Trust Formation in Collaborative New Product Development*

This research examines antecedents of trust formation in new product development partnerships and the effect of trust on performance. Trust is modeled as an outcome of communication behavior, shared problem‐solving, perceived fairness, the existence of conflicts during the development project, and partner egoism. The hypotheses are tested with data on 44 product development partnerships representing the perspective of the manufacturer. The findings suggest that communication behavior and fairness are positive contributors to trust. In contrast, conflicts during product development and perceived egoism of the partner appear to have a detrimental effect. High levels of trust were found to create the conditions for successful outcomes. A higher level of trust clearly differentiates between high‐ and low‐performing collaborative relationships in new product development. Trust also was found to be a powerful mediator, particularly as it relates to mitigating conflicts during such partnerships.     

New Product Development Practices of Industrial Marketers*

William L. Moore personally interviewed a number of senior managers employed in 25 large industrial marketing companies about new product development practices. These managers are familiar with all phases of the development of typical new products, from the time ideas are generated until market introduction. Most respondents were either division heads or those directly responsible for a division's new product development program. In agreement with a previous study, the use of formal new product strategies and sophisticated quantitative marketing research techniques was found to be lacking in most companies. However, many other elements of the new product development process were carried out more completely than previously reported. For example, respondents reflected sensitivity to informal understanding of new product strategies. A number of the less sophisticated, small scale qualitative research methods actually used may be more appropriate than more sophisticated methods. While several research areas are suggested, the general assessment of the new product practices of these firms is more positive than that of Feldman and Page.     

Exploring New Product Development Project Review Practices*

Most organizations use new product development (NPD) processes that consist of activities and review points. Activities basically solve problems and gather and produce information about the viability of successfully completing the project. Interspersed between the development activities are review points where project information is reviewed and a decision is made to either go on to the next stage of the process, stop it prior to completion, or hold it until more information is gathered and a better decision can be made. The review points are for controlling risk, prioritizing projects, and allocating resources, and the review team typically is cross‐disciplinary, comprising senior managers from marketing, finance, research and development (R&D), or manufacturing. Over the past four decades, research has greatly advanced knowledge with respect to NPD activities; however, much less is known about review practices. For this reason, the present paper reports findings of a study on NPD project review practices from 425 Product Development & Management Association (PDMA) members. The focus is on three decision points in the NPD process common across organizations (i.e., initial screen, prior to development and testing, and prior to commercialization). In this paper, the number of (1) review points used, (2) review criteria, (3) decision makers on review committees and the proficiency with which various evaluation criteria are used are compared across incremental and radical projects and across functional areas (i.e., marketing, technical, financial). Furthermore, the associations between these NPD review practices and new product performance are examined. Selected results show that more review points are used for radical NPD projects than incremental ones, and this is related to a relatively lower rate of survival for radical projects. The findings also show that the number of criteria used to evaluate NPD projects increases as NPD projects progress and that the number of review team members grows over the stages, too. Surprisingly, the results reveal that more criteria are used to evaluate incremental NPD projects than radical ones. As expected, managers appear to more proficiently use evaluation criteria when making project continuation/termination decisions for incremental projects; they use these criteria less proficiently during the development of radical projects, precisely when proficiency is most critical. At each review point, technical criteria were found to be the most frequently used type for incremental projects, and financial criteria were the most commonly used type for radical ones. Importantly, only review proficiency is significantly associated with performance; the number of review points, review team size, and number of review criteria are not associated with new product performance. Furthermore, only the coefficient for proficiently using marketing criteria was significantly related to new product program performance; the proficiency of using financial and technical information has no association with performance. Finally, across the three focal review points of the NPD process in this study, only the coefficient for proficiency at the first review point, (i.e., the initial screen) is significantly greater than zero. The results are discussed with respect to research and managerial practice, and future research directions are offered.     

