The Impact of Front‐End Innovation Activities on Product Performance

This paper describes and tests a model of the impact of front‐end innovation activities on product performance. Data were collected from 272 companies to test the hypothesis that front‐end performance impacts new product performance in the marketplace while controlling for new product development (NPD) processes and strategy. The data support the hypothesis that front‐end performance favorably and independently impacts overall product success, time to market, market penetration, and financial performance. Front‐end performance is predicted by a set of activities, including: the actual amount of front‐end work done in various areas, specifically marketing, R&D, and concept development; the existence of a front‐end process; the existence of a champion; and agreement on the order of developmental steps in the front end. Front‐end activities are related to front‐end performance, and front‐end performance is related to NPD performance. This relationship highlights the distinction between front‐end activities and standard product development practices and the importance of building competency in the front end. This is the first study that quantifies both the nature and amount of work done in the front end and relates that work to commercial performance. This research empirically demonstrates the distinction between the front‐end and formal stages and gates types of systems. This suggests that the concept of the front end needs it own set of theoretical constructs to adequately describe and predict this categorically different set of activities. While this study demonstrates the difference between front‐end and stage‐gate systems, it does not establish the limits of those activities. From a managerial point of view recognizing that formal development and front‐end activities are different mandates that these activities must be managed differently. In particular, the skills, structures, processes, governance, leadership, performance metrics, and resources must be assessed separately and differently. These findings suggest that firms should actively manage the flow of ideas from the front end into the more formal development programs.     

Towards Holistic "Front Ends" In New Product Development

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.     

Sustainability,Social Media Driven Open Innovation,and New Product Development Performance*

Sustainability and social media use in open innovation play important roles in a firm's new product development (NPD) process. This research examines, in conjunction, the roles of sustainability and social media driven inbound open innovation (SMOI) for a firm's NPD performance, and further, takes a more refined approach by differentiating between different types of SMOI activities. To this end, this research develops and tests a conceptual framework, which predicts that (1) a firm's sustainability orientation (SO) is positively associated with its NPD performance, (2) customer focus (CF) partially mediates the SO–NPD performance link, and (3) particular SMOI activities moderate the CF–NPD performance link. The empirical results, using data from the Product Development and Management Association (PDMA)'s comparative performance assessment study, provide support for most of the framework. Notably, this research documents a positive link between SO and NPD performance, as well as a partial mediating role of CF. The results further suggest that social media driven open innovation activities focused on gathering market insights enhance CF directly, while social media driven open innovation activities that garner technical expertise enhance the link between CF and NPD performance. This paper bridges the separate literatures on sustainability and open innovation, and contributes to the NPD research. The findings suggest that managers should take a strategic approach to sustainability and embed it in the NPD process. Furthermore, managers should manage social media based open innovation carefully to fully benefit the firm during the front end and back end of NPD.     

A Stage‐Wise Approach to Exploring Performance Effects of Cycle Time Reduction

Research on reducing new product development (NPD) cycle time has shown that firms tend to adopt different cycle time reduction mechanisms for different process stages. However, the vast majority of previous studies investigating the relationship between new product performance and NPD cycle time have adopted a monolithic process perspective rather than looking at cycle time for the distinct stages of the NPD process (i.e., fuzzy front end, development, and commercialization). As a result, little is known about the specific effect of the cycle times of the different stages on new product performance or how they interact to influence new product performance. This study uses a stage‐wise approach to NPD cycle time to test the main and interacting effects of fuzzy front end, development, and commercialization cycle times on new product performance using objective data for 399 NPD projects developed following a Stage‐Gate® type of process in one firm. The results reveal that at least in this firm, new product performance only increases if all three stages of the NPD process are consistently accelerated. This finding, combined with the previous research showing that firms use different mechanisms to accelerate different stages of the process, emphasizes the need to conduct performance effect studies of NPD cycle time at the stage level rather than at the monolithic process level.     

Expected Development Time Reductions in the German Mechanical Engineering Industry

This article presents initial results of field studies on the product development practices in German mechanical engineering companies. The investigation concentrates on managers' estimates on how much and by what means they could reduce cycle time and resource usage if the projects had been managed differently. In his analysis of fourteen development projects, Philipp Murmann reports that managers expect a reduction of development time as well as of development resources by 30% if appropriate activities would be employed. Parallel tasking and efficiency improvements account for the potential savings. Paralleling effects are project related, while improvements external to the projects cause efficiency-effects. Ten identified internal and external activities were expected to be of major importance in the reduction of development times. Major improvements are found among activities concentrated at the front end of development process.
Further analyses show that primary and secondary activities can be separated; however, all of these activities need to be activated in order to achieve the anticipated results.     

