Process Uncertainty: A New Dimension for New Product Development

Abstract

Companies pursuing product leadership continually push products into innovative technology areas and new unknown markets. As companies continue to strive for continuous innovation, often leapfrogging even their own technology, new product development (NPD) processes play an increasingly important role in defining the success or failure of many new innovations. In addition, increased competitive rivalry is driving companies to commercialize their new products much more quickly. To meet these pressures, new strategies are being used to supplement the conventional new product development process that consists of strategy formulation, idea generation, screening and evaluation, development, testing, and launch. The primary objective of each of these innovation strategies is to attain sustainable competitive advantage for the company and achieve higher overall performance.

Our research examined product and service innovation strategies of six projects. Half of which were considered successful and the other half failures. Using several emerging innovation strategies including process-driven, speed-to-market, quantitative, market-driven, technology-driven, and learning-driven to classify these projects, we evaluated the innovation strategies employed in an attempt to determine the overall NPD strategy effectiveness. In addition, we also attempted to identify relevant critical success factors and associated activities to construct an ideal innovation strategy model.

In the projects we studied, we found that no one best strategy leads to successful innovation. While evaluating areas of uncertainty that impact project success, we determined that a new dimension, process uncertainty, plays as important a role as market or technical uncertainty previously examined in the emerging scholarship. Furthermore, the insights that were discovered by comparing the different innovation strategies led us to formulate the technical-market-process (TMP) uncertainty mode. The TMP model serves as a predicator for identifying the appropriate innovation strategies that can be brought together to drive project success. We conclude that the combination of identifying the appropriate innovation strategies and proficiently executing these strategies is the key to successful new product development.