A Model of Supplier Integration into New Product Development*

In many industries, firms are looking for ways to cut concept‐to‐customer development time, to improve quality, and to reduce the cost of new products. One approach shown to be successful in Japanese organizations involves the integration of material suppliers early in the new product development cycle. This involvement may range from simple consultation with suppliers on design ideas to making suppliers fully responsible for the design of components or systems they will supply. While prior research shows the benefit of using this approach, execution remains a problem. The processes for identifying and integrating suppliers into the new product development (NPD) process in North American organizations are not understood well. This problem is compounded by the fact that design team members often are reluctant to listen to the technology and cost ideas made by suppliers in new product development efforts. We suggest a model of the key activities required for successful supplier integration into NPD projects, based on case studies with 17 Japanese and American manufacturing organizations. The model is validated using data from a survey of purchasing executives in global corporations with at least one successful and one unsuccessful supplier integration experience. The results suggest that (1) increased knowledge of a supplier is more likely to result in greater information sharing and involvement of the supplier in the product development process; (2) sharing of technology information results in higher levels of supplier involvement and improved outcomes; (3) supplier involvement on teams generally results in a higher achievement of NPD team goals; (4) in cases when technology uncertainty is present, suppliers and buyers are more likely to share information on NPD teams; and (5) the problems associated with technology uncertainty can be mitigated by greater use of technology sharing and direct supplier participation on new product development teams. A supplier's participation as a true member of a new product development team seems to result in the highest level of benefits, especially in cases when a technology is in its formative stages.     

The Impact of Product Innovativeness on the Link between Development Speed and New Product Profitability*

A review of the literature reveals that the relationship between development speed and new product profitability is not as strong and straightforward as conventional wisdom suggests. A number of studies show positive results, others show mixed results, and some present no evidence of a relationship. In other words, the valence of the link between development speed and new product profitability is unclear at this time. Therefore, this study investigates whether or not speeding new products to market has positive or negative effects on new product profitability. Prior research shows that product innovativeness influences both development speed and new product profitability. This raises the question of whether increasing speed is equally successful in improving profitability across new products that differ in their degree of innovativeness. Therefore, this study also investigates the moderating effect of product innovativeness on the relationship between development speed and new product profitability. The results from a survey‐based study of 233 manufacturers of industrial products in the Netherlands reveal an inverted U‐shaped relationship between development speed and new product profitability. The findings also show that the optimal point is different for two new product types—product improvements and line additions—that vary in their innovativeness. These results provide an onset for the development of a decision tool that helps managers to determine how much to spend on accelerating the development of individual new products and how they should allocate that spending across products in their new product portfolio.     

PERSPECTIVE: Empirical Generalization and the Role of Culture in New Product Development*

Empirical generalization continues to be a challenge in most applied fields that favor publication of original results. The purpose of this study was to report on a new product development exercise in one, controlled cultural setting, which replicates and extends Ettlie (2002) . Results from four recent graduate business classes in Portugal show that the background of students—technical versus other or mixed—is a nearly perfect predictor of the average or central estimates the class makes tendency (median) of new product success in the exercise. Country matters little. These results have now persisted over nearly seven years, and implications are discussed concerning theory, practice, and future research.     

Increasing Learning and Time Efficiency in Interorganizational New Product Development Teams*

Despite the growing popularity of new product development across organizational boundaries, the processes, mechanisms, or dynamics that leverage performance in interorganizational (I‐O) product development teams are not well understood. Such teams are staffed with individuals drawn from the partnering firms and are relied on to develop successful new products while at the same time enhancing mutual learning and reducing development time. However, these collaborations can encounter difficulties when partners from different corporate cultures and thought worlds must coordinate and depend on one another and often lead to disappointing performance. To facilitate collaboration, the creation of a safe, supportive, challenging, and engaging environment is particularly important for enabling productive collaborative I‐O teamwork and is essential for learning and time efficient product development. This research develops and tests a model of proposed factors to increase both learning and time efficiency on I‐O new product teams. It is argued that specific behaviors (caring), beliefs (psychological safety), task‐related processes (shared problem solving), and governance mechanisms (clear management direction) create a positive climate that increases learning and time efficiency on I‐O teams. Results of an empirical study of 50 collaborative new product development projects indicate that (1) shared problem solving and caring behavior support both learning and time efficiency on I‐O teams, (2) team psychological safety is positively related to learning, (3) management direction is positively associated with time efficiency, and (4) shared problem solving is more strongly related to both performance dimensions than are the other factors. The factors supporting time efficiency are slightly different from those that foster learning. The relative importance of these factors also differs considerably for both performance aspects. Overall, this study contributes to a better understanding of the factors that facilitate a favorable environment for productive collaboration on I‐O teams, which go beyond contracts or top‐management supervision. Establishing such an environment can help to balance management concerns and promote the success of I‐O teams. The significance of the results is elevated by the fragility of collaborative ventures and their potential for failure, when firms with different organizational cultures, thought worlds, objectives, and intentions increasingly decide to work across organizational boundaries for the development of new products.     

