PDMA Success Measurement Project: Recommended Measures for Product Development Success and Failure

Abstract

Success is not just elusive; it is also multifaceted and difficult to measure. A firm can assess the success or failure of a development project in any (or all) of many terms, including customer satisfaction, financial return, and technical advantage. To complicate matters, success may be measured not only at the level of the individual project, but also at the program level. With so many variables to consider and so many stakeholders involved, managers face a difficult challenge just deciding which measures are useful for measuring product development success. Recognizing that no single measure suffices for gauging the success of every product development project, Abbie Griffin and Albert L. Page hypothesize that the most appropriate set of measures for assessing project‐level success depends on the project strategy. For example, the objectives (and thus, the success criteria) for a new product that creates an entirely new market will differ from those of a project that extends an existing product line. Similarly, they hypothesize that the appropriate measures of a product development program's overall success depend on the firm's innovation strategy. For example, a firm that values being first to market will measure success in different terms from those used by a firm that focuses on maintaining a secure market niche. To test these hypotheses, product development professionals were presented with six project strategy scenarios and four business strategy scenarios. For each project strategy scenario, participants were asked to select the four most useful measures of project success. For each business strategy scenario, participants were asked to choose the set of four measures that would provide the most useful overall assessment of product development success. The responses strongly support the idea that the most appropriate measures of project‐level and program‐level success depend on the firm's project strategy and business strategy, respectively. For example, customer satisfaction and customer acceptance were among the most useful customer‐based measures of success for several project strategies, but market share was cited as the most useful customer‐based measure for projects involving new‐to‐the‐company products or line extensions. At the program level, firms with a business strategy that places little emphasis on innovation need to focus on measuring the efficiency of their product development program, while innovative firms need to assess the program's contribution to company growth.

Market Orientation, Creativity, and New Product Performance in High-Technology Firms

“…Thus: Finally, we hypothesize that cross-functional integration (XFI) positively influences NP and MP creativity. The significance of XFI in generating superior values for target customers is well documented with respect to NPD (e.g., Ayers, Dahlstrom, and Skinner 1997;Griffin and Hauser 1996;Gupta, Raj, and Wilemon 1986;Ruekert and Walker 1987;Song and Parry 1992;Song, Xie, and Dyer 2000;Xie, Song, and Stringfellow 1998). In NPD, XFI can be represented by the level of interaction and communication, the level of information sharing and coordination, and the degree of joint involvement in conducting specific tasks involved in an NP's development and launch (Song and Parry 1997a).…”

“…In the NPD context, XFI enhances creativity because it involves open generation and sharing of new ideas, resolution of problems and disagreements by means of nonroutine methods and different frames of reference, and responsiveness to change in novel and meaningful ways (Andrews and Smith 1996;Gatignon and Xuereb 1997;Griffin and Hauser 1996;Han, Kim, and Srivastava 1998;Van de Ven 1986). Thus, an NP team that acquires and disseminates divergent ideas and information through close XFI is more likely to generate creative ideas for developing and marketing NPs.…”

“…2 A creative firm that provides unique and meaningful products and programs will meet the changing needs of consumers by generating highly innovative and superior products and programs in the market (Cooper 1979;Deshpandé, Farley, and Webster 1993). Thus, both NP and MP creativity and proactiveness are strong strategic determinants of NP success (Griffin and Page 1996). Despite the presumed impact of NP and MP creativity on NP performance, there is a lack of empirical study on their linkage.…”

The Convergence of Planning and Execution: Improvisation in New Product Development

“…Cost efficiency was measured by a singleitem measure of the estimated cost structure of the new product (Griffin andPage 1993, 1996). Time efficiency was measured by a three-item measure that asked respondents to rate the (1) length of the product development process, (2) speed of the product development process, and (3) project timeliness.…”

“…For example, a review of published articles cited in a recent special issue of the Journal of Marketing Research on innovation and new products reveals a tendency to view planning as the accepted norm while acknowledging that business environments are becoming increasingly dynamic (Wind and Mahajan 1997). Studies there and elsewhere suggest that product development cycle times are faster (Griffin 1997 Our purpose in this article is not to detract from the value of planning. We believe that planning is an important aspect of effective marketing management and decision making.…”