The Impact of NPD Strategy, Product Strategy, and NPD Processes on Perceived Cycle Time

Studies of new product development (NPD) have identified a variety of factors that influence cycle time, but most of these findings are based on case studies of individual firms. The few empirical studies that have attempted to examine the generalizability of these findings have tended to focus on one set of decisions (e.g., product strategy decisions) without considering the impact of organizational variables. To address this gap in the literature, this paper examines the impact on perceived cycle time of six variables that reflect a business unit's NPD strategy, NPD environment, product strategy, and NPD processes. The study also examines whether the impact of each of these antecedent variables is independent of the remaining variables. Contingency theory implies that cycle time performance will reflect the internal consistency of multiple contingencies and multiple structural characteristics. This implication is tested by evaluating the incremental explanatory power of two distance variables: one based on a theoretically defined ideal profile; and a second based on an empirically defined ideal profile. This analysis is important, because it permits a test of the proposition that understanding the pattern of contextual and structural variables adds additional insight to the understanding of cycle time performance. The analysis, based on data collected from 164 firms, indicates that the development of a formal NPD strategy, the creation of an appropriate climate for innovation, and the use of cross-functional teams all contributed to improved perceptions of satisfactory cycle times. It was also found that executives in business units with broad product lines were less likely to perceive their cycle times as satisfactory. Contrary to expectations, an increasing emphasis on products involving breakthrough core processes was found to increase perceptions of satisfactory cycle times. Moreover, the use of heavyweight project managers had no significant impact on cycle time perceptions. The study also found no evidence to indicate that deviations from either a theoretically or an empirically defined ideal profile lengthen perceived cycle time.