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Harvard Business School 9-699-152

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The New Product Development Imperative

I. Product Development Capability as a Sustaining Strategy

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Research Associate Edward Smith prepared this note under the supervision of Professor Steven C. Wheelwright as the basis
for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.

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This document is authorized for use only in Dr. Rajib Roy's Innovation Management at Narsee Monjee Institute of Management Studies (NMIMS) from Jun 2022 to Dec 2022.
699-152 The New Product Development Imperative

Exhibit 1 Forces Driving Development Imperatives

Driving Forces Development Imperative Implications

1. Intense competition; Shorter development cycles;


Fast and Responsive better targeted products
changing customer
expectations; accelerating
technological change

2. Exploding product variety; Leverage from critical


High Development
sophisticated discerning resources; increased number of
customers; technical Productivity successful development
diversity projects per engineer

Creativity combined with total


3. Demanding customers; Products with
product quality; customers
crowded markets; intense Distinction and Integrity
integrated with truly cross-
competition functional development process

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This document is authorized for use only in Dr. Rajib Roy's Innovation Management at Narsee Monjee Institute of Management Studies (NMIMS) from Jun 2022 to Dec 2022.
The New Product Development Imperative 699-152

Exhibit 2 Examples of “Incorrect Principles”


(Obstacles to Outstanding Development Capabilities)

Myth A Probable Outcome if Applied

• Management should select from Development strategy created by a


proposed projects. random process – disconnected from
company objectives

• Portfolio of projects should Over-commitment of resources means


exceed capacity that completed projects are late, over
budget and inferior

• Dynamic environment requires Increasingly reactive to the environment


frequent changes in priorities (e.g., a competitor’s moves and feigns);
the company’s trajectory is chaotic

• Individuals should work on multiple People are over committed and


projects concurrently ineffective; disenchantment and
inefficiencies grow

• All projects should follow Putting a square peg in a round hole—


the same process projects with different needs receive the
same prescription.

• Cannot compare projects— Experience from one project cannot be


each one is unique applied to another; new development
projects “reinvent the wheel”

• Repeated Go/No-go reviews Delays propagate through project


lead to better project results phases; deliverables are late

II. A Revolutionary Development Strategy—Creating the Right Set of Projects

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This document is authorized for use only in Dr. Rajib Roy's Innovation Management at Narsee Monjee Institute of Management Studies (NMIMS) from Jun 2022 to Dec 2022.
699-152 The New Product Development Imperative

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Concepts and Tools for Creating the Development Portfolio


Exhibit 3
(8 steps towards building outstanding development capabilities)

Concepts & Tools Description

Pre-Project
• Characterizing project types
A common language is established by
defining types of development projects;
each project’s contribution to the larger
strategic framework becomes evident
• Strategic choice of project mix Creating by design a development
portfolio that is aligned with the
company’s objectives

• Creation of road maps


Linking and sequencing the individual
projects in the project mix; mapping out
the evolution of future product
generations
• Aggregate Project Planning The big picture: managing the strategic
project portfolio

Project Execution

• Type of project team


Building a development team that is
matched to the project type; nurturing the
teams that will be executing tomorrow’s
development projects
• Prototyping Monitoring project performance and
status relative to established targets;
testing market realities and consumer
acceptance

Learning from Projects

• Project audits Post project analysis of performance to


capture know-how; creating effective
processes for future development
projects

• Learning across projects Building process capabilities as a means


for competitive renewal; building
confidence and enabling repeated
success

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The New Product Development Imperative 699-152

Tools and Concepts for a New Product Development Strategy


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Exhibit 4 Defining Development Projects


(The development project continuum)

BREAKTHROUGHS PLATFORMS MAINTENANCE

Completely new Integration of new and Minor modifications:


product: Building existing components product maintenance
products and process and processes into a
capabilities for the systems solution
future

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This document is authorized for use only in Dr. Rajib Roy's Innovation Management at Narsee Monjee Institute of Management Studies (NMIMS) from Jun 2022 to Dec 2022.
699-152 The New Product Development Imperative

