SlideShare une entreprise Scribd logo
1  sur  19
Jumping the Curve: Getting from
Mind to Market
The Use of Incentives in New Product Development
A Concept Paper
David C. Carrithers
CIO, Vice President
Information Technology & New Business Development
American Express Incentive Services
Jack Hennies
Hennies Associates
Mary P. Luckey
Product Manager, Marketing
American Express Incentive Services
David K. Mulcahy
Director
New Business Development
American Express Incentive Services
July 1999
www.aeis.com
Introduction
The Current State of Development
Ever wash your hair with Clairol’s “The Look of Buttermilk” shampoo? You’re not
alone. Despite the attractive farm scene on the bottle, the connection between buttermilk,
farms, freshness and hair was too great a stretch for most consumers, and the product
failed. (McMath, February 1998)
Robert McMath’s running series of articles, “What Were They Thinking?” in American
Demographics, chronicles a host of such product development miscues.
Microwave Sundaes is another case in point. (McMath, April 1998)
Or how about EZ-Cal Soft Calcium Whip and Maalox Whip Antacid? Both were
whipped before the race even started.
Seen any vacuum-packed rice or peanuts on the shelves lately? It hasn’t been for lack of
manufacturers trying. (McMath, May 1998)
Even consumer goods giants like Campbell’s can stub their new product development
toes. Consider Campbell’s Souper Combo — a combination of frozen soup and
sandwich. Despite testing well and enjoying $10 million in marketing support during its
first year, it failed. Folks tried it, but didn’t come back for more. (McMath, January 1998)
Paul Lukas recalls other far-misses for Fortune:
We all know Miller Lite. Do you remember Miller’s clear beer (or any of the rest of the
doomed “clear” product trend)? How about Nestea's launch of a yellowish carbonated
beverage called Tea Whiz? Sound appealing?
World-Class New Product Development: Benchmarking Best Practices of Agile
Manufacturers by Dan Dimancescu and Kemp Dwenger cite what they consider the
predominant problems facing companies in developing new products:
• Customer needs not well-defined or understood
• Errors found too late
• Management by interference
• Too many projects
• Burnout
• Poor communication
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
2
They highlight poor definition of customer needs as the most pervasive problem.
(Dimancescu & Dwenger 1966)
McMath estimates it costs $20 million to $50 million to launch a new product
successfully, and 25,000 new items appeared in 1997 alone.
But there’s burnished gold on the flip side of the NPD coin.
ConAgra with Healthy Choice and Nabisco with SnackWells both cracked the “eating
sensibly” consumer acceptance code. Healthy Choice has spawned over 463 line
extensions, while SnackWells enjoys 105 SKUs on supermarket shelves.
It is no wonder, then, that despite new product failure rates that various estimates place
from 60 to 90 per cent, most companies consider new products their life’s blood, not just
growth, but continued existence.
A 1996 American Management Association study revealed that corporations “once
obsessed with cutting costs are now urgently trying to boost sales — with new products,
new services, and new markets, both at home and abroad.”
The study quotes Charles Knight, CEO of Emerson Electric, on the shortsighted strategy
of companies trying to cut their way to success: “We got so bottom-line oriented that we
were inhibiting growth. We were cutting, cutting. But you can only go so far.” (Henkoff
& Kover, 1996)
Michael L. Tushman and Charles A. O'Reilly, III’s Winning Through Innovation: A
Practical Guide to Leading Organizational Change and Renewal discuss what they call
the tyranny of success — “a pattern of success followed by failure, innovation followed
by inertia, common across firms and industries and over time.”
Early successes, they explain, become reflected in organizational culture, structures, and
practices, which slowly become invariant over time, even in the face of a “dramatically-
changed strategic context and a palpably clear recognition of the need for change.”
Robert J. Thomas, in New Product Success Stories: Lessons from Leading Innovators,
concurs. He points out that while the Ford Taurus, for example, was a successful product,
Ford failed to adopt a view of new product development as an ongoing process of
innovation (Thomas 1994).
Fey & Rivin’s The Science of Innovation (1997) reasons succinctly that in an
increasingly competitive global marketplace, “winning companies will be those that can
deliver superior products to customers faster.” That’s quality products and speed-to-
market. No easy formula.
According to a PricewaterhouseCoopers paper, “The Drive to Reduce Time-To-Market,”
37% of new consumer products were late and 46% were over budget.
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
3
As many Sales and Marketing Managers will attest, there is potential profit in pain. With
just 42% of the products that hit the market meeting the expectations of the people who
manage them — according to Group EFO, a Weston, Connecticut, consulting firm —
many companies have embraced an array of product development strategies and tactics
looking for that next home run.
Some new product development (NPD to marketing types in the know) has embraced
highly formalized schemes like QFD (Quality Function Deployment) and DFM (Design
for Manufacturability). Some are skunk works undergoing various degrees of
institutionalization following a grassroots NPD breakthrough.
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
4
New Product Development Practices
A good deal of literature exists on the subject of new product development (NPD). An
excellent resource is the Product Development & Management Association (PDMA) and
their web site (http://www.pdma.org/).
Another excellent source of academic research into NPD is Dr. Kevin Dooley, Professor
of Management at Arizona State University. In Dooley’s study of 41 companies to
determine the impact on NPD of best practices and maturity of processes, results indicate
“the important influence of customer involvement, project selection, prelaunch activities,
concurrent engineering and group design on product and project success.”
Germane to our discussion here, Dooley also notes, “The development process itself is
made timely and cost effective by managing the human resources in the project.”
(Dooley, et al) One fundamental element of successful human management is proper
incentives focusing the individuals on key steps, elements and practices.
Dooley examines both best practices (what is done) and maturity (how well it is done) as
key elements for NPD success.
Maturity is worth discussing here because organizations will vary widely on how
formalized their NPD processes are. A tool to describe process maturing is Software
Engineering Institute's (SEI) process Capability Maturity Model (CMM, originally
developed so that the U.S. Department of Defense could evaluate the capabilities of its
software suppliers.
• Level 1 - initial - The process is characterized as ad hoc, and occasionally even
chaotic. Few processes are defined, and success depends on individual effort.
• Level 2 - repeatable - Basic project management processes are established to track
cost, schedule, and functionality. The necessary process discipline is in place to
repeat earlier successes on similar projects.
• Level 3 - defined - The process for both management and engineering activities is
documented, standardized and integrated into a standardized process for the
organization. All projects use an approved, tailored version of the organization's
standard process.
• Level 4 - managed - Detailed measures of the process and product quality are
collected. Both the process and products are quantitatively understood and
controlled.
• Level 5 - optimizing - Continuous process improvement is enabled by quantitative
feedback from the process and from piloting innovative ideas and technologies.
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
5
By corresponding via email with Dr. Dooley to determine his familiarity with the use of
incentives to enhance NPD, although he knew of no such specific research on NPD
incentives, he commented:
“I know the research on team incentives in general supports non-monetary over
monetary awards, by a landslide. The theory in human resources, in general, is
that money can only act as a satisfier for an extremely short amount of time; that
more generally it can only act as a dissatisfier (if you're not compensated
according to needs and/or expectations). As a CEO once said: ‘double the pay of
everyone in this company tomorrow, and it will not double productivity.’”
A good deal of the literature and many corporations have focused on the process of NPD,
generally incorporating a stage-gate or phase-gate series of checks and balances to review
progress and make go no-go decisions.
Not all of Dooley’s research, however, would indicate a simple infusion of awards into
key NPD process junctures — or even an emphasis on process at all.
Dooley states: “Goals and metrics had weak effects on product success and cycle time
improvement. None of the maturity-related activities had any effect on project success,
and two concepts relating to maturity, structured process and learning, were the only two
variables in the entire study that did not generate some level of significant correlation.”
Instead, riper areas for non-cash incentive reinforcement emerged.
“Product success was driven by activities that occur at the boundaries of the NPD
process:
• customer involvement, which represents the boundary between the organization
and the customer
• project selection, which involves the decision of what project to work on
• manufacturing and launch preparations, which are the activities that ensure a
proper hand-off between design and manufacturing/marketing”
Significantly, project success was found to be “strongly driven by concurrent engineering
and group design, activities involving the way in which functional and cross-functional
resources are utilized.”
Additionally, cycle time improvement was revealed to be “strongly driven by project
selection, activities which carefully manage the pipeline of work in the NPD process,
ensuring the resources are not over utilized and project priorities are constantly updated.”
Dooley summarizes the results this way:
The success of the product depends on selecting the right projects, involving the
customer throughout the process, and handing off the project in a smooth fashion
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
6
to marketing and manufacturing. The timeliness and cost effectiveness of the NPD
process depends on how human resources are managed in a functional and cross-
functional manner. Improvement in process cycle time occurs through intelligent
bottleneck management of the project stream.
Concurrent engineering, group design and smooth hand-offs are all facilitated by cross-
functional teams.
Kenneth A Crow of DRM Associates elaborates:
“Early involvement and parallel design are key objectives of integrated product
development. The achievement of these objectives is dependent upon how people
work together and organize product and process development activities. As a
result, organizational approaches are critical to the success of integrated product
