Use of Evaluation Criteria and Innovation Performance in the Front End of Innovation*

Abstract

Selecting the right ideas and concepts for product development projects is among the major decisions that product development directors must make. Companies have adopted evaluation criteria at decision gates to offer the decision makers sufficient knowledge of the alternative ideas and concepts, and to promote choices that would result in the best possible business benefit. The actual benefits of using the different criteria in the front end of innovation have rarely been studied. The purpose of this paper is to explain how the use of evaluation criteria is associated with innovation performance in the front end of innovation. Also, we investigate the moderating impact of product complexity. We developed a set of hypotheses and constructs and a questionnaire instrument to measure the use of evaluation criteria and front end performance in idea and concept development in industrial firms. The results show that assessment formality is negatively but nonsignificantly associated with innovation performance, whereas the use of evaluation criteria has a significant role in promoting competitive and business potential in the front end of innovation. None of the moderating effects of product complexity are significant, but the use of evaluation systems and criteria mediate the link between product complexity and strategic opportunity. The study contributes to research regarding the use of different evaluation criteria particularly during idea and concept evaluation. As the use of different evaluation criteria is differently associated with the different strategic opportunity measures, the findings confirm the need to develop holistic but informal assessment systems and adapt the evaluation criteria in line with the development objectives of the firm. In order to fully benefit from radical strategic opportunities, firms need to focus on demanding product concepts that require a stretch in both technical and market competences, as well as managerial work that proactively reduces risks associated with complexity.