Planned Flexibility: Linking Anticipation and Reaction in Product Development Projects

The early phases of a product development project (i.e., concept generation and product planning) are commonly acknowledged to play a central role in the success of product innovation. Early decisions are unlikely to be changed during downstream phases, unless high costs and time are experienced. They have therefore the highest influence on project performance. However, early analysis and problem solving is also a difficult task, because the necessary information and insights are not available until one gets into detailed design. Most companies are locked in this dilemma between anticipation (i.e., anticipating decisions in the early phases of product development, where influence on performance is substantial) and reaction (i.e., delaying decisions to downstream phases, where information and opportunities are manifest). This article investigates early development practices in 18 Italian and Swedish companies, operating in the vehicle, helicopter, and white-goods industries. It shows that neither anticipation nor reaction may be considered a best practice in absolute terms. Rather, it identifies four possible approaches to manage the early phases (detailed, selective, comprehensive, and postponed), where anticipation and reaction have different balances. In addition, the article shows how anticipation and reaction are not contradictory or mutually exclusive, but strongly interact with each other through a mechanism that we call planned flexibility, i.e., the capability to build flexibility into the development process due to decisions taken early in the project.     

Platform-Driven Development of Product Families: Linking Theory with Practice

Firms in many industries increasingly are considering platform-based approaches to reduce complexity and to better leverage investments in new product development, manufacturing, and marketing. However, a clear gap in literature still exists when it comes to discussing the problems and risks related to implementing and managing product families and their underlying platforms. Using a multiple-case approach, we compare three technology-driven companies in their definition of platform-based product families, investigate their reasons for changing to platform-driven development, and analyze how they implemented platform thinking in their development process and which risks they encountered in the process of creating and managing platform-based product families. The field study shows that the companies involved in the study use a homogeneous concept of platform-based product families and that they have similar reasons to turn to platform thinking and to encounter comparable risks. However, the companies analyzed use mainly product architecture as a basis for their platforms (and ignore many of the platform types advocated in literature), while on the other hand they show divergent applications of the platform concept regarding the combinations of product families and market applications. Through this exploratory study, some important white spots in literature became evident as well. In the discussion part of this article these white spots are discussed and directions for future platform research are proposed. The article concludes that given its importance, platform-driven development of product families clearly deserves further research to provide more insight into strategic planning for new products.     

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.     

Integration planning for technology intensive acquisitions

Rapid technological change, growing technological complexity and shortening product life cycles increasingly force companies to source technologies externally. One means of building up competencies and fostering innovation based on external resources such as knowledge is through the acquisition of technology-based companies. However as literature and practice have shown, technologically motivated and intensive acquisitions are highly vulnerable to failure. One of the main reasons for this value destruction lies in the miscarried and inappropriate integration of the technology-based company after the acquisition.
Based on eight in-depth case studies on technology intensive acquisitions in multi-national technology-based companies this paper aims to identify the main causes of failure in internalizing external knowledge during the integration of technology intensive acquisitions. It was derived that a lack of integrative decision-making, of systemic processes and of a holistic change of both companies during the integration hinders successful knowledge sourcing through acquisitions. Based on these findings, a concept for integration planning which is tailored towards the specific characteristics of technology intensive acquisitions is proposed. This concept is embedded in the acquisition process and encompasses the development of an appropriate integration strategy and the determination, assessment and planning of the required integration projects thus fostering successful knowledge sourcing.     

Antecedents of functional integration during new product development: The purchasing–marketing link

In response to different economic and business trends, companies are becoming increasingly dependent on external resources and capabilities as they seek to cater for an ever more complex and challenging demand. Such dependence has led an important group of scholars to draw attention to the inevitable integration of the purchasing and marketing functions. We stress here the need for such integration during new product development, and seek the mechanisms that may promote purchasing–marketing integration. Accordingly, this study describes two essential components underlying the concept of purchasing–marketing integration, and tests the effect of different integration mechanisms gathered from the literature on these two components. The model is tested on a sample of 141 Spanish industrial companies. Our results show that each one of these integration mechanisms varies in its effectiveness in promoting each key component of purchasing–marketing integration. Taking these asymmetric effects into account is crucial for selecting the appropriate purchasing and marketing integration devices within companies.     

