An Interim Report on Measuring Product Development Success and Failure

Griffin, Abbie; Page, A. L.

doi:10.1111/1540-5885.1040291

Cited by 359 publications

(380 citation statements)

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“…Another aspect of the NPD structure is the formalization of the development process (Griffin and Page 1993). Formalisation refers to the degree in which the process is subject to rules, procedures and structures previously specified (Johne 1984).…”

Section: Npd Structurementioning

confidence: 99%

“…Customer satisfaction, timeliness, product price, quality (Chiesa et al 1996) Sales and profit impact (Bretani and Kleinschmidt 2004) R&D/Manufacturing integration (Swink 1999;Yam et al 2004) R&D/Marketing integration (Leenders and Wierenga 2002) Speed relative to schedule (Kessler and Bierly 2002) Development time (DT), concept to customer time (CTC), total time (TT) (Griffin 1997) Speed and commitment of the NPD decisionmaking process, (Griffin and Page 1993) Average time and cost of redesign, enhancement (Chiesa et al 1996;Thomke 1997) The ability to change specs late (Thomke 1997) The possibility for lower development budget (Iansiti 1993) Cost relative to budget, competitors (Kessler and Bierly 2002) Engineering hours, cost of materials, cost of tooling (Clark and Wheelwright 1993) Current NPD performance is measured by using all the scales of the product concept effectiveness and development process effectiveness. Product concept effectiveness is measured as the average score of the constructs 'fit with market demands' and 'fit with firm competences'.…”

Section: Based Onmentioning

confidence: 99%

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Successful New Product Development by Optimizing Development Process Effectiveness in Highly Regulated Sectors: The Case of the Spanish Medical Devices Sector

Pullen¹,

Cabello‐Medina²,

Weerd-Nederhof³

et al. 2011

Managing Innovation Driven Companies

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Rapid development and commercialization of new products is of vital importance for small and medium sized enterprises (SME) in regulated sectors. Due to strict regulations, competitive advantage can hardly be achieved through the effectiveness of product concepts only. If an SME in a highly regulated sector wants to excell in new product development (NPD) performance, the company should focus on the flexibility, speed, and productivity of its NPD function: i.e. the development process effectiveness. Our main research goals are first to explore if SMEs should focus on their their development process effectiveness rather than on their product concept effectiveness to achieve high NPD performance; and second, to explore whether a shared pattern in the organization of the NPD function can be recognized to affect NPD performance positively. The medical devices sector in Spain is used as an example of a highly regulated sector. A structured survey among 11 SMEs, of which 2 were studied also as in in-depth case studies, led to the following results. First of all, indeed the companies in the dataset which focused on the effectiveness of their development process, stood out in NPD performance. Further, the higher performing companies did have a number of commonalities in the organisation of their NPD function: 1) The majority of the higher performing firms had an NPD strategy characterized by a predominantly incremental project portfolio. 2) a) Successful firms with an incremental project portfolio combined this with a functional team structure b) Successful firms with a radical project portfolio combined this with a heavyweight or autonomous team structure. 3) A negative reciprocal relationship exists between formalization of the NPD processes and the climate of the NPD function, in that a formalized NPD process and an innovative climate do not seem to reinforce each other. Innovative climate combined with an informal NPD process does however contribute positively to NPD performance. This effect was stronger in combination with a radical project portfolio. The highest NPD performance was measured for companies focusing mainly on incremental innovation. It is argued that in highly regulated sectors, companies with an incremental product portfolio would benefit from employing a functional structure. Those companies who choose for a more radical project portfolio in highly regulated sectors should be aware that they are likely to excell only in the longer term by focusing on strategic flexibility. In their NPD organization, they might be well advised to combine informal innovation processes with an innovative climate. 2

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Section: Npd Structurementioning

confidence: 99%

Section: Based Onmentioning

confidence: 99%

Successful New Product Development by Optimizing Development Process Effectiveness in Highly Regulated Sectors: The Case of the Spanish Medical Devices Sector

Pullen¹,

Cabello‐Medina²,

Weerd-Nederhof³

et al. 2011

Managing Innovation Driven Companies

View full text Add to dashboard Cite

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“…Recently, this "gap" has been addressed by an increasing interest in NPD performance measurement at the level of the firm [9,13,15]. These articles offer overall NPD performance measures, but do not test their relevant impact on business success.…”

