PERSPECTIVE - CHANGING PRODUCT DEVELOPMENT STRATEGY - A MANAGERIAL CHALLENGE

By changing its product development strategies to match more closely t he wants and needs of the marketplace, a firm can transform product de velopment into a formidable competitive weapon. Just as formidible, ho wever, is the effort that this transformation requires. Established or ganizational structures and corporate politics present significant bar riers to acheiving fundamental changes in product development strategy . Christer Karlsson and Pdr Ahlstrom present a case study of one firm' s efforts to build capabilities for creating new products quickly and efficiently. Rather than focus on the content of the firm's product de velopment strategies, however, they emphasize the process this electro mechanical manufacturing firm used for changing its product developmen t strategy. Drawing on their experiences as clinical researchers in th is effort, they describe key lessons beamed during the change process, and they offer suggestions for managing the process of changing produ ct development strategy. They highlight five key lessons learned durin g the strategy development process. First, rather than viewing product development as a line function, a firm should view product developmen t as a key executive area with responsibility for the company's compet itive position. Second, market issues are the responsibility, not only of marketing, but also of product development and production. Third, to avoid corporate myopia, management control systems must consider no t only time and money, but also acheivement of goals. Fourth, strategi c planning flows more smoothly if the participants start by mapping th e firm's past and present position before attempting to define the des ired position. Finally, formulation of a product development strategy is the responsibility of a multifunctional team of executives. Manager s should keep a few rules in mind when devising a process for formulat ing a product development strategy. First, adopt a learning strategy t hroughout the change process. Formulation of a product development str ategy involves many abstract concepts, and a successful strategy requi res cross-functional consensus. Second, combine tangible, direct activ ities with long-term strategic aims. Third, avoid the pitfall of best practice. The form that the product development organization takes dep ends, to a great extent, on the type of development work. Finally, bef ore discussing future strategies, the strategy formulation process sho uld focus on analyzing the current situation.