A Survey of New Product Evaluation Models

New product development is a dynamic and lengthy process ranging from idea generation through product launch. It is quite important that product managers evaluate the viability of a new product at every stage of its development. Previous literature provides a large number of models that can be used to evaluate new products at different stages of the new product development process. These models vary with respect to their objectives, applicability to different products, data requirements, suitable environments and time frames, and diagnostics. This article presents a critical review of the models with an emphasis on these factors. The article also outlines other emerging methods that companies are using today. It concludes with managerial and research implications. © 1999 Elsevier Science Inc.     

Work with and implementation of new concepts for management of product development—experiences for the Swedish Manufacturing Industry

Extensive organizational changes in the management of product development work of industrial companies are currently taking place. Speediness (time-based competition) and/or 'high' quality (total quality) are emphasized and for this purpose concepts such as simultaneous, concurrent or integrated product development have been introduced. This paper describes a study of the importance of these concepts in 29 large Swedish manufacturing companies and how these companies deal with the implementation of the new product development concepts. In addition, three in-depth studies have been carried out to enable a more detailed study to be made of the effects of the product development work on time and quality variables.     

Key Factors Affecting Customer Evaluation of Discontinuous New Products

Common sense, as well as plenty of research, tells us that customer feedback can play an important role in successful product development efforts. By understanding the key factors that affect customers' evaluations of a new product, a project team improves its chances of making the right decisions throughout the design and development effort. However, customers typically lack a useful frame of reference for evaluating discontinuous, or really new products. In all likelihood, the key factors that affect customers' evaluations of radically new products differ from those for incremental innovations. Robert Veryzer describes the results of a study that examines the customer research efforts and findings of seven firms involved in the development of discontinuous new products. This study has the following objectives: gaining insight into the customer research inputs such companies use during the development of discontinuous new products, and exploring the critical factors that influence customers' evaluations of these really new products. The subjects in this study conducted relatively little formal customer research during the early stages of the NPD projects. The methods used for obtaining customer input during the concept generation and exploration stages were primarily qualitative. Although the companies in the study still did not focus consistently on customer issues during the technical development and design stage, the less discontinuous projects did use such traditional quantitative techniques as concept tests, clinics, and experiments during this phase of NPD. Throughout the projects in this study, the real opportunities for obtaining customer input came during the prototype testing and commercialization phases of the NPD projects. Several key factors appeared to influence customer evaluations of the products that were being developed by the NPD teams in this study. Lack of familiarity was manifested in customers' resistance to the new products in the study. Similarly, unfamiliarity with these new products often seemed to lead customers to focus on product attributes that development team members viewed as relatively unimportant. Other factors that affected customer evaluation of the products in this study included customer uncertainty about the benefits and risks associated with the product, customers' ability to understand how the product operates, perceptions of the product's safety, and product aesthetics.     

ERP‐Supported Teamworking in Danish Manufacturing?

Enterprise Resource Planning (ERP) systems and teamworking both entail significant changes to work on the shop-floor. However, a study of 24 Danish manufacturing enterprises found both change programs were rarely explicitly tuned to each other, with little direct interaction in a majority of cases. A case study shows the importance of, and the micro-political difficulties involved in getting companies to configure ERP-systems to support teamworking.     

