8.2 Evaluating product development

Conducting a post-development review of a specific product development project and a regular review of the product development programme, is a very good way of learning what is excellent, all right and bad in the company's product development. For the product development project, the initial product strategy needs to be compared with the final total product in the market; the final product characteristics with the consumer needs and wants; the efficiency of the product development project with the overall implementation of the launch. For the product development programme, some important measures are:

     ratio of major innovations to incremental products;

     key differentiating factors in products and services;

     number of new products in a time period;

     programme complexity - the size of the programme and the
         interrelationships between projects;

     commercial constraints on the programme;

     company pressures on the programme.

In recent years there has been an increasing interest in developing methods for evaluating product development. For example, the assessment tool and methodology (ATM) of Barclay et al. (2001) measures the complexities and newness of a product and relates them to the PD integrating activities and process. Clark and Wheelwright (1993) developed a method for auditing the individual project. Cooper and Kleinschmidt (1995) developed a tool aimed at identifying the firm's critical success factors in product development. It had two sets of measures for the product development programme: programme profitability and programme impact on the company. They separated companies using these measures into:

     high-impact technical winners with highest product success rate and %
        sales from new products, but not so high profitability

     dogs with poorest performance on all measures

     solid performers with highest profitability and second highest product
        success rate, lower % sales from new products than high-impact
        technical winners

     low-impact performers with mediocre product success rates and low
        impact of new products on company sales.

There have been the general industry comparisons described in Chapter 1, for example Griffin (1997), which have useful measures and results to compare with your company's results.

This comparison of the company's product development effectiveness and efficiency with those of other companies or of the industry in general is known as 'benchmarking'. Benchmarking the company's current practices against the latest findings in the literature and through comparison with other companies is an essential part of overall product development management. The application of best practices to our specific situations and the on-going measurement of performance ensure a basis for continuous improvement.