development.”
Crow succinctly sums up the positive economics of effective product development teams
(PDT):
“Although PDTs will require more resources early in the development process,
the result will not only be superior designs, but reduced resources over the life
cycle of development to production through reduced design/build/test iterations
and less effort to correct initial design deficiencies through the reviews and
engineering changes. The early involvement of the affected functional areas will
lead to buy-in with the design of products and their processes and result in a
smoother transition to production.” (Crow, http://members.aol.com/drmassoc/pdt.html)
Fortune’s “Hot Products from Hot Tubs,” authors agree. “Most of the successful product
development we observed was done by project teams. Call it the rugby approach:
Everybody is on the field from day one — engineers, production, quality control, sales.
Whenever a problem comes up, they all pile in together. That's very different from the
relay approach, in which one functional team passes the baton to the next.” (Stratford et
al, Fortune 1996)
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
7
Drivers of NPD Success: The 1997 PDMA Report
The PDMA report on New Product Development reinforces the direction recommended
on the Use of Incentives in New Product Development.
Specifically, the Summary Of Key Findings (page 3) on the report notes the widespread
adoption of multi-functional teams in NPD, with over 84% of more innovative projects
using them and even 40-50% of the less innovative projects using them.
Cash compensation is not being used to reward teams.
Sixty percent (60%) of US firms use some variation of the stage-gate process for NPD,
though third generation processes are more flexible, validating a decision not to prescribe
process formulas in the incentive process.
New market research tools have allowed closer and better customer input into the
process, and this is expected to continue. Best practice companies spend more in-depth
time in qualitative studies with fewer customers, an ideal application for incentives.
Kill rates are up. The Trends and Processes section (page 5) notes that initiating a NPD
project is relatively inexpensive, but expenses soar in the development and test phases.
Eliminating less promising projects early is recognized as a critical success factor.
Failure is actually a success — that no-go decisions are good — that businesses have to
trust your development team to kill an idea if it’s wrong!
A Checklist for Keeping Up with NPD Trends (page 8):
1. Implement a NPD process, improve it over time
• Screen projects out earlier
• Match the organization to the project goal
• Use multi-functional teams
• Investigate and use new market research techniques
• Determine whether engineering tools are needed, and use them all
2. Rewards to successful NPD teams are overwhelmingly non-cash (page 12):
• Private, off-site celebration dinners
• Newsletter recognition and firm-wide award dinners
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
8
• Plaques, pins and team shirts (study cites trophy value)
The study notes that higher quality items provide significantly more trophy value. This
finding points the way to a major opportunity for more significant non-cash awards as a
logical next step. Overall, NPD success rates have not significantly improved over the
years, and non-cash awards — properly applied — could be viewed as the missing link.
Four of the eight Key Success Drivers cited (page 14) validate the strategy of utilizing
incentives as part of the New Product Development.
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
9
NPD Incentive Rewards Concept
As noted, the NPD goals in any organization are likely to be:
• Superior product innovation
• Speed-to-market
The pervasive use of teams in new product development would seem to be fertile ground
for non-cash award reinforcement.
David Goodall, corporate compensation director at Motorola, calls informal team rewards
“the pats, perks, and pizza” that drive up team performance.
Pats are the informal positive feedback or atta-boys given to the team for
accomplishments.
Perks are the benefits for team members accorded by virtue of team membership
— for example, access to resources or meeting or conference participation.
Pizza refers to opportunities for team members to socialize together either during
or after the workday. (Frohman & Perry, Industry Week 1995)
The Incentive Industry likes to use terms like honor & recognition, trophy value and non-
cash awards, another way of saying “pats and perks.”
But with a wide variety of company approaches to NPD, key to the success of New
Product Development awards offerings is adequate collateral to help client companies
match awards structures to new product development processes with which they are
comfortable.
Concluding from Dooley that the most likely points of positive influence are in customer
involvement, project selection and effective cross-functional teams, programs can be
designed to impact these areas the most.
• Liberal use of defined value awards to encourage frequent customer input
throughout the process.
• Awards used to reward not only idea generation but also steps leading to
intelligent idea selection.
• Awards maximizing cross-functional team involvement and effectiveness to
reinforce smooth transitions to manufacturing and marketing.
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
10
Let’s look at each of the three:
In World-Class New Product Development: Benchmarking Best Practices of Agile
Manufacturers, the authors cite a study showing that 66% of development project failures
stem from a weak understanding of user needs. “The key solution is to get all members of
the development team into direct contact with a small, select group of customers.”
A PricewaterhouseCoopers article cites an Industry Week Census of Manufacturers study
to identify best practices of “world class companies.” Forty-one percent (41%) of the
world class organizations rely exclusively on customer participation to help develop new
products. Only 25% of all others involve them. (Boehm et al. 1998)
For example, according to an article in OEM Magazine, Netscape' s product teams,
working with electronic feedback from customers, have been able to both add new
features and capitalize on often-unexpected opportunities that present themselves during
the developmental cycle. And all that on a very modest research budget. (McCartney,
OEM Magazine, 1996)
In the American Management Association’s Organizational Dynamics , an article
profiles W. L. Gore & Associates, makers of Gore-Tex and a company known for
organizing small teams around business opportunities. Still, Gore NPD teams found a
tendency to get locked into a particular definition of the problem, or to a particular
solution, too early. (Pacanowsky, Organizational Dynamics, 1995) In this scenario, high
quality project selection becomes critical.
A Fortune article describes effective organization knowledge sharing as a result of cross-
functional teams. At Sharp, knowledge passes from the individual to the team, and then
from the team to the organization. When a project is completed, the team members
return to the normal hierarchy. Gradually, the experience of project teams spreads
through the whole organization. “That's how you achieve continuity and repeatability,”
and minimize fumbles at key hand-offs. (Sherman et al. 1996)
A Compensation & Benefits Review indicates that at team-based organizations (e.g.,
Motorola, Xerox, TRW, Johnson & Johnson, Lucent Technologies, and Kraft Foods)
monetary rewards alone do not always lead to high performance, while non-monetary
rewards such as recognition and empowerment can explain the success or failure of many
teams.
“Some experts completely reject the notion of monetary incentives for teams, believing
either that linking pay to team performance can be insulting to individual star performers
who feel their contributions disproportionately lead to success, or [monetary] team
incentives cheapen the value of the team experience.” (Newman & Krzystofiak, 1998)
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
11
Caveats
Beyond these three identified critical success factors, success factors for NPD become
less obvious. As noted, efforts aimed at increasing process maturity (rewarding phase-
gate milestones, for example, or various measurement schemes) are likely — at least in
Dooley’s view —to not have a significant impact on product development success.
In the early 1980’s, idea generation incentive programs were a very popular type of
incentive program in corporate America. While the formulaic nature of existing idea
generation programs that give an incentive for ideas makes it attractive to many
customers, much of the formula (with its emphasis on process) — administration issues
in particular — may limit its success in ongoing environments.
The key to a successful NPD awards strategy may lie in a less is more approach, steering
clear of thorny and contested process issues, and allowing companies to reinforce
behaviors that their cultures value.
Idea Generation Incentive Programs NPD Incentive Awards
Team-based Team-based
Defined duration On-going—but time targets could improve
speed-to-market
Process/creativity training included Process/creativity training possible
Program budgeted from projected results Too many variables to tie all rewards to
product success—some failure is inevitable
Disruptive to existing culture Must become key part of culture
Highly competitive, Top Award Intrinsically competitive, consider Top
Award for “home run” products
Primarily rewarded results Primarily reward behavior
Highly-structured, process-intensive Must match client-preferred NPD
structures and processes
Rewarded program management Reward key partnerships (customers,
suppliers, functional support)
Low renewal Ongoing
Emphasis on results backlash—not all
approved ideas pan out
Concentrate on building innovative culture
with reduced cycle times
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
12
Applying Incentive Awards
As always, companies can reward:
• Results (sales, profit, number of products)
• Behavior (steps to sale, process)
Companies should consider both when applying incentives to new product development.
Consider the three identified critical success factors.
Customer input
Reward customer input and the development team for including the customer via focus
groups, interviews and surveys with defined value awards like gift certificates, selective
use debit cards, or other individual awards.
A Persona card account could be set up for longer-term customer partnering in the NPD
process.
Awards are recommended following each specific customer behavior: attending a focus
group, returning a survey, etc. Reward each discreet act to reinforce behavior and
encourage future cooperation — e.g., prototype feedback, product testing.
Project selection
Reward development teams for timely, well-reasoned go/no-go decisions. Incentives at
this juncture can impact both product innovation and speed-to-market.
If project selection is truly a critical success indicator, then reward team members for
applying their companies’ selection criteria quickly and decisively. In many
organizations ideas languish in a limbo of halfhearted development or in an idea bank.