Adopting Design Thinking in Novice Multidisciplinary Teams: The Application and Limits of Design Methods and Reflexive Practices

Scholarly and practitioner literature have both described the potential benefits of using methods associated with a “design thinking” approach to develop new innovations. Most studies of the main design thinking methods—needfinding, brainstorming, and prototyping—are based either on analyses of experienced designers or examine each method in isolation. If design thinking is to be widely adopted, less‐experienced users will employ these methods together, but we know little about their effect when newly adopted. Drawing on perspectives that consider concept development as broadly consisting of a divergent concept generation phase followed by a convergent concept selection phase, we collected data on 14 cases of novice multidisciplinary product development teams using design methods across both phases. Our hybrid qualitative and quantitative analysis indicate both benefits and limits of formal design methods: First, formal design methods were helpful not only during concept generation, but also during concept selection. Second, while brainstorming was valuable when combined with other methods, increased numbers of brainstorming sessions actually corresponded to lower performance, except in the setting where new members may join a team. And third, increased team reflexivity—such as from debating ideas, processes, or changes to concepts—was associated with more successful outcomes during concept generation but less successful outcomes during concept selection. We develop propositions related to the contingent use of brainstorming and team reflexivity depending on team composition and phase of development. Implications from this study include that novice multidisciplinary teams are more likely to be successful in applying design thinking when they can be guided to combine methods, are aware of the limits of brainstorming, and can transition from more‐ to less‐reflexive practices.     

Innovation and Product Development Strategies in the Italian Motorcycle Industry

The motorcycle industry in Italy offers fertile ground for anyone interested in developing a better understanding of the role innovation plays in enhancing a firm's competitive position. This industry includes both domestic and Japanese firms, with companies ranging from high-volume manufacturers to specialty or niche producers. Firms trying to gain a competitive edge in this crowded field must contend with not only advances in product and process technology, but also the whims of fashion. In a survey of top-level marketing and product development managers from eight leading firms in the Italian motorcycle industry, Moreno Muffatto and Roberto Panizzolo explore the innovation models these firms employ to enhance their competitive position. Their study has the following objectives: categorizing the various competitors in terms of their product and market strategies and their product development and innovation strategies; highlighting differences between the methods of Italian and Japanese firms competing in this market; analyzing the relationships between firms, as well as the roles suppliers play in the various innovation strategies; and identifying the various organizational models employed by the firms in this industry. Different product and market strategies are identified on the basis of three variables: total production volume, the number of different products offered, and the number of different engine capacities offered. Using these variables, the companies in the study are categorized as volume producers, specialists, or niche specialists. The firms are further differentiated on the basis of the relative emphasis each places on product technology and design, product innovation, product variety, and time-based competition. In the firms studied, partnerships play a key role in new product development. Nearly every firm participates in joint projects, most often involving development of either an entire vehicle or an engine. Other partnerships involve firms in countries that offer emerging markets for the motorcycle industry. Organizational structures and strategies employed by the volume producers in this study include: the large product leader, who oversees concept definition and product planning; the project leaders group, which coordinates all phases of development, including activities assigned to external groups; the project managers matrix, a matrix organizational structure with a strong product orientation; and the business unit program manager, who oversees all projects within an independent business unit.     

An innovation activity model for Very Small Entities in the software sector: an empirical study

Innovation management is a subdiscipline of management that studies the rules that govern the generation, diffusion, adoption of innovation, and relationships between innovation inputs and outputs. A great number of innovative products and services depend on software. In the software industry, many small entities act as subcontractors that develop components that are later integrated into larger industrial systems. However, these small entities do not have the resources needed to support long-term R&D activities and they also lack innovation management models which makes the planning and execution of innovation management difficult. These same small enterprises face similar challenges in the software development process. However, the ISO/IEC 29110 standard provides small enterprises with a clear path in implementing a systematic software development process. The planning and execution of innovation management activities may also benefit from a similar approach. This article describes an innovation activity model suited to the characteristics of small entities whose main stream of revenue is software development. Using the existing literature, standards, and the practical experience of companies with a successful history of developing innovative software-based products, this study identifies the activities and practices that lead to the development of innovative products. Interfaces between innovation management activities, software development processes, and work products are also identified.     

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.     