How Ideation Portfolio Management Influences Front‐End Success

The front end of innovation is recognized as an important driver for successful new products and business prosperity. On the one hand, companies must generate a sufficient number and variety of high‐quality ideas to obtain a well‐balanced portfolio of potentially successful innovation projects. On the other hand, companies must strictly select and prioritize promising ideas and concepts because resource constraints do not allow for the pursuit of every idea. Therefore, companies must practice ideation portfolio management to simultaneously support the variety and selection of ideas and concepts before they enter the innovation project portfolio. To date, there is no research on how ideation portfolio management affects the performance of the front end and of the eventual project portfolio. The current study addresses this research gap in an empirical cross‐industry investigation of 175 medium‐sized and large firms in Germany using a double‐informant design. Ideation portfolio management is conceptualized with three elements: ideation strategy, process formalization, and creative encouragement. We find that all three elements independently and significantly contribute to front‐end success. The results also show that front‐end success mediates the relationship between the elements of ideation portfolio management and project portfolio success. More importantly, we find significant interaction effects between creative encouragement and process formalization and between creative encouragement and ideation strategy. The findings suggest that these elements of ideation portfolio management are complementary and should be balanced to maximize the performance of the front end and the eventual innovation project portfolio.     

Rational Versus Intuitive Gatekeeping: Escalation of Commitment in the Front End of NPD

The unwillingness of a gatekeeper to let go of a fruitless new product development (NPD) project wastes valuable resources and hampers NPD performance. The onset of such escalation of commitment is likely to occur already in the front end of NPD, where high ambiguity and complexity make it hard to distinguish fruitless from potentially successful projects. This study investigates if a gatekeeper’s thinking style—whether they think rationally or whether they follow their intuition—can prevent escalation of commitment in the front end. Theory on cognition provides arguments for and against either thinking style’s influence on escalation of commitment, but empirical evidence on this matter is lacking. Our study demonstrates that gatekeepers who think rationally are less likely to escalate their commitment than those who follow their intuition. This result holds both in a correlational study of dispositional thinking styles, as well as in an individual‐level randomized experiment in which the thinking style of experienced practitioners before they take gate decisions is induced. Our findings provide ample opportunities for improving existing front end gate review practices, such as allocating candidates for gatekeeper positions based on their thinking style, training gatekeepers to think rationally, and increasing the use of gate‐decision rules and templates.     

FROM EXPERIENCE: Creating Synergy between Marketing and Research and Development*

The tensions between marketing and research and development (R&D) are so common that we have come to accept them as the way organizations are. If we remain resigned like this, how will we ever reap some of the benefits that can accrue from these groups working better together? If we can improve the working relationships between marketing and R&D, researchers promise a variety of desirable organizational outcomes, such as cycle‐time reduction and new product success. This article describes in detail the changes that a Fortune 500 company made to its product development process to foster synergy between marketing and R&D. The modified process formalized the roles of marketing and R&D at both the front and back ends of the product development process, increasing productive interaction between the groups. The company found that at the front end, marketing and R&D needed to work together (1) to clarify the market requirements implicit in the market attack plan and (2) to develop a technical strategy that responded to the market requirements and that consequently implemented the market attack plan. At the back end, the groups needed to work together (3) to formulate the value messages used to market the company's products. The synergy created between marketing and R&D through the new process is credited for enabling the company to compete successfully in a market it never before had entered.     

The front end of new product development: a Canadian survey

Despite the importance of the early stages of a product's life, very little attention has been paid to empirically testing the activities performed in the front end of new product development. This article presents the results of a survey of 53 individuals from fifteen high technology firms in the integrated circuit board industry. Our study adopts Cooper's (1988) 'predevelopment' model consisting of idea generation, product definition and project evaluation stages, and probes the activities undertaken in each stage. Particular activities were found to play pivotal roles in achieving the objectives of each stage. The results present a clarified view of front end activities that can be used as a starting point for adequately preparing products for development and market success.     

