The Value of Design Strategies for New Product Development: Some Econometric Evidence

Investments in design play a potentially significant role in new product development (NPD) although there is little unanimity on the most appropriate or effective design strategy. Previous case-study based studies have identified three alternative design strategies for NPD: design used as a functional specialism, design used as part of a multi-functional team and designer-led NPD. Using data on a sample of Irish manufacturing plants over three periods we are able to examine the effectiveness of each of these three design strategies for NPD novelty and success. Our analysis suggests that design is closely associated with success in NPD performance regardless of the type of strategy pursued. Adopting designer-led NPD, however, is associated with a much greater NPD performance than more functionally-oriented strategies. The effects of design on NPD outcomes are also strongly moderated by other plant characteristics. For example, the beneficial role of design on NPD outputs is only evident for plants which also engage in R&D. Also, while both small and larger plants do gain from using design as a functional specialism and as part of multi-functional teams, the additional benefits of design-leadership in the NPD process are only evident in larger plants.

[1]  Wayne D. Hoyer,et al.  Sales, Marketing, and Research-and-Development Cooperation across New Product Development Stages: Implications for Success , 2010 .

[2]  Almas Heshmati,et al.  Knowledge capital and performance heterogeneity: : A firm-level innovation study , 2002 .

[3]  Chris Harty,et al.  Implementing innovation: designers, users and actor-networks , 2010, Technol. Anal. Strateg. Manag..

[4]  H. Chesbrough,et al.  Open Innovation: A New Paradigm for Understanding Industrial Innovation , 2006 .

[5]  Rachel Cooper,et al.  Characterizing the Role of Design in New Product Development: An Empirically Derived Taxonomy* , 2005 .

[6]  Rajeev Sharma,et al.  A Critique of the Marker Variable Technique: The Effect of Alternative Marker Variable Criteria , 2010, ECIS.

[7]  Busayawan Lam,et al.  Design-Driven Innovation , 2014 .

[8]  Donald G. Marquis,et al.  Successful industrial innovations : a study of factors underlying innovation in selected firms , 1969 .

[9]  Gerda Gemser,et al.  An agenda for research on the relationships between industrial design and performance , 2010 .

[10]  Dirk Czarnitzki,et al.  The Design Paradox: The Contribution of In-House and External Design Activities on Product Market Performance , 2009 .

[11]  Tucker J. Marion,et al.  Applying Industrial Design and Cost Engineering to New Product Development in Early‐Stage Firms , 2011 .

[12]  R. W. Vossen.  Relative Strengths and Weaknesses of Small Firms in Innovation , 1998 .

[13]  R. Kramer,et al.  Trust in Organizations: Frontiers of Theory and Research , 1995 .

[14]  Anne-Mette Lilleoere,et al.  Knowledge-sharing enablers and barriers in pharmaceutical research and development , 2011, J. Knowl. Manag..

[15]  Christian Zeller,et al.  Project Teams as Means of Restructuring Research and Development in the Pharmaceutical Industry , 2002 .

[16]  Ammon Salter,et al.  The role of openness in explaining innovation performance among UK manufacturing firms , 2004 .

[17]  J. Bryson,et al.  The production and consumption of industrial design expertise by small‐ and medium‐sized firms: some evidence from norway , 2007 .

[18]  M. Hobday,et al.  Policies for design and policies for innovation: contrasting perspectives and remaining challenges , 2012 .

[19]  Nola Hewitt-Dundas.  Resource and Capability Constraints to Innovation in Small and Large Plants , 2006 .

[20]  G. Gemser,et al.  How integrating industrial design in the product development process impacts on company performance , 2001 .

[21]  P. Norling,et al.  Research/Technology Management , 2000 .

[22]  D. Sjödin,et al.  Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development , 2010 .

[23]  Chun Wei Choo,et al.  The Strategic Management of Intellectual Capital and Organizational Knowledge , 2002 .

[24]  Adegoke Oke,et al.  The Influence of Leadership on Innovation Processes and Activities , 2009 .

[25]  H. Chesbrough.  Managing Open Innovation , 2004 .

[26]  Almas Heshmati,et al.  On the relationship between innovation and performance: A sensitivity analysis , 2006 .

[27]  V. Acha.  OPEN BY DESIGN: THE ROLE OF DESIGN IN OPEN INNOVATION. , 2008 .

[28]  Regina C. McNally,et al.  Your New Product Development (NPD) is Only as Good as Your Process: An Exploratory Analysis of New NPD Process Design and Implementation , 2007 .

[29]  M. Hoegl,et al.  Organizational knowledge creation and the generation of new product ideas: A behavioral approach , 2008 .

[30]  P. Lawrence,et al.  Marketing Meets Design: Core Necessities for Successful New Product Development , 2005 .

[31]  Bruno Crépon,et al.  Research, Innovation, and Productivity: an Econometric Analysis at the Firm Level , 1998 .

