J PROD INNOV MANAG 2012;29(2):180192 2012 Product Development & Management Association DOI: 10.1111/j.1540-5885.2011.00888.

An Examination of New Product Development Best Practice*

Kenneth B. Kahn, Gloria Barczak, John Nicholas, Ann Ledwith, and Helen Perks

Efforts continue to identify new product development (NPD) best practices. Examples of recognized studies include those by the Product Development and Management Associations Comparative Performance Assessment Study and the American Productivity Quality Center NPD best practices study. While these studies designate practices that distinguish top-performing companies, it is unclear whether NPD practitioners as a group (not just researchers) are knowledgeable about what represents a NPD best practice. The importance of this is that it offers insight into how NPD practitioners are translating potential NPD knowledge into actual NPD practice. In other words, are practitioners aware of and able to implement NPD best practices designated by noteworthy studies? The answer to this question ascertains a current state of the eld toward understanding NPD best practice and the maturity level of various practices. Answering this question further contributes to our understanding of the diffusion of NPD best practices knowledge by NPD professionals, possibly identifying gaps between prescribed and actual practice. Beginning the empirical examination by conducting a Delphi methodology with 20 leading innovation researchers, the study examined the likely dimensions of NPD and corresponding denitions to validate the NPD practices framework originally proposed by Kahn, Barczak, and Moss. A survey was then conducted with practitioners from the United States, United Kingdom, and Ireland to gauge opinions about perceptions of the importance of different NPD dimensions, specic characteristics reected by each of these dimensions, and the level of NPD practice maturity that these characteristics would represent. The study is therefore unique in that it relies on the opinions of NPD practitioners to see what they perceive as best practice versus prior studies where the researcher has identied and prescribed best practices. Results of the present study nd that seven NPD dimensions are recommended, whereas the 2006 Kahn, Barczak, and Moss framework had suggested six dimensions. Among practitioners across the three country contexts, there is consensus on which dimensions are more important, providing evidence that NPD dimensions may be generalizable across Western contexts. Strategy was rated higher than any of the other dimensions followed by research, commercialization, and process. Project climate and metrics were perceived as the lowest in importance. The high weighting on strategy and low weighting on metrics and project climate reinforce previous best practice ndings. Regarding the characteristics of each best practice dimension, practitioners appear able to distinguish what constitutes poor versus best practice, but consensus on distinguishing middle range practices are not as clear. The suggested implications of these ndings are that managers should emphasize strategy when undertaking NPD efforts and consider the t of their projects with this strategy. The results further imply that there are clearly some poor practices that managers should avoid and best practices to which managers should ascribe. For academics, the results strongly suggest a need to do a better job of diffusing NPD knowledge and research on best practices. Particular attention by academics to the issues of metrics, project climate, and company culture appears warranted.

Introduction

best practice can be dened as that technique, method, process, or activity that is more effective at delivering a particular outcome than any other technique, method, process, or activity within that

Address correspondence to: Kenneth B. Kahn, da Vinci Center for Innovation, Virginia Commonwealth University, Richmond, Virginia 23059. E-mail: kbkahn@vcu.edu. Tel: 804-828-9944. * This research was supported by a research grant from the Product Development and Management Association.

domain (Camp, 1989). In the case of new product development (NPD), the identication and subsequent adoption of a best practice can help to replicate NPD success, NPD vitality, and NPD process maturity of the bestperforming companies (Dooley, Subra, and Anderson, 2002; Paulk, Curtis, Chrissis, and Weber, 1993). Accordingly, various studies have been undertaken to search for best practices such as the two noteworthy studies of the Product Development and Management Associations (PDMA) Comparative Performance Assessment Study (Adams-Bigelow, 2004; Barczak, Grifn, and Kahn,

NEW PRODUCT DEVELOPMENT BEST PRACTICE

J PROD INNOV MANAG 2012;29(2):180192

181

BIOGRAPHICAL SKETCHES Kenneth B. Kahn is a Professor of Marketing and Director of the da Vinci Center for Innovation at Virginia Commonwealth University in Richmond, Virginia. His teaching and research interests address product development, product management, and demand forecasting of current and new products. He has published in a variety of journals, including the Journal of Product Innovation Management, Journal of Business Research, Journal of Forecasting, Journal of Business Forecasting, Marketing Management, and R&D Management. He also has authored the books Product Planning Essentials (Sage Publications, 2000; 2nd ed. by M.E. Sharpe, 2011) and New Product Forecasting: An Applied Approach (M.E. Sharpe, 2006), and served as editor of the PDMA Handbook on New Product Development (2nd ed., Wiley & Sons, 2004). Gloria Barczak is Professor and Chair of the Marketing Group at Northeastern University. She received her Ph.D. in marketing and innovation management from Syracuse University. Her current research interests include the use of information technology in NPD and the relationship between emotional intelligence and creativity in teams. Her research has been published in Journal of Product Innovation Management, IEEE Transactions on Engineering Management, R&D Management, Research and Technology Management, and Industrial Marketing Management, among others. She is a member of the Editorial Board of the Journal of Product Innovation Management, Creativity and Innovation Management, and IEEE Transactions on Engineering Management. She is the 2010 Robert D. Klein University Lecturer and is ranked as one of the Top 25 innovation management scholars in the world. John Nicholas is a researcher in new product and process development at the Enterprise Research Centre at the University of Limerick in Ireland. He holds a B.Eng. in mechanical and biomedical engineering and an M.Eng. in new product development management from the University of Limerick (UL), Ireland. He is currently completing a Ph.D. at the Enterprise Research Centre at the University of Limerick. His research interests focus on new product development in small to medium enterprises and radical innovation management. Ann Ledwith is the director of educational programmes at the Enterprise Research Centre in the Faculty of Science and Engineering at the University of Limerick in Ireland. She holds a B.Eng. and an MBA from the University of Limerick and a Ph.D. in Technology Management from the University of Brighton in the UK. She is the academic director of a distance learning masters program in Technology Management. Her research interests include new product development, technology management and project management in small rms. She has published on these topics in various journals including Journal of Product Innovation Management, Creativity and Innovation Management, International Journal of Product Development, International Journal of Entrepreneurial Behaviour and Research, and Journal of European Industrial Training. Helen Perks is Professor of Marketing and Product Innovation at Manchester Business School, University of Manchester, UK. Professor Perk has research interests in product and service innovation. She is on the editorial board of Journal of Product Innovation Management, Industrial Marketing Management, R&D Management, and International Marketing Review and regularly publishes in these and other international journals. She is Chair of the EIASM International Product Development Management conference 2012.