Section: The Product Development Performance Literaturementioning

confidence: 99%

“…The measurement of NPD performance follows previous work that has identified a number of performance dimensions [15,20]. From our data set, we were able to construct variables for the following of these dimensions: technical product performance (perceived performance relative to competition), market leadership (% of new products being first to market), development intensity (development personnel per $ million of sales), -product line freshness (% of sales from products introduced in the last 3 years), innovation rate (number of new products introduced over a life cycle, relative to industry average).…”

Section: Hypothesesmentioning

confidence: 99%

“…They include the length of development cycles and the fraction of products first to market, development productivity, the percentage of distinctive and financially successful new products, or the proportion of sales from new products [15,40]. Some empirical studies of NPD performance stretch across industries [6], while others are industry specific [7,8].…”

Section: Introductionmentioning

confidence: 99%

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When Product Development Performance Makes a Difference: A Statistical Analysis in the Electronics Industry

Terwiesch¹,

Loch²,

Niederkofler*³

1998

J of Product Innov Manag

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Throughout the pages of JPIM and other publications, researchers and practitioners devote considerable effort to identifying the dimensions of new-product development (NPD) performance that relate most closely to business success. Although we may hope to unveil a set of universal truths about the relationship between NPD performance and business success, the relevant NPD performance measures appear to depend on the industry in which a firm competes.In fact, Christian Terwiesch, Christoph Loch, and Martin Niederkofler suggest that the overall relevance of NPD performance to business success depends on the firm's competitive market environment. In a study of 86 business units operating in 12 different electronics industries worldwide, they develop a market contingency framework for understanding the impact of NPD performance on a firm's profitability. Their study uses data from the "Excellence in Electronics" project, a joint research effort by Stanford University, the University of Augsburg, and McKinsey & Co.They describe market context in terms of three dimensions: market share, market growth, and external stability-that is, the average product life cycle duration in the market. Looking at all 86 business units in the study, they find that industry membership accounts for 23% of the variance in profits, with 18 percent of the variance determined by industry profitability and 5% by the three dimensions of market context. For the firms in the study, development performance has the most significant effect in slow-growth markets and in markets with long product life cycles. In these stable industries, low development intensity, product line freshness, and technical product performance increase profitability.The results indicate that NPD performance plays a much more important role for explaining the profitability of dominant firms than that of the low-market-share firms in the study. NPD performance explains 30% of the profitability variance among the high-market-share business units in the study, but none of the variance for the low-market-share business units. Although the profitability of the smaller firms in the study is driven primarily by the industry environment, these firms can compete on the basis of superior technical performance. A working paper in the INSEAD Working Paper Series is intended as a means whereby a faculty researcher's thoughts and findings may be communicated to interested readers. The paper should be considered preliminary in nature and may require revision. Disciplines Other Business | Other Electrical and Computer Engineering | Statistical MethodologyPrinted at INSEAD, Fontainebleau, France. When Product Development Performance Makes a Difference: A Statistical Analysis in the Electronics Industry AbstractHigh performance of the product development function is seen as a path to competitive advantage in many industries. Product development performance is commonly measured as the efficient and rapid development of new and high performing products.However, the relevance of develop...

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Innovation Metrics

Reibstein¹,

Shankar²

2010

Wiley International Encyclopedia of Marketing

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No firm can last forever on its existing products. It is necessary for a firm to invest for the future through either entirely new products or enhancements of existing products/services. Thus, investments on innovations constitute a major proportion of firms' total investments. To manage their investments in innovation, firms track the success and progress of their innovations. There is a growing body of research on “innovation metrics” – the measures used to track innovation progress. We review the state of the art on innovation metrics, report on the usage of metrics by firms, and highlight the measures that have proven to be most useful to firms.

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An Interim Report on Measuring Product Development Success and Failure

Cited by 359 publications

References 35 publications

Successful New Product Development by Optimizing Development Process Effectiveness in Highly Regulated Sectors: The Case of the Spanish Medical Devices Sector

Successful New Product Development by Optimizing Development Process Effectiveness in Highly Regulated Sectors: The Case of the Spanish Medical Devices Sector

When Product Development Performance Makes a Difference: A Statistical Analysis in the Electronics Industry

Innovation Metrics

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