Modified Stage‐Gate® Regimes in New Product Development*

The purpose of this research was to explore the nature of the Stage‐Gate^®process in the context of innovative projects that not only vary in new product technology (i.e., radical versus incremental technology) but that also involve significant new product development technology (i.e., new virtual teaming hardware‐software systems). Results indicate that firms modify their formal development regimes to improve the efficiency of this process while not significantly sacrificing product novelty (i.e., the degree to which new technology is incorporated in the new offering). Four hypotheses were developed and probed using 72 automotive engineering managers involved in supervision of the new product development process. There was substantial evidence to creatively replicate results from previous benchmarking studies; for example, 48.6% of respondents say their companies used a traditional Stage‐Gate^®process, and 60% of these new products were considered to be a commercial success. About a third of respondents said their companies are now using a modified Stage‐Gate^®process for new product development. Auto companies that have modified their Stage‐Gate^®procedures are also significantly more likely to report (1) use of virtual teams; (2) adoption of collaborative and virtual new product development software supporting tools; (3) having formalized strategies in place specifically to guide the new product development process; and (4) having adopted structured processes used to guide the new product development process. It was found that the most significant difference in use of phases or gates in the new product development process with radical new technology occurs when informal and formal phasing processes are compared, with normal Stage‐Gate^®usage scoring highest for technology departures in new products. Modified Stage‐Gate^®had a significant, indirect impact on organizational effectiveness. These findings, taken together, suggest companies optimize trade‐offs between cost and quality after they graduate from more typical stage‐process management to modified regimes. Implications for future research and management of this challenging process are discussed. In general, it was found that the long‐standing goal of 50% reduction in product development time without sacrificing other development goals (e.g., quality, novelty) is finally within practical reach of many firms. Innovative firms are not just those with new products but also those that can modify their formal development process to accelerate change.     

Antecedents of Team Intuition and Its Impact on the Success of New Product Development Projects

Research on new product development (NPD) team decision making has identified a number of cognitive mechanisms (e.g., team intelligence, teamwork quality, and charged behavior) that appear to guide NPD teams toward effective decisions. Despite an extensive body of literature on these aspects of NPD team decisions, team intuition has yet to be investigated in the context of NPD teams. Intuition is regarded as a form of information processing that differs from cognitive processes, and is associated with gut feelings, hunches, and mystical insights. Past research on intuition suggests that many managers and teams embrace intuition as an effective approach in response to situations in a turbulent environment where decisions need to be made immediately. Past research also revealed various benefits of intuition in decision making. These are: to speed up decision‐making process, to improve decision outcomes such as higher product quality, and to solve less structured problems (e.g., new product planning). This research examines the impact of team‐related antecedents (e.g., team member experience) and decision‐specific antecedents (e.g., decision importance) on intuition in NPD teams. The moderating impact of environmental turbulence between antecedent variables and intuition, as well as between intuition and team performance, is investigated. To test hypotheses, data were collected from 155 NPD projects in Turkey. The results showed that past team member experience, transactive memory systems (TMS), team empowerment, decision importance, and decision motives are significantly related to team intuition. The results also revealed that team intuition is significantly related to product success and speed‐to‐market, with both high and low levels of market turbulence. The findings of this study present some interesting practical implications to managers in order to improve intuitive skills of NPD teams. First, managers should make sure that team members have the relevant expertise to facilitate effective intuition. Second, managers should encourage and enhance TMS for effective intuition. If team members are not able to gain timely and unhindered access to others who have the needed experience and knowledge, past team member experience becomes idle in order to make effective intuitive judgments. Third, managers concerned with achieving successfully developed products and helping teams to make immediate but accurate decisions during NPD process should assign more power to team members so that they can rely on their intuitive skills.     

