Maximizing Productivity in Product Innovation

OVERVIEW: Recent evidence suggests that productivity in new product development (NPD) is declining; that is, we are seeing less output (measured in terms of impact on the business) for the same relative spending level. This article outlines seven practices or principles which, according to studies of NPD practices and performance, will increase NPD productivity after they are embraced. These principles include familiar concepts such as building in the voice of the customer, front-end loading projects, and taking a more holistic approach to product innovation. However, while they are familiar, it is surprising how many firms have yet to embrace them. Other, less familiar, principles include: relying on spiral rather than linear development; building in metrics, team accountability and continuous improvement; and portfolio management techniques to yield higher value projects. Finally, a number of best performers are redesigning their idea-to-launch processes, moving to the next-generation Stage-Gate® system; they employ methods borrowed from lean manufacturing to remove waste from their development processes, and they also make their processes scalable, flexible, adaptable, and more open to the external environment.