Identifying industrial new product success: Project NewProd

What is the key to success in industrial product innovation? This question is frequently posed, and many authors and managers have speculated as to which critical factors or variables decide the fate of new industrial products. What is missing in the debate is evidence based on actual new product successes and failures. Project NewProd is an investigation that was designed to fill this void. In this article we report the results of a study into a large number of successful and unsuccessful new products, project NewProd, whose goal was to identify the determinants of commercial success in industrial product innovation.     

What Distinguishes the Top Performing New Products in Financial Services

Despite previous comparisons of success and unsuccessful new products, an Important question remains unaddressed: What separates very successful new service products from the ordinary? Robert Cooper, Christopher Easingwood, Scott Edgett, Elko Kleinschmidt, and Chris Storey obtained data on 173 new financial services and identified three performance dimensions: financial performance, relationship enhancement, and market development. Of eleven potential success determinants, nine were found to be drivers of performance. Management implications included the need for a market-driven, customer-focused new product process, greater emphasis on planning and executing the launch, the role of product design, and project prioritization factors.     

How New Product Strategies Impact on Performance

What is involved in a successful new product program? Is it high spending on risky R&D? Is it close contact with customers? Is it the overall competitive strength of the firm? Well, it might be any of these things, and more, according to Robert G. Cooper, depending on your definition of success. In an exhaustive examination of the new product strategies and performances of 122 industrial products firms, Cooper found that the strategy that a firm elects for its new product program is closely linked to the performance results that firm achieves. But what's performance? Cooper's analysis uncovered three different and independent ways of viewing new product performance. He brings some clarity to the meaning of a “high-performance” product innovation program, but there's a catch—the strategies leading to high performance in one direction are quite different from the strategies leading to positive results by other measures. In his summing up, Professor Cooper proposes sets of generalized strategies—guides to action—that product innovation managers should consider.     

Measuring New Product Success: The Difference that Time Perspective Makes

Management is often criticized for overemphasizing short-term profits at the expense of long-term growth. On the other hand, although numerous studies have explored the factors underlying new product success and failure, such studies rarely distinguish between short- and long-term success. In fact, little research has been conducted to explore the relationship between a company's time perspective and its choice of criteria for measuring new product success. For that matter, little consensus exists as to just what we mean by the term success. Expanding on work done by a PDMA task force on measurement of new product success and failure, Erik Jan Hultink and Henry S.J. Robben identify 16 core measures of new product success. In a survey of large Dutch companies, they explore managers' perceptions of new product success, hypothesizing that the importance attached to each of the 16 core measures depends on the company's time perspective. For example, they propose that criteria such as development cost and speed-to-market are more important in the short term, and return-on-investiment (ROI) is more important in the long term. The study also examines the type of market served, the innovation strategy, and the perceived innovativeness of the company's products. It is hypothesized that these factors will influence the importance the company attaches to the core measures of new product success. For example, it is expected that speed-to-market is probably more important for technological innovators than for fast imitators or cost minimizers. The findings support the hypothesis that the firm's time perspective influences the perceived importance of the core measures of success. For the short term, the respondents emphasize product-level measures such as speed-to-market and whether the product was launched on time. In the long term, the focus is on customer acceptance and financial performance, including attaining goals for profitability, margins, and ROI. Four factors are perceived as being equally important for short-term and long-term success: customer satisfaction, customer acceptance, meeting quality guidelines, and product performance level. Customer satisfaction was found to be the most important measure, regardless of a company's time perspective. Contrary to expectations, the perceived importance of the 16 core measures does not differ on the basis of the type of market, the innovation strategy, or the product's perceived innovativeness. In addition, the firm's functional orientation—technology push or market pull—does not affect the importance attached to the core measures of new product success.     