The Effect of "Front-Loading" Problem-Solving on Product Development Performance

In recent years, there has been a growing interest in the link between problem‐solving capabilities and product development performance. In this article, the authors apply a problem‐solving perspective to the management of product development and suggest how shifting the identification and solving of problems—a concept that they define as front‐loading—can reduce development time and cost and thus free up resources to be more innovative in the marketplace. The authors develop a framework of front‐loading problem‐solving and present related examples and case evidence from development practice. These examples include Boeing's and Chrysler's experience with the use of “digital mock‐ups” to identify interference problems that are very costly to solve if identified further downstream—sometimes as late as during or—after first full‐scale assembly. In the article, the authors propose that front‐loading can be achieved using a number of different approaches, two of which are discussed in detail: (1) project‐to‐project knowledge transfer—leverage previous projects by transferring problem and solution‐specific information to new projects; and (2) rapid problem‐solving—leverage advanced technologies and methods to increase the overall rate at which development problems are identified and solved. Methods for improving project‐to‐project knowledge transfer include the effective use of “postmortems,” which are records of post‐project learning and thus can be instrumental in carrying forward the knowledge from current and past projects. As the article suggests, rapid problem‐solving can be achieved by optimally combining new technologies (such as computer simulation) that allow for faster problem‐solving cycles with traditional technologies (such as late stage prototypes), which usually provide higher fidelity. A field study of front‐loading at Toyota Motor Corporation shows how a systematic effort to front‐load its development process has, in effect, shifted problem‐identification and problem‐solving to earlier stages of product development. They conclude the article with a discussion of other approaches to front‐load problem‐solving in product development and propose how a problem‐solving perspective can help managers to build capabilities for higher development performance.     

The Complementary Roles of Applied and Basic Research: A Knowledge‐Based Perspective*

While a great deal of scholastic effort has gone into discovering the multifaceted relationships between applied research initiatives and subsequent performance, relatively little empirical research addresses the performance impact from firm investments in basic research initiatives. Even less addresses the interactive roles of both types of research. The authors conceptualize and empirically evaluate the interactive relationship between applied and basic research initiatives and firm performance. Applied and basic research projects are knowledge creation activities in a product development domain, and both initiatives enhance the stored knowledge of a firm. Stored knowledge is the fuel that drives the product development engine. Applied research initiatives assimilate and exploit stored knowledge to develop new products. Basic research initiatives contribute to and enhance the stock of knowledge from which the applied initiatives are drawn. This expanded base of stored knowledge has positive ramifications for subsequent applied research initiatives. Results indicate that firms that engage in moderate or higher levels of applied research will see enhanced performance returns from additional investments in basic research. Conversely, firms that engage in relatively lower levels of applied research see no performance enhancement at any level of investment in basic research. Firms that rely on a flow of product innovations to provide a continued income stream must certainly invest in applied research initiatives. However, additional investment in directed basic research initiatives will augment future applied projects and could become the source of sustainable competitive advantage.     

Marriage and Family Therapy in NPD Teams: Effects of We‐ness on Knowledge Sharing and Product Performance

Drawing on marriage and family therapy (MFT), this paper introduces the concept of we‐ness to new product development (NPD). We‐ness is the shared sense of togetherness family members feel toward each other. We apply we‐ness to NPD as the construct through which people share knowledge at the team, between‐team, and between‐organization levels. The results support the hypotheses that we‐ness increases knowledge sharing and that knowledge sharing increases product performance. In this study, we used regressions to analyze the hypotheses. We found that the greater in‐team we‐ness (H1, t = 3.786, p = .000), between‐team we‐ness (H2, t = 5.411, p = .000), and between‐organization we‐ness (H3, t = 2.940, p = .004) activities there were, the more knowledge sharing in NPD. Results also indicate that knowledge sharing is related to better NPD performance. This paper contrasts team and family as the foundation metaphor to organize people engaged in product development. We argue the team metaphor can be counterproductive in settings where difficult decisions must be made. Teams can lead to individual members suppressing their opinions to “help” the team achieve its goal. Members are expected to sacrifice for the good of the team. That can be adaptive when the task is straightforward. The family metaphor suggests that the group sacrifices for the individual. In a family environment, members protect minority opinions, and in cases where complex, ambiguous decisions must be made individual expertise and insight may come from one person. High‐trust family‐like settings can facilitate sharing sensitive information and norms that can be challenged. The family metaphor suggests a more flexible and tolerant approach to new ideas. At the same time, it is recognized that families can have dysfunctions that can detract from performance. Therefore, managers must carefully apply the use of family‐like settings. The importance for family‐like approaches across organizations seems to be more important as technology complexity increases. Between‐team we‐ness was revealed significantly higher in goods manufacturers than service firms in this study. Small companies need to make extra effort to increase between‐team we‐ness. The idea of approaching product development from a family relations perspective opens up new alternatives for managing people in teams, between teams, and even between organizations. MFT tools to address behaviors and individual performance issues increase the number and nature of managerial tools to increase product performance.     