Antecedents of open innovation at the project level: empirical analysis of Korean firms

The concept of open innovation has recently gained wide academic attention, as it seems to have significant impact for company performance. Most empirical investigations about this emerging concept have been case studies of successful early adopters of open innovation, and their analyses have largely been at the company level. Although case studies at that level provide meaningful implications, the new phenomena merit a more in‐depth examination: that is, we need to collect and analyze data on multiple companies to explore more systematic findings about open innovations across companies. Moreover, analyses may need to go down to the individual project rather than the whole company level because innovation activities are often conducted as part of research and development (R&D) projects. To meet these needs, this study examines companies' open innovation efforts at the level of the individual R&D project. Specifically, the present study focuses on project‐level openness to better understand the mechanisms of open innovation. It explores systematic relationships between various antecedent factors and the degree of openness. Project‐level openness could be affected by team and task characteristics, such as team size, learning distance, strategic importance, technology and market uncertainty, and relevance to the main business. Relevant data collected from 303 companies in Korea were used to identify the antecedents that affect inbound and outbound openness. The research findings are expected to help provide a concrete theoretical framework suited for more generalized application and further practical development of open innovation strategy.     

Evaluating Customer Support During New Product Development—An Exploratory Study

Anyone who has struggled with a balky computer understands the importance of product support. Useful support for a high-tech product may take various forms, including installation, documentation, field service, user training, and product upgrades. All these forms of support share a common goal: achieving customer satisfaction with the product. To increase the likelihood of customer satisfaction with a high-tech product, a firm must carefully consider the product's support requirements during the design stage of the new-product development (NPD) effort. As Keith Goffin points out, however, relatively little research has been published about the manner in which product design influences product support. He suggests that firms may benefit from considering product support requirements during the design stage, in much the same way as design for manufacturability (DFM) techniques enable firms to increase ease of manufacture. In a survey of high-tech firms, he explores the ways in which companies evaluate product support requirements during the design stage. The study also examines whether firms use quantitative goals to focus the design team's attention on a product's support needs. To provide deeper understanding of the interrelationship between support requirements and product design, he also presents a case study involving Hewlett-Packard's development of a complex medical device. With responses from 66 companies, the survey offers the first empirical data on how companies plan for product support. Whereas DFM techniques involve consideration of manufacturability during the early stages of design, more than two-thirds of the companies in the study begin planning for support during the second half of the product development process. Only slightly more than one-half of the respondents report the use of a formal product support plan, although use of this type of document is more prevalent among the computer firms in the study. The companies in this study do not consider all aspects of support during product planning. The respondents also do not set quantitative goals for all aspects of support during the design stage. They typically set quantitative goals for service-related aspects of support—for example, product reliability targets such as annual failure rate—rather than for such support areas as user training. The survey responses identify a range of measures which could be used for performing a more comprehensive evaluation of support requirements during the design stage.     

Time-Based Management of the New Product Development Process

This study explored the problem of compressing new product development by focusing on the specific phases of the innovation process. These phases manifest significant qualitative differences that require attention for understanding the complexities of accelerating new product development. Based on data from 35 high-technology companies, Necmi Karagozoglu and Warren Brown identified several different acceleration methods. Results revealed unexpected and at times inconsistent insights than those reflected in the case study and anecdotally based literature, and implied also that some of the well documented approaches to successful new product development need to be replaced with their time-based versions.     

Process implications of the use of the Internet in new product development: a conceptual analysis

New product development requires a long and detailed process with numerous activities such as product line planning, strategy development, concept generation and screening, business analysis, development, testing and validation, manufacturing development and commercialization. Furthermore, each of these activities has its own unique requirements, some requiring information collection from the market, whereas others requiring the collaboration of different people who are involved in the new product development activities. This paper investigates the Internet's role in these activities and develops research propositions. In addition, it discusses how the impact of the Internet might change based on different products and different organizational conditions.     

