Assessing best practices for new product development in organisations

Abstract

New product development (NPD) is increasingly being recognised as a critical factor in ensuring the continued sustainability of organisations. For companies to compete in the market place, they have to keep up with market and technological changes that have accelerated in the last decade. To introduce new products successfully to the market place, new methods and techniques are inevitable. Starting with innovation and using NPD best practices, a product can be delivered to the market successfully. Assessment of best practices for NPD in organisations can help understand the dimensions of developing new products and being competitive. Implementation of NPD best practices within each dimension could vary in accordance with the size of the organisation due to company policies, management and structure of the organisation. This study will investigate best practices for NPD in organisations. A survey was conducted and the sample was randomly taken from the target population located in the Vaal Triangle and neighbouring towns. Participants were business owners or management-level employees involved in the NPD process of the business. The literature study that was conducted elucidates the concept of a product, models of NPD and NPD best practice dimensions. In managing the NPD process, a few important points were raised to understand the complexity of NPD. An assessment of the empirical investigation was done to find practical answers to NPD best practices. The relative importance of NPD best practices compare with previous research in literature. By comparing NPD best practices of SMEs and large enterprises, it was found that they do not have similar opinions regarding the relative importance of the seven dimensions of NPD. Strategy is the most important dimension, while metrics and performance measurement are the least important of the total of seven NPD dimensions that had been assessed. The ranking of company culture with a strong presence suggests that local organisations understand the need and urgency to embrace innovation. Findings of best and poor NPD practices indicated that practitioners reflect quite evenly over all the practices, but slightly less over NPD best practices of the dimensions of commercialization and project climate. A general consensus among practitioners existed to what constitutes a best and a poor NPD practice on the seven dimensions. Additional work - that was not part of the objective, but nevertheless complemented the survey - was done. This included the assessment of structural relationships of NPD dimensions in organisations, as well as identification of the differences in NPD best practices between SMEs and large enterprises. The contribution of the study is firstly to better understand NPD best practices by means of the assessment and structural equation modelling that will fill gaps in literature. Secondly, the study can help managers to improve their capabilities of NPD in practice. Recommendations include the need for organisations to invest in opportunities and an environment that promote innovativeness. This includes skilled innovative human resources and financial resources to support NPD. Senior management has to encourage and provide for NPD in the organisation. The co-ordination of managers at different levels that involves the bigger picture of departments and achieving the mission and vision of the organisation has a final influence on NPD sustainability