Academic journal article Research-Technology Management

Do You Need a New Product-Development Strategy? Aligning Process with Context: There Is No One-Size-Fits-All Product-Development Process; Designing New Products for Different Business Contexts Requires Different New-Product Development Processes

Academic journal article Research-Technology Management

Do You Need a New Product-Development Strategy? Aligning Process with Context: There Is No One-Size-Fits-All Product-Development Process; Designing New Products for Different Business Contexts Requires Different New-Product Development Processes

Article excerpt

Over the past decade, firms have invested millions of dollars to define and standardize the way they bring new products and services to market. Despite these investments, however, studies of new product success rates have shown little or no improvement (Griffin 1997; Adams and Boike 2004). Indeed, recent data suggest that firms struggle more than ever to develop and launch new products on time with acceptable features, cost, and quality (Christensen 1997). And remarkably, some of these firms blame the very processes designed to help. So what went wrong? Often, firms fail to align product-development strategy to business needs.

Different business contexts demand different product-development processes; one size does not fit all (MacCormack 2001; De Meyer, Loch, and Pich 2002). Consider the type of process needed to nurture a rapidly growing new-business venture aimed at developing a breakthrough technology in an emerging market. How well would this process work for a product aimed at a mature industry with flat revenues and an established technology base? These different contexts place different demands on a development organization; the optimal process for each should differ. Yet all too often, senior managers are unaware of these distinctions and, as a result, end up using the wrong type of development process for the project at hand.

The mistake is easily made. Many managers spend their entire careers using a single style of development and don't realize that multiple choices exist. Furthermore, many firms have standardized their processes, stripping managers of the freedom to select or design something better suited to the task (Cooper 1990). Seldom is there an explicit step in the business planning or product-development process that forces managers to consider the type of process to use. The default is typically what was done before, regardless of the differences between the current project and a firm's past experiences. The results can be catastrophic. Rigid, inflexible processes that require extensive planning and forecasting are applied to breakthrough projects where little is known up front. Conversely, flexible, exploratory processes that emphasize creativity are applied to projects where tight control of costs and features is required. In either case, the final product almost certainly doesn't meet market needs or firm goals. Tackling this problem requires that the firm craft a development strategy to fit the context in which it competes and update development processes as this context evolves over time.

One firm--Hewlett-Packard (HP)--has succeeded in meeting these objectives by developing a framework that specifies several distinct styles of development and helps managers choose the one most suited to their business needs. HP has a large, heterogeneous business and product portfolio, introducing a significant number of new products each year (over 500 from $3 billion in R&D investment in 2010). The company's businesses serve a broad range of customers, from consumers to enterprises; they include early-stage start-ups and divisions competing in mature or declining markets, and they span a broad range of technologies, from hardware to software to medical instruments and professional services. In short, HP competes in a variety of contexts, each of which places specific demands on its development organization, and the company has learned to adapt its development strategy to fit these different contexts.

Via an extensive series of interviews with HP managers and staff at different levels of the organization and across different business units, we sought to understand how the company had achieved this. We also benefited from the experience of several of the authors of this paper who worked at HP during the study period and participated in the design and implementation of the framework as part of an internal consulting organization that supported the company's many business units. …

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