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("C)3("%*'1)6%1<"%*<;%*%5*=?%+"*(:%61%B1D2="6"$%%A51)45%65":"%6+2":%1?%2(1["B6:%("2(":"<6%*%:34<3?3B*<6
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;"(3#*63#":%?1(%D*<+%+"*(:%61%B1D"%*<;%65):%:51)=;%5*#"%*%D*[1(%3D2*B6%1<%65"%B1D2*<+Y:%?)6)("$

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?"*6)("% 1(% "#"<% (";)B";% B1:6$% % A53:% 3:% *% ="::% ;"D*<;3<4% 6+2"% 1?% 2(1["B6% :3<B"% B5*<4":% 3<#1=#";% *("
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;"?3<";% D*<+% 1?% 65"% ;"#"=12D"<6% B513B":]$% % % % % N<% "V*D2="% 1?% *% ;"(3#*63#"% 2(1["B6% >1)=;% '"% 65"
3<6(1;)B631<%1?%*%W?*:6"(X%=*2612%B1D2)6"(%'+%("2=*B3<4%36:%D3B(12(1B"::1(%>365%*%?*:6"(%#"(:31<%1?%65"
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):";%61%B("*6"%"#"<%D1("%;"(3#*63#":%51>"#"(P%65"%OG/%D"4*5"(6a%D1;"=%D3456%B1D"%>365%*%:6*<;*(;
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The New Product Development Imperative 699-152

("C)3(";% ?1(% "*B5% 2(1["B6$% % L1D"% B1D2*<3":% 5*#"% 65"<% ?1)<;% B1=1(:% *% ):"?)=% >*+% 61% :51>% >53B5
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3D2(1#"D"<6:$

Exhibit 5 The four primary types of projects differ in the degree of change they require in product
and process technology. Circles are used to indicate the location and size of individual projects
within the product/process change framework.

Characterizing Project Types -


through degrees of product and process change

more Product Change less

Breakthrough
more

completely new
product and
process
technologies
creative latitude
required

Platform
systems solution to a product
Process Change

challenge
cross-functional development
required
Derivative
incremental change to
existing product
one or two functional skills
to complete
Maintenance
sustaining
less

routine
processes

Continual Improvement of the Definitions of Project Types


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7
This document is authorized for use only in Dr. Rajib Roy's Innovation Management at Narsee Monjee Institute of Management Studies (NMIMS) from Jun 2022 to Dec 2022.
699-152 The New Product Development Imperative

Exhibit 6% B5*(*B6"(3a":% 65"% "#1=)631<% 3<% ;"?3<3631<:% 65*6% 5*:% 1BB)((";% 3<% D*<+% ?3(D:% 1#"(% 63D"% *<;
1#"(%:"#"(*=%4"<"(*631<:%1?%2(1;)B6$
Refining Project Definitions over Time
Exhibit 6
Phase 1: Overlapping

Breakthrough

Platform

Derivative

Maintenance
Phase 2: Mutually Exclusive

Breakthrough Platform Derivative Maintenance

Phase 3: Focused

Breakthrough Platform Derivative Maintain.

Planning the Firm’s Future as its Product Line Grows


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*%;":T612Q=*2612%B1D2)6"(%D*<)?*B6)("(%3:%:51><%3<%Exhibit 7$

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The New Product Development Imperative 699-152

Exhibit 7 This exhibit shows what the development roadmap might look like for a planned line
of desktop and laptop computer derivatives based on microprocessor speed. The expected market
launch and termination dates of the desktop and laptop lines are shown though the actual
development projects would begin well in advance. Note that shortly after the introduction of the 350
megahertz (MHz) laptop derivative, a redesigned desktop platform would be introduced.

The Project Roadmap

Product Launch
Product Termination
500 MHz

450 MHz

Desktop
400 MHz

350 MHz

Laptop
300 MHz

250 MHz

1998 Today 2000 time

Linking Strategy to the Project Mix


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699-152 The New Product Development Imperative

Exhibit 8 Three different business strategies.