2009) and the American Productivity Quality Center NPD best practices study (Cooper, Edgett, and Kleinschmidt, 2002, 2004a, 2004b). While these studies designate contemporary practices that distinguish top-performing companies, it is unclear whether and to what extent NPD practitioners as a group (not just researchers) are knowledgeable about what constitutes a NPD best practice. Investigating this issue ascertains a current state of the eld about NPD best practices and the maturity level of various practices. Investigating this issue also furthers understanding of how NPD practitioners translate potential NPD knowledge into actual NPD practice, thereby reecting the diffusion of NPD best practices knowledge by NPD practitioners and possibly revealing gaps between prescribed and actual practice. To examine these issues, an empirical study was undertaken through the support of the PDMA with the aim to provide a fuller characterization and cognizance of contemporary NPD practice. The ndings from surveys of NPD academics and practitioners specically explored the underlying dimensions of the NPD domain, the relative importance of these dimensions, and the maturity level of various NPD characteristics in the course of validating the Kahn, Barczak, and Moss (2006) framework for NPD best practice. The sample of practitioners included those from the United States, United Kingdom, and Ireland to examine congruence among NPD practitioners between United States and Western Europe on underlying NPD dimensions and the characteristics associated with NPD best practices. In doing so, the present study addresses the generalizability of NPD practices across different global contexts. We begin the present paper by dening NPD practice and NPD best practice. Next, the dimensions for NPD practice are delineated. The three-phase methodology and results are then presented. The paper concludes with managerial and research implications for driving excellence in both practice and theory development within the NPD discipline.

The Meaning of NPD Practice and NPD Best Practice

Practice is dened as habitual or customary performance and a certain tradition in doing a job (http://www. dictionary.com/browse/practice). Practice also represents the implementation of a set of ideas to achieve intended consequences, where implementation represents the formulation or execution of a policy (Argyris, 1985). Adapting these denitions, NPD practice is dened as customary

182

J PROD INNOV MANAG 2012;29(2):180192

K. B. KAHN ET AL.

performance that implements ideas and policies leading to the development and launch of new products and services. Through the study of practice, one can readily guide NPD theory and new research (Goodman, 1985). Dening practice along the lines of policy implementation suggests that improvements in practice are recognizable when new policies are used commonly and supplant contemporary policies (Goodman, 1985). Best practices would be those practices that appear to result in the most favorable outcomes. In the case of NPD practice, best practice would be those NPD practices that promote greater success in developing and launching new products and services. This aligns with Frederick Taylors (1967) seminal work claiming that among the various methods and implements used in each element of each trade, there is always one method and one implement which is quicker and better than any of the rest. As previously dened, a best practice is a technique, method, process, or activity that is more effective at delivering a particular outcome than any other technique, method, process, or activity. This normative view emphasizes a one-size-ts-all approach to best practice. Some researchers contend that best practices vary from rm to rm, evolving over time, and with changes in the marketplace (Murray, ODriscoll, and Torres, 2002). Thus, there is no one best way to high performance but rather different routes to the same end goal. Loch (2000) argues that while the Stage-Gate process serves as the NPD backbone, company survival depends on how well that company adapts to specic environments, and so there is no one best practice NPD process. Loch prescribes that companies essentially need to develop a customized NPD project portfolio and a corresponding mixture of processes, which together meet strategic innovation needs across incremental projects, really new product projects, and radical innovation projects (Garcia and Calantone, 2002). Davidson, Clamen, and Karol (1999) reach a similar conclusion by emphasizing the need for process exibility so that the process can be continually adjusted to the organizations needs and desires.

The Kahn, Barczak, and Moss Best Practices Framework

The rst step for any company wishing to improve its product development process is to gain an understanding of the practices that inuence NPD success. The work of Kahn et al. (2006) suggests that best practices exist for six dimensions of NPD practice: strategy, portfolio

management, process, market research, people, and metrics and performance. Strategy represents dening and planning a focus for the NPD efforts of a strategic business unit (SBU), division, product line, and/or individual project. Work by Cooper et al. (2002) and Grifn (1997a) reafrms that leading organizations are more likely to guide their NPD activity using a strategy, and almost 65% of product companies report that they do a good job of dening the strategy for their NPD efforts (Cooper et al., 2002). Firms that view product development as a strategic, long-term endeavor look for future market opportunities. These rms also recognize and identify customers real or unarticulated needs in the course of identifying new product strategies (Cooper et al., 2002). Portfolio management represents the screening out of product concepts to identify the preferable product concepts with which to proceed (Adams-Bigelow, 2004). Work by Cooper et al. (2002) indicates that only 21.2% of companies have a well-executed portfolio management system in place and that many companies rate their portfolio management as very weak in terms of the degree to which it is put in place. Those NPD organizations considered more sophisticated have a formal and systematic portfolio management approach, which results in better allocation of human and other resources. Sophisticated organizations also have portfolios containing a balanced mix of radical or breakthrough types of projects and incremental projects (Cooper et al., 2002). Process represents the NPD stages, corresponding activities, and gate criteria for moving products to launch. Cooper et al. (2002) indicate that almost 47% of companies reported having clearly dened criteria to evaluate projects at each gate (Cooper et al., 2002). Results also indicate that over 40% of companies designate a process manager to own the process and ensure its use; 65% report having a process that was adaptable and scalable to different types of projects and situations (Cooper et al., 2002). Similar results from PDMAs 2004 study indicate that 60% of organizations indicated using a Stage-Gate process for NPD, while 21% indicated no formal process at all (Adams-Bigelow, 2004). Among these studies results, best-performing companies are found to use a common, formal process with clearly dened stages and gates that are visible, documented, and used (Cooper et al., 2002; Grifn, 1997a). Market research includes application of activities for sensing, learning about, and understanding customers, competitors, and macro-environmental forces in the marketplace. More sophisticated organizations appear to employ a variety of market research techniques so that

