Management of Technology (OM476) Managing the NPD Process, part II March 6, 2006 S. Fisher

Agenda Discuss mid-semester feedback NPD tools and metrics Return exams

Mid-semester feedback summary Keep  Real world examples  Class discussion Change  More small group discussion  Spread cases out more  More interesting, energetic discussion after case presentations

Project champions Commonly used, but impact on project success is debatable  Appears unrelated to success in the marketplace  Does appear to enhance odds of finishing the project – is this a good thing?

Stage-Gate TM Processes  Structured process with firm go/kill decision points to help minimize wasteful NPD expenditures.  68% of U.S. firms, 56% of European firms and 59% of Japanese firms use some type of stage-gate process in NPD. Source:

Iterative Product Development Idea Generation Prototype Development Controlled Launch Feedback Refined Idea Prototype II Controlled Launch Feedback And so on…

Pros and Cons of Iterative Approach Provides greater opportunity for feedback from a variety of sources  Investors  Target market More appropriate for evolving markets, new technologies Example: Danger hiphop2 mobile device Source: Mankin, E. (2004). Is your product-development process helping – or hindering – innovation? Harvard Business School Publishing Newsletter, Reprint # S0411C.

Cooper’s iterative version Source:

Quality Function Deployment Structured process for communication, planning, and problem solving Mapping customer requirements against product attributes Quality is defined here as attributes or features that add value

What does QFD do? “…maximizes "positive" quality (such as ease of use, fun, luxury) that creates value. Traditional quality systems aim at minimizing negative quality (such as defects, poor service). With those systems, the best you can get is zero defects - which we see is not enough when all the players are good - or in products that fail to sell despite being defect-free. (

"The House of Quality is not QFD". ---Dr. Akao, the founder of QFD So what is the House of Quality? A tool that is used to assemble many types of information  Demanded Quality  Quality Characteristics  Quality Planning  Design Planning Connects the dots between the Voice of the Customer and the Voice of the Engineer. Can be part of the overall QFD process

Integrating QFD with Stage-Gate processes Can be used as part of discovery stage or scoping Use QFD findings as part of testing process (validation) Source: Miguel (2005). Evidence of QFD best practices for product development: a multiple case study

CAD/CAM CAD – developing and testing products in virtual reality  Design  Communication  “We dramatically reduced the number of hardware learning cycles because the math models enable us to predict what the hardware is going to do.” (Winter, 2003, p.3) CAM – faster, more flexible than traditional manufacturing

Metrics for measuring NPD project performance What are you evaluating?  Success of a single project Cooper’s post-launch review Microsoft postmortems  Firm’s overall NPD process  Introduction of new process elements (i.e., use of QFD should lead to an increase in customer satisfaction)  Overall innovation performance Balancing various metrics according to importance, strategic priority

NPD Performance Measures Source: Rogers, Ghauri and Pawar (2005). Measuring international NPD projects: an evaluation process. Journal of Business and Industrial Marketing, 20, 2/3,

Back to IDEO… How structured is IDEO’s NPD process? Do they seem to use techniques discussed in this chapter? What is the role of structure in NPD? When do you need to have structure, and when is it better to have a loose, free- flowing process?

Exam Results Mean score = 19.9 (80%)

If you have concerns Let me know if I added incorrectly If you think your response should have been scored correctly, submit a written explanation no later than Wednesday, March 8 Any other concerns, please come talk to me

For next class Eli Lilly case  Team 5 presenting  Team 1 review/questions  All others – exec summary