Put a premium on speed and thoroughness. Target realistic but aggressive timeliness in
order to reduce cycle time, move best ideas forward and reduce time and resources spent
on less promising products.
This may require something of a paradigm shift in some organizations, as this would
require rewarding teams for killing bad ideas. Be sure to provide adequate
documentation supporting the value of timely and accurate project selection in collateral
materials.
Awards can make intelligent project selection a significant source of ongoing non-cash
compensation for the team and strengthen the effectiveness of NPD efforts.
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
13
Cross-functional teams
Make cross-functional team members stakeholders in the NPD process by rewarding their
involvement and effectiveness.
For example, if alignment to corporate goals and marketing strategy is key to success, tie
some team rewards to the successful completion of the business case for the product.
Reward team leaders for involving all necessary cross-function members.
Reward cross-function members for active, quality participation.
Pay special attention to critical hand-offs to manufacturing and marketing, rewarding
those disciplines’ team involvement throughout the NPD process.
Basic measures have been used to evaluate NPD performance: quality, timing, financial
performance, and development cost. A study of growth in fast track Silicon Valley,
however, poses some alternative measures for NPD success (Meyer, 1998):
• cycle time
• resource capacity
• team effectiveness
• resource capability
• competitive comparisons
According to a Compensation and Benefits Review article, “Organizations that do not
support their teams with team approaches to rewards often see improved results slip
away.” The authors go on to explain that “because of their fluid nature, [non-cash]
incentives and awards play a prominent role in most team-based pay programs,” noting
that such awards must be integrated with other incentive programs and “must be based on
results that teams can control.” (Saunier and Hawk, 1994)
A recommendation is to give the NPD teams an awards budget and let them reward the
behaviors they find most valuable. A Compensation & Benefits Review article cites a
research study sponsored by the Consortium for Alternative Reward Strategies (CARS)
Research that found that when a task force — regardless of the level of employees
involved — designs a reward plan, that plan produces higher employee satisfaction and
improves business performance more effectively than plans designed by the company's
headquarters staff.
The time is probably overripe for a new product development awards strategy,
particularly in those industries with the shortest cycle times, to assist these industries in
better NPD results. A PricewaterhouseCoopers report indicates that over 30% of sales
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
14
come from new products introduced within the preceding two years for high tech
companies. (Keown, 1998)
According to Coopers & Lybrand's “Trendsetter Barometer,” more high tech than non-
tech firms are planning to increase investments in new product development, cited by 48
percent (12 points higher).
Additional Ideas:
Idea Generation: identify, clarify, and qualify ideas that are on-target to the NPD process
goals/business goals. Reward both teams and individuals for the ideas that succeed.
Base the award value on either the value of the idea in revenue or savings to the business
— give a percentage of the value back to the initiator of the idea (on a team reward, split
the award value among the team).
Cross-Functional Team: Identify the steps necessary for an approved or defined idea to
move forward within the NPD process. Most likely, this will include a series of team
interactions. Reward attendance and being on time at these meetings. Also look at
rewarding the team based on the performance of the product development stage and the
product launch stage. Include in the team activity, steps like “client interaction and
feedback,” then reward for this step taking place (X value, based on value of idea). Also
reward the client for their involvement.
Awareness and Training: Most times businesses rush forward with launching a new
product. Communications is carried out. Sales materials are produced. But the element
of training can be overlooked. As stated in, “How to Sell New Products,” July 1999 of
Selling Power by Randy Scott of Square D:
“It’s all about awareness and education. We can come out with a new product
and just put it out there, but unless we’re educated on the product beforehand,
it’s going to be difficult for us [to sell].”
It makes sense to put together formalized training that includes testing. Once testing is
completed and a certain grade level attained, a reward could be used to re-enforce the
positive message and introduction.
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
15
Conclusion
There is no silver bullet. There is no quick answer. There is no magic book that has all
the answers. There is no process that can answer it all. Instead, businesses need to use a
mixture of the empirical and the emotional. It is important to capture the imagination and
the energies of all those involved in the development of new products. NPD is about
process and people. Do not leave out the human coefficient.
As outlined:
• Involve clients/customers in the NPD process and reward them for being involved
and taking the time.
• Focus on project and idea selection not raw idea generation and reward individuals
for not only coming up with solid ideas but for also “killing off” bad or off base ideas.
• Work on cross-functional team interaction skills and steps, along with smooth
transition from idea, to development, to launch to on going product and reward key
and core steps/processes (i.e. which are different for each company and each
industry).
Individual incentives offer a business the ability to identify and reward the right NPD
behaviors, creating consistent and positive results.
A View Point
The American Express Incentive Services team continually looks for ways and
approaches to help businesses succeed. We are strong believers in the power of incentives
and what incentives offer a business. Properly structured programs utilizing individual
incentives give a business the ability to focus its resources on those behaviors that
generate the best results.
In the simplest of terms individual incentives will create a spotlight on those actions,
activities, steps, and processes that can make a difference between success and failure.
Most businesses assume that what they say, what they write, what they demand will get
done. But what is missing is the classical, “WIIFM: What’s In It For Me?” Don’t take
this for granted, because if you do, most people will overlook the obvious. They will do
what is common, what is comfortable, what is easy. But by rewarding key behaviors
with individual awards, activities and behaviors a business can increase their chances of
success — mobilizing the whole team in the same direction.
One area of business that seems to need support in generating consistent and team “mind-
share/focus” is the world of new product development. The authors of this document
have a combined history of over 30 years of product development interactions. What we
have found is the majority of documents, reports, metrics, etc., are great tools and
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
16
methods. Yet, time and time again what are overlooked is the basics of the human
element.
All development is carried out, lead, and involves people. These individuals have needs,
wants, pre-conceived notions, fears, likes, dislikes, etc. How do you manage these core
emotions and core abilities to generate a positive NPD result for your business? You can
have input via motivation and incentive tactics to focus and guide a team and individuals
to higher levels of performance and results. Beyond a salary it is important to reward
people for their support — “what gets rewarded gets done.”
It is important to combine both “at a-boy” rewards (i.e., thank you's, lunches, etc.) with
monetary awards. By bringing both together you are helping to ensure that what needs to
be done will get done. This is especially true in group development efforts, where people
are most likely assigned to assist in a development project. This extra task can be looked
at as a burden “on top of” their existing responsibilities. Also, getting a team to focus on
the necessary processes and elements of solid product development requires rewarding
proper action and behavior – as a team.
The goal of this paper was to highlight those elements in the NPD process that have
shown to improve the end results of NPD.
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
17
References Cited
Crow, Kenneth A. “Benchmarking Best Practices to Improve Product Development,”
DRM Associates. 1997. http://members.aol.com/drmassoc/pdt.html
Dimancescu, Dan and Dwenger, Kemp. World-Class New Product Development:
Benchmarking Best Practices of Agile Manufacturers. 1966.
Dooley, Kevin. The Impact of Best Practices and Maturity in New Product Development,
ASU Conference on Quality & Management. 1997.
Fey, Victor R. and Rivin, Eugene I. The Science of Innovation. 1997.
Frohman, Mark and Pascarella, Perry. “Don't Abdicate: Teams’ Effectiveness Starts and
Ends at the Top,” Industry Week. November 6, 1995.
Griffin, Abbie. Drivers of NPD Success: The 1997 PDMA Report. 1997.
Henkoff, Ronald and Kover, Amy R. “Growing Your Company: Five Ways to Do It
Right,” Fortune. November 25, 1996.
Jerry M. Newman, Frank J. Krzystofiak, “Value-Chain Compensation,” Compensation &
Benefits Review. April 17, 1998.
Keown, Shawn. “Reducing Time-to-Market in Developing Med Tech products,”
PricewaterhouseCoopers. 1998. http://www.pwc.com
Laton McCartney, “The Internet Zone,” OEM Magazine, December 1, 1996.
McMath, Robert M. “What Were They Thinking?” American Demographics, February
1998.
McMath, Robert M. “What Were They Thinking?” American Demographics, April 1998.
McMath, Robert M. “What Were They Thinking?” American Demographics, May 1998.
McMath, Robert M. “What Were They Thinking?” American Demographics, January
1998.
Pacanowsky, Michael, ”Team tools for wicked problems,” Organizational Dynamics,
January 1, 1995.
Palo, Joseph D. and Rule, Erik “The Drive to Reduce Time-To-Market,”
PricewaterhouseCoopers. 1998. http://www.pwc.com
Sherman, Stratford Takeuchi, Hirotaka and Davies, Erin M. “Hot Products from Hot
Tubs or How Middle Managers Innovate,” Fortune. April 29, 1996.
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
18
Thomas, Robert J. New Product Success Stories: Lessons from Leading Innovators. 1994.
Tushman ,Michael L. and O'Reilly, Charles A., III. Winning Through Innovation: A
Practical Guide to Leading Organizational Change and Renewal. 1997.
Boehm, Barrett L., Mistor, Paul G. and Reinwart, Richard. “Partnering with Customers
and Suppliers,” PricewaterhouseCoopers. 1998. http://www.pwc.com
Saunnier, Anne M. and Hawk, Elizabeth J. “Realizing the Potential of Teams through
Team-based Rewards,” Compensation & Benefits Review. July 1, 1994.
06/10/13 Jumping the Curve: Getting from Mind to Market
The Use of Incentives in New Product Development
19

