Benchmarking the Firm's Critical Success Factors in New Product Development

Benchmarking the Firm's Critical Success Factors in New Product Development Managing new product development (NPD) is, to a great extent, a process of separating the winners from the losers. At the project level, tough go/no‐go decisions must be made throughout each development effort to ensure that resources are being allocated appropriately. At the company level, benchmarking is helpful for identifying the critical success factors that set the most successful firms apart from their competitors. This company‐ or macro‐level analysis also has the potential for uncovering success factors that are not readily apparent through examination of specific projects. To improve our understanding of the company‐level drivers of NPD success, Robert Cooper and Elko Kleinschmidt describe the results of a multi‐firm benchmarking study. They propose that a company's overall new product performance depends on the following elements: the NPD process and the specific activities within this process; the organization of the NPD program; the firm's NPD strategy; the firm's culture and climate for innovation; and senior management commitment to NPD. Given the multidimensional nature of NPD performance, the study involves 10 performance measures of a company's new product program: success rate, percent of sales, profitability relative to spending, technical success rating, sales impact, profit impact, success in meeting sales objectives, success in meeting profit objectives, profitability relative to competitors, and overall success. The 10 performance metrics are reduced to two underlying dimensions: program profitability and program impact. These performance factors become theX‐and Y‐ax.es of a performance map, a visual summary of the relative performance of the 135 companies responding to the survey. The performance map further breaks down the respondents into four groups: solid performers, high‐impact technical winners, low‐impact performers, and dogs. Again, the objective of this analysis is to determine what separates the solid performers from the companies in the other groups. The analysis identifies nine constructs that drive performance. In rank order of their impact on performance, the main performance drivers that separate the solid performers from the dogs are: a high‐quality new product process; a clear, well‐communicated new product strategy for the company; adequate resources for new products; senior management commitment to new products; an entrepreneurial climate for product innovation; senior management accountability; strategic focus and synergy (i.e., new products close to the firm's existing markets and leveraging existing technologies); high‐quality development teams; and cross‐functional teams. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Product Innovation Management Wiley

Benchmarking the Firm's Critical Success Factors in New Product Development

Loading next page...
 
/lp/wiley/benchmarking-the-firm-s-critical-success-factors-in-new-product-HcFlb6Z052
Publisher
Wiley
Copyright
© 1995 Elsevier Science Inc.
ISSN
0737-6782
eISSN
1540-5885
DOI
10.1111/1540-5885.1250374
Publisher site
See Article on Publisher Site

Abstract

Managing new product development (NPD) is, to a great extent, a process of separating the winners from the losers. At the project level, tough go/no‐go decisions must be made throughout each development effort to ensure that resources are being allocated appropriately. At the company level, benchmarking is helpful for identifying the critical success factors that set the most successful firms apart from their competitors. This company‐ or macro‐level analysis also has the potential for uncovering success factors that are not readily apparent through examination of specific projects. To improve our understanding of the company‐level drivers of NPD success, Robert Cooper and Elko Kleinschmidt describe the results of a multi‐firm benchmarking study. They propose that a company's overall new product performance depends on the following elements: the NPD process and the specific activities within this process; the organization of the NPD program; the firm's NPD strategy; the firm's culture and climate for innovation; and senior management commitment to NPD. Given the multidimensional nature of NPD performance, the study involves 10 performance measures of a company's new product program: success rate, percent of sales, profitability relative to spending, technical success rating, sales impact, profit impact, success in meeting sales objectives, success in meeting profit objectives, profitability relative to competitors, and overall success. The 10 performance metrics are reduced to two underlying dimensions: program profitability and program impact. These performance factors become theX‐and Y‐ax.es of a performance map, a visual summary of the relative performance of the 135 companies responding to the survey. The performance map further breaks down the respondents into four groups: solid performers, high‐impact technical winners, low‐impact performers, and dogs. Again, the objective of this analysis is to determine what separates the solid performers from the companies in the other groups. The analysis identifies nine constructs that drive performance. In rank order of their impact on performance, the main performance drivers that separate the solid performers from the dogs are: a high‐quality new product process; a clear, well‐communicated new product strategy for the company; adequate resources for new products; senior management commitment to new products; an entrepreneurial climate for product innovation; senior management accountability; strategic focus and synergy (i.e., new products close to the firm's existing markets and leveraging existing technologies); high‐quality development teams; and cross‐functional teams.

Journal

The Journal of Product Innovation ManagementWiley

Published: Nov 1, 1995

References

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create folders to
organize your research

Export folders, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off