Most firms recognize the importance of new products to their competitiveness and their bottom line. But what is it that the best firms do, and what can managers from other firms learn about the best practices employed by these firms? Also, what have been the most recent trends in new product development (NPD), and how has this process changed in recent years?
The Product Development & Management Association (PDMA) periodically surveys new product managers in an on-going effort to identify best practices in new product development. The first best practice study was conducted in 1990, and later studies were done in 1995, 2004, and now most recently in 2012. This effort is known as the Comparative Performance Assessment Study or CPAS, and had continued to expand in scope to include a wider range of issues from its earliest form up to the present.
Previous versions of CPAS studied key NPD practices including NPD process, portfolio management, the “fuzzy front end” of the innovation process, development tools, and NPD outcomes. The 2012 CPAS was a serious upgrade from previous studies in that there was a new or expanded emphasis on innovation culture, product strategy, sustainability, intellectual property, open innovation, social media as a source of information, service development, and new NPD analytical tools. In addition, for the first time, data were gathered globally, with managers from 24 countries included in the study. A total of 453 managers were included in the most recent study. About 44% of respondents were from North America, about 33% from Asia, 13% from Europe, and 10% from elsewhere.
To understand and identify best practices, the sample was divided into the “Best” and the “Rest.” The Best firms were among the most successful in their industries in terms of both NPD success and sales and profits generated by new products. Just under 25% of the sample was classified as “Best” according to these criteria.
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