Contenu connexe

Tendances

Tendances (20)

Disenyo at Pamamaraan ng Pananaliksik
Disenyo at Pamamaraan ng PananaliksikDisenyo at Pamamaraan ng Pananaliksik
Disenyo at Pamamaraan ng Pananaliksik
 
Pananaliksik 1
Pananaliksik 1Pananaliksik 1
Pananaliksik 1
 
Pananaliksik unang hakbang Updated File
Pananaliksik unang hakbang Updated FilePananaliksik unang hakbang Updated File
Pananaliksik unang hakbang Updated File
 
Concept Paper Best Examples
Concept Paper Best ExamplesConcept Paper Best Examples
Concept Paper Best Examples
 
Chapter 1 Research
Chapter 1 ResearchChapter 1 Research
Chapter 1 Research
 
Sample Entry of Related Literature and Related Study
Sample Entry of Related Literature and Related StudySample Entry of Related Literature and Related Study
Sample Entry of Related Literature and Related Study
 
Pagbasa
PagbasaPagbasa
Pagbasa
 
Research (chapter 1 sip)
Research (chapter 1 sip)Research (chapter 1 sip)
Research (chapter 1 sip)
 
pagsulat ng abstrak
pagsulat ng abstrakpagsulat ng abstrak
pagsulat ng abstrak
 
Morpolohiya
MorpolohiyaMorpolohiya
Morpolohiya
 
Pagmamay aring-intelektuwal
Pagmamay aring-intelektuwalPagmamay aring-intelektuwal
Pagmamay aring-intelektuwal
 
Panandang kohesyong gramatikal
Panandang kohesyong gramatikalPanandang kohesyong gramatikal
Panandang kohesyong gramatikal
 
Bionote
BionoteBionote
Bionote
 
Karagatan at duplo
Karagatan at duploKaragatan at duplo
Karagatan at duplo
 
Kohesyong gramatikal at uri ng pang abay
Kohesyong gramatikal at uri ng pang abayKohesyong gramatikal at uri ng pang abay
Kohesyong gramatikal at uri ng pang abay
 
Mga Uri ng Talumpati
Mga Uri ng TalumpatiMga Uri ng Talumpati
Mga Uri ng Talumpati
 
Talumpati
Talumpati Talumpati
Talumpati
 
Philippine Literature After EDSA Revolution
Philippine Literature After EDSA RevolutionPhilippine Literature After EDSA Revolution
Philippine Literature After EDSA Revolution
 
100 Concept Paper Ideas
100 Concept Paper Ideas100 Concept Paper Ideas
100 Concept Paper Ideas
 
Pagsasaling wika
Pagsasaling wikaPagsasaling wika
Pagsasaling wika
 

En vedette

Life Light For Education Concept Paper On Education
Life  Light For Education Concept Paper On EducationLife  Light For Education Concept Paper On Education
Life Light For Education Concept Paper On EducationAshish Tandon
 
Concept Paper
Concept PaperConcept Paper
Concept Paperplhill14
 
Media Presnetation Final Products Studio 64
Media Presnetation Final Products Studio 64Media Presnetation Final Products Studio 64
Media Presnetation Final Products Studio 64christinacss13
 
Hi Path 3000 V7 Product Presentation
Hi Path 3000 V7 Product PresentationHi Path 3000 V7 Product Presentation
Hi Path 3000 V7 Product Presentationraulduke
 
Design for Variable Printing
Design for Variable PrintingDesign for Variable Printing
Design for Variable Printinglmeyl
 
Trailer Record Sheet Trailer Blindness
Trailer Record Sheet Trailer BlindnessTrailer Record Sheet Trailer Blindness
Trailer Record Sheet Trailer Blindnesschristinacss13
 
Ohri Presentation at RINFRA-D's MYT Petition on 6th April 2013
Ohri Presentation at RINFRA-D's MYT Petition on 6th April 2013Ohri Presentation at RINFRA-D's MYT Petition on 6th April 2013
Ohri Presentation at RINFRA-D's MYT Petition on 6th April 2013Sandeep Ohri
 
Chicago Chemists
Chicago ChemistsChicago Chemists
Chicago Chemistshostage
 
Shauna Ryan\'s Portfolio
Shauna Ryan\'s PortfolioShauna Ryan\'s Portfolio
Shauna Ryan\'s PortfolioShaunaKRyan
 
Animations
AnimationsAnimations
Animationsguru0000
 

En vedette (20)

Music Video Concept Paper
Music Video Concept PaperMusic Video Concept Paper
Music Video Concept Paper
 
Concept Paper in Guidance Program
Concept Paper in Guidance ProgramConcept Paper in Guidance Program
Concept Paper in Guidance Program
 
Life Light For Education Concept Paper On Education
Life  Light For Education Concept Paper On EducationLife  Light For Education Concept Paper On Education
Life Light For Education Concept Paper On Education
 
Concept Paper
Concept PaperConcept Paper
Concept Paper
 
Concept paper
Concept paperConcept paper
Concept paper
 
Media Presnetation Final Products Studio 64
Media Presnetation Final Products Studio 64Media Presnetation Final Products Studio 64
Media Presnetation Final Products Studio 64
 
Association Engagement Success Guide
Association Engagement Success GuideAssociation Engagement Success Guide
Association Engagement Success Guide
 
How To Market and Develop Business With The Fed Gov
How To Market and Develop Business With The Fed GovHow To Market and Develop Business With The Fed Gov
How To Market and Develop Business With The Fed Gov
 
Elag2015
Elag2015Elag2015
Elag2015
 
Hi Path 3000 V7 Product Presentation
Hi Path 3000 V7 Product PresentationHi Path 3000 V7 Product Presentation
Hi Path 3000 V7 Product Presentation
 
20100306 Datasalon 4 : code4lib
20100306 Datasalon 4 : code4lib20100306 Datasalon 4 : code4lib
20100306 Datasalon 4 : code4lib
 
Design for Variable Printing
Design for Variable PrintingDesign for Variable Printing
Design for Variable Printing
 
Trailer Record Sheet Trailer Blindness
Trailer Record Sheet Trailer BlindnessTrailer Record Sheet Trailer Blindness
Trailer Record Sheet Trailer Blindness
 
Business Environment Outlook Electronics
Business Environment Outlook ElectronicsBusiness Environment Outlook Electronics
Business Environment Outlook Electronics
 
Ohri Presentation at RINFRA-D's MYT Petition on 6th April 2013
Ohri Presentation at RINFRA-D's MYT Petition on 6th April 2013Ohri Presentation at RINFRA-D's MYT Petition on 6th April 2013
Ohri Presentation at RINFRA-D's MYT Petition on 6th April 2013
 
Chicago Chemists
Chicago ChemistsChicago Chemists
Chicago Chemists
 
Vimeo
VimeoVimeo
Vimeo
 
Women Of Algiers 3
Women Of Algiers 3Women Of Algiers 3
Women Of Algiers 3
 
Shauna Ryan\'s Portfolio
Shauna Ryan\'s PortfolioShauna Ryan\'s Portfolio
Shauna Ryan\'s Portfolio
 
Animations
AnimationsAnimations
Animations
 

Similaire à Concept Paper: The Use of Incentives in New Product Development

Do you need a new product development strategy
Do you need a new product development strategyDo you need a new product development strategy
Do you need a new product development strategysamatong
 
Stage Gate Whitepaper_0716
Stage Gate Whitepaper_0716Stage Gate Whitepaper_0716
Stage Gate Whitepaper_0716Kenneth Kish
 
P l e a s e n o t e t h a t g ra y a re a s re f l e c t .docx
P l e a s e  n o t e  t h a t  g ra y  a re a s  re f l e c t .docxP l e a s e  n o t e  t h a t  g ra y  a re a s  re f l e c t .docx
P l e a s e n o t e t h a t g ra y a re a s re f l e c t .docxaman341480
 
Application of voc translationtools a case study
Application of voc translationtools a case studyApplication of voc translationtools a case study
Application of voc translationtools a case studyiaemedu
 
Application of voc translationtools a case study
Application of voc translationtools a case studyApplication of voc translationtools a case study
Application of voc translationtools a case studyiaemedu
 
Conjoint analysis a perfect link between
Conjoint analysis  a perfect link betweenConjoint analysis  a perfect link between
Conjoint analysis a perfect link betweenprj_publication
 
Conjoint analysis a perfect link between
Conjoint analysis  a perfect link betweenConjoint analysis  a perfect link between
Conjoint analysis a perfect link betweenprj_publication
 
New product developement
New product developementNew product developement
New product developementMadiha Ahmed
 
Innovation Guest lecture Tu Delft
Innovation Guest lecture Tu Delft Innovation Guest lecture Tu Delft
Innovation Guest lecture Tu Delft Koen Klokgieters
 
Quest for organizational innovation strategy
Quest for organizational  innovation strategy Quest for organizational  innovation strategy
Quest for organizational innovation strategy Dr Oliver Ho
 
Paper on driving_innovation_in_large_corporations
Paper on driving_innovation_in_large_corporationsPaper on driving_innovation_in_large_corporations
Paper on driving_innovation_in_large_corporationsmitecenter
 
Paper on driving_innovation_in_large_corporations
Paper on driving_innovation_in_large_corporationsPaper on driving_innovation_in_large_corporations
Paper on driving_innovation_in_large_corporationsmitecenter
 
Managing innovation within firms-Chapter 4 (Paul Trott).pptx
Managing innovation within firms-Chapter 4 (Paul Trott).pptxManaging innovation within firms-Chapter 4 (Paul Trott).pptx
Managing innovation within firms-Chapter 4 (Paul Trott).pptxAartiPandey63
 
Conjoint analysis a perfect link between
Conjoint analysis  a perfect link betweenConjoint analysis  a perfect link between
Conjoint analysis a perfect link betweenprjpublications
 
