Performance measurement in R&D and new product development: setting the scene

In parallel to the focus on what is a high performance R&D and new product development (NPD) organisation, the question of measuring the performance of R&D and NPD is gaining increasing interest. Internally, many projects never result in a commercial product, and if they do, still many new products fail to generate economic return in the marketplace. Numerous different methods have been developed in order to evaluate R&D and NPD outputs (expected and realised), inputs (resources allocated, enabling structures/factors etc.), and the processes involved (project management, learning dynamics etc.). The paper presents a comprehensive literature review of the rationales, metrics and methods of performance measurement in R&D and NPD. It introduces seven performance measurement perspectives: financial, customer satisfaction, strategic management, process management, technology management, innovation, and knowledge management. This overview gives managers a framework for developing their measurement strategy and provides a platform for further academic research into R&D performance measurement.