Cost‐cutting measures may keep investors happy, but such belt‐tightening does little for a company's long‐term growth. In an era of ever‐shrinking product life cycles, effective product design skills are essential to any company's ongoing vitality. To remain competitive, even the largest manufacturers must learn to replicate the entrepreneurial drive and innovativeness that characterize small, high‐growth firms. To foster a better understanding of the product design skills of small, high‐growth firms, Peter Dickson, Wendy Schneier, Peter Lawrence, and Renee Hytry describe the results of a survey of CEOs from companies that have been included in the Inc. 100 or Inc. 500 lists. On average, 50% of the sales for these companies came from new products launched during the past 3 years. The survey addresses three fundamental questions. First, which aspects of design management do the CEOs of small, high‐growth firms believe they manage well, and which give them difficulty? Second, to what extent are the CEOs involved in design decisions? Finally, how important is good product design to these firms? The respondents face the most difficulty in making the transition from sequential to concurrent engineering and design. Many cite a need for improved management of such skills as design for manufacturability, involvement of suppliers in the design process, estimation of costs during the design process, and the use of computer‐aided design tools during the design process. In contrast to these engineering‐related aspects of product design, the respondents are more confident in their ability to handle such marketing‐related tasks as generating new design ideas and involving customers in the design process. The survey results indicate that CEOs of small, high‐growth firms are deeply involved in design decisions. In over half the companies surveyed, CEOs indicated they had primary responsibility for design decisions. Most respondents also reported increasing their investment in design, with approximately 75% increasing their investment in product/service design over the past 3 years and almost 50% increasing their investment in packaging design. CEOs of Inc. 100 and Inc. 500 firms clearly recognize the importance of design. Approximately 70% of the respondents believe that design issues will be of increasing importance for U.S. firms' competitiveness in the coming years, and the majority feel it is important that their managers be knowledgeable about design. Approximately 75% of the CEOs believe that adopting new, fast‐track approaches to new product design would improve their firms' competitiveness.
The Journal of Product Innovation Management – Wiley
Published: Nov 1, 1995
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