Abstract
The process of developing new products always contains an element of uncertainty. This uncertainty translates into a significant risk for companies investing in the development of new products or services. The risk in new product development (NPD) can be based on ‘disciplined experimentation’: a structured process designed to rapidly identify the ‘vivid’ needs of the customer, test whether the main features of the new product or service will satisfy these needs (fast prototyping). ‘Disciplined experimentation’, in particular, addresses assumptions about value (how the initiative will produce outcomes that outweigh the effort involved), growth (how the initiative can be scaled up beyond the first group of customers) and sustainability (how quickly the organisation can adapt to the new initiative and how easily competitors will be able to replicate it).
Highlights
New product development (NPD) is an inherently uncertain process
Loch (2000), while acknowledging that Stage-Gate is at the core of most NPD processes, argued that survival and growth depends on how well a company adapts to its specific environment
While all the NPD processes we reviewed have their uses in the quest to reduce risk, we noticed that they tend to share a number of pitfalls
Summary
Research shows that as many as 40% of new products fail to deliver anything approaching the promised objectives (Castellion, Markham 2013) This uncertainty results from many factors including the difficulty of identifying ‘vivid’ (strong and conscious) customer needs, the problem of correctly defining the right features and shaping how the user experiences the new product or service, identifying the most suitable route to market and, getting the pricing right. In the 1970s Robert Cooper and his colleagues started looking at the difficulties businesses were encountering in bringing new products to successful fruition (Cooper, Kleinschmidt 1986; 1987; 1990; 1991) As a result, they developed the NewProd project which utilised a Stage/Gate approach. Agile originated in 2001 in the software development field and emphasises the importance of self managing, cross functional teams working quickly, flexibly and responsively
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