NEW PRODUCT DEVELOPMENT BEST PRACTICE

J PROD INNOV MANAG 2012;29(2):180192

183

the customer can be involved throughout the development process (Grifn, 1997b). These include concept testing, product testing (both internal and external), and market testing to determine product denition and customer response (Cooper et al., 2002). Leading organizations provide adequate resources to support the market research function and to gather a variety of market information to learn customers current and unarticulated needs, problems, and benets; customer reaction to the proposed product and price sensitivity; market size and potential; expected sales revenue; and competitive situation (Cooper et al., 2002). People include human resources and team-related initiatives. About 42% of rms indicated that they use champions to lead their NPD efforts (Grifn, 1997b). Cooper et al. (2002) nd that leading organizations rely greatly on cross-functional teams throughout the NPD process and are likely to have a centralized NPD function at the corporate and/or divisional level where NPD specialists work full time on such activities. Metrics and performance evaluation pertain to how NPD performance is measured, tracked, reported, recognized, and rewarded. Cooper et al. (2002) nd that sophisticated organizations have dened go/kill gates and specic gate criteria, with an emphasis on strategic criteria, for example, t with core capabilities, market need, and nancial objectives. These organizations are also more likely to gauge how well the project met specic NPD goals such as market share, customer satisfaction, time to market, sales volume, and customers attitude toward the brand (Cooper et al., 2002).

Research Issues with the Framework

Kahn et al. (2006) readily admit that there are issues underlying the validity of the six dimensions. One issue concerns inclusivity, which refers to whether or not the six dimensions are the only elements to contribute to NPD best practice. Key elements pertaining to the fuzzy front end, life-cycle management, and launch are conspicuously missing (Kahn et al., 2006). Do these topics require a separate dimension or can elements of these be linked to the present six dimensions? Of these, an argument for establishing a life-cycle management dimension (Ausura, Gill, and Haines, 2004) and culture dimension (Cooper et al., 2004a; Cormican and OSullivan, 2004) is particularly strong. Are there other elements that are missing given the denitions of each dimension? Agreement on the breadth of the denitions for the dimensions and the number of dimensions is crucial to establish the validity of the framework.

A second issue is equality, which refers to whether there is equal weighting among the dimensions. Some argue that particular dimensions, such as NPD process and strategy, are more important to NPD success than others (Kleinschmidt, 2006). For example, Cooper and Kleinschmidt (1995) nd that of the nine factors that drive new product program performance, a high-quality new product process is most important followed by a clearly articulated new product strategy. This would suggest that dimensions are unequal in weight. The third issue concerns sophistication or maturity. Kahn et al. (2006) argue that each of the six dimensions can be dened across four levels of maturity, ranging from a low level of maturity (poor practice) to a higher level of maturity (best practice). Moreover, they suggest that companies often reect some but not all best practice characteristics. In fact, the achievement of best practice in some instances may be unattainable because of the amount of effort necessary to achieve best practice, e.g., as a consequence of diminishing returns on the effort necessary to attain best practice. Maturity is a key concept in their framework and is dened as perfected condition, fully developed (http://www.dictionary.com/ browse/maturity). Yet perfection is not necessarily achievable or advisable, especially in turbulent and uncertain contexts that require exibility, creativity, and innovation (Henard and Szymanski, 2001; Loch, 2000). Thus, the conceptualization of mature activities within each dimension representing best practice may be a misnomer. Indeed, some have suggested that a curvilinear relationship between maturity and at least several dimensions may persist, where maturity is necessary up to a certain point, after which the introduction of more exible, informal initiatives would be needed for stimulating more innovative NPD and commercialization (Henard and Szymanski, 2001; Loch, 2000). Radically new NPD projects, for example, would require less structure, more exploration, and more process exibility than incremental projects because of their nature.

Methodology
Phase 1: Validation of the Six NPD Dimensions
Through the support of a PDMA research grant, an empirical examination of the Kahn et al. (2006) best practices framework was undertaken to address the three issues cited above. The rst phase of the study attended to the question of the frameworks inclusivity. A Delphi methodology was embarked on with 20 leading innovation researchers, who, after receiving an invitation,

184

J PROD INNOV MANAG 2012;29(2):180192

K. B. KAHN ET AL.

agreed to examine the denitions and degree to which the six given dimensions were inclusive of NPD content. Comments on the denition and scope of the dimensions were collected through three rounds; feedback during a third round suggested that a degree of consensus had been reached. The use of researchers was deemed appropriate for this rst phase based on the presumption that these researchers would be more holistic in their view of NPD, versus industry-specic, and attuned with NPD theory and models dening the NPD discipline as a whole. A number of Delphi participants agreed that the six dimensions were inclusive. As one expert remarked:
The six dimensions look appropriate and inclusive. Although people might parse out other dimensions, most if not all could be handled in these six . . . seven or more dimensions gets cumbersome.

Creativity needs to be considered. Since you have Process to provide discipline, you might want to add a dimension for Creativity/Knowledge Management.

Comments also highlighted the need to account for a technical dimension:

Your list looks pretty good but it seems to overlook the technological feasibility issue, which to me includes scientic/engineering dimensions: can it be done at all and can it be manufactured at an appropriate scale? I was wondering if technology can be another dimension, as companies may differ with respect to the level of technological tools such as the internet that they use in their NPD.

Some participants strongly prescribed that the six dimensions should be modied. Following subsequent rounds, the collective recommendation was the addition of a dimension concerning commercialization to encompass issues pertaining to marketing and launch. Three illustrative comments are as follows:
Marketing should be a major dimension not just tucked into the end of the stage process. I am wondering if marketing could also be a separate dimension. The reasons for considering it are the increasingly fragmented nature of media and media selection (Internet, podcasts, etc.), market segmentation and positioning, value pricing, channel consolidation, and customer relationship management (CRM) can all have an impact on the NPD outcome. Consider a commercial dimension that addresses if the product can be manufactured and distributed protably in the context of the particular rm, its resources and capabilities, and the markets it can access?

Collaboration was another common theme:

You might consider adding a dimension around collaborating with people/organizations outside the company for the purpose of developing products (vs. sensing). These might include customers, vendors, etc.