Managing Seller–Buyer Relationships during New Product Development*

Ineffective relationship management with potential buyers during new product development (NPD) can be an important contributor to new product failure in technology‐based, industrial markets. However, empirical research on managing these relationships remains underdeveloped. This study addresses this deficiency by developing an empirically based taxonomy of relationship approaches used by sellers to develop technology‐based, industrial innovations, identifying situational characteristics that correlate with the choice of a particular relationship approach, and evaluating sellers' satisfaction with their relationship approach. The study's conceptual model is rooted in transaction cost analysis (TCA) and draws from extant literature on seller–buyer relationships during NPD. It was tested with data from 334 small to mid‐sized firms in a variety of technology‐based industrial markets. The results indicate that sellers use three basic relationship approaches during NPD: a bilateral approach, a buyer‐guided approach, and a seller‐guided approach. While the bilateral approach relies on a mutual exchange of information, the buyer‐guided and seller‐guided approaches do not. Juxtaposed with the high levels of satisfaction experienced by sellers in the sample, the study suggests that no one relationship approach is universally desirable. Therefore, managers may need to engage in a portfolio of relationship approaches with buyers during NPD; further, these approaches should correlate with buyer‐related (i.e., perceived buyer knowledge and prior relationship history) and innovation‐related (i.e., product customization and technological uncertainty) characteristics. Collectively, these results can help sellers optimize their relationships with buyers during NPD.     

Using Exploratory and Exploitative Market Learning for New Product Development*

While the need for research on the market‐learning efforts of a firm in relation to its new product development is continuously emphasized, the empirical results on this issue reported so far have been mixed. The current study contends that the inconclusive nature of the empirical evidence is mostly due to the existence of different dimensions of organizational market learning—exploratory and exploitative—and to possible different routes by which these learning dimensions are linked to new product performance. More specifically, this study argues that exploratory market learning contributes to the differentiation of the new product because it involves the firm's learning about uncertain and new opportunities through the acquisition of knowledge distant from existing organizational skills and experiences. By contrast, this study posits that exploitative market learning enhances cost efficiency in developing new products as it aims to best use the currently available market information that is closely related to existing organizational experience. This study provides empirical support for this two‐dimensional scheme of organizational market learning and its consequent effects on two components of new product advantage: new product differentiation and cost efficiency. Further, given that the effectiveness of firms' strategic efforts is contingent upon the nature of the market environment, the current study examines the moderating effects of environmental dynamism and market competitiveness for this market learning—new product advantage relationship. This study is based on survey data from 157 manufacturing firms in China that encompass various industries. The empirical findings support the two‐dimensional market learning efforts that increase new product differentiation and cost efficiency, respectively. The study confirms that exploratory market learning becomes more effective under a turbulent market environment and that exploitative market learning is more contributive when competitive intensity is high. It also suggests that because of their differential direct and moderating effects on new product advantage either exploratory or exploitative market learning may not be used exclusively, but the two should be implemented in parallel. Such learning implementations will help to secure both the feature and cost‐based new product advantage components and will consequently lead to the new product success. The current study attempts to contribute to greater clarity and better understanding of how market learning influences new product success as it theoretically identifies and empirically validates the two forms of new product advantage as the conceptual mediator between market learning and new product performance.     

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.     

Fostering Innovation in Complex Product Development Settings: The Role of Team Member Identity and Interteam Interdependence*

Much of the existing research on innovation has concentrated on the study of individuals in small group settings. However, projects marked by multiple teams, high task interdependence, long duration, and large scale have become increasingly common in practice. Very little is known about how extant research findings related to innovation may generalize to such complex settings. Taking a multilevel theoretical approach, individuals' propensity to innovate is hypothesized as the product of individuals' relationship with their work team (team member identification) and their team's relationship to other teams within the organizational system (interteam interdependence). A large, diversified manufacturing firm engaged in a multibillion dollar project that involved the development of a technologically intense, highly innovative, new product served as the research site. Based on archival and survey data (n=118), five hypotheses were tested. The findings indicate that individuals' strong team identification and their perceptions of high interteam interdependence each had positive main effects on individuals' intentions to innovate. However, these two variables also interacted negatively to significantly decrease innovation intentions. Therefore, high identification with team may lead individuals to view interdependence with another team as a threat deflecting attention from innovation. The finding related to the role of identity, although consistent with work linking identity to other team behaviors, usefully broadens the reach of identification theories to demonstrate their impact on innovation. Additionally, this study is the first to demonstrate the impact of interteam interdependence on innovation. The alternative operationalizations of interdependence used in this paper highlight the fact that it must be strongly perceived and experienced by individuals to affect their innovation attitudes. The findings of this study also have implications for managerial practice in complex project settings. Since team identification has a direct effect on innovation, managers might employ strategies related to the creation of social bonds to complement task related connections among team members. Further, managers should configure staffing and incentive mechanisms to reinforce team identification. Finally, the results suggest that managers need to carefully attend to individuals' perceptions of each team's interdependence with other teams. Although perceptual interdependence can be an enabler of innovation, it can also be a disabler, through its interaction with team identification. Recognizing this potential for negative effects, managers might emphasize the benefits that can come from cooperating across teams, thus encouraging team members to identify not only at the team level but at the overall project level as well. Such actions might deflect negative identity threats that can derail positive innovation intentions.     

