Stevens, G., Burley, J., & Divine, R. (1999). Creativity + Business Discipline Higher Profits Faster From New Product Development. Journal of Product Innovation Management, 16(5), 455-468.

Format: Peer-reviewed article

Type: Research — Non-experimental

Experience level of reader: Fundamental

Annotation: The study suggests that the early stages of NPD should be conducted by people with measurably high levels of creativity, who are also rigorously trained in Stage-Gate business analysis. The results show that overall speed and productivity of NPD can be increased nearly an order of magnitude.

Setting(s) to which the reported activities/findings are relevant: Federal lab, Government, 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: Individual

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

Barrier: Placing creative people in NPD roles as analysts without providing them with proper training and coaching in disciplined NPD processes is only getting it half-right and likely destroy value rather than creating it. Forcing business discipline on the creative mind is a necessary element to consider.
Interview Survey. Study of 69 analysts evaluating 267 early-stage NPD projects.
Occurrence of finding within the model: Stage 1, Stage 2, Stage 3, Stage 4

Carrier: Early stages of NPD require creativity because early ideation requires revision through branching thought processes. Identify people with high levels of creativity (reliably measured with standard instruments), and train them the Stage-Gate methods. The overall speed and productivity of typical NPD processes can be increased nine-fold over standard activity by people with low levels of creativity. Forcing business discipline on the creative mind is a key combination.
Interview survey. Study of 69 analysts evaluating 267 early-stage NPD projects.
Occurrence of finding within the model: Stage 3, Stage 4, Stage 1, Stage 2

Model: Certain individuals use the NPD stage-gate discipline in a strictly linear fashion, chiefly to kill new product ideas (which may be warranted). However, other individuals used the same process to set aside the initial flawed idea, and creatively identified an alternative that was successful.
Experiential. Author observation drawn from over twenty years of conducting, teaching and coaching NPD processes in a Fortune 500 company.

• In general, the earliest four stages of the NPD process are done the least well and provide the greatest opportunity for improvement. These include the vision and strategy development, as well as the pre-development NPD activity where the initial concept is shaped, along with the preliminary and detailed analysis.
  Interview survey. Study of 69 analysts evaluating 267 early-stage NPD projects.
  Occurrence of finding within the model: Stage 1, Stage 2, Stage 3, Stage 4
• Experiential. During the first three or four stages of the NPD process, management is relying primarily on one person to make a recommendation about whether to proceed.
  Occurrence of finding within the model: Gate 1, Gate 2, Gate 3, Gate 4

Tip: The odds inherent NPD are shown in the universal success curve as 1 in 300 at idea submission, 1 in 125 after patent granted, 1 in 9 during early stage development, 1 in 4 during major development and still only 1 in 1.7 (60%) at commercial launch, success is almost assuredly not on the original path chosen at the outset of the project. There remains a need for creative and non-linear thinking throughout the NPD process.
Interview survey. Study of 69 analysts evaluating 267 early-stage NPD projects.
Occurrence of finding within the model: Stage 1, Stage 2

Carrier: Creativity is seen as an important personality trait for NPD analysts because a lack of meaningful product uniqueness has been found to be the number one reason why new products fail. (Crawford [1977])
Occurrence of finding within the model: Stage 1, Stage 2, Stage 3, Stage 4

Measure: A universal success curve shows that the odds of commercial success for substantially new products averages 1 in 300 at the idea submission stage (or at patent disclosure stage), and 1 in 125 at the small project stage (or after a patent is granted). After the detailed analysis of Stage 4, the odds of success are 1 in 9 (11%). Even when the project reaches the stage of major development, the odds of success are typically no greater than 1 in 4 (25%). At the commercial launch stage the odds of success are still only 1 in 1.7 (60%). This success rate curve has remained essentially unchanged in the last 40 years. (Stevens & Burley [1997])
Occurrence of finding within the model: Stage 1, Stage 2, Stage 3, Stage 4, Stage 5, Stage 6, Stage 7, Stage 8

Model: Stage-Gate NPD processes have been in existence since at least 1957, where it appeared in an article along with one of the first product-market matrices. (Johnson & Jones [1957])

Method: The most significant differences between successful and unsuccessful products lie in the quality of execution of the first few stages of NPD — simply stated, the first few plays of the game seem to decide the outcome. Attention should be focused on the first three stages where we determine what should be developed. (Cooper [1988]; Cooper [1993])
Occurrence of finding within the model: Stage 1, Stage 2, Stage 3