Academic journal article Research-Technology Management

Benchmarking Best NPD Practices-III: Driving New-Product Projects to Market Success Is the Focus of This Third in a Three-Part Series

Academic journal article Research-Technology Management

Benchmarking Best NPD Practices-III: Driving New-Product Projects to Market Success Is the Focus of This Third in a Three-Part Series

Article excerpt

Success in new product development depends on the tactics that project teams employ to drive new product projects from the idea stage through to launch. These tactics are the focus of this final article of our three-part report on the results of a benchmarking study of NPD practices in 105 U.S. businesses.

Part I reported NPD performance results of these businesses, and identified a group of Best Performing businesses, which become the "benchmark businesses." A large number of practices were considered, and those that separated the Best from Worst Performing businesses were identified as "best practices" (see RTM. Jan-Feb. 2004, pp. 31-44).

Part II of the series moved to strategic issues, namely the role and elements of a product innovation strategy for the business, resource sufficiency and resource allocation for NPD, and portfolio management (see RTM, May-June 2004, pp. 50-59).

In this final Part III, we focus on tactics and the following issues:

* Quality of execution of key activities from idea generation through to market launch--and their impact on performance.

* Firms' new product processes and their components.

* Best practices built into this NPD process.

* The impact of voice-of-customer research, solid market information, product advantage, and getting the product definition nailed down early.

In order to identify best practices, we probe what distinguishes best performing businesses, and what they do differently from the rest. Best Performers are those businesses that assessed their NPD effort as profitable, meeting objectives, successful versus competitors, time efficient, and opening up new markets, technologies and product categories.

Performance Drivers: Distinguishing Best from Worst

A systematic process

A new product process that guides projects from idea to launch is a well-recognized key to NPD success (1). By "new product process," we mean more than just a flowchart: the term includes all process elements: the stages, stage activities, gates, deliverables, and gate criteria that constitute a well-defined new product process. Having such a process is the strongest practice observed in our sample of businesses:

* 73.7 percent of businesses claim to have such an NPD process, with 66.7 percent indicating that it is well-documented and visible.

* 72.4 percent have defined stages in their NPD process, complete with activities spelled out for each stage.

* 73.8 percent have built gates into their NPD process, and 46.7 percent have well-defined Go/Kill gate criteria.

* 71.0 percent have an explicit menu of deliverables for gates.

* 71.9 percent have designated gatekeepers who make the Go/Kill decisions.

* 52.4 percent of businesses really make use of their NPD process, but only 43.8 percent report that their process is an enabling one.

* 65.2 percent view their NPD process as flexible, adaptable and scalable.

* 41 percent have put a Process Manager in place to oversee the process.

Not surprisingly, all five of the best-practices companies singled out for site visits have in place a well-designed NPD process, such as Stage-Gate[R] (2). An outline of each company's process is provided in the full American Productivity and Quality Center report (3). Each company indicated that a solid, well-defined process with clearly defined activities in each stage and a well-defined decision framework for the gates (decision points) was a critical best practice. For example:

* ExxonMobil Chemical--"This process, a company-wide stage-gate framework, has become institutionalized and is ingrained in the language and culture of the company."

* Bausch & Lomb--"B&L's new product development process, called the product development management process (PDMP), is simple, easy to follow, and built on internal and external successes and best practices. …

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