In sum, the Delphi methodology results led to modication of the original six dimensions. A seventh dimension pertaining to commercialization was added. The people dimension, which was considered too broad, was broken into the two dimensions of project climate and company culture. Project climate addressed intra-company and project-specic people issues, and company culture addressed cross-company values and extra-company alliances and partnerships. And the strategy dimension was merged with the portfolio management dimension due to portfolio management being strongly driven by strategy. Following the Delphi methodology, NPD practice was characterized across these seven dimensions:

Other expert comments led to denitional augmentations. For example, one comment pertained to the market research dimensions. As one expert noted:
Wouldnt it be better to broaden the Market Research dimension into Research? When I look around here at my school, our students . . . (in the course of project work) . . . do a tremendous amount of research only part of which can be called market research.

strategy, process, research, project climate, company culture, metrics and performance measurement, and commercialization.

Phase 2: Expansion and Development of the NPD Dimensions

Using the redened seven dimensions, the second phase of the study involved the development and expansion of

Comments also pertained to the need to consider creativity and creativity management. Consider the following two comments by experts:

NEW PRODUCT DEVELOPMENT BEST PRACTICE

J PROD INNOV MANAG 2012;29(2):180192

185

the dimensions. A maturity model usually encompasses the following features (Paulk et al., 1993):

a number of maturity levels; a number of dimensions; and a description of how each dimension should be performed at each maturity level.

Consensus was reached during the Delphi process (phase 1) regarding the denition of the dimensions. The next step was to dene the maturity levels for each dimension and the practices indicative of a company operating at a particular maturity level. Typically, a continuum of improvement is seen in the practices used by companies operating at each increasing level of maturity within a framework. Characteristics were developed based on the ndings of general benchmarking studies (for example, Adams-Bigelow, 2004; Cooper et al., 2002, 2004a, 2004b) and reected a progression from poor to best practice. Below is a brief discussion of the individual characteristics that were selected for inclusion in each dimension of the framework. NPD strategy involves the dening and planning of a vision and focus for research and development (R&D), technology management, and product development efforts at the SBU, division, product line, and/or individual project levels, including the identication, prioritization, selection, and resource support of preferred projects. Characteristics of the strategy dimension of the framework were chosen to reect these activities across the four maturity levels: poor, good, better, and best. For example, characteristics of a poor maturity level reect an organization having no NPD goals and no system for portfolio management or prioritization resulting in a poorly balanced portfolio. At the other end of the spectrum best practice characteristics involve having welldeveloped and communicated clear NPD goals, projects in a portfolio that are aligned to the NPD strategy, and a portfolio management system is used to prioritize key projects and to ensure balance in the project portfolio. The use of an NPD process has frequently been cited as a differentiating factor between the success and the failure of NPD projects (Brown and Eisenhardt, 1995; Grifn, 1997b; Page, 1993). Within this framework, NPD process is dened as the implementation of product development stages and gates for moving products from concept to launch, coupled with those activities and systems that facilitate knowledge management for product development projects and the product development process. Best practice characteristics include the use of a formal NPD process that is documented and focuses effort on quality of execution but is also exible

and adaptable to meet the varying needs of individual projects, while poor practices are characterized by the absence of process or documentation to guide NPD. Understanding customer needs ultimately depends on an organizations capability for gathering and using market information to innovate successful projects. Therefore, the research dimension of the framework describes the application of methodologies and techniques to sense, learn about, and understand customers, competitors, and macro-environmental forces in the marketplace (e.g., focus groups, mail surveys, electronic surveys, and ethnographic study). Characteristics that are considered poor practice include incomplete market research, no customer/ user involvement, and no evaluation of technical or market results. On the other hand, best practice characteristics describe an organization where research is an integral part of development with customers highly involved in the process and different types of testing frequently undertaken depending on the projects individual needs. An innovative climate is a signicant factor for NPD success (Cooper et al., 2004a). Within this framework, project climate is dened as the means and ways that underlie and establish product development intracompany integration at the individual and team levels, including the leading, motivating, managing, and structuring of individual and team human resources. Characteristics of poor practice in this dimension describe a project climate where NPD work is completed by individuals on an ad-hoc basis while good practice describes a climate where NPD work is completed by dedicated, accountable, and empowered cross-functional teams. Within the framework, company culture is dened as the company management value system driving those means and ways that underlie and establish product development thinking and product development collaboration with external partners, including customers and suppliers. Characteristics of company culture include the level of managerial support for NPD, sources used for NPD ideas, and if creativity is rewarded and encouraged. Poor practice in this dimension is characterized by an organization where all NPD ideas originate inside the company, and senior management does not encourage creativity or does not support the NPD effort of the employees. In comparison, best practice is characterized by organizations that use multiple sources for ideas (suppliers, customers, competitors, etc.) and where senior management supports and rewards the NPD efforts of the employees. Measurement of NPD performance leads to improved product development performance (Cooper et al., 2004b; Godener and Soderquist, 2004). The metrics and performance measurement dimension of the framework

186

J PROD INNOV MANAG 2012;29(2):180192

K. B. KAHN ET AL.

includes the measurement, tracking, and reporting of product development project and product development program performance. Characteristics describing poor practice reect organizations using no metrics or evaluation criteria for their NPD capability. Best practice characteristics are found in organizations that set formal objectives against which performance can be evaluated and use varying metrics that are exible enough to meet the needs of individual products. Commercialization can be the most costly step of the NPD process with its costs often exceeding the combined cost for all previous stages (Urban and Hauser, 1980); thus, a company may only have one opportunity to launch a new product and to maximize their prots. Commercialization describes activities related to the marketing, launch, and postlaunch management of new products that stimulate customer adoption and market diffusion. Poor practice on this dimension is characterized by a lack of planning of the market launch, or a poorly managed market launch characterized by frequent and late changes or limited information sharing. Best practice is seen where market planning is an integral part of the development process and planning for the launch starts early in the development and is performed by a capable crossfunctional team. The output of this phase consisted of lists of practices that characterize each of the dimensions across each of the maturity levels.

in the United Kingdom, encouraging more effective cross-functional understanding and integration (Swan et al., 2007). R&D and commercial interests in the United Kingdom and Irish context are more clearly demarcated (Clark, 2003), leading to more problematic knowledge ows across the two domains (Swan et al., 2007). At the micro level, research has found evidence to suggest differences in managers styles of thinking because of different models of professional and educational institutions (Clark, 2003) and that Anglo-Irish contexts reect a larger degree of subordination to managerial superiority that embraces a tough results-oriented approach to managersubordinate relations, whereas Americans tend to rank high on individualism and achievement (Torrington, 1994). Such ndings support the three countries of the United States, United Kingdom, and Ireland as a sufciently diverse sample set within which to explore and compare NPD practices.