Supportiveness of Organizational Climate, Market Orientation, and New Product Performance in Chinese Firms

Most knowledge development efforts in new product development have focused on Western economies and companies. However, due to its size, rapid growth rate, and market reforms, China has emerged as an important new context for new product development. Unfortunately, current understanding of the factors associated with new product success in China remains limited. We address this knowledge gap using mixed methods. First, we conducted 19 in‐depth interviews with managers involved in new product development in 11 different Chinese firms. The qualitative fieldwork indicated that firm behaviors and employee perceptions consistent with the phenomena of market orientation and the supportiveness of organizational climate both are viewed as important drivers of the new product performance of Chinese firms. Drawing on the marketing, management, and new product development literature this study develops a hypothetical model linking market orientation, supportiveness of organizational climate, and firms' new product performance. Direct relationships are hypothesized between both market orientation and supportiveness of organizational climate and firms' new product performance, as well as a relationship between supportiveness of organizational climate and market orientation. Data to test the hypothetical model were collected via an on‐site administered questionnaire from 110 manufacturing firms in China. The hypothesized relationships are tested using structural equation modeling. Results indicate a positive direct relationship of market orientation on firms' new product performance, with an indirect positive effect of supportiveness of organizational climate via its impact on market orientation. However, no support is found for a direct relationship between the supportiveness of a firm's organizational climate and its new product performance. These findings are consistent with resource‐based view theory propositions in the marketing literature indicating that market orientation is a valuable, nonsubstitutable, and inimitable resource and with similar propositions in the management literature concerning organizational culture. However, this study's findings also indicate that in contrast to a number of organizational culture theory propositions and empirical findings in some consumer service industries, the impact of organizational climate on firm performance in a new product context is indirect via the firm's generation, dissemination, and responsiveness to market intelligence. These results suggest that an effort to improve firms' new product performance by enhancing the flow and utilization of market intelligence is an appropriate allocation of resources. Further, this study's findings indicate that managers should direct at least some of their efforts to enhance a firm's market orientation at improving employee perceptions of the supportiveness of the firm's management and of their peers. This study indicates a need for further research concerning the role of different dimensions of organizational climate in firms' new product processes.     

Commercial Innovations from Consulting Engineering Firms: An Empirical Exploration of a Novel Source of New Product Ideas

Industrial firms interact with many outside organizations such as the customers, suppliers, competitors, and universities to obtain input for their new product development (NPD) programs. The importance of interfirm interactions is reflected in a large number of interdisciplinary studies reported in a wide variety of literature bases. As a result, several sources of new product ideas have been investigated in the extant literature. Yet given the growing complexity and risks in new product development, there seems to be a need for managers to obtain input from new and unutilized sources. Apparently, one source that industry has not tapped adequately for its NPD efforts is the consulting engineering firms (CEFs). To fill the aforementioned gap in the literature, this article explores the roles and suitability of CEFs in new product development by conducting a rigorous in‐depth case research of new product idea generation in a large Australian firm manufacturing a variety of industrial products. To generate ideas for the sponsoring firm, longitudinal field interviews with 64 managers and engineers from 32 large CEFs were conducted over a one‐and‐one‐half year period. The findings of the field interviews were combined with the documentary evidences and the archival data. This longitudinal data collection enabled the author to generate new product ideas over real time and to gain access to the information that otherwise might have been difficult to obtain. The results suggest that CEFs are a rich source of new product ideas of potential commercial value. However, industry is making little use of CEFs, which underscores the need for industrial firms to collaborate and to establish an effective idea transfer relationship with them. Moreover, the services of CEFs are not restricted to idea generation but can stretch across the entire NPD process. These findings of the study encourage product managers to conceptualize NPD as a highly synergistic mutually interdependent process between CEFs and industrial firms rather than simply an arm's‐length consulting transactions. Given the dearth of research on idea generation with CEFs, this study highlights the findings that are novel and that go beyond the techniques of new product idea generation established in the extant literature.