NewProdTM Study Results on
NPD Success (102 successes, 93 failures,
102 companies)
• Product has to offer unique benefits and
superior value for money to customers
• Market orientation leading to marketing
research and launch tasks done well
• Leveraging technology capabilities and
executing well
Stanford Innovation Project Study
Results on NPD Success (86 successes
and 86 failures)
• Strong R&D with strong interface with both
manufacturing and customer
• Technically superior and unique products
• Positive market environment: first to market
and growing market
• Significant value to customers
• Leverage capabilities and resources
Booz-Allen & Hamilton Study
Results on NPD Success (700
firms)
• Operating philosophy- internal growth
• Organizational structure- greater crossfunctional influence and interactions
• Manage the experience effect
• Adaptive management style depending on
type of new product
– entrepreneurial- new to the world
– collegial- new businesses and new lines
– managerial- closely related new products
Hewlett-Packard success factors
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understanding user needs
strategic alignment
competitive analysis and product superiority
regulation compliance
priority decision criteria list
risk assessment
product positioning
product channel and support
project endorsement by upper management
total organizational support
Critical success factors
• Top three drivers
– high-quality NPD
process
– defined NPD strategy
– adequate resources and
commitment to R&D
• Important other
drivers
– use of high-quality
cross-functional teams
– senior management
commitment
– an innovative climate
and culture
– senior management
accountability
Fifteen Critical Success Factors
Five ways to improve cycle time
profitably
• Do it right the first time
• homework and definition
• organize around a true cross-functional
team
• employ parallel processing
• prioritize and focus
Seven Goals of a NPD (similar to
the requirements for speeding up
cycle time)
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Quality of execution
Sharper focus, better prioritization
fast-paced parallel processing
true cross-functional team
strong market orientation and hard wired voice of
customer
• better homework up front
• products with competitive advantage
Managing complex risky
decisions
• Break into smaller decisions
• each decision process should reduce the risk
of the next stage
Managing risk
• Lessen the amounts at stake
– if the uncertainties are high keep the amount at
stake low
– as the uncertainties decrease the amount at
stake can be increased
– incrementalize the decision process
– be prepared to pay for relevant information to
reduce risk
– provide for bail-out points