Achieving Business Strategy through the New Product


Development Project Mix

Business A Business B Business C


Types of Projects
Strategy Strategy Strategy

• Breakthrough 60 10 5

• Platform 25 60 35

• Derivatives &
15 30 60
Maintenance

100% 100% 100%

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The Aggregate Project Plan

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This document is authorized for use only in Dr. Rajib Roy's Innovation Management at Narsee Monjee Institute of Management Studies (NMIMS) from Jun 2022 to Dec 2022.
The New Product Development Imperative 699-152

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Exhibit 9* Sequencing Projects*:


Creating projects plans with rhythm and discipline

Defibrillators
1995 1998
Platform Platform
Product
Line 1 derivative derivative derivative derivative

1996 1999
Product Platform Platform
Line 2
derivative derivative derivative derivative

Pacemaker
1997 2000
Platform Platform
Product
Line 3 derivative derivative derivative derivative

time

Defining the Contents of Individual Projects


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%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
h%&(1D%Cardiac Pacemakers, Inc. (A)%\:""%"<;<16"]

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699-152 The New Product Development Imperative

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III. Outstanding Project Execution – Two Imperatives


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The New Product Development Imperative 699-152

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Creating the Right Team for the Project Type


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699-152 The New Product Development Imperative

Exhibit 10 Four levels of teams are depicted here: functional, were the work is completed in the
function and coordinated by functional managers (FM); lightweight, were a coordinator works through
liaison representatives (L) but has little influence over the work; heavyweight, where a strong leader
exerts direct, integrating influence across all functions; and autonomous, where a heavyweight team
is removed from the function, dedicated to a single project, and co-located.

Types of Development Teams

1. Functional Team Structure 2. Lightweight Team Structure


Functional
Manager
FM FM FM FM FM FM
(FM)

ENG MFG MKG ENG MFG MKG

L L

Project Liaison (L)


Working Level Manager Area of Strong PM Influence
(PM)

3. Heavyweight Team Structure 4. Autonomous Team Structure

FM FM FM FM FM FM
Market

ENG MFG MKG ENG MFG MKG

Market
Con-
cept
L L L

Con-
PM
cept
PM L L L

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The New Product Development Imperative 699-152

Exhibit 11 Project Team Types


(Their strengths and weaknesses)

Team Structure and Associated Strengths Weaknesses


Characteristics

Functional (traditional): • Brings functional expertise to • Judged based on adherence to


Team members work under problem solving function processes rather than
different functional managers; overall project results
projects evolve in a serial fashion • Function managers control
as tasks pass from one function to resources for the tasks they • Lack of coherence between
the next. own functional tasks on complex
projects; serial processing
• Cookie cutter approach to
solving varied problems
Lightweight: • Same as functional • Same as functional
Heightened degree of coordination •
• Oversight of collective The lightweight manager has
due to “administrative” oversight;
functional responsibilities helps little organizational clout and
similar to a functional team
ensure timely project little power to affect critical
completion decisions

Heavyweight: • Heavyweight manager has • Team members still report to


Core team members are broad control over the functional head; rewards and
representatives of their functions on decision-making processes, responsibilities are
an integrated development team; resources used and targets disconnected from project
heavyweight manager is a established deliverables
heavyweight in the organization
• Political tightrope - project
manager has about the same
stature as functional heads
Autonomous: • Focus: no conflicting forces • Less corporate control; team
Team members are co-located and pulling at team members tends to expand on original
answer only to the heavyweight project description
project manager; the team has • Speed and ability in solving
challenging, novel problems • Little use of existing process
extreme latitude to devise solutions
solutions
to the problems it has responsibility
for. • Complete functional
• Unique product and process
integration- the broadly skilled
solutions may be difficult to
team is independent
integrate into existing business

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699-152 The New Product Development Imperative

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2=*6?1(D%2(1["B6$

Effective Communication: Schedules and Timing


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;"#"=12D"<6%2(1["B6%D*<*4"D"<6$

Exhibit 12* The Project Team Dashboard*


(A comprehensive performance indicator at one company]