Brand Community Members as a Source of Innovation

Brand community members have a strong interest in the product and in the brand. They usually have extensive product knowledge and engage in product‐related discussions; they support each other in solving problems and generating new product ideas. Therefore, brand communities can be a valuable source of innovation. So far, little is known about the member's ability and willingness to participate in a company's innovation process. How does passion for the brand, affiliation to the brand community, and trust in the brand affect the willingness to engage in a company's innovation process? What is the effect of brand passion on brand knowledge and on domain‐specific skills, which are considered important prerequisites for qualified and creative contributions to new product development? What is the effect of personality traits on the willingness and ability to engage in new product development? This research addresses these questions, which are interesting for managers who are thinking about opening up their innovation process and collaborating with brand communities and for academics exploring the opportunities of online communities for new product development and trying to develop promising new forms of open innovation networks. Drawing on brand community literature, relationship theory, creativity theory, and personality traits research, this paper introduces a comprehensive set of antecedents affecting brand community members' willingness to engage in new product development. It is argued that consumer creativity, identification with the brand community, and brand‐specific emotions and attitudes (passion and trust) as well as brand knowledge are important determinants of consumers' willingness to share their knowledge with producers. The paper also identifies two personality traits (i.e., extraversion and openness) that have significant influence on brand passion, creativity, and identification with the community. The hypotheses are tested on a sample of 550 members of the Volkswagen Golf GTI car community. Structural equation modeling was used to test the relationship among the constructs. Though a positive disposition toward a brand may be advantageous for consumers that are willing to interact with producers during new product development, our results show that it is consumer interest in innovations and the innovative process that drives them to get involved. Further, brand community members with more knowledge and more innovative skills seem to be more willing to contribute than less qualified community members.     

The Contribution of In‐house and External Design Activities to Product Market Performance

Design may be seen as one of several key factors contributing to new product development, along with research and development, marketing, manufacturing, purchasing, etc. More and more, creative design comes to the fore, and many companies believe that superior design will be the key to winning customers. It has the ability to create corporate distinctiveness and also possesses the potential to give a product an individual or new look. Furthermore, the model of open innovation suggests that firms can and should use external and internal knowledge flows in order to create valuable ideas, and also internal and external paths to the market. Also, in the design process, a common trend toward external design skills has emerged in recent years. Due to cost and control factors, firms are increasingly outsourcing design activities. By using a sample of Belgian companies, this paper explores the contribution of design activities to product market performance. While there is mounting evidence that design can be seen as a strategic tool to successfully spur sales of new product developments at the firm level, the topic of design innovation has not yet been linked to the open innovation concept. In this paper, it is empirically tested whether design activities conducted in house differ in their contribution to new product sales from externally acquired design. So, do design activities that have been developed only with internal resources lead to a greater success than those that have been carried out with external sources of knowledge? Using a large cross‐section of manufacturing and service firms, the effects on sales of products new to the market and of imitations or significantly improved products of the firm are investigated. At first glance, the findings indicate that externally acquired design is not superior to in‐house design activities: the results show that only design activities that are mainly conducted with internal knowledge sources play a crucial role regarding the product innovation's success with market novelties. Design conducted in collaboration with external partners, however, has no significant influence. This is not the case for imitations, that is, products only new to the firm. Their success is also influenced by design activities developed with external collaborators. This effect is robust for several modifications of the model specification. In contrast to earlier literature on new technological developments, this paper argues that external design may not affect the sales of market novelties as the “market news” may spill over quickly to rivals through common suppliers including external designers.     

The drivers of success in new-product development

Why are some new products so successful and some companies outstanding performers in new-product development? The article identifies success factors from numerous research studies into NPD (new-product development) performance in industry. Three categories of success drivers have been defined. First, success drivers, that explain the success of individual new-product projects, are more tactical: They capture the characteristics of new product projects, such as certain executional best practices (building in voice-of-customer; doing the front-end homework; and adopting a global orientation for the project), and well as the nature of the product itself (a compelling value proposition, for example). A second category is drivers of success at the business level: They include organizational and strategic factors, such as the business's innovation strategy and how the firm makes its R&D investment decisions; how it organizes for NPD; climate and culture; and leadership The third category of success divers identified is the systems and methods the firm has in place for managing NPD, for example gating systems, Agile development approaches, and ideation methods. The details of each of these 20 success drivers, along with their managerial implications, are outlined in the article.     