Conjoint analysis a perfect link between
Conjoint analysis  a perfect link betweenConjoint analysis  a perfect link between
Conjoint analysis a perfect link betweenprjpublications
 
final version dissertation
final version dissertationfinal version dissertation
final version dissertationInka Tiono
 
Mc kinsey the eight essentials of innovation
Mc kinsey the eight essentials of innovationMc kinsey the eight essentials of innovation
Mc kinsey the eight essentials of innovationChien Do Van
 
Ideation Preso Final (Eccix + Results)
Ideation Preso Final (Eccix + Results)Ideation Preso Final (Eccix + Results)
Ideation Preso Final (Eccix + Results)Daniel P. Phillips
 
Feedback from the frontlines
Feedback from the frontlinesFeedback from the frontlines
Feedback from the frontlinesChelse Benham
 

Similaire à Concept Paper: The Use of Incentives in New Product Development (20)

Do you need a new product development strategy
Do you need a new product development strategyDo you need a new product development strategy
Do you need a new product development strategy
 
Stage Gate Whitepaper_0716
Stage Gate Whitepaper_0716Stage Gate Whitepaper_0716
Stage Gate Whitepaper_0716
 
P l e a s e n o t e t h a t g ra y a re a s re f l e c t .docx
P l e a s e  n o t e  t h a t  g ra y  a re a s  re f l e c t .docxP l e a s e  n o t e  t h a t  g ra y  a re a s  re f l e c t .docx
P l e a s e n o t e t h a t g ra y a re a s re f l e c t .docx
 
Application of voc translationtools a case study
Application of voc translationtools a case studyApplication of voc translationtools a case study
Application of voc translationtools a case study
 
Application of voc translationtools a case study
Application of voc translationtools a case studyApplication of voc translationtools a case study
Application of voc translationtools a case study
 
NEW PRODUCT DEVELOPMENT
NEW PRODUCT DEVELOPMENTNEW PRODUCT DEVELOPMENT
NEW PRODUCT DEVELOPMENT
 
Conjoint analysis a perfect link between
Conjoint analysis  a perfect link betweenConjoint analysis  a perfect link between
Conjoint analysis a perfect link between
 
Conjoint analysis a perfect link between
Conjoint analysis  a perfect link betweenConjoint analysis  a perfect link between
Conjoint analysis a perfect link between
 
New product developement
New product developementNew product developement
New product developement
 
Innovation Guest lecture Tu Delft
Innovation Guest lecture Tu Delft Innovation Guest lecture Tu Delft
Innovation Guest lecture Tu Delft
 
Quest for organizational innovation strategy
Quest for organizational  innovation strategy Quest for organizational  innovation strategy
Quest for organizational innovation strategy
 
Paper on driving_innovation_in_large_corporations
Paper on driving_innovation_in_large_corporationsPaper on driving_innovation_in_large_corporations
Paper on driving_innovation_in_large_corporations
 
Paper on driving_innovation_in_large_corporations
Paper on driving_innovation_in_large_corporationsPaper on driving_innovation_in_large_corporations
Paper on driving_innovation_in_large_corporations
 
Managing innovation within firms-Chapter 4 (Paul Trott).pptx
Managing innovation within firms-Chapter 4 (Paul Trott).pptxManaging innovation within firms-Chapter 4 (Paul Trott).pptx
Managing innovation within firms-Chapter 4 (Paul Trott).pptx
 
Conjoint analysis a perfect link between
Conjoint analysis  a perfect link betweenConjoint analysis  a perfect link between
Conjoint analysis a perfect link between
 
Conjoint analysis a perfect link between
Conjoint analysis  a perfect link betweenConjoint analysis  a perfect link between
Conjoint analysis a perfect link between
 
final version dissertation
final version dissertationfinal version dissertation
final version dissertation
 
Mc kinsey the eight essentials of innovation
Mc kinsey the eight essentials of innovationMc kinsey the eight essentials of innovation
Mc kinsey the eight essentials of innovation
 
Ideation Preso Final (Eccix + Results)
Ideation Preso Final (Eccix + Results)Ideation Preso Final (Eccix + Results)
Ideation Preso Final (Eccix + Results)
 
Feedback from the frontlines
Feedback from the frontlinesFeedback from the frontlines
Feedback from the frontlines
 

Plus de Organizational Development & Change Management

Plus de Organizational Development & Change Management (20)

Successful jv starts with strategy and relationships
Successful jv starts with strategy and relationshipsSuccessful jv starts with strategy and relationships
Successful jv starts with strategy and relationships
 
Press release chairman emeritus membership awarded to Carrithers 2020
Press release   chairman emeritus membership awarded to Carrithers 2020Press release   chairman emeritus membership awarded to Carrithers 2020
Press release chairman emeritus membership awarded to Carrithers 2020
 
Moneycorp google campaigns
Moneycorp google campaignsMoneycorp google campaigns
Moneycorp google campaigns
 
FinTech Achievelinks System
FinTech Achievelinks SystemFinTech Achievelinks System
FinTech Achievelinks System
 
Moneycorp US Consumer Program
Moneycorp US Consumer ProgramMoneycorp US Consumer Program
Moneycorp US Consumer Program
 
Strategy Development 2019
Strategy Development 2019Strategy Development 2019
Strategy Development 2019
 
Fort McCoy Mini Golf
Fort McCoy Mini GolfFort McCoy Mini Golf
Fort McCoy Mini Golf
 
Accomplishments While At Air Products David Carrithers
Accomplishments While At Air Products David CarrithersAccomplishments While At Air Products David Carrithers
Accomplishments While At Air Products David Carrithers
 
Letters of recognition and recommendation air products
Letters of recognition and recommendation air productsLetters of recognition and recommendation air products
Letters of recognition and recommendation air products
 
David Carrithers Resume 707 484-3620
David Carrithers Resume 707 484-3620David Carrithers Resume 707 484-3620
David Carrithers Resume 707 484-3620
 
Lifecycle Branding Guidelines Presentation
Lifecycle Branding Guidelines PresentationLifecycle Branding Guidelines Presentation
Lifecycle Branding Guidelines Presentation
 
Campaign One Real Estate
Campaign One Real Estate Campaign One Real Estate
Campaign One Real Estate
 
Currency and Payment Products
Currency and Payment ProductsCurrency and Payment Products
Currency and Payment Products
 
US Consumer Launch Press Release
US Consumer Launch Press Release US Consumer Launch Press Release
US Consumer Launch Press Release
 
Loyalty 101
Loyalty 101Loyalty 101
Loyalty 101
 
David Carrithers can help today!
David Carrithers can help today!David Carrithers can help today!
David Carrithers can help today!
 
HDI - Practice Growth By Design 2015
HDI - Practice Growth By Design 2015HDI - Practice Growth By Design 2015
HDI - Practice Growth By Design 2015
 
Job Order Contracting 101
Job Order Contracting 101Job Order Contracting 101
Job Order Contracting 101
 
NSC Employee Reward & Recognition Programs Overview
NSC Employee Reward & Recognition Programs OverviewNSC Employee Reward & Recognition Programs Overview
NSC Employee Reward & Recognition Programs Overview
 
Needs Based Selling
Needs Based SellingNeeds Based Selling
Needs Based Selling
 

Dernier

The Coffee Bean & Tea Leaf(CBTL), Business strategy case study
The Coffee Bean & Tea Leaf(CBTL), Business strategy case studyThe Coffee Bean & Tea Leaf(CBTL), Business strategy case study
The Coffee Bean & Tea Leaf(CBTL), Business strategy case studyEthan lee
 
It will be International Nurses' Day on 12 May
It will be International Nurses' Day on 12 MayIt will be International Nurses' Day on 12 May
It will be International Nurses' Day on 12 MayNZSG
 
Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...
Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...
Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...amitlee9823
 
M.C Lodges -- Guest House in Jhang.
M.C Lodges --  Guest House in Jhang.M.C Lodges --  Guest House in Jhang.
M.C Lodges -- Guest House in Jhang.Aaiza Hassan
 
Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...
Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...
Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...amitlee9823
 
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdfDr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdfAdmir Softic
 
FULL ENJOY Call Girls In Mahipalpur Delhi Contact Us 8377877756
FULL ENJOY Call Girls In Mahipalpur Delhi Contact Us 8377877756FULL ENJOY Call Girls In Mahipalpur Delhi Contact Us 8377877756
FULL ENJOY Call Girls In Mahipalpur Delhi Contact Us 8377877756dollysharma2066
 
👉Chandigarh Call Girls 👉9878799926👉Just Call👉Chandigarh Call Girl In Chandiga...
👉Chandigarh Call Girls 👉9878799926👉Just Call👉Chandigarh Call Girl In Chandiga...👉Chandigarh Call Girls 👉9878799926👉Just Call👉Chandigarh Call Girl In Chandiga...
👉Chandigarh Call Girls 👉9878799926👉Just Call👉Chandigarh Call Girl In Chandiga...rajveerescorts2022
 
Insurers' journeys to build a mastery in the IoT usage
Insurers' journeys to build a mastery in the IoT usageInsurers' journeys to build a mastery in the IoT usage
Insurers' journeys to build a mastery in the IoT usageMatteo Carbone
 
Call Girls Hebbal Just Call 👗 7737669865 👗 Top Class Call Girl Service Bangalore
Call Girls Hebbal Just Call 👗 7737669865 👗 Top Class Call Girl Service BangaloreCall Girls Hebbal Just Call 👗 7737669865 👗 Top Class Call Girl Service Bangalore
Call Girls Hebbal Just Call 👗 7737669865 👗 Top Class Call Girl Service Bangaloreamitlee9823
 
