnographic approaches, in-depth case descriptions of two projects of this type and a review of twelve other projects, this article addresses three questions: (1) What key process steps and alternative approaches lead to insightful identification of relevant customer experiences? (2) What critical dimensions of customer experience offer hidden opportunities for innovative product design?(3) How are ethnographic studies planned, executed, and leveraged in the front end of the product development process when defining new product concepts? An analysis of these projects and related literature suggests particular kinds of product insights expected to be achieved from ethnographic inquiry, along with lessons for planning, conducting, and leveraging ethnographies. A successful ethnography may call attention to design opportunities not obvious at the outset but arising instead through appreciation of unconscious concerns or desires of the consumer. Accepting the notion of initial ambiguity helps ensure that such studies incorporate a broad coverage of potential kinds of issues and provide time and opportunities for serendipitous learning. Successful planning for ethnographies calls for an open mind coupled with explicit procedures for screening for diversity in respondents, gaining access to the desired range of respondents, and selecting a suitable ethnography team. Ethnographies use multiple observation and inquiry techniques in the field, often in combination with other techniques traditionally used in marketing research. They require teamwork, capturing relevant visual accounts, flexible probing for insights when surprises arise, and skill in modifying the ethnographic guide as needed during the study. The findings from ethnographies in the front end may be leveraged through traditional market research, innovation workshops, and formal product concept development.
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