Agile Stage-Gate Management (ASGM) for physical products

We present a qualitative study of Agile Stage-Gate Management (ASGM),: a hybrid new product development methodology that combines Agile and Stage-Gate Management (SGM) approaches for the coordination of new product development. When applied to software projects, Agile is expected to deliver reduced development times, improved resource utilization, and greater financial success. We examine whether ASGM practitioners realize similar outcomes in a sample of global firms developing complex electro-mechanical products (e.g., automobile components, railway propulsion systems, and medical devices). Our grounded theory approach articulates an understanding of ASGM through extensive interviews of experienced professionals. Our thematic analysis supports many expected benefits (i.e., speed to market, innovation enabling), but also does not encourage others, and reveals new pitfalls that deserve recognition (i.e., resource inefficiency). ASGM is not a panacea for all product development. Overall, physical product firms adopting this method can expect reduced development times and higher levels of innovation but will expend more resources to complete development projects, but a dichotomy exists. Physical product developers using ASGM experience a negative impact on project resource efficiency due to the need for dedicated resources, frequent product demonstrations, and duplicative management structures.     

The Role of Suppliers in Market Intelligence Gathering for Radical and Incremental Innovation*

Drawing on transaction cost economics theory, this study addresses the following research questions: (1) Does supplier involvement in market intelligence gathering activities have a greater impact on innovation success in predesign or commercialization activities? and (2) Does supplier involvement in market intelligence gathering activities have a greater impact on success in radical or incremental product innovation? Hypotheses are tested using both subjective and objective measures of success from a study of 205 incremental and 110 radical new product development projects. Results from the estimation of a two‐group path model suggest that this theoretical framework is useful in providing guidance as to when product developers should emphasize the gathering of market intelligence through suppliers. Consistent with conventional wisdom, the findings suggest that supplier involvement in market intelligence gathering activities are positively related to success in incremental innovations across predesign and commercialization activities. However, supplier involvement in market intelligence gathering activities is found to have no significant impact on market share and is negatively associated with perceived product performance in radical innovations in predesign tasks. Also, while there was no significant difference in market share for supplier involvement in market intelligence gathering activities between radical and incremental innovation in commercialization activities, supplier involvement in these activities did have a greater impact on perceived product performance in radical innovation than it did in incremental innovation. Although current practice suggests that teams allocate fewer resources to the gathering of market intelligence through their suppliers during predesign activities in incremental innovation projects compared with radical innovation projects, the findings in this study suggest that they should do the opposite. Shifting resources allocated for engaging suppliers in market information gathering activities in predesign activities from radical innovation projects to incremental innovation projects could increase the return on these investments. Alternatively, these resources currently allocated to the gathering of market intelligence through suppliers in predesign activities of radical innovation projects could also provide greater benefits if allocated to commercialization activities of radical innovation projects, where they have the greatest positive impact.     

Perspective—Riding the Wind: Managing New Product Development in an Age of Change

New product development (NPD) has never been more challenging or rewarding than it is today. With the dawning of the new millennium, new product developers now find themselves in an “age of change,” the likes of which the world has never known. The rate of change is numbing, if not stupefying for many business people. With the winds of change blowing at near gale force intensity levels, this is clearly a time for NPD professionals to pursue new product and market strategies that are anchored on sound business fundamentals. This article begins with a brief review of the Product Development & Management Association's 1998 International Research Conference held in Atlanta. The theme for the conference was “Achieving Excellence in New Product Development and Management.” The article then offers a reflective look at seven NPD themes that could dominate new millennium business thinking and offer guidance to those seeking new product success. The article's first theme discusses why NPD is increasing in importance. The second theme outlines key NPD building blocks which NPD champions must bolster for new product success. The third theme explores the value in conceptualizing NPD output in items of “turns per decade.” The fourth theme champions the notion that continuous quality improvement is an integral part of NPD's contribution to a firm. The fifth theme explains why product elimination is an essential element in the innovation process. Theme number six reminds readers that fun and optimism are essential and commonly overlooked ingredients for sustaining NPD achievement. The seventh theme states that product development professionals build credibility and successful careers by delivering on promises made. Innovation opportunities embedded within each theme are explored from both firm‐level and individual developer‐level perspectives. In building the case for their themes, the authors initially provide a rationale for NPD's growing stature and importance. Then they suggest NPD strategies that firms can implement with high likelihood of success. The article concludes with suggested actions that individual developers can undertake to bolster their own careers while simultaneously strengthening the NPD profession.     