Regression analysis: Simple Linear Regression Multiple Linear Regression
Regression analysis:  Simple Linear Regression Multiple Linear RegressionRegression analysis:  Simple Linear Regression Multiple Linear Regression
Regression analysis: Simple Linear Regression Multiple Linear RegressionRavindra Nath Shukla
 
John Halpern sued for sexual assault.pdf
John Halpern sued for sexual assault.pdfJohn Halpern sued for sexual assault.pdf
John Halpern sued for sexual assault.pdfAmzadHosen3
 
Lucknow 💋 Escorts in Lucknow - 450+ Call Girl Cash Payment 8923113531 Neha Th...
Lucknow 💋 Escorts in Lucknow - 450+ Call Girl Cash Payment 8923113531 Neha Th...Lucknow 💋 Escorts in Lucknow - 450+ Call Girl Cash Payment 8923113531 Neha Th...
Lucknow 💋 Escorts in Lucknow - 450+ Call Girl Cash Payment 8923113531 Neha Th...anilsa9823
 
Monthly Social Media Update April 2024 pptx.pptx
Monthly Social Media Update April 2024 pptx.pptxMonthly Social Media Update April 2024 pptx.pptx
Monthly Social Media Update April 2024 pptx.pptxAndy Lambert
 
A DAY IN THE LIFE OF A SALESMAN / WOMAN
A DAY IN THE LIFE OF A  SALESMAN / WOMANA DAY IN THE LIFE OF A  SALESMAN / WOMAN
A DAY IN THE LIFE OF A SALESMAN / WOMANIlamathiKannappan
 
Organizational Transformation Lead with Culture
Organizational Transformation Lead with CultureOrganizational Transformation Lead with Culture
Organizational Transformation Lead with CultureSeta Wicaksana
 
Cracking the Cultural Competence Code.pptx
Cracking the Cultural Competence Code.pptxCracking the Cultural Competence Code.pptx
Cracking the Cultural Competence Code.pptxWorkforce Group
 
How to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League CityHow to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League CityEric T. Tung
 
Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...
Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...
Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...lizamodels9
 

Dernier (20)

The Coffee Bean & Tea Leaf(CBTL), Business strategy case study
The Coffee Bean & Tea Leaf(CBTL), Business strategy case studyThe Coffee Bean & Tea Leaf(CBTL), Business strategy case study
The Coffee Bean & Tea Leaf(CBTL), Business strategy case study
 
It will be International Nurses' Day on 12 May
It will be International Nurses' Day on 12 MayIt will be International Nurses' Day on 12 May
It will be International Nurses' Day on 12 May
 
Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...
Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...
Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...
 
M.C Lodges -- Guest House in Jhang.
M.C Lodges --  Guest House in Jhang.M.C Lodges --  Guest House in Jhang.
M.C Lodges -- Guest House in Jhang.
 
Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...
Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...
Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...
 
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdfDr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
 
FULL ENJOY Call Girls In Mahipalpur Delhi Contact Us 8377877756
FULL ENJOY Call Girls In Mahipalpur Delhi Contact Us 8377877756FULL ENJOY Call Girls In Mahipalpur Delhi Contact Us 8377877756
FULL ENJOY Call Girls In Mahipalpur Delhi Contact Us 8377877756
 
Forklift Operations: Safety through Cartoons
Forklift Operations: Safety through CartoonsForklift Operations: Safety through Cartoons
Forklift Operations: Safety through Cartoons
 
👉Chandigarh Call Girls 👉9878799926👉Just Call👉Chandigarh Call Girl In Chandiga...
👉Chandigarh Call Girls 👉9878799926👉Just Call👉Chandigarh Call Girl In Chandiga...👉Chandigarh Call Girls 👉9878799926👉Just Call👉Chandigarh Call Girl In Chandiga...
👉Chandigarh Call Girls 👉9878799926👉Just Call👉Chandigarh Call Girl In Chandiga...
 
Insurers' journeys to build a mastery in the IoT usage
Insurers' journeys to build a mastery in the IoT usageInsurers' journeys to build a mastery in the IoT usage
Insurers' journeys to build a mastery in the IoT usage
 
Call Girls Hebbal Just Call 👗 7737669865 👗 Top Class Call Girl Service Bangalore
Call Girls Hebbal Just Call 👗 7737669865 👗 Top Class Call Girl Service BangaloreCall Girls Hebbal Just Call 👗 7737669865 👗 Top Class Call Girl Service Bangalore
Call Girls Hebbal Just Call 👗 7737669865 👗 Top Class Call Girl Service Bangalore
 
Regression analysis: Simple Linear Regression Multiple Linear Regression
Regression analysis:  Simple Linear Regression Multiple Linear RegressionRegression analysis:  Simple Linear Regression Multiple Linear Regression
Regression analysis: Simple Linear Regression Multiple Linear Regression
 
John Halpern sued for sexual assault.pdf
John Halpern sued for sexual assault.pdfJohn Halpern sued for sexual assault.pdf
John Halpern sued for sexual assault.pdf
 
Lucknow 💋 Escorts in Lucknow - 450+ Call Girl Cash Payment 8923113531 Neha Th...
Lucknow 💋 Escorts in Lucknow - 450+ Call Girl Cash Payment 8923113531 Neha Th...Lucknow 💋 Escorts in Lucknow - 450+ Call Girl Cash Payment 8923113531 Neha Th...
Lucknow 💋 Escorts in Lucknow - 450+ Call Girl Cash Payment 8923113531 Neha Th...
 
Monthly Social Media Update April 2024 pptx.pptx
Monthly Social Media Update April 2024 pptx.pptxMonthly Social Media Update April 2024 pptx.pptx
Monthly Social Media Update April 2024 pptx.pptx
 
A DAY IN THE LIFE OF A SALESMAN / WOMAN
A DAY IN THE LIFE OF A  SALESMAN / WOMANA DAY IN THE LIFE OF A  SALESMAN / WOMAN
A DAY IN THE LIFE OF A SALESMAN / WOMAN
 
Organizational Transformation Lead with Culture
Organizational Transformation Lead with CultureOrganizational Transformation Lead with Culture
Organizational Transformation Lead with Culture
 
Cracking the Cultural Competence Code.pptx
Cracking the Cultural Competence Code.pptxCracking the Cultural Competence Code.pptx
Cracking the Cultural Competence Code.pptx
 
How to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League CityHow to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League City
 
Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...
Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...
Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...
 