Characterizing the Role of Design in New Product Development: An Empirically Derived Taxonomy*

This article empirically explores the nature of the role of design in the new product development process. The investigation adopts a multiple case study methodology. Data were collected through a six‐month interview program carried out with mid‐size to large U.K. manufacturing companies. The researchers articulate the scope and detailed nature of actions undertaken by design across all phases of the new product development process. Design functional, integration, and leadership actions are unraveled from the data. A taxonomy characterizing three roles for design in new product development is developed and explained. In the first role, design is explored as a functional specialism. The second categorization develops the role of design as part of a multifunctional team. The third role depicts the designer as process leader. Detailed actions and skills associated with each role are discussed and illustrated. Contextual factors explaining and influencing each design role are unraveled. These are articulated as speed of development process, innovativeness of the product development effort, and use of external design agencies. The implications of these findings for the development of design skills and capabilities are discussed in terms of recruitment, training, and educational policies.     

Determinants of New Product Development Team Performance: A Meta‐analytic Review

New product development (NPD) has become a critical determinant of firm performance. There is a considerable body of research examining the factors that influence a firm's ability to successfully develop and introduce new products. Vital to this success is the creation and management of NPD teams. While the evidence for the use of NPD teams and the factors that determine their success is accumulating, there is still a lack of clarity on the team‐level variables that are most impactful on NPD success. This meta‐analytic study examines the effects of NPD team characteristics on three different measures of success: effectiveness (market success), efficiency (meeting budgets and schedules), and speed‐to‐market, requiring incorporation of a broader set of team variables than previous studies in order to capture more factors explaining NPD outcomes. Unlike a typical empirical study that considered no more than two team variables to predict NPD performance, this study combines research spanning eight team variables including team input variables (team tenure, functional diversity, team ability, and team leadership) and team process variables (internal and external team communication, group cohesiveness, and goal clarity). Results from 38 studies were aggregated to estimate the meta‐analytic effect sizes for each of the variables. Using the meta‐analytic results, a path analytic model of NPD success was estimated to isolate the unique effects of team characteristics on NPD effectiveness and efficiency. Results indicate that team leadership, team ability, external communication, goal clarity, and group cohesiveness are the critical determinants of NPD team performance. NPD teams with considerable experience and led by a transformational leader are more successful at developing new products. Effective boundary spanning within and outside the organization and a shared understanding of project objectives are paramount to success. Group cohesiveness is also an important predictor of NPD outcomes confirming the importance of esprit de corps within the team. The findings provide product development managers with a blueprint for creating high‐performance NPD teams.     

New Product Team Decision Making: Regulatory Focus Effects on Number,Type, and Timing Decisions*

Company executives rely on new product development teams to carry out their directives and make decisions according to management's goals. However, team members bring their own motivational perspectives to strategic decisions. This research examines how individual and leadership motivations influence a dyadic team's new product decisions. Specifically, this article investigates how matching vs. mismatched motivations between team members affect new product number, type, and timing decisions. In addition, this study asks how effective leadership‐provided motivations are in guiding teams' new product decisions. A set of hypotheses is developed using regulatory focus theory, which identifies basic motivational differences in individuals (i.e., promotion vs. prevention focus) and their effects on decision making. The hypotheses examine the effects of regulatory focus match vs. mismatch within teams on the likelihood to introduce new products, the timing of new product introductions, and the types of new products introduced. To test the hypotheses, a controlled, yet realistic product management simulation is employed. A total of 124 undergraduate seniors (83 women and 41 men) at a large public university enrolled in a marketing management capstone course participated in this study for partial course credit. Utilizing two‐person teams engaged in a business simulation ensured an appropriate level of controlled complexity in the decision making task, while allowing the phenomena of interest to be isolated and tested. Results show that when dyads share the same motivational approach (regulatory focus match), leadership‐prescribed goal pursuit strategies are largely ineffective. Only dyads that do not share the same motivational approach to decision making (regulatory focus mismatch) make new product decisions consistent with leadership‐prescribed goal pursuit strategies. For regulatory focus match dyads, the results demonstrate that a promotion focus (when compared to a prevention focus) leads to greater numbers of new products introduced, faster new product introductions, and more novel new product introductions. For new product managers, these results carry important implications. Which new product opportunities to invest in and which to forgo is presumably determined by the strategic direction given to teams by top management. Results suggest that when team members share the same motivational approach, this not only influences new product decisions, but also diminishes or eliminates the influence top management can exert on new product decisions. Such “isolation” from leadership influences does not have to be detrimental. For example, companies that seek to insulate new product development teams from influences from the top, such as is the case in many new venture incubations, would be well served to staff those teams ensuring a promotion focus match.     