Understanding success and failure in customer relationship management

Customer Relationship Management (CRM) systems can help organizations manage customer interactions more effectively. Like many new technologies, CRM has been accompanied by vendor hype and stories of implementation failure. Work on critical success factors (CSFs) should encourage more appropriate implementation practice; however many CSF studies conclude with a list of factors but provide little further guidance. In particular, there is a need for stronger theoretical models of the entire CRM innovation process which can be used by managers to understand better the underlying causes of success and failure. This paper adopts a novel approach to this problem by firstly developing a conceptual model of CRM innovation and then converting this model into a dynamic simulation model. Some early simulation results illustrating changes in CRM benefits and organizational support over time are presented together with a discussion of the underlying causes and suggestions for how managers can counteract potential innovation failure.     

Exploring the Contributions of Involving Ordinary Users in Ideation of Technology‐Based Services*

Lead users have long been acknowledged as important contributors to the market success of innovative products and services. The ability of lead users to be such effective innovators has been ascribed to a combination of adequate technological expertise and superior knowledge of the user domain so‐called use experience. Drawing on the apparent success of lead users in innovation, many companies are now attempting to involve other types of users, namely, ordinary users, for ideation at the fuzzy front end (FFE) of new product and service development. However, ordinary users do not usually possess the technological knowledge of lead users, and the existing literature provides little guidance on how to manage such user involvement or its expected contributions. The purpose of the present study is, therefore, to contribute to scholarly knowledge regarding the benefits and management of user involvement during the ideation phase of innovation in technology‐based services. More specifically, the study investigates the contribution made in this respect by “ordinary” users, as opposed to professional developers. The research questions that are addressed are as follows: (1) What contributions do ordinary users make when involved in the FFE for ideation of new technology‐based services; and (2) how is the contribution of the users affected by their knowledge of the underlying technology? The study addresses these questions through a literature review and conceptual analysis of the involvement of users in innovation in mobile telephony, followed by an empirical study using a quasi‐experimental design in which the independent variable is the users' technological knowledge of the underlying mobile telephone system and the dependent variable is the quality of the created idea‐proposals from an innovation perspective. Various scenarios involving guided users, pioneering users, and professionals are investigated. The study finds that the users' knowledge of the underlying technology has an effect on their propensity to contribute with incremental or radical new ideas. The ideas from guided users tend to be more incremental whereas the pioneering users' ideas are more radical. Contrary to the users in the guided user scenarios, the users in the pioneering user scenarios have a propensity to produce ideas that challenge the prevailing dominant logic of the company; these ideas can be used to assist the company to think in new trajectories. The paper proposes that ordinary users should not be expected to contribute ideas that can be directly put into the new product development process; rather, ordinary user involvement should be regarded as a process whereby a company learns about users' needs and is inspired to innovate. The paper concludes that user involvement can actually be a stimulus for review of a company's business strategy.     

