LEARNING FROM THE BEST NEW PRODUCT DEVELOPERS

The most successful companies take into account clarity, ownership, leadership, integration, and flexibility when implementing their new product development processes. OVERVIEW: A survey by the Quality Directors ' Network of the Industrial Research Institute finds that most IRI member companies have a formalized new product development process in place, and that the R&D organizations in these companies have been active adopters and promoters of such processes. However, successful use of these processes has not been nearly as widespread. As the experience base around these processes develops, we are finding that the most successful companies abide by few common guiding principles in implementing new product development processes, although with different approaches tailored to their organization. These best companies have also introduced new R&D management systems and approaches to effectively integrate R&D into the company's product development activities. The past decade has seen a rapid and broad adoption of structured new product development (NPD) processes within companies whose growth, or even survival, rests on their ability to innovate fast and effectively. Many of these companies use some form of a Stage-Gate process derived from the model developed by Robert Cooper of McMaster University for managing NPD projects (1,2). Similarly structured processes are also described by Wheelwright and Clark (3), McGrath et al (4) and Smith and Reinertsen (5). The primary focus of most of the literature on these structured NPD processes has been on descriptions of the process itself as well as supporting tools and practices. Descriptions are provided, for example, for the overall layout of the stages and gates for a project, the scope of the individual stages, and organizational structures for project teams and gatekeeper (or management decision-making) teams. The supporting tools and practices that are described include assessment of technical feasibility, market analysis, financial evaluation, gate-meeting protocols, gate-decision criteria, and decision-making techniques. Based upon the frameworks described, many companies have developed NPD processes tailored to their own business strategy and culture. As experience around these processes accumulates, several prominent features of the most successful NPD processes are emerging. One excellent summary of best practices, derived from a survey of 383 U.S.-based companies, has recently been published by the Product Development & Management Association (6). Still, the majority of these studies tend to address the elements of process architecture or organizational structure-the what rather than the how. Recognizing the increasing interest in NPD and the critical role of R&D in this process, a small study team within the Industrial Research Institute's Quality Directors Network (QDN) was formed to explore this area further. In reviewing the current literature on NPD, we, as R&D/technology managers well-versed in the details of NPD and Stage-Gate processes, recognized two shortcomings. First, little has been published on the successful execution of NPD processes-how to use and sustain the process to achieve the intended results. Why is it, for example, that one company can embrace an NPD process with remarkable impact on business success, while an almost identical process might never take root-and consequently yield little or no benefit-in another company? The few excellent papers that have captured lessons on successful use of NPD processes have generally done so through small benchmarking forums of successful practitioners, or through consultants' observations or in-depth reviews of such companies (see, for example, 7,8). The second shortcoming in our view is the lack of description of NPD processes from an R&D perspective. While it is recognized that NPD can be successful only if it integrates all parts of a business that contribute to product success, the special implications for R&D organizations force us to redefine R&D management approaches and organizational roles and responsibilities in order to achieve fast and efficient NPD. …