Questionnaire
The rst page of the questionnaire asked for demographic information regarding title, industry type, years of experience, and company size, along with innovation performance characteristics. The second page provided the denitions of the seven dimensions and asked respondents to indicate the relative importance of each element by allocating 100 points across the seven features. The third page of the survey provided respondents with the list of characteristics outlined for a particular dimension and asked them to indicate, for each element, whether it represented poor, good, better, or best practice. Pretest feedback from managers stressed that the survey be concise. Consequently, only one page of characteristics representing one of the seven dimensions was given to each survey participant, with the sheets of characteristics across the seven dimensions randomly assigned to survey participants.

Phase 3: Quantitative Survey of Managers from Three Countries

The third phase of the study involved the development and implementation of a questionnaire to garner managers perceptions of these dimensions with regard to the issues of equality and maturity. NPD practitioners in the United States, United Kingdom, and Ireland served as the sample and allowed for an investigation of generalizability of results across country contexts. A pertinent question is whether these three countries are really different contexts. Evidence from various studies would suggest yes. Research has found distinctions between the United States and the United Kingdom. regarding general innovation activities at the macronational level (Clark, 1987; Owen-Smith, 2003). Other studies suggest that the United States has a stronger culture of commercialization, entrepreneurial values, and applied R&D as compared with the culture found in U.K./ Irish environments (Mallon, Duberley, and Cohen, 2005; Stokes, 1997). Personnel movement across R&D and commercial domains is stronger in the United States than

Survey Sample Statistics

For the U.S. sample, practitioner members of PDMA, including program managers, directors, and managers of product development, were deemed as appropriate and qualied individuals to comment on innovation practice and represented the best company source for doing so. A sample of 2100 PDMA practitioner members was canvassed electronically and also received copies of the survey while attending the PDMA Annual October Conference in 2006. Following two electronic waves of the survey, 173 usable responses were collected, correspond-

NEW PRODUCT DEVELOPMENT BEST PRACTICE

J PROD INNOV MANAG 2012;29(2):180192

187

Table 1. Summary of Sample: Size and Location

Employee Number <10 11500 5011000 1001+ Total U.S. Sample 10 35 19 99 163 Ireland/U.K. Sample 13 75 11 45 144

Note: Not all U.S. respondents answered this question; thus, the total here does not equal the actual sample size.

ing to an 8.2% response rate. Analysis did not indicate demographic differences between the two waves. The sample of U.K. and Irish rms came from two sources. One source consisted of 85 company-sponsored individuals studying at the University of Limerick in a Masters of Technology program via distance learning. The second source was the PDMAs U.K. and Ireland member database consisting of 287 members. One hundred forty-four useable responses resulted from this sample, yielding a response rate of 38%. Respondents from both samples had a median of 10 years of NPD work experience and so were deemed qualied to have completed the questionnaire. The U.S. sample consists primarily of rms with greater than 1000 employees. In contrast, the Ireland and U.K. sample consisted predominantly of smaller rms with less than 500 employees (see Table 1), although all samples reected similarity in terms of industry sector represented (see Table 2).

In accordance with the recommendations of Rossiter (2002), who outlines when single-item scales may be appropriate, particular efforts were undertaken to provide the same denitions and exact same question format across the three countries. Pretest samples in each of the countries reected clear and equivalent understanding across the three country contexts about what was being asked plus were able to clearly articulate the focal object of the study. This satises pre-data collection guidelines for construct equivalence based on the criteria given for functional, conceptual, and category dimensions of construct equivalence (Hult et al., 2008). The nature of the questions as predominantly single-item category descriptors precluded a post data collection conrmatory factor analysis, however. With the survey not needing to be translated and the data representing relative percentages adding up to 100% and individual NPD characteristics rated on the scale of poor, better, good, and best, the issue of calibration equivalence was addressed (Hult et al., 2008). With the industry composition similar across the three samples plus data collection procedures closely followed in each of the three countries, some assurance of data collection equivalence is offered (Hult et al., 2008). Together, there appears to be adequate evidence in support of data equivalence across the three country samples.

Results and Discussion

Relative Importance of Seven Dimensions
The rst empirical analysis compared the relative importance that NPD professionals in the United States versus the United Kingdom and Ireland place on the seven dimensions. As shown in Table 3, t-tests applied to the data indicate that, for the most part, there is no difference between managers of these countries with regard to their
Table 3. Relative Importance of NPD Dimensions Comparing United States and Ireland Samples
Dimension Strategy Research Commercialization Process Company culture Project climate Metrics United States (n = 162) (%) 18.57 15.16 14.99 14.76 14.14 11.96 10.54 U.K. and Ireland (n = 144) (%) 18.15 16.20 14.79 14.54 11.81 14.80 9.70 Statistical Signicance .628 .221 .787 .771 .001* .000* .110

Data Equivalence Considerations

Due to potential differences across the three country contexts, there is a need to show evidence of data equivalence per the prescriptions of Hult et al. (2008). Data equivalence, which is dened as the extent to which elements of a research design have the same meaning and can be applied in the same way in different cultural contexts, is evaluated by way of construct equivalence, measurement equivalence, and data collection equivalence (Hult et al., 2008).
Table 2. Summary of Sample: Industry Sector and Location
Industry Sector Raw material sector Services sector Manufacturing sector Other sector Total U.S. Sample 2 72 91 11 176 Ireland/U.K. Sample 11 57 76 0 144

Note: U.S. sample total is greater than the number of useable response because of rms representing more than one industry sector.

NPD, new product development; * = statistically signicant difference between U.S. and U.K./Ireland NPD professionals.