[32]  David R. Urbach,et al.  The worlds and modalities of engagement of design participants: A qualitative case study of three medical innovations , 2011 .

[33]  Stephen J. Redding,et al.  R&D and Absorptive Capacity: Theory and Empirical Evidence* , 2003 .

[34]  Roberto Verganti,et al.  Radical Design and Technology Epiphanies: A New Focus for Research on Design Management , 2011 .

[35]  Daniel Arias-Aranda,et al.  New product performance through multifunctional teamwork: An analysis of the development process towards quality excellence , 2009 .

[36]  Stephen Roper,et al.  The organisation of innovation: collaboration, cooperation and multifunctional groups in UK and German manufacturing , 2004 .

[37]  Naresh K. Malhotra,et al.  Common Method Variance in IS Research: A Comparison of Alternative Approaches and a Reanalysis of Past Research , 2006, Manag. Sci..

[38]  S. Roper,et al.  Ireland's Innovation Performance: 1991 to 2005 , 2008 .

[39]  Bruno Crépon,et al.  Research, Innovation And Productivity: An Econometric Analysis At The Firm Level , 1998 .

[40]  P. M. Podsakoff,et al.  Self-Reports in Organizational Research: Problems and Prospects , 1986 .

[41]  Yen Hsu,et al.  Design innovation and marketing strategy in successful product competition , 2011 .

[42]  R. E. Miles,et al.  Trust in organizations: A conceptual framework linking organizational forms, managerial philosophies, and the opportunity costs of controls. , 1996 .

[43]  Keith Goffin,et al.  Maximizing the Value of Industrial Design in New Product Development , 2010 .

[44]  Camilla Jensen.  Localized Spillovers in the Polish Food Industry: The Role of FDI in the Development Process? , 2004 .

[45]  Jaap E. Wieringa,et al.  What about design newness? Investigating the relevance of a neglected dimension of product innovativeness , 2009 .

[46]  Orietta Marsili,et al.  The Dark Matter of Innovation: Design and Innovative Performance in Dutch Manufacturing1 , 2006, Technol. Anal. Strateg. Manag..

[47]  S. Roper,et al.  Knowledge , openness , innovation and growth in UK business services , 2010 .

[48]  Michael Frese,et al.  Explaining the Heterogeneity of the Leadership-Innovation Relationship: Ambidextrous Leadership , 2011 .

[49]  Bruce Tether,et al.  'Think Piece' on the Role of Design in Business Performance , 2005 .

[50]  Afsheen Fatima,et al.  Transformational leadership and organizational innovation: Moderated by organizational size , 2009 .

[51]  A. Griffin.  PDMA Research on New Product Development Practices: Updating Trends and Benchmarking Best Practices , 1997 .

[52]  Sabrina M. Neeley,et al.  Managing R&D-marketing integration in the new product development process , 1996 .

[53]  Aija Leiponen,et al.  Skills and innovation , 2005 .

[54]  Eulogio Cordón-Pozo,et al.  Inter-departmental collaboration and new product development success: a study on the collaboration between marketing and R&D in Spanish high-technology firms , 2006, Int. J. Technol. Manag..

[55]  S. Roper,et al.  Modelling the innovation value chain , 2008 .

[56]  H. Chesbrough,et al.  Open Innovation and Strategy , 2007 .

[57]  Ricardo Chiva,et al.  Investment in Design and Firm Performance: The Mediating Role of Design Management* , 2009 .

[58]  José Arana Varela,et al.  New product development process in Spanish firms: typology, antecedents and technical/marketing activities , 2005 .

[59]  Jeffrey B. Schmidt,et al.  Antecedents and consequences of cross-functional cooperation: A comparison of R&D, manufacturing, and marketing perspectives , 1997 .

[60]  Scott B. MacKenzie,et al.  Common method biases in behavioral research: a critical review of the literature and recommended remedies. , 2003, The Journal of applied psychology.

[61]  Ingrid Dackert,et al.  Leadership and Climate for Innovation in Teams , 2004 .

[62]  Kwaku Atuahene-Gima,et al.  Cross-Functional Influence in New Product Development: An Exploratory Study of Marketing and R&D Perspectives , 2000 .

[63]  Cornelia Dröge,et al.  Investigating the manufacturing–marketing interface in new product development: does context affect the strength of relationships? , 2002 .

[64]  Eric M. Olson,et al.  Patterns of cooperation during new product development among marketing, operations and R&D: Implications for project performance , 2001 .

[65]  D. Gregori,et al.  Inside the Black Box: Technology and Economics , 1984 .

[66]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[67]  M. Freel,et al.  Patterns of innovation and skills in small firms , 2005 .

[68]  R. Verganti.  Design, Meanings, and Radical Innovation: A Metamodel and a Research Agenda* , 2008 .