Autonomous Teams and New Product Development

An autonomous team is an emerging tool for new product development (NPD). With its high degree of autonomy, independence, leadership, dedication, and collocation, the team has more freedom and stronger capabilities to be innovative and entrepreneurial. Several anecdotal cases suggest that autonomous teams are best when applied to highly uncertain, complex, and innovative projects. However, there is no empirical study to test such a notion. Moreover, autonomous teams are not a panacea, and implementing them can be costly and disruptive to their parent organization. When should this powerful, yet costly tool, be pulled out of the new product professional's toolbox? This paper attempts to answer this question. The objective of this study is to explore under which circumstances an autonomous team is the best choice for NPD. Based on contingency and information‐processing theories, autonomous teams are hypothesized to be more effective to address projects with: (1) high technology novelty and (2) radical innovation. To test these hypotheses, the relative effectiveness of four types of team structures: autonomous, functional, lightweight, and heavyweight are compared. The effectiveness measures include development cost, development speed, and overall product success. Vision clarity, resource availability, and team experience are the controlled variables. The empirical results based on the data from 555 NPD projects generally support the research hypotheses. Relative to other team structures, autonomous teams are more effective in addressing projects with high technology novelty or radical innovation. The results also suggest that heavyweight teams perform better than other teams in developing incremental innovation. These results provide some evidence to support contingency and information‐processing theories at the project level. Given the importance of the development of novel technology and radical innovation in establishing new businesses and other strategic initiatives, the findings of this study may not only have some important implications for NPD practices but may also shed some light on other important topics such as disruptive innovation, strategic innovation, new venture, corporate entrepreneurship, and ambidextrous organization.     

Investigation of Factors Contributing to the Success of Cross-Functional Teams

Although recent empirical research shows that most firms have implemented cross‐functional teams for the majority of the new product development projects undertaken, they are still finding it hard to ensure that these teams are successful in completing the new product development task. In this article, the author first reviews the vast literature on cross‐functional new product development teams to uncover the array of factors that have previously been demonstrated or hypothesized to relate to cross‐functional team success, when measured at the project level. He then analyzes the responses of 112 new product development professionals to determine which factors are more frequently mentioned as leading to project success. In looking at how to achieve successful teams, many factors have been suggested in the literature by a number of different researchers. The author suggests a model of these factors that divides them into three categories that help achieve success. Setting the stage for product development by developing appropriate project goals, empowering the team with the needed decision‐making power, assigning the appropriate human resources, and creating a productive climate should be related to fostering team success. Of these four factors, appropriate project goals is mentioned most often as being associated with success, followed by empowerment. Several specific team behaviors, including cooperation, commitment to the project, ownership of the project, and respect and trust among team members, also have been posited to contribute to team success. Of these, this research finds that cooperation is mentioned most often as being associated with success, followed by commitment and ownership. Finally, a number of researchers have suggested that team leaders, senior managers, and champions provide enabling support to cross‐functional teams in achieving success. Team leadership is the most frequently mentioned enabler, according to these findings, followed by senior management support. The author's results also show that increased use of cross‐functional teams in new product development is related to higher project success. However, achieving cross‐functional team success appears to be more complicated than previously thought. For example, across the set of factors identified in this research, the most frequently mentioned is obtaining the team behavior of cooperation. Setting appropriate project goals, a stage‐setting step that is completed early in the project, follows closely in relative importance. Finally, providing good team leadership as an enabler is the third most frequently mentioned factor in achieving success. This suggests that companies must work in all dimensions to maximize the probability of achieving team success.     

Kellogg on Branding: By the Marketing Faculty of the Kellogg School of Management by Alice M. Tybout and Tim Calkins (eds.)

These reviews are intended to help you reach a decision about purchasing or reading a book. But more importantly, they are meant to bring to your attention notable contemporary topics related to product innovation. The review here of The Change Function illustrates this point well. According to Amazon.com sales rankings (on August 23, 2006), this book is more popular than any we have reviewed in the past year—including Geoffrey A. Moore's Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution (Penguin, 2005). Yet the reviewer points out some critical weaknesses in The Change Function's treatment of truly innovative products. Just because a book is popular with a general business audience does not mean that it is adequate for new product professionals. Should you decide to read it, we hope that our review helps you, as a product developer, to get more out of it.
Books reviewed in this issue:

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  Kellogg on Branding: By the Marketing Faculty of the Kellogg School of Management

       
  
  

Keys to new product success and failure

This article reports the findings of a 1985–1986 study of success and failure determinants for new industrial products that had recently reached commercialization. In particular, the paper seeks to identify underlying factors for success and to test whether perceived success and failure factors vary with new product “experience” levels and/or with the degree of innovation in the company's new product program. The paper concludes that companies with more innovative and/or hightech new product programs have significantly different success and failure factors at work than their less innovative and/or lower technology counterparts, and that across a sample of companies from many industries, wide variety of situation- specific success and failure variables need to be addressed by industrial marketers.     

