BENCHMARKING THE FIRMS CRITICAL SUCCESS FACTORS IN NEW PRODUCT DEVELOPMENT

Managing new product development (NPD) is, to a great extent, a proces s of separating the winners from the losers. At the project level, tou gh go/no-go decisions must be made throughout each development effort to ensure that resources are being allocated appropriately. At the com pany level, benchmarking is helpful for identifying the critical succe ss factors that set the most successful firms apart from their competi tors. This company- or macro-level analysis also has the potential for uncovering success factors that are not readily apparent through exam ination of specific projects. To improve our understanding of the comp any-level drivers of NPD success, Robert Cooper and Elko Kleinschmidt describe the results of a multi-firn benchmarking study. They propose that a compnny's overall new product performance depends on the follow ing elements: the NPD process and the specific activities within this process; the organization of the NPD program; the firm's NPD strategy; the firm's culture and climate for innovation; and senior management commitment to NPD. Given the multidimensional nature of NPD performanc e, the study involves 10 performance measures of a company's new produ ct program: success rate, percent of sales, profitability relative to spending, technical success rating, sales impact, profit impact, succe ss in meeting sales objectives, success in meeting profit objectives, profitability relative to competitors, and overall success. The 10 per formance metrics are reduced to two underlying dimensions: program pro fitability and program impact. These performance factors become the X- and Y-axes of a performance map, a visual summary of the relative per formance of the 135 companies responding to the survey. The performanc e map further breaks down the respondents into four groups: solid perf ormers, high-impact technical winners, low-impact performers, and dogs . Again, the objective of this analysis is to determine what separates the solid performers from the companies in the other groups. The anal ysis identifies nine constructs that drive performance. In rank order of their impact on performance, the main performance drivers that sepa rate the solid performers from the dogs are: a high-quality new produc t process; a clear, well-communicated new product strategy for the com pany; adequate resources for new products; senior management commitmen t to new products; an entrepreneurial climate for product innovation; senior management accountability; strategic focus and synergy (i.e., n ew products close to the firm's existing markets and leveraging existi ng technologies); high-quality development teams; and cross-functional teams.