188

J PROD INNOV MANAG 2012;29(2):180192

K. B. KAHN ET AL.

Table 4. Relative Importance of NPD Dimensions

Dimension Strategy Research Commercialization Process (n = 306) (%) 18.37 15.65 14.90 14.66 Statistically greater than all other dimensions at the p < .05 level Statistically greater than climate, culture, and metrics dimensions at the p <. 05 level Statistically greater than culture and metrics dimensions at the p < .05 level Statistically greater than the metrics dimension at the p < .05 level Statistically lower than all other dimensions at the p < .05 level

Project climate Company culture Metrics

13.30 13.04 10.15

NPD, new product development.

perceptions of the importance of the seven dimensions. Where there are signicant differences, U.S. professionals view company culture as more important than project climate while U.K. and Ireland NPD professionals perceive project climate as more important than company culture. Given that the U.S. sample has larger rms, we infer that these rms put more effort into creating a company culture that values innovation and encourages creativity. By contrast, smaller rms, such as those in the U.K./Ireland sample, are likely to have smaller, dedicated cross-functional teams, which implicitly emphasizes project climate due to limited personnel resources. Comparing the relative importance placed on each NPD dimension within the combined sample reafrms that strategy is rated higher than any other NPD dimension (see Table 4). This exemplies the importance to be

placed on NPD strategy. All managers rated metrics as the lowest in relative importance. This is particularly interesting given the growing emphasis on that topic. A deeper analysis was undertaken to investigate the exact nature of the interrelationships among the seven dimensions in the combined sample. Due to the ipsative nature of dimensional data because of the use of a summed scale item, correlation analysis was not appropriate. Instead, nonmetric multidimensional scaling (NMDS) was applied to the relative importance data to visually portray the relationships among the dimensions. A benet of NMDS is that data do not have to be normally distributed for analysis; thus, it is suited for ordinal data. However, pictorial results are not statistically signicant but, rather, presented for interpretation. Prior to running ALSCAL NMDS on SPSS 16.0 (IBM, Armonk, NY), dissimilarity proximity matrices based on Euclidean distances were calculated. The matrix was then input into the ALSCAL routine to generate a twodimensional plot of interrelationships between NPD dimensions and therefore offer a visualization of interrelationships for interpretation. The stress statistic for the two dimensional MDS plot was .023, satisfying excellent goodness-of-t criteria and well below maximum stress statistic guidelines of .20 (Wickelmaier, 2003). The stress statistics for a one-dimension solution and threedimension solution were also calculated and found to be greater than the stress statistic for the two-dimension solution. This provides evidence to favor the twodimensional MDS plot, indicating that the data are best described using two dimensions (Wickelmaier, 2003). Figure 1 presents the two-dimensional visualization of the MDS analysis showing the relative importance among

1.0 Process .5 .0 .5 1.0 1.5 Research 2.0 1 0 1 Dimension 1 2 3 Climate Culture Commercial Metrics Strategy

Figure 1. Multidimensional Scaling Plot

Dimension 2

NEW PRODUCT DEVELOPMENT BEST PRACTICE

J PROD INNOV MANAG 2012;29(2):180192

189

Internal

NPD Best Practices

For the purposes of identifying best and poor practices, a listing of characteristics receiving a majority of votes as a poor or best practice1 was amassed across the seven dimensions. As shown in Table 5, it seems clear that the elements of poor NPD practice are more well known than the characteristics of best practice for each of the seven dimensions. This is somewhat surprising given the various benchmarking and new product success studies. On the other hand, these ndings indicate that some best practice messages with regard to strategy, process, research, and commercialization are being heard by managers. Most interesting is the lack of understanding of best practice elements of climate, culture, and, especially, metrics. These results support previous work that metrics and culture are weak areas of NPD and that most rms do not know how to implement these effectively (Cooper et al., 2002, 2004a, 2004b). Those practices distinguished as poor and best correspond to the characteristics suggested by the Kahn et al. (2006) framework. This provides some verication of what the framework proposes. Moreover, the results indicate that practitioners can distinguish between poor and best practices on most dimensions. The middle ground between poor and best practice typifying better and good practices appears to lack clear consensus. This suggests that practitioners reect a general consensus of what constitutes poor and best practice, and infers that there are some generalizable NPD characteristics reective of best (and poor) practice. What may be the difculty in establishing best practice is implementing common practices that progress a company through the middle stages of better and good practices. Thus, certain best practices are readily recognizable, but the path transitioning through stages to being best appears to be a customized path to NPD best practice due to a lack of consensus.

NPD / Innovation Focus

Broader Company Focus

External

Strategy Process Research Climate Culture Metrics Commercialization

Characterization of the Dimension Broader Company Focus, Internal NPD/Innovation Focus, Internal Broader Company Focus, External NPD/Innovation Focus, Internal NPD/Innovation Focus, Internal NPD/Innovation Focus, Internal NPD/Innovation Focus, External

Figure 2. Interpretation of the Multidimensional Scaling Plots

NPD, new product development

the seven NPD dimensions. As shown, strategy is clearly separate from the other dimensions, reinforcing its higher relative importance. Research is also separate with a distinct positioning relative to the other dimensions. The other ve dimensions are more closely grouped together. An important objective of an MDS analysis is to decipher the two axes. Our interpretation is that the x-axis corresponds to an NPD/innovation focus versus a broader company focus due largely to the positioning of strategy and research. The y-axis is characterized along a continuum ranging from internal to external activities/ processes, as shown in Figure 2. The basis of this characterization stems in part from the relative positioning of commercialization versus process, where commercialization involves activities planned for internally but implemented externally in the marketplace while process is clearly a procedure used internally in the rm. Applying these characterizations of the axes suggests a particular focus for each of the seven dimensions. All of the professionals in the sample appear to characterize NPD practice as, not surprisingly, more NPD/innovation focused with ve of the seven dimensions at that end of the continuum. Only strategy and research are viewed as broad, company elements. NPD professionals also perceive NPD practices to be more internal in nature as ve of the seven dimensions were characterized as such. Only research and commercialization are considered to be externally focused in nature.

Discussion and Implications

The study results show that regardless of where a rm resides, strategy is clearly viewed as important and is distinguished from the other six given dimensions. Such results reinforce the emphasis of strategy in NPD research and exemplify the generalizability of the importance of strategy to NPD best practice (cf. Cooper et al., 2002, 2004b). Firms also view strategy as illustrative of the broader companys strategy and mission (Cooper et al., 2004b).
1 Respondents found it difcult to dene good and/or better practice. They were more comfortable delineating poor and best practice; thus, we only report on these practices.

