Cooper, R.G., Edgett, S.J., & Kleinschmidt, E.J. (2004). Benchmarking Best NPD Practices-III. Research Technology Management, 47(6), 43-55.

Format: Peer-reviewed article

Type: Research — Non-experimental

Experience level of reader: Fundamental

Annotation: Some NPD activities are considered critical to success, yet are often poorly executed in practice. Important but weak practices include: Market information; Up-front homework; Stable product definitions; Voice of the Customer research. Based on a survey of 105 business units and the authors experience.

Setting(s) to which the reported activities/findings are relevant: Federal lab, Large business, Small business (less than 500 employees), University

Knowledge user(s) to whom the piece of literature may be relevant: Manufacturers, Researchers

Knowledge user level addressed by the literature: Organization

This article uses the Commercial Devices and Services version of the NtK Model

• Performance Drivers: One is a Systematic Process. Most businesses surveyed follow a Stage/Gate process: A) 74% claim to have such a process with 67% indicating it is well documented and visible; B) 72% have defined stages in their NPD process, complete with activities described within each stage. C) 74% have build decision gates into their NPD process, with 47% having well-defined Go/Kill gate criteria. D) 71% have an explicit menu of deliverables for gates. E) 72% have designated gate keepers who make the Go/Kill decisions. Since most businesses have a systematic process, the key distinction is in how the process and its activities and recommended practices are implemented.
  A quantitative survey of 105 business units, supported by team's experience in NPD modeling, consultation, application and analysis.

• A new product process that guides projects from idea to launch is a well-recognized key to NPD success. By new product process we mean more than just a flow-chart; the term includes all process elements: the Stages and stage activities, the Gates and gate criteria, and the Deliverables that constitute a well-defined new product process.
  A quantitative survey of 105 business units, integrated with author's experience in NPD modeling, consultation, application and analysis.

• Four Best Practices in the NPD process are: 3) Metrics on how well the NPD process is working — These metrics focus on if projects are following the process and if effective gates are being held.
  A quantitative survey of 105 business units, supported by team's experience in NPD modeling, consultation, application and analysis.
  Occurrence of finding within the model: Gate 3, Gate 4, Gate 5, Gate 6, Gate 7, Gate 8
• Four Best Practices in the NPD process are: 4) Tough and demanding Go/No-Go decision points, where projects really do get killed. Some businesses claim to have gates but a closer inspection reveals that these are largely project review points with the result that projects rarely get terminated.
  A quantitative survey of 105 business units, supported by team's experience in NPD modeling, consultation, application and analysis.
  Occurrence of finding within the model: Gate 3, Gate 4, Gate 5, Gate 6, Gate 7, Gate 8, Gate 9

• Best Practices concerning the requirement for a sharp, early product definition prior to initiating the NPD process: 1) The benefits to be delivered to the customer — the value proposition — clearly defined. 2) The target market defined — the segment at which the product will be targeted. 3) The positioning strategy defined in the eyes of the customers versus competitive products. 4) The product concept defined — what the product will be and do. 5) Establish firm product specifications to avoid unstable specifications and scope creep which can extend time and cost of NPD process. 6) The product's features, requirements and specifications defined. 7) Using a teaming contract between the project team and management to define the product, the project and corporate expectations before the NPD process begins.
  A quantitative survey of 105 business units, supported by team's experience in NPD modeling, consultation, application and analysis.
  Occurrence of finding within the model: Stage 1, Stage 2, Stage 3, Stage 4

• Best Practices concerning quality of market information at the point NPD is initiated: 1) Information on customer needs, wants and problems. 2) Competitive information (products, pricing and strategies). 3) Information on the customer's reaction to the proposed product (degree of liking or purchase intent). 4) Information on customer price sensitivity for the new product. 5) Data on expected non-revenue performance of the product. 6) Data on market size and potential. 7) Expected sales revenue from the new product.
  A quantitative survey of 105 business units, supported by team's experience in NPD modeling, consultation, application and analysis.
  Occurrence of finding within the model: Stage 2, Stage 3, Stage 4

• Four Best Practices in the NPD process are: 2) Performance Measurement. The use of metrics to gauge how products perform — success, profitability, Net Present Value, is a major weakness with less than 30% of firms having such metrics.
  A quantitative survey of 105 business units, supported by team's experience in NPD modeling, consultation, application and analysis.
  Occurrence of finding within the model: Stage 8, Stage 9, Gate 9

• Four Best Practices in the NPD process are: 1) Emphasis on pre-Development homework. The fuzzy front end of NPD is considered most problematic. This is where the new product idea is fleshed out into a clear product definition; that the magnitude of the opportunity is assessed, and the business case constructed, and the action plan for the NPD process is mapped. How much homework is enough? On average, twelve percent of the project's total cost (labor, material, equipment) is spend on Up-front Homework before the Development begins.
  A quantitative survey of 105 business units, supported by team's experience in NPD modeling, consultation, application and analysis.
  Occurrence of finding within the model: Stage 1, Stage 2, Stage 3, Stage 4

• Performance Drivers: One is the Quality of Execution. Eight activities distinguish best from worse performers: 1) Conducting a post-launch review (8.2); 2) Assessment of product's value to business (2.1); 3) Test market or trial sell to a limited set of customers (7.13); 4) Concept testing to determine customer reaction to product and gauging purchase intent before Development begins (4.11); 5) Idea Generation (1.3); 6) Customer tests of products under real-life conditions (6.3); 7) Detailed market study/research or Voice of the Customer (4.3, 4.13); 8) Pre-launch business analysis (7.7, 7.8, 7.9).
  A quantitative survey of 105 business units, supported by team's experience in NPD modeling, consultation, application and analysis.
  Occurrence of finding within the model: Step 4.11, Step 4.3, Step 2.1, Step 1.3, Step 4.13, Step 8.2, Step 7.13, Step 7.9, Step 7.8, Step 7.7, Step 6.3

• Voice of the Customer Information as a Best Practice for the NPD process: 1) Market and buyer behavior studies are a valuable source of information for planning the market launch. 2) Market research as a tool to help define the product. 3) The customer or user ought to be an integral part of the Development process. 4) Identification of customers or users real or un-articulated needs and their problems, is considered fundamental to voice-of-the-customer research, and should be a key input to product design. 5) Working with highly innovative users or customers.
  A quantitative survey of 105 business units, supported by team's experience in NPD modeling, consultation, application and analysis.
  Occurrence of finding within the model: Step 3.1, Step 4.1, Step 2.3, Step 4.11, Step 3.5, Step 1.3, Step 1.2, Step 1.1, Step 9.1, Step 8.3, Step 8.2, Step 7.13, Step 7.12, Step 6.3, Step 6.1, Step 5.3