Innovation and Design in the Age of Artificial Intelligence

At the heart of any innovation process lies a fundamental practice: the way people create ideas and solve problems. This “decision making” side of innovation is what scholars and practitioners refer to as “design.” Decisions in innovation processes have so far been taken by humans. What happens when they can be substituted by machines? Artificial Intelligence (AI) brings data and algorithms to the core of the innovation processes. What are the implications of this diffusion of AI for our understanding of design and innovation? Is AI just another digital technology that, akin to many others, will not significantly question what we know about design? Or will it create transformations in design that current theoretical frameworks cannot capture? This paper proposes a framework for understanding the design and innovation in the age of AI. We discuss the implications for design and innovation theory. Specifically, we observe that, as creative problem-solving is significantly conducted by algorithms, human design increasingly becomes an activity of sensemaking, that is, understanding which problems should or could be addressed. This shift in focus calls for the new theories and brings design closer to leadership, which is, inherently, an activity of sensemaking. Our insights are derived from and illustrated with two cases at the frontier of AI—Netflix and Airbnb (complemented with analyses of Microsoft and Tesla)—which point to two directions for the evolution of design and innovation in firms. First, AI enables an organization to overcome many past limitations of human-intensive design processes, by improving the scalability of the process, broadening its scope across traditional boundaries, and enhancing its ability to learn and adapt on the fly. Second, and maybe more surprising, while removing these limitations, AI also appears to deeply enact several popular design principles. AI thus reinforces the principles of Design Thinking, namely: being people-centered, abductive, and iterative. In fact, AI enables the creation of solutions that are more highly user centered than human-based approaches (i.e., to an extreme level of granularity, designed for every single person); that are potentially more creative; and that are continuously updated through learning iterations across the entire product life cycle. In sum, while AI does not undermine the basic principles of design, it profoundly changes the practice of design. Problem-solving tasks, traditionally carried out by designers, are now automated into learning loops that operate without limitations of volume and speed. The algorithms embedded in these loops think in a radically different way than a designer who handles the complex problems holistically with a systemic perspective. Algorithms instead handle complexity through very simple tasks, which are iterated continuously. This paper discusses the implications of these insights for design and innovation management scholars and practitioners.     

Decomposing Product Innovativeness and Its Effects on New Product Success

Does product innovativeness affect new product success? The current research proposes that the ambiguity in findings may be due to an overly holistic conceptualization of product innovativeness that has erroneously included the concepts of product advantage and customer familiarity. This article illustrates how the same measures have often been used to assess product advantage with product innovativeness and product innovativeness with customer familiarity. These paired overlaps in measurement use are clarified in this research, which decomposes dimensions of product innovativeness along conceptual lines into distinct product innovativeness, product advantage, and customer familiarity constructs. To further support this decomposition, structural equation modeling is used to empirically test the distinctions. The measurement model supports the conceptual separation, and the path model reveals contingent effects of product innovativeness. Although product innovativeness enhances product advantage, a high level of innovativeness reduces customer familiarity, indicating that product innovativeness can be detrimental to new product success if customers are not sufficiently familiar with the nature of the new product and if innovativeness fails to improve product advantage. This exercise in metric development also reveals that after controlling for product advantage and customer familiarity, product innovativeness has no direct effect on new product profitability. This finding has strong implications for firms that mistakenly pursue innovation for its own sake. Consideration of both distribution and technical synergy as driving antecedents demonstrates how firms can still enhance new product success even if an inappropriate level of innovativeness is present. This leads to a simple but powerful two‐step approach to bringing highly innovative products to market. First, firms should only emphasize product innovativeness when it relates to the market relevant concepts of product advantage and customer familiarity. Second, existing technical and distribution abilities can be used to enhance product quality and customer understanding. Distribution channels in particular should be exploited to counter customer uncertainty toward newly introduced products.     

