Enhancing New Product Development Performance: An Organizational Learning Perspective

Abstract

Several years ago, an editorial in a software industry journal asked readers, “Why aren't they using all those marvelous methods?” The focus of the editorial was on software engineering methods, but the question also applies to the broader realm of new product development (NPD). Proven tools exist for gathering, disseminating, and using market information. But despite widespread recognition of the important role that market knowledge plays in NPD, most firms fail to employ these tools in a consistent manner.Marjorie E. Adams, George S. Day, and Deborah Dougherty contend that the tools for successful NPD cannot be implemented successfully until we understand the barriers that hinder an organization's capabilities for learning about markets. To foster that understanding, they describe the results of a study that explores the organizational barriers to learning about markets for new products. The study examines 40 NPD efforts in 15 large firms, and it has the following goals: identifying the processes through which organizational barriers impede market learning, developing specific ideas for how NPD professionals can cope more effectively with these barriers, and offering suggestions for improving market tools and techniques to help overcome these barriers.The study identifies three organizational learning barriers: avoiding ambiguity, compartmentalized thinking, and inertia. For the participants in this study, these barriers persistently act in specific ways to inhibit market learning. In acquiring market information, people typically focus on less ambiguous, more easily understood technologies and business truisms. Dissemination of market information is hindered because people focus on their own goals, which are often defined within their department's role instead of the overall goals of the project. Inertia acts as a barrier to the effective use of market information. That is, people tend to proceed as they always have, maintaining the status quo rather than adjusting actions to capitalize on market learning.By encouraging broad functional participation in the acquisition and interpretation of data, NPD organizations can reduce the perceived ambiguity of market information. However, cross‐functional approaches are only one step in overcoming organizational barriers. Managers must enable teams to develop rich, vivid market data, help people extend established routines into new practices, and promote trust. Specific market research tools and methods that promote market learning are also suggested.