Categories of new products

• New-to-the-world ( 3M Post-It Notes)

• New product lines for firm

• Additions to existing lines

• Improvements and revisions to existing products

• Repositioning

• Cost reductions

Resource expenditure by NPD phase

% of Dollars

% of Person-days

Pre-development activities 7 16Development &testing 4 61Evaluation (screening, business analysis, project approvaCommercializationls)

54 23

% of Total Project

Type of Activity

Deficiencies in NPD processes

· A lack of market orientation

· Poor quality of execution

· Moving too quickly

· Not enough up-front homework

· Lack of product value to customer

· Lack of focus, too many products

· Lack of disciplined approach

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

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

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

Uncertainty-Stakes relationship over time

Risk-Stakes in an Out of Control NPD Process

Marketing Plan Flow Chart

Stage-Gate Launch Plan Meshing