Concept Paper: The Use of Incentives in New Product Development

  • 1. Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development A Concept Paper David C. Carrithers CIO, Vice President Information Technology & New Business Development American Express Incentive Services Jack Hennies Hennies Associates Mary P. Luckey Product Manager, Marketing American Express Incentive Services David K. Mulcahy Director New Business Development American Express Incentive Services July 1999 www.aeis.com
  • 2. Introduction The Current State of Development Ever wash your hair with Clairol’s “The Look of Buttermilk” shampoo? You’re not alone. Despite the attractive farm scene on the bottle, the connection between buttermilk, farms, freshness and hair was too great a stretch for most consumers, and the product failed. (McMath, February 1998) Robert McMath’s running series of articles, “What Were They Thinking?” in American Demographics, chronicles a host of such product development miscues. Microwave Sundaes is another case in point. (McMath, April 1998) Or how about EZ-Cal Soft Calcium Whip and Maalox Whip Antacid? Both were whipped before the race even started. Seen any vacuum-packed rice or peanuts on the shelves lately? It hasn’t been for lack of manufacturers trying. (McMath, May 1998) Even consumer goods giants like Campbell’s can stub their new product development toes. Consider Campbell’s Souper Combo — a combination of frozen soup and sandwich. Despite testing well and enjoying $10 million in marketing support during its first year, it failed. Folks tried it, but didn’t come back for more. (McMath, January 1998) Paul Lukas recalls other far-misses for Fortune: We all know Miller Lite. Do you remember Miller’s clear beer (or any of the rest of the doomed “clear” product trend)? How about Nestea's launch of a yellowish carbonated beverage called Tea Whiz? Sound appealing? World-Class New Product Development: Benchmarking Best Practices of Agile Manufacturers by Dan Dimancescu and Kemp Dwenger cite what they consider the predominant problems facing companies in developing new products: • Customer needs not well-defined or understood • Errors found too late • Management by interference • Too many projects • Burnout • Poor communication 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 2
  • 3. They highlight poor definition of customer needs as the most pervasive problem. (Dimancescu & Dwenger 1966) McMath estimates it costs $20 million to $50 million to launch a new product successfully, and 25,000 new items appeared in 1997 alone. But there’s burnished gold on the flip side of the NPD coin. ConAgra with Healthy Choice and Nabisco with SnackWells both cracked the “eating sensibly” consumer acceptance code. Healthy Choice has spawned over 463 line extensions, while SnackWells enjoys 105 SKUs on supermarket shelves. It is no wonder, then, that despite new product failure rates that various estimates place from 60 to 90 per cent, most companies consider new products their life’s blood, not just growth, but continued existence. A 1996 American Management Association study revealed that corporations “once obsessed with cutting costs are now urgently trying to boost sales — with new products, new services, and new markets, both at home and abroad.” The study quotes Charles Knight, CEO of Emerson Electric, on the shortsighted strategy of companies trying to cut their way to success: “We got so bottom-line oriented that we were inhibiting growth. We were cutting, cutting. But you can only go so far.” (Henkoff & Kover, 1996) Michael L. Tushman and Charles A. O'Reilly, III’s Winning Through Innovation: A Practical Guide to Leading Organizational Change and Renewal discuss what they call the tyranny of success — “a pattern of success followed by failure, innovation followed by inertia, common across firms and industries and over time.” Early successes, they explain, become reflected in organizational culture, structures, and practices, which slowly become invariant over time, even in the face of a “dramatically- changed strategic context and a palpably clear recognition of the need for change.” Robert J. Thomas, in New Product Success Stories: Lessons from Leading Innovators, concurs. He points out that while the Ford Taurus, for example, was a successful product, Ford failed to adopt a view of new product development as an ongoing process of innovation (Thomas 1994). Fey & Rivin’s The Science of Innovation (1997) reasons succinctly that in an increasingly competitive global marketplace, “winning companies will be those that can deliver superior products to customers faster.” That’s quality products and speed-to- market. No easy formula. According to a PricewaterhouseCoopers paper, “The Drive to Reduce Time-To-Market,” 37% of new consumer products were late and 46% were over budget. 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 3
  • 4. As many Sales and Marketing Managers will attest, there is potential profit in pain. With just 42% of the products that hit the market meeting the expectations of the people who manage them — according to Group EFO, a Weston, Connecticut, consulting firm — many companies have embraced an array of product development strategies and tactics looking for that next home run. Some new product development (NPD to marketing types in the know) has embraced highly formalized schemes like QFD (Quality Function Deployment) and DFM (Design for Manufacturability). Some are skunk works undergoing various degrees of institutionalization following a grassroots NPD breakthrough. 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 4
  • 5. New Product Development Practices A good deal of literature exists on the subject of new product development (NPD). An excellent resource is the Product Development & Management Association (PDMA) and their web site (http://www.pdma.org/). Another excellent source of academic research into NPD is Dr. Kevin Dooley, Professor of Management at Arizona State University. In Dooley’s study of 41 companies to determine the impact on NPD of best practices and maturity of processes, results indicate “the important influence of customer involvement, project selection, prelaunch activities, concurrent engineering and group design on product and project success.” Germane to our discussion here, Dooley also notes, “The development process itself is made timely and cost effective by managing the human resources in the project.” (Dooley, et al) One fundamental element of successful human management is proper incentives focusing the individuals on key steps, elements and practices. Dooley examines both best practices (what is done) and maturity (how well it is done) as key elements for NPD success. Maturity is worth discussing here because organizations will vary widely on how formalized their NPD processes are. A tool to describe process maturing is Software Engineering Institute's (SEI) process Capability Maturity Model (CMM, originally developed so that the U.S. Department of Defense could evaluate the capabilities of its software suppliers. • Level 1 - initial - The process is characterized as ad hoc, and occasionally even chaotic. Few processes are defined, and success depends on individual effort. • Level 2 - repeatable - Basic project management processes are established to track cost, schedule, and functionality. The necessary process discipline is in place to repeat earlier successes on similar projects. • Level 3 - defined - The process for both management and engineering activities is documented, standardized and integrated into a standardized process for the organization. All projects use an approved, tailored version of the organization's standard process. • Level 4 - managed - Detailed measures of the process and product quality are collected. Both the process and products are quantitatively understood and controlled. • Level 5 - optimizing - Continuous process improvement is enabled by quantitative feedback from the process and from piloting innovative ideas and technologies. 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 5
  • 6. By corresponding via email with Dr. Dooley to determine his familiarity with the use of incentives to enhance NPD, although he knew of no such specific research on NPD incentives, he commented: “I know the research on team incentives in general supports non-monetary over monetary awards, by a landslide. The theory in human resources, in general, is that money can only act as a satisfier for an extremely short amount of time; that more generally it can only act as a dissatisfier (if you're not compensated according to needs and/or expectations). As a CEO once said: ‘double the pay of everyone in this company tomorrow, and it will not double productivity.’” A good deal of the literature and many corporations have focused on the process of NPD, generally incorporating a stage-gate or phase-gate series of checks and balances to review progress and make go no-go decisions. Not all of Dooley’s research, however, would indicate a simple infusion of awards into key NPD process junctures — or even an emphasis on process at all. Dooley states: “Goals and metrics had weak effects on product success and cycle time improvement. None of the maturity-related activities had any effect on project success, and two concepts relating to maturity, structured process and learning, were the only two variables in the entire study that did not generate some level of significant correlation.” Instead, riper areas for non-cash incentive reinforcement emerged. “Product success was driven by activities that occur at the boundaries of the NPD process: • customer involvement, which represents the boundary between the organization and the customer • project selection, which involves the decision of what project to work on • manufacturing and launch preparations, which are the activities that ensure a proper hand-off between design and manufacturing/marketing” Significantly, project success was found to be “strongly driven by concurrent engineering and group design, activities involving the way in which functional and cross-functional resources are utilized.” Additionally, cycle time improvement was revealed to be “strongly driven by project selection, activities which carefully manage the pipeline of work in the NPD process, ensuring the resources are not over utilized and project priorities are constantly updated.” Dooley summarizes the results this way: The success of the product depends on selecting the right projects, involving the customer throughout the process, and handing off the project in a smooth fashion 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 6
  • 7. to marketing and manufacturing. The timeliness and cost effectiveness of the NPD process depends on how human resources are managed in a functional and cross- functional manner. Improvement in process cycle time occurs through intelligent bottleneck management of the project stream. Concurrent engineering, group design and smooth hand-offs are all facilitated by cross- functional teams. Kenneth A Crow of DRM Associates elaborates: “Early involvement and parallel design are key objectives of integrated product development. The achievement of these objectives is dependent upon how people work together and organize product and process development activities. As a result, organizational approaches are critical to the success of integrated product development.” Crow succinctly sums up the positive economics of effective product development teams (PDT): “Although PDTs will require more resources early in the development process, the result will not only be superior designs, but reduced resources over the life cycle of development to production through reduced design/build/test iterations and less effort to correct initial design deficiencies through the reviews and engineering changes. The early involvement of the affected functional areas will lead to buy-in with the design of products and their processes and result in a smoother transition to production.” (Crow, http://members.aol.com/drmassoc/pdt.html) Fortune’s “Hot Products from Hot Tubs,” authors agree. “Most of the successful product development we observed was done by project teams. Call it the rugby approach: Everybody is on the field from day one — engineers, production, quality control, sales. Whenever a problem comes up, they all pile in together. That's very different from the relay approach, in which one functional team passes the baton to the next.” (Stratford et al, Fortune 1996) 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 7
  • 8. Drivers of NPD Success: The 1997 PDMA Report The PDMA report on New Product Development reinforces the direction recommended on the Use of Incentives in New Product Development. Specifically, the Summary Of Key Findings (page 3) on the report notes the widespread adoption of multi-functional teams in NPD, with over 84% of more innovative projects using them and even 40-50% of the less innovative projects using them. Cash compensation is not being used to reward teams. Sixty percent (60%) of US firms use some variation of the stage-gate process for NPD, though third generation processes are more flexible, validating a decision not to prescribe process formulas in the incentive process. New market research tools have allowed closer and better customer input into the process, and this is expected to continue. Best practice companies spend more in-depth time in qualitative studies with fewer customers, an ideal application for incentives. Kill rates are up. The Trends and Processes section (page 5) notes that initiating a NPD project is relatively inexpensive, but expenses soar in the development and test phases. Eliminating less promising projects early is recognized as a critical success factor. Failure is actually a success — that no-go decisions are good — that businesses have to trust your development team to kill an idea if it’s wrong! A Checklist for Keeping Up with NPD Trends (page 8): 1. Implement a NPD process, improve it over time • Screen projects out earlier • Match the organization to the project goal • Use multi-functional teams • Investigate and use new market research techniques • Determine whether engineering tools are needed, and use them all 2. Rewards to successful NPD teams are overwhelmingly non-cash (page 12): • Private, off-site celebration dinners • Newsletter recognition and firm-wide award dinners 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 8