The Impact of a Creativity‐supporting Work Environment on a Firm's Product Innovation Performance

Many scholars and practitioners have suggested that a creativity‐supporting work environment contributes to a firm's product innovation performance. Although there is evidence that such an environment enhances innovative behavior at individual level, very few studies address the effect of a creativity‐supporting work environment on product innovation performance at firm level, and the results are inconsistent. This paper examines the relationship between a firm's creativity‐supporting work environment and a firm's product innovation performance in a sample of 103 firms. For measuring a firm's creativity‐supporting work environment, a comprehensive and creativity‐focused framework is used. The framework consists of 9 social‐organizational and 12 physical work environment characteristics that are likely to enhance employee creativity. These characteristics contribute to the firm's overall work environment that supports creativity. The firm's product innovation performance is defined by two distinct concepts: new product productivity (NP productivity), which is the extent to which the firm introduces new products to the market, and new product success (NP success), which is the percentage of the firm's sales from new products. In most firms, different knowledgeable informants provided the data for the variables. The results show that firms with creativity‐supporting work environments introduce more new products to the market (NP productivity), and have more NP success in terms of new product sales (NP success). NP productivity partly mediates the relationship between creativity‐supporting work environment and NP success. The mediation model shows that the two paths from a creativity‐supporting work environment to NP success are about equally important: the direct path between creativity‐supporting work environment and NP success has a coefficient of .22, and the coefficient of the indirect path via NP productivity is .23. The creativity‐supporting work environment framework can be used in managerial practice to enhance employee creativity for product innovation. It allows applying a flexible and broad approach by influencing both social‐organizational and physical characteristics of the work environment.     

Benchmarking the Firm's Critical Success Factors in New Product Development

Managing new product development (NPD) is, to a great extent, a process of separating the winners from the losers. At the project level, tough go/no-go decisions must be made throughout each development effort to ensure that resources are being allocated appropriately. At the company level, benchmarking is helpful for identifying the critical success factors that set the most successful firms apart from their competitors. This company- or macro-level analysis also has the potential for uncovering success factors that are not readily apparent through examination of specific projects. To improve our understanding of the company-level drivers of NPD success, Robert Cooper and Elko Kleinschmidt describe the results of a multi-firm benchmarking study. They propose that a company's overall new product performance depends on the following elements: the NPD process and the specific activities within this process; the organization of the NPD program; the firm's NPD strategy; the firm's culture and climate for innovation; and senior management commitment to NPD. Given the multidimensional nature of NPD performance, the study involves 10 performance measures of a company's new product program: success rate, percent of sales, profitability relative to spending, technical success rating, sales impact, profit impact, success in meeting sales objectives, success in meeting profit objectives, profitability relative to competitors, and overall success. The 10 performance metrics are reduced to two underlying dimensions: program profitability and program impact. These performance factors become theX-and Y-ax.es of a performance map, a visual summary of the relative performance of the 135 companies responding to the survey. The performance map further breaks down the respondents into four groups: solid performers, high-impact technical winners, low-impact performers, and dogs. Again, the objective of this analysis is to determine what separates the solid performers from the companies in the other groups. The analysis identifies nine constructs that drive performance. In rank order of their impact on performance, the main performance drivers that separate the solid performers from the dogs are: a high-quality new product process; a clear, well-communicated new product strategy for the company; adequate resources for new products; senior management commitment to new products; an entrepreneurial climate for product innovation; senior management accountability; strategic focus and synergy (i.e., new products close to the firm's existing markets and leveraging existing technologies); high-quality development teams; and cross-functional teams.