190

J PROD INNOV MANAG 2012;29(2):180192

K. B. KAHN ET AL.

Table 5. Elements of Best versus Poor Practice for Each Dimension: Best versus Poor Practices Receiving a Majority Response
Best Practice Strategy Clearly dened and organizationally visible NPD goals The organization views NPD as a long-term strategy NPD goals are clearly aligned with organization mission and strategic plan NPD projects and programs are reviewed on a regular basis Opportunity identication is ongoing and can redirect the strategic plan real time to respond to market forces and new technologies A common NPD process cuts across organizational groups Go/no-go criteria are clear and predened for each review gate The NPD process is exible and adaptable to meet the needs, size, and risk of individual projects The NPD process is visible and well documented The NPD process can be circumvented without management approval Poor Practice Most NPD projects t with mission, but some pet projects that do not t mission exist No NPD goals The organization views NPD only as a short-term tactical initiative Unclear NPD goals A portfolio management process is used to manage existing offerings All projects are aligned with the organizations mission/strategic plan No concern over types of NPD projects being developed No process for undertaking portfolio management NPD projects may or may not be aligned with organizations mission/strategic plan NPD projects are evaluated relative to other projects in a portfolio Criteria for evaluating NPD projects are not dened Limited documentation on the NPD process exists Minimal testing (concept, product, and market) performed No NPD process exists There is no NPD process owner or NPD process champion An information technology (IT) infrastructure with appropriate hardware, software, and technical support is available to all NPD personnel Not all NPD personnel have access to the same IT tools (software and hardware) Knowledge of projects is stored and available to NPD personnel Project management software and techniques are used to manage projects The company actively works with customers to develop new solutions All NPD ideas come from within the company No identiable NPD group No project leader(s) Functional areas only support those ideas which they originated Interaction and knowledge transfer between functional areas is poor Customer/user is uninvolved in NPD process Little if any market research is undertaken No real evaluation of testing (concept, product, and market) results is undertaken No market studies are undertaken to understand marketplace

Process

Culture

Project climate

Research

Top management supports the NPD process Management rewards and recognizes entrepreneurship Cross-functional teams underlie the NPD process NPD activities between functional areas are coordinated through formal and informal communication Ongoing market research is used to anticipate/ identify future customer needs and problems Concept, product, and market testing is consistently undertaken and expected with all NPD projects Customer/user is an integral part of the NPD process Results of testing (concept, product, and market) are formally evaluated

Metrics

Commercialization

The launch team is cross-functional in nature A project postmortem meeting is held after the new product is launched Logistics and marketing work closely together on new product launch Customer service and support are part of the launch team A launch process exists

No standard criteria for evaluating NPD projects exist No standard criteria for evaluating the overall NPD effort exist One person does all NPD project evaluations Projects are never killed Marketing budget decisions can dramatically change up to the point of launch Launch decisions are kept condential by the launch team because of fear of public announcement

NPD, new product development.

NEW PRODUCT DEVELOPMENT BEST PRACTICE

J PROD INNOV MANAG 2012;29(2):180192

191

The study results also indicate that there is a consensus on the metrics dimension. Specically, this dimension was weighted the lowest relative to the other dimensions. This counters recent calls for greater focus on metrics and tracking (cf. Chan, 2004; Cooper et al., 2004a). It is possible, though, that these ndings are simply providing evidence to underlie the need for greater emphasis as metrics are not currently of high importance. In either case, it is clear that NPD practitioners see other NPD dimensions as more important. What makes these more important in companies is a research question to address. The low relative importance of project climate and company culture also reinforces previous ndings. For example, Cooper et al. (2004a) found that only 37% of rms are strong in building an innovative climate that fosters innovation. In fact, they indicate that the climate and culture for NPD is dangerously weak in most businesses (p. 39). Another counter to NPD research is the relative importance placed on process. Much attention in NPD literature has highlighted the importance of NPD processes (cf. Cooper et al., 2004a, 2004b). However, the present study nds that process is less important than strategy as well as research and commercialization. This nding suggests that given that 69% of rms use a formal NPD process (Barczak et al., 2009), and likely have done so for several years, the use of their process may be part of standard best practice and thus requires less emphasis relative to other practices. This nding may also reect the current emphasis on customer participation in the NPD process through market research activities such as beta testing, customer site visits, and voice of the customer research (Barczak et al., 2009). Moreover, research is externally focused as it potentially involves examining not just end customers but also trade customers, suppliers, and competitors, as well as industry trends, emerging technologies, etc. With regard to specic items of practice, there appears to be greater cognizance and majority thinking of what constitutes a poor practice than what constitutes a best practice. This would reafrm suggestions by Loch (2000) and Murray et al. (2002) that there is no one best practice for NPD. However, there was a consensus on some characteristics as best, suggesting that there are likely generalizable characteristics of best and poor practicethose practices identied as poor should be avoided. The large convergence and majority responses for poor practices strongly suggests that research should nd it easier to identify poor practice when examining NPD practice. Therefore, consensus over poor practice may be easier to establish and document. A one-size-ts-all approach for avoiding poor practice just might be possible. What the

present study further suggests is that path from poor to best is not clear and may require customization as Loch (2000) suggests. Research needs to continue to identify what best practice really means for NPD and how companies can strive toward these practices, although the results infer that these may be difcult to prescribe especially across all NPD scenarios. In summary, the present study sought to provide insights on NPD managers views of NPD best practices from three different countries, predicated on the objective of addressing three issues raised with the best practice framework of Kahn et al. (2006). Acknowledging seven dimensions of innovation practice, results indicate that strategy is viewed as a crucial NPD dimension. This nding reinforces Cooper et al.s (2002) contention that strategy is important to guiding NPD activities. Thus, it seems vital that managers articulate a clear new product strategy and consider the t of their projects with their strategy. Addressing the elements of each dimension, the good news is that some best practice messages about strategy, process, research, and commercialization are being recognized by managers in Western countries. However, managers seem to lack understanding of best practice elements of climate, culture, and metrics. Previous work suggests that climate, culture, and metrics are particularly weak areas across rms and industries (Cooper et al., 2004a, 2004b), so this may not be so surprising. Given these discernible weak areas, continued work on these topics is warranted.