University‐industry collaboration and front‐end success: the moderating effects of innovativeness and parallel cross‐firm collaboration

Collaboration with science‐based and/or market‐based partners is a promising means for firms’ R&D groups to leverage complementary expertise and resources to generate innovative results. However, R&D managers face the dilemma which partner type to choose in different innovative contexts and whether to focus on one partner type or to integrate both types in early stage R&D. Using survey data from 166 heads of R&D groups, this study investigates university–industry collaboration’s impact on front‐end success depending on the degree of innovativeness and the interaction with other industry partners. The results confirm an overall positive relationship between university–industry collaboration and front‐end success. However, innovativeness increases complexity in this relationship. Parallel collaboration with firms and universities can have a mixed impact on front‐end success depending on the degree of innovativeness. This simultaneous collaboration with firms and universities strengthens front‐end success for more radical innovations, while parallel collaboration activities for more incremental innovations do not necessarily strengthen front‐end success. These findings imply that both collaboration types should be used simultaneously in the front end of radical innovation and that firms could reduce complexity by focusing on either firms or universities as partners for incremental innovations.     

The fuzzy front end of Japanese new product development projects: impact on success and differences between incremental and radical projects

This study of Japanese New Product Development (NPD) projects explores the fuzzy front end of innovation. The goal of the paper is twofold: First, we analyse the impact of the fuzzy front end on the success of all the NPD projects. We develop a conceptual model based on the information-processing approach. A structural equation model was fitted to data from 497 NPD projects in Japanese manufacturing firms to test the proposed model. The empirical analysis suggests that an early reduction of market and technical uncertainty as well as an initial planning before development have a positive impact on NPD project success. The model accounts for 17% of the variance of the efficiency and 24% of the variance of the effectiveness-dependent variable. Thus, the front end phase is an important driver of NPD project success. Second, we compare the fuzzy front end of incremental to radical NPD projects. Although these projects differ in many aspects of newness, we found only a few differences with regard to the fuzzy front end. For instance, it was more difficult to estimate the market size and price sensitivity of the customers during the fuzzy front end of the radical NPD projects compared with the incremental projects. Implications of the empirical results and limitations of the study are discussed.     

The Roles of Marketing and Industrial Design in Discontinuous New Product Development*

Radical or “discontinuous” products based on new technological breakthroughs are playing an ever‐increasing role in the success of firms. However, little research has been conducted that investigates the roles of marketing and industrial design (ID) in the development of these types of products. Further, past research has tended to overlook the role that industrial design, and the impact of the marketing‐industrial design interaction, can have on the development of discontinuous new products. Frequently, the term design is used broadly or is equated with engineering; thus, while the marketing–research and development (R&D) interaction is studied, the marketing–ID as well as the industrial design–R&D relationships are not considered. This article examines the roles of marketing and industrial design in the product development process for discontinuous innovations. Specifically, questions concerning how and the degree to which marketing and industrial design are integrated into the development process are investigated. The investigation employs multiple methods, or triangulation, in order to secure an in‐depth understanding of the roles of these disciplines. In the course of examining these questions, key factors influencing industrial design and marketing involvement are identified and preliminary models are examined. The research, which was conducted in two phases, employed a mixed‐method, multiple sample design. The methods used included a survey, field observation study, and depth‐interviewing. Data were collected from three different samples: R&D managers, project team members (including personnel from various disciplines—marketing, R&D, industrial design, engineering, etc.), and industrial design managers. The use of the different data sources and sampling of various groups of managers was employed in order to provide a rich context for investigating the research questions of interest. In addition, a preliminary analysis of factors (e.g., degree of product discontinuity, product innovation objectives, process discontinuity, process formality) identified in the first phase was conducted, and these relationships were explored further in the second phase of the research. Findings across the two phases of this research suggest that the development of discontinuous new products involves a process that is different from more conventional new product development—particularly as it concerns the roles of marketing and industrial design. The high degree of discontinuity inherent in such projects, along with the strong R&D orientation often surrounding them, results in delayed involvement of marketing and ID, as well as altering their roles in the new product development (NPD) process. Factors such as the degree of product discontinuity (DPD), process discontinuity (PCD), and process formality (PF) seemed to exert a differential influence on the involvement of marketing and ID. Although their roles and involvement are altered in discontinuous new product development, this research suggests that marketing and ID roles in this context involve increased challenges with respect to validation of key assumptions and product application directions. Additionally, managers operating in this development context need to explicitly consider the influence of factors such as discontinuity level in undertaking NPD projects with respect to how it affects the execution of industrial design and marketing activities.     

