Winning Businesses in Product Development: The Critical Success Factors

Abstract

OVERVIEW:2007 is Research-Technology Management's 50th year of publication. To mark the occasion, each issue reprints one of RTM's six most frequently referenced articles. The articles were identified by N. Thongpapanl and Jonathan D. Linton in their 2004 study of technology innovation management journals, a citation-based study in which RTM ranked third out of 25 specialty journals in that field (see RTM, May–June 2004, pp. 5–6). The benchmarking study reprinted here was originally published in 1996 and has been updated with its author's reflections. Their study of 161 business units uncovered the key drivers of new product performance at the business unit level. Ten different performance measures were gauged, including percentage of sales by new products, profitability and success rate. The ten gauges were reduced to two key performance dimensions—profitability and impact—which defined the “performance map.” Nine possible drivers—including strategy, process, organizational design, and climate for innovation—were investigated, and four key drivers of performance were identified; namely, a high-quality new product process, the new product strategy for the business unit, resource availability, and R&D spending levels. Merely having a formal new product process had no impact.