References
Adams-Bigelow, M. E. 2004. First results from the 2003 comparative performance assessment study (CPAS). In The PDMA handbook of new product development (2nd ed.), ed. K. B. Kahn, 54666. Hoboken, NJ: John Wiley & Sons. Argyris, C. 1985. Making knowledge more relevant to practice: Maps for action. In Doing research that is useful for theory and practice, ed. E. E. Lawler, A. M. Mohrman, T. G. Cummings, S. A. Mohrman, and G. E. Ledford, 79106. Lanham, MD: Lexington Books. Ausura, B., B. Gill, and S. Haines. 2004. Overview and context for life cycle management. In The PDMA handbook of new product development (2nd ed.), ed. K. B. Kahn, 497512. Hoboken, NJ: John Wiley & Sons. Barczak, G., A. Grifn, and K. Kahn. 2009. Trends and drivers of success in NPD practices: Results of the 2003 PDMA best practices study. Journal of Product Innovation Management 26 (1): 323. Brown, S., and K. Eisenhardt. 1995. Product development: Past research, present ndings and future directions. Academy of Management Review 20 (2): 34378. Camp, R. 1989. Benchmarking: The search for industry best practices that lead to superior performance. Milwaukee, WI: ASQ Quality Press. Chan, A. 2004. Using an effective metrics program to support business objectives. In The PDMA handbook of new product development (2nd ed.), ed. K. B. Kahn, 44554. Hoboken, NJ: John Wiley & Sons.

192

J PROD INNOV MANAG 2012;29(2):180192

K. B. KAHN ET AL.

Clark, P. A. 1987. Anglo-American innovation. New York: De Gruyter. Clark, P. 2003. Organizational innovations. London: Sage. Cooper, R. G., S. J. Edgett, and E. J. Kleinschmidt. 2002. Improving new product development performance and practices. Consortium Learning Forum Best-Practice Report. Houston, TX: American Productivity and Quality Center. Cooper, R. G., S. J. Edgett, and E. J. Kleinschmidt. 2004a. Benchmarking best NPD practicesI. Research-Technology Management 47 (1): 3143. Cooper, R. G., S. J. Edgett, and E. J. Kleinschmidt. 2004b. Benchmarking best NPD practicesII. Research-Technology Management 47 (3): 5059. Cooper, R. G., and E. J. Kleinschmidt. 1995. Benchmarking the rms critical success factors in new product development. Journal of Product Innovation Management 12 (5): 37491. Cormican, K., and D. OSullivan. 2004. Auditing best practice for effective product innovation management. Technovation 24 (10): 81929. Davidson, J. M., A. Clamen, and R. A. Karol. 1999. Learning from the best new product developers. Research-Technology Management 42 (4): 1218. Dooley, K., A. Subra, and J. Anderson. 2002. Adoption rates and patterns of best practices in new product development. International Journal of Innovation Management 6 (1): 85103. Garcia, R., and R. Calantone. 2002. A critical look at technological innovation typology and innovativeness terminology: A literature review. Journal of Product Innovation Management 19 (2): 11032. Godener, A., and K. E. Soderquist. 2004. Use and impact of performance measurement results in R&D and NPD: An exploratory study. R&D Management 34 (2): 191219. Goodman, P. S. 1985. Critical issues in doing research that contribute to theory and practice. In Doing research that is useful for theory and practice, ed. E. E. Lawler, A. M. Mohrman, T. G. Cummings, S. A. Mohrman, and G. E. Ledford, 32442. Lanham, MD: Lexington Books. Grifn, A. 1997a. Drivers of NPD success: The 1997 PDMA report. Chicago, IL: PDMA. Grifn, A. 1997b. PDMA research on new product development practices: Updating trends and benchmarking best practices. Journal of Product Innovation Management 14 (6): 42958. Henard, D., and D. Szymanski. 2001. Why some new products are more successful than others. Journal of Marketing Research 38: 36275. Hult, G. T. M., D. J. Ketchen Jr., D. A. Grifth, C. A. Finnegan, T. Gonzalez-Padron, N. Harmancioglu, Y. Huang, M. B. Talay, and S. T.

Cavusgil. 2008. Data equivalence in cross-cultural international business research: Assessment and guidelines. Journal of International Business Studies 39: 102744. Kahn, K. B., G. Barczak, and R. Moss. 2006. Establishing a NPD best practices framework. Journal of Product Innovation Management 23 (2): 10616. Kleinschmidt, E. 2006. Rejoinders to establishing an NPD best practices framework. Journal of Product Innovation Management 23 (2): 117 27. Loch, C. 2000. Tailoring product development to strategy: Case of European technology manufacturer. European Management Journal 18 (3): 24658. Mallon, M., J. Duberley, and L. Cohen. 2005. Careers in public sector science: Orientations and implications. R&D Management 35 (4): 395 407. Murray, J. A., A. ODriscoll, and A. Torres. 2002. Discovering diversity in marketing practice. European Journal of Marketing 36 (3): 37390. Owen-Smith, J. 2003. From separate systems to a hybrid order: Accumulative advantage across public and private science at research one universities. Research Policy 32: 1081104. Page, A. L. 1993. Assessing new product development practices and performance: Establishing crucial norms. Journal of Product Innovation Management 10 (4): 27390. Paulk, M. C., B. Curtis, M. B. Chrissis, and C. V. Weber. 1993. Capability maturity model for software, version 1.1. Software Engineering Institute, Technical Report No. CMU/SEI-93-TR-24. Rossiter, J. R. 2002. The C-OAR-SE procedure for scale development in marketing. International Journal of Research in Marketing 19: 30535. Stokes, D. E. 1997. Pasteurs quadrant: Basic science and technological innovation. Washington, DC: Brookings Institution Press. Swan, J., A. Goussevskaia, S. Newell, M. Robertson, M. Bresnen, and A. Obembe. 2007. Modes of organizing biomedical innovation in the UK and US and the role of integrative and relational capabilities. Research Policy 36 (4): 52947. Taylor, F. 1967. The principles of scientic management. New York: W. W. Norton. Torrington, D. 1994. International human resource management. Hemel Hempstead, UK: Prentice-Hall. Urban, G. L., and J. R. Hauser. 1980. Design and marketing of new products. Englewood Cliffs, NJ: Prentice-Hall. Wickelmaier, F. 2003. An introduction to MDS. Working Paper. Sound Quality Research Unit at Alaborg University, Aalboarg East, Denmark.