Winning businesses in product development : the critical sucess

factors

by Rober G. Cooper &Elko J.Kleinschimdt

Marina NaccaratoMathieu Cornille

Bahadir KayaLucy Ellen lwakatare

“… merely studying successful and unsuccessful new product project, as we have too have done in the past, misses many of the key factor in success.”

R.G. Cooper and E.J. Kleinschmidt

Contents

1. How the research was done 2. Performance map3. Four main key success factors4. Other success factors5. Conclusion

How the research was done 5 major blocks of characteristics for

measurement ( on 161 business units ):• Process• Organization• Strategy• Culture• commitment

10 performance metrics

Performance map

Impact

profitability

Four main key sucess factory

1. A high quality new product process“The mere existence of a formal product development had absolutely no effect on

performance”

R.G. Cooper and E.J. Kleinschmidt

How to measure the quality of a process?1. Carefully evaluate the project before moved into

development phase

Five-stage Process*

*Employed by the Professional Division of SC Johnsons

How to measure the quality of a process?1. Carefully evaluate the project before moved into

development phase2. The process included sharp, early, product definition before

development work began3. There were tought Go/Kill decision point in the process,

where project really did get killed4. There was a focus on quality of execution in which project

acivities were carried out in a quality fashion5. The new process was complet. All the activities need must

carried out with no hasty corner-cutting.6. The new process was flexible

2. A defined new product strategy for the business unit

• Second crucial driver of perfomance emphasising on:• A well defined and clearly written set of goals and objectives

for the business’s total NP effort e.g 20% of sales will come from new products

• Communicating the role of NP in achieving business goal to all involved persons

• Clear areas of strategic focus – inbounds and out bounds• Business’s NP effort having a long term focus and thrust

3. Adequate resources of people and money

• Resource adequacy and commitment led to profitability and overall impact on business

• Some key ingredients include:• Allocation of resources by senior management to

achieve NP objectives • Adequate R&D budget to achieve objectives• Release time of NP project specified with

necessary people in place

4. R&D spending

• Strongest determinant of the impact

• No effect on the profitability

For an high impact new product effort

Other success factors

5. High quality new product teams• Team leader dedicated to this one project

• Team interacted and communicated well and often

• Decisions made by outsider are handle quickly and efficiently

6. Senior management commitment

• Senior management stongly commited

• Necessary resources commited to achieve the goals

• Senior management involved in the project Go/Kill and new product spending decisions

7. An innovative climate and culture• Solicited ideas from all employes

• Free time to technical people

• Ressources available to employees

• Skunk works and team working on unofficial project encouraged

8. Cross-functional teams• Defined and accountable team leader

• Leader responsible from the beginning to the end

• Assigned team of players who work on specific project

9. Senior mangement accountability

• New product performance is a part of their personal performance objectives

• Their compensation tie to the new product performances

• Performance results measured

Conclusion

• There was no relationship at all between R&D spending and the profitability of new product effort

• The link between R&D spending and impact was not one to one

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3

• Profitability • Impact on the business

• A high-quality new Product Process• A clearly defined new product strategy for the business unit.• Adequate new product resources: people and Money

Beware naive process re-engineering!

• High Quality New Product Teams• Senior Management Commitment• Innovative climate and culture• Cross-functional Teams• Senior Management Accountability

Benchmark before re-engineering!

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To Sum Up

“New Product Devoplement, more then ever, is tied to

corporate fortunes and prosperity”