ACCELERATING NEW PRODUCT DEVELOPMENT - A PRELIMINARY EMPIRICAL-TEST OF A HIERARCHY OF IMPLEMENTATION

Although time to market and a product's profitability are closely link ed, simply speeding up new product development (NPD) is no guarantee o f success. In fact, haphazardly adopting the numerous methods for acce lerating NPD may jeopardize the potential success of the new product a nd the company. An article in a previous issue of The Journal of Produ ct Innovation Management suggests that companies seeking to speed up t heir NPD process should take a hierarchical approach to implementing t he various acceleration techniques. To improve the likelihood that eff orts to accelerate NPD will pay off with shorter development time, gre ater market share, and improved profitability, it is recommended that a company start by focusing on simplification of the NPD process. From there, the company can proceed in sequence through techniques involvi ng the elimination of unnecessary steps in the NPD process, parallel p rocessing (i.e., performing two or more NPD steps at the same time), t he elimination of delays, and speeding up of the NPD process. Ed J. Ni jssen, Arthur R. L. Arbouw, and Harry R. Commandeur follow up on this earlier work by addressing several key questions regarding the propose d hierarchy of techniques for accelerating NPD. First, do companies th at make extensive use of the proposed hierarchy develop new products f aster than companies that do not? Second, do companies that make exten sive use of the hierarchy enjoy better financial performance than thos e that do not? Third, regardless of the hierarchy, are products develo ped faster by companies that make more intensive use of acceleration m ethods than by companies that use fewer methods of acceleration? Final ly, how does financial performance compare among companies that make m ore intensive use of acceleration methods without following the hierar chy and those that use fewer methods of acceleration? A survey of Dutc h companies finds that the proposed hierarchy of techniques has a posi tive effect on NPD speed. The survey results also suggest that faster NPD is possible through the use of the various acceleration methods wi thout regard for the order in which they are implemented. However, a s trong positive relationship is evident between the hierarchy and the p rofitability of the product and the company. In other words, a random approach to NPD acceleration does not improve financial performance. B y trying to accelerate NPD in accordance with the proposed hierarchy o f methods, a company can avoid critical mistakes that might otherwise limit financial results.