PDMA Research on New Product Development Practices: Updating Trends and Benchmarking Best Practices

Abstract

Product development professionals may have the feeling that yet another buzzword or magic bullet always lurks just around the corner. However, researchers have devoted considerable effort to helping practioners determine which tools, techniques, and methods really do offer a competitive edge. Starting 30 years ago, research efforts have aimed at understanding NPD practices and identifying those which are deemed “best practices.” During the past five years, pursuit of this goal has produced numerous privately available reports and two research efforts sponsored by the PDMA. Abbie Griffin summarizes the results of research efforts undertaken during the past five years and presents findings from the most recent PDMA survey on NPD best practices. This survey, conducted slightly more than five years after PDMA's first best‐practices survey, updates trends in processes, organizations, and outcomes for NPD in the U.S., and determines which practices are more commonly associated with firms that are more successsful in developing new products. The survey has the following objectives: determining the current status of NPD practices and performance; understanding how product development has changed from five years ago; determining whether NPD practice and performance differ across industry segments; and, investigating process and product development tools that differentiate product development success. The survey findings indicate that NPD processes continue to evolve and become more sophisticated. NPD changes continually on multiple fronts, and firms that fail to keep their NPD practices up to date will suffer an increasingly marked competitive disadvantage. Interestingly, although more than half of the respondents use a cross‐functional stage‐gate process for NPD, more than one‐third of all firms in the study still use no formal process for managing NPD. The findings suggest that firms are not adequately handling the issue of team‐based rewards. Project‐completion dinners are for the most frequently used NPD reward; they are also the only reward used more by best‐practice firms than by the rest of the respondents. The best‐practice firms participating in the study do not use financial rewards for NPD. Compared to the other firms in the study, best‐practice firms use more multifunctional teams, are more likely to measure NPD processes and outcomes, and expect more from their NPD programs.