Employee Satisfaction Product Quality


4 Development Status 125 150
3 5
2 6 Product-Development Status Process-Development Status 100 175
-1 0 1 -1 0 1
1 7 -2 2 -2 2 75 200
Current -3 3 -3 3
Last survey -4 4 -4 4 Estimate of mean time
between failures
Critical Path (weeks) Critical Path (weeks)
Goal
Weekly hot item: Hot item:
Staffing GoKart ASIC chip Test development Business
Engineering Staffing Margins
Milestones Completed
30 Milestones Planned 15 20
25 35 10 25
20 40 Evaluations in Progress 5 30
Target Customers Start Complete
Other Staffing Grand Revenue
30 Systems, Inc 135
25 35 HiTech, Inc 100 135

20 40 Other Customers Start Complete 75 135


Charged Systems
Current Finetype Current Est.: FY 92
Goal Korea, Inc Business Plan: FY 92

Weeks to Next Quartly Product Costs


Bill of Materials Overhead
Program Cost to Date
Business Review
105 115 15 20 105 115
-8 -4 0 4 8 95 125 10 25 95 125
85 135 5 30 85 135
Business Strategy
Current Estimate: FY 92 Actual
Development
Business Plan: FY 92 Plan

90 91 92 93 94 Current product Business plan


cost estimate: 152 product cost: 138
%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
h%&(1D%05(3:%M"+"(-%How the Right Measures Help Teams Excel%\:""%"<;<16"]

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The New Product Development Imperative 699-152

Linking Development Project Phases to Prototype Cycles

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Project Staffing and Career Development


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699-152 The New Product Development Imperative

Exhibit 13 % Project managers take on a variety of roles and responsibilities, eleven of which are depicted
here. How much of a heavyweight (versus lightweight) project manager’s role occurs on a specific project is
determined by how extensive a role the project manager takes in each of these areas.

Project Manager Profile

Lightweight Heavyweight
(limited) (extensive)

• Span of coordination responsibilities

• Duration of responsibilities

• Responsible for specs, cost, layout,


• components
• Working level contact with engineers

• Direct contact with customers

• Multilingual/multidiscipline skills

• Role in conflict resolution

• Marketing imagination/concept
champion

• Influence in:

- engineering

- marketing

- manufacturing

IV. Getting on the Right Trajectory for Effective Product Development


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The New Product Development Imperative 699-152

Exhibit 14$%%^53="%B):61D"(:%')+%65"%2(1;)B6:%*<;%:"(#3B":%B("*6";%'+%65":"%?3(D:-%>5*6%D*T":%65"3(
*;#*<6*4"% :):6*3<*'="% 3:% 65"% ?*B6% 65*6% "#"(+% 2(1["B6% :34<3?3B*<6=+% 3D2(1#":% 65"% ;"#"=12D"<6
B*2*'3=363":%1?%65"%?3(D:$

Exhibit 14 % This example compares two competitors who incorporate similar amounts of technological
change in each generation of product, but the slow competitor lets twice as much time elapse between product
generation introductions as does the faster one. Note the fast cycle competitor starts one year after the slow
cycle competitor .

Getting on the Right Development Trajectory

Generational
Technological Fast-Cycle
Improvements Competitor
6

5
Slow-Cycle
Competitor
4

3 4

2 3

1 2

1
Time
0 0 (years)

References and Additional Readings

New product and process development

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0=*(T-%L6"#"<%0$%^5""=>(3456-%Managing New Product and Process Development: Text and Cases-%A5"
&(""%9("::-%,88O

.$ &1(%*<%1#"(#3">%1<%65"%3D21(6*<B"%1?%<">%2(1;)B6%;"#"=12D"<6%B*2*'3=363":%*<;%2=*<<3<4%?)6)("
2(1["B6:P% @$% f"<6% K1>"<-% f3D% K$% 0=*(T-% 05*(=":% N$% @1==1>*+-% L6"#"<% 0$% ^5""=>(3456,
Development Projects: The Engine of Renewal,%@*(#*(;%K):3<"::%!"#3">-%94501-%L"26"D'"(EZB61'"(
,88H

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699-152 The New Product Development Imperative

O$ Process-Based Capabilities: A Principal Focus of Operations Management-% @*(#*(;% K):3<"::% LB511=


9)'=3:53<4-%,88G

Project planning

H$ A>1% ("?"("<B":% ?1(% "??"B63#"% <">% 2(1;)B6% *<;% 2(1B"::% ;":34<% 3<% ;"#"=12D"<6% 2(1["B6:P% f*(=% A$
_=(3B5-%Product Design and Development-%MBb(*>E@3==%U<B$-%,88Gl%c*<%g$%L5)<T-%Integrated Process
Design and Development-%K):3<"::%Z<"%U(>3<-%,88.