How Canon and Sony Drive Product Innovation Through Networking and Application-Focused R&D

To ensure the ongoing vitality of a company's product offerings, R&D professionals must play a daunting array of roles. The already rapid, yet still accelerating, pace of technological change may lead some companies to devote more resources to intensive internal research efforts. However, the shift toward global competition demands a more market-oriented focus from R&D; clear understanding of current and potential markets must drive R&D efforts. And efficient, cost-effective manufacturing of new products requires an R&D organization that understands and interacts effectively with the production department. How does a company create an environment in which its R&D organization comprises market-savvy, production-friendly experts in diverse technologies? With case studies of R&D efforts at Canon and Sony, Sigvald Harryson identifies and illustrates the key mechanisms that these companies use to foster product innovation. His examples show how Canon and Sony use a combination of external and internal networking mechanisms to identify and acquire key technologies and related skills, gain market knowledge, improve the results of internal R&D efforts, and ensure the successful transfer of these results to efficient production processes. He identifies four key mechanisms underlying successful product innovation at Canon and Sony: strategic training and job rotation for engineers, application-driven R&D, direct transfer of development teams from R&D to production, and extensive networking with external centers of excellence and key suppliers. At Canon, the initial training program for all researchers and engineers begins with three months of work on a production line. Sony's new researchers and development engineers spend one month in production. Both companies also give their new R&D professionals three months of training in sales and marketing. The emphasis on market-driven research at both companies means that researchers have identified some commercial application for almost every initial research proposal that gains approval. Neither company treats research as a long-term assignment; almost all engineers at both companies eventually move from the labs to production. And rather than viewing this job rotation strategy as a drain on the technological expertise in their labs, both companies rely on strong external networks with key suppliers and university-based researchers as important sources for acquiring new technologies and the competencies needed to support them.     

创造石油名牌 参与市场竞争

名牌从不同的角度看有不同的含义，创造石油名牌产品，实施名牌战略从转变经济体制，转变经济增长方式，参与市场竞争，提高产品质量，加快企业发展等四个方面有着十分重要的意义。石油企业创造名牌产品，实施名牌战略，必须从提高企业科技水平，管理水平和营销水平等几方面下功夫。     

Innovative versus incremental new business services: Different keys for achieving success

In companies where new product development plays an important strategic role, managers necessarily contend with a portfolio of projects that range from high technology, new‐to‐the‐world, innovations to relatively simple improvements, adaptations, line extensions, or imitations of competitive offerings. Recent studies indicate that achieving successful outcomes for projects that differ radically in terms of innovativeness requires that firms adjust their NPD practices in line with the type of new product project they are developing. Based on a large‐scale survey of managers knowledgeable about new product development in their firm, this study focuses on new business‐to‐business service projects in an attempt to gain insights about the influence of product innovativeness on the factors that are linked to new service success and failure. The research results indicate that there are a small number of “global” success factors which appear to govern the outcome of new service ventures, regardless of their degree of newness. These include: ensuring an excellent customer/need fit, involving expert front line personnel in creating the new service and in helping customers appreciate its distinctiveness and benefits, and implementing a formal and planned launch program for the new service offering. Several other factors, however, were found to play a more distinctive role in the outcome of new service ventures, depending on how really new or innovative the new service was. For low innovativeness new business services, the results suggest that managers can enhance performance by: leveraging the firm's unique competencies, experiences and reputation through the introduction of new services that have a strong corporate fit; installing a formal “stage‐gate” new service development system, particularly at the front‐end and during the design stage of the development process; and ensuring that efforts to differentiate services from competitive or past offerings do not lead to high cost or unnecessarily complex service offerings. For new‐to‐the‐world business services, the primary distinguishing feature impacting performance is the corporate culture of the firm: one that encourages entrepreneurship and creativity, and that actively involves senior managers in the role of visionary and mentor for new service development. In addition, good market potential and marketing tactics that offset the intangibility of “really new” service concepts appear to have a positive performance effect.