Uses of Agent‐Based Modeling in Innovation/New Product Development Research*

Little has been written in the new product development literature about the simulation technique agent‐based modeling, which is a by‐product of recent explorations into complex adaptive systems in other disciplines. Agent‐based models (ABM) are commonly used in other social sciences to represent individual actors (or groups) in a dynamic adaptive system. The social system may be a marketplace, an organization, or any type of system that acts as a collective of individuals. Agents represent autonomous decision‐making entities that interact with each other and/or with their environment based on a set of rules. These rules dictate the behavioral choices of the agents. In these simulation models, heterogeneous agents interact with each other in a repetitive process. It is from the interactions between agents that aggregate macroscale behaviors or trends emerge. The simulated environment can be thought of as a “virtual” society in which actions taken by one agent may have an effect on the resulting actions of another agent. This article is an introduction to the ABM methodology and its possible uses for innovation and new product development researchers. It explores the benefits and issues with modeling dynamic systems using this methodology. Benefits of ABMs found in sociology and management studies have found that as the heterogeneity of individuals increase in a system or as network effects become more important in a system, the effectiveness of ABMs as a methodology increases. Additionally, the more adaptive a system or the more the system evolves over time, the greater the opportunity to learn more about the adaptive system using ABMs. Limitations to using this methodology include some knowledge of computer‐programming techniques. Three potential areas of research are introduced: diffusion of innovations, organizational strategy, and knowledge and information flows. A common use of ABMs in the extant literature has been the modeling of the diffusion process between networked heterogeneous agents. ABMs easily allow the modeling of different types of networks and the impact of these networks on the diffusion process. A demonstrative example of an agent‐based model to address the research question of how should manufacturers allocate resources to research (exploration) and development (exploitation) projects is provided. Future courses of study using ABMs also are explored.     

Managing Technologically Innovative Team Efforts Toward New Product Success

Based on his two-year field study of 360 new product managers in 52 high technology companies, Hans Thamhain reports on the characteristics of innovative product teams. He identifies both drivers and barriers to innovative performance. Further, he presents a simple input-output framework for organizing and analyzing the variables that influence team performance, and provides specific guidelines to help new products managers become more effective.     

Faster New Product Development

Clearly today's business climate mandates the need for faster development of new products. Drawing upon his experience, Milton Rosenau describes several techniques that have not been mentioned explicitly in recent articles: short, focused development phases; management involvement and support; procurement and use of productivity improvements; multifunctional teamwork; distraction reduction; frozen specifications; and microcomputer-based project management software.     

The Moderating Effect of Environmental Uncertainty on New Product Development and Time Efficiency*

This empirical study examines the influence of environmental uncertainty on industrial product innovation. The present study addresses what is believed to be a shortcoming in the new product development literature and explores potential effects of environmental uncertainty on the development process, project organization, and on project timeliness with a sample of development projects in two countries, Canada and Australia. When looking at the combined sample of 182 completed projects, this study finds that the perceived market‐related project environment has a direct and positive impact on time efficiency. Further, this research finds that a higher degree of technological uncertainty moderates the relationship between development process, project organization and time efficiency. Consequently, innovating companies may benefit by adapting some of their development approaches to different environmental conditions and to varying degrees of uncertainty. However, when examining country‐specific effects, the results change quite significantly. In particular, the findings indicate that environmental uncertainty in the Canadian sample neither directly impacts time efficiency, nor does it have any moderating effect. Instead, technical proficiency in the development process, project team organization, and process compression appear to be viable strategies to increase time‐efficient development. In contrast, the results of the Australian study suggest that perceived market and technological uncertainty impact time efficiency. In particular, under conditions of technological unpredictability, project team organization increases time efficiency, whereas process compression appears to decrease time‐efficient product development. However, process compression seems to be a viable strategy in environments characterized by lower technological uncertainty. The results also point to the importance of disaggregating data when studying product development processes across countries.