A world class new product development best practices model

Abstract

Past research provides evidence of a wide range of antecedent variables to explain new product development performance. The reported determinants are a combination of strategic, development process, organizational, and market factors. However, these research efforts are fragmented and focus on one or two key factors. Researchers look at this issue from a narrow disciplinary perspective. So the results are quite discipline-biased. Apart from the lack of a multi-disciplinary approach, there is a real gap in subjecting these factors to rigorous empirical tests, and incorporate modern proven best practices of world class innovative companies to guide practitioners in their innovation journey. There is a real need to broaden the range of factors considered and develop an integrated model with high predictive power to guide new product development (NPD) efforts. This paper aims to address this research issue. In this research study, four key factors have been identified in modelling financial performance in NPD. They are strategic fit and shared vision, market orientation, stimulus and slack time, organization for collaboration and communication. Regression analysis was performed to validate their importance and estimate the parameters of these four key factors. The result shows that all these four factors are statistically significant in determining financial performance in NPD. This framework can be used practically to assist managers to improve in their NPD efforts so as to achieve higher financial return on investment.

Keywords:

• New product development
• Best practices model

Acknowledgement

Some data used in this paper was collected by Dr. Bernadette Eckermann under the supervision of one of the authors (Professor Grier Lin) at the Centre for Advanced Manufacturing Research (University of South Australia). The sample size was 81 manufacturing organizations in South Australia.