G$ L6"#"<%0$%^5""=>(3456-%^$%`*(=%L*::"(-%m($, The New Product Development Map, %@*(#*(;%K):3<"::


!"#3">%89315%M*+Em)<"%,88J

J$ L6"#"<%0$%^5""=>(3456-%f3D%0=*(T, Creating Project Plans to Focus Product Development,-%@*(#*(;


K):3<"::%!"#3">-%92210-%M*(B5EN2(3=%,88.

I$ `=="<%L6"3<-%M*(B1%U*<:363-%A51D*:%m$%f1:<3BT, Product Development: A Customer Driven Approach-


@*(#*(;%K):3<"::%LB511=%9)'=3:53<4-%695-016-%,88J

F$ A5"% ?1==1>3<4% :1)(B"% 2(1#3;":% 65"% =*6":6% 653<T3<4% 3<% 65"% *("*% 1?% B):61D"(% ?1B):% 3<% 2(1;)B6
;"#"=12D"<6P% `;>*(;% &$% MBn)*((3"-% Customer Visits: Building a Better Market Focus-% L*4"
9)'=3B*631<:-%.<;%";$-%,88F

Project execution and management

8$ f3D% K$% 0=*(T-% L6"#"<% 0$% ^5""=>(3456, Organizing and Leading Heavyweight Development Teams-
0*=3?1(<3*%M*<*4"D"<6%!"#3">-%L2(3<4%,88.

,/$ &1(% *% ;"6*3=";% =11T% *6% B1<B"26:% *<;% 611=:% ?1(% 2(1["B6% D*<*4"D"<6P% Project Management Manual,
@*(#*(;%K):3<"::%LB511=%9)'=3:53<4-%697-034-%,88J

,,$ 05(3:6125"(% M"+"(-% How the Right Measures Help Teams Excel,% @*(#*(;% K):3<"::% !"#3">-% 94305-
M*+Em)<"%,88Hl%%&1(%*<%"??"B63#"%):"%1?%65"%;*:5'1*(;%B1<B"26%;)(3<4%*%;"#"=12D"<6%2(1["B6-%:""
Chrysler and BMW: Tritec Engine Joint Venture,%@*(#*(;%K):3<"::%LB511=%9)'=3:53<4-%699-033-%,88F

,.$ L6"#"<%0$%^5""=>(3456-%M3T"=="%&$%`*:6="+, Cardiac Pacemakers, Inc. (A),%@*(#*(;%K):3<"::%LB511=


9)'=3:53<4-%698-024%,88F

,O$ Constructing and Using Process Control Charts, @*(#*(;%K):3<"::%LB511=%9)'=3:53<4-%686-118-%,8FJ

,H$ &1(% *% D1("% ;"6*3=";% #3">% 1<% 65"% 12"(*631<% D*<*4"(Y:% (1="% 3<% 2(1B"::% ;"#"=12D"<6% *<;% 2(1["B6
B11(;3<*631<-% 2="*:"% =11T% *6P% % N<*<65% !*D*<-% Coordination: An Overview, % @*(#*(;% K):3<"::
LB511=% 9)'=3:53<4-% 696-001-% ,88Gl% N<<% `$% b(*+, Process Fundamentals-% @*(#*(;% K):3<"::% LB511=
9)'=3:53<4-%696-023-%,88I

Learning from development project execution and management

,G$ m1:"25%g$%K1>"(-%A51D*:%M$%@1)6, Fast-Cycle Capability for Competitive Power-%@*(#*(;%K):3<"::


LB511=%9)'=3:53<4-%88602-%R1#"D'"(Ec"B"D'"(%,8FF

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