  • 9. • Plaques, pins and team shirts (study cites trophy value) The study notes that higher quality items provide significantly more trophy value. This finding points the way to a major opportunity for more significant non-cash awards as a logical next step. Overall, NPD success rates have not significantly improved over the years, and non-cash awards — properly applied — could be viewed as the missing link. Four of the eight Key Success Drivers cited (page 14) validate the strategy of utilizing incentives as part of the New Product Development. 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 9
  • 10. NPD Incentive Rewards Concept As noted, the NPD goals in any organization are likely to be: • Superior product innovation • Speed-to-market The pervasive use of teams in new product development would seem to be fertile ground for non-cash award reinforcement. David Goodall, corporate compensation director at Motorola, calls informal team rewards “the pats, perks, and pizza” that drive up team performance. Pats are the informal positive feedback or atta-boys given to the team for accomplishments. Perks are the benefits for team members accorded by virtue of team membership — for example, access to resources or meeting or conference participation. Pizza refers to opportunities for team members to socialize together either during or after the workday. (Frohman & Perry, Industry Week 1995) The Incentive Industry likes to use terms like honor & recognition, trophy value and non- cash awards, another way of saying “pats and perks.” But with a wide variety of company approaches to NPD, key to the success of New Product Development awards offerings is adequate collateral to help client companies match awards structures to new product development processes with which they are comfortable. Concluding from Dooley that the most likely points of positive influence are in customer involvement, project selection and effective cross-functional teams, programs can be designed to impact these areas the most. • Liberal use of defined value awards to encourage frequent customer input throughout the process. • Awards used to reward not only idea generation but also steps leading to intelligent idea selection. • Awards maximizing cross-functional team involvement and effectiveness to reinforce smooth transitions to manufacturing and marketing. 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 10
  • 11. Let’s look at each of the three: In World-Class New Product Development: Benchmarking Best Practices of Agile Manufacturers, the authors cite a study showing that 66% of development project failures stem from a weak understanding of user needs. “The key solution is to get all members of the development team into direct contact with a small, select group of customers.” A PricewaterhouseCoopers article cites an Industry Week Census of Manufacturers study to identify best practices of “world class companies.” Forty-one percent (41%) of the world class organizations rely exclusively on customer participation to help develop new products. Only 25% of all others involve them. (Boehm et al. 1998) For example, according to an article in OEM Magazine, Netscape' s product teams, working with electronic feedback from customers, have been able to both add new features and capitalize on often-unexpected opportunities that present themselves during the developmental cycle. And all that on a very modest research budget. (McCartney, OEM Magazine, 1996) In the American Management Association’s Organizational Dynamics , an article profiles W. L. Gore & Associates, makers of Gore-Tex and a company known for organizing small teams around business opportunities. Still, Gore NPD teams found a tendency to get locked into a particular definition of the problem, or to a particular solution, too early. (Pacanowsky, Organizational Dynamics, 1995) In this scenario, high quality project selection becomes critical. A Fortune article describes effective organization knowledge sharing as a result of cross- functional teams. At Sharp, knowledge passes from the individual to the team, and then from the team to the organization. When a project is completed, the team members return to the normal hierarchy. Gradually, the experience of project teams spreads through the whole organization. “That's how you achieve continuity and repeatability,” and minimize fumbles at key hand-offs. (Sherman et al. 1996) A Compensation & Benefits Review indicates that at team-based organizations (e.g., Motorola, Xerox, TRW, Johnson & Johnson, Lucent Technologies, and Kraft Foods) monetary rewards alone do not always lead to high performance, while non-monetary rewards such as recognition and empowerment can explain the success or failure of many teams. “Some experts completely reject the notion of monetary incentives for teams, believing either that linking pay to team performance can be insulting to individual star performers who feel their contributions disproportionately lead to success, or [monetary] team incentives cheapen the value of the team experience.” (Newman & Krzystofiak, 1998) 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 11
  • 12. Caveats Beyond these three identified critical success factors, success factors for NPD become less obvious. As noted, efforts aimed at increasing process maturity (rewarding phase- gate milestones, for example, or various measurement schemes) are likely — at least in Dooley’s view —to not have a significant impact on product development success. In the early 1980’s, idea generation incentive programs were a very popular type of incentive program in corporate America. While the formulaic nature of existing idea generation programs that give an incentive for ideas makes it attractive to many customers, much of the formula (with its emphasis on process) — administration issues in particular — may limit its success in ongoing environments. The key to a successful NPD awards strategy may lie in a less is more approach, steering clear of thorny and contested process issues, and allowing companies to reinforce behaviors that their cultures value. Idea Generation Incentive Programs NPD Incentive Awards Team-based Team-based Defined duration On-going—but time targets could improve speed-to-market Process/creativity training included Process/creativity training possible Program budgeted from projected results Too many variables to tie all rewards to product success—some failure is inevitable Disruptive to existing culture Must become key part of culture Highly competitive, Top Award Intrinsically competitive, consider Top Award for “home run” products Primarily rewarded results Primarily reward behavior Highly-structured, process-intensive Must match client-preferred NPD structures and processes Rewarded program management Reward key partnerships (customers, suppliers, functional support) Low renewal Ongoing Emphasis on results backlash—not all approved ideas pan out Concentrate on building innovative culture with reduced cycle times 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 12
  • 13. Applying Incentive Awards As always, companies can reward: • Results (sales, profit, number of products) • Behavior (steps to sale, process) Companies should consider both when applying incentives to new product development. Consider the three identified critical success factors. Customer input Reward customer input and the development team for including the customer via focus groups, interviews and surveys with defined value awards like gift certificates, selective use debit cards, or other individual awards. A Persona card account could be set up for longer-term customer partnering in the NPD process. Awards are recommended following each specific customer behavior: attending a focus group, returning a survey, etc. Reward each discreet act to reinforce behavior and encourage future cooperation — e.g., prototype feedback, product testing. Project selection Reward development teams for timely, well-reasoned go/no-go decisions. Incentives at this juncture can impact both product innovation and speed-to-market. If project selection is truly a critical success indicator, then reward team members for applying their companies’ selection criteria quickly and decisively. In many organizations ideas languish in a limbo of halfhearted development or in an idea bank. Put a premium on speed and thoroughness. Target realistic but aggressive timeliness in order to reduce cycle time, move best ideas forward and reduce time and resources spent on less promising products. This may require something of a paradigm shift in some organizations, as this would require rewarding teams for killing bad ideas. Be sure to provide adequate documentation supporting the value of timely and accurate project selection in collateral materials. Awards can make intelligent project selection a significant source of ongoing non-cash compensation for the team and strengthen the effectiveness of NPD efforts. 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 13
  • 14. Cross-functional teams Make cross-functional team members stakeholders in the NPD process by rewarding their involvement and effectiveness. For example, if alignment to corporate goals and marketing strategy is key to success, tie some team rewards to the successful completion of the business case for the product. Reward team leaders for involving all necessary cross-function members. Reward cross-function members for active, quality participation. Pay special attention to critical hand-offs to manufacturing and marketing, rewarding those disciplines’ team involvement throughout the NPD process. Basic measures have been used to evaluate NPD performance: quality, timing, financial performance, and development cost. A study of growth in fast track Silicon Valley, however, poses some alternative measures for NPD success (Meyer, 1998): • cycle time • resource capacity • team effectiveness • resource capability • competitive comparisons According to a Compensation and Benefits Review article, “Organizations that do not support their teams with team approaches to rewards often see improved results slip away.” The authors go on to explain that “because of their fluid nature, [non-cash] incentives and awards play a prominent role in most team-based pay programs,” noting that such awards must be integrated with other incentive programs and “must be based on results that teams can control.” (Saunier and Hawk, 1994) A recommendation is to give the NPD teams an awards budget and let them reward the behaviors they find most valuable. A Compensation & Benefits Review article cites a research study sponsored by the Consortium for Alternative Reward Strategies (CARS) Research that found that when a task force — regardless of the level of employees involved — designs a reward plan, that plan produces higher employee satisfaction and improves business performance more effectively than plans designed by the company's headquarters staff. The time is probably overripe for a new product development awards strategy, particularly in those industries with the shortest cycle times, to assist these industries in better NPD results. A PricewaterhouseCoopers report indicates that over 30% of sales 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 14
  • 15. come from new products introduced within the preceding two years for high tech companies. (Keown, 1998) According to Coopers & Lybrand's “Trendsetter Barometer,” more high tech than non- tech firms are planning to increase investments in new product development, cited by 48 percent (12 points higher). Additional Ideas: Idea Generation: identify, clarify, and qualify ideas that are on-target to the NPD process goals/business goals. Reward both teams and individuals for the ideas that succeed. Base the award value on either the value of the idea in revenue or savings to the business — give a percentage of the value back to the initiator of the idea (on a team reward, split the award value among the team). Cross-Functional Team: Identify the steps necessary for an approved or defined idea to move forward within the NPD process. Most likely, this will include a series of team interactions. Reward attendance and being on time at these meetings. Also look at rewarding the team based on the performance of the product development stage and the product launch stage. Include in the team activity, steps like “client interaction and feedback,” then reward for this step taking place (X value, based on value of idea). Also reward the client for their involvement. Awareness and Training: Most times businesses rush forward with launching a new product. Communications is carried out. Sales materials are produced. But the element of training can be overlooked. As stated in, “How to Sell New Products,” July 1999 of Selling Power by Randy Scott of Square D: “It’s all about awareness and education. We can come out with a new product and just put it out there, but unless we’re educated on the product beforehand, it’s going to be difficult for us [to sell].” It makes sense to put together formalized training that includes testing. Once testing is completed and a certain grade level attained, a reward could be used to re-enforce the positive message and introduction. 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 15
  • 16. Conclusion There is no silver bullet. There is no quick answer. There is no magic book that has all the answers. There is no process that can answer it all. Instead, businesses need to use a mixture of the empirical and the emotional. It is important to capture the imagination and the energies of all those involved in the development of new products. NPD is about process and people. Do not leave out the human coefficient. As outlined: • Involve clients/customers in the NPD process and reward them for being involved and taking the time. • Focus on project and idea selection not raw idea generation and reward individuals for not only coming up with solid ideas but for also “killing off” bad or off base ideas. • Work on cross-functional team interaction skills and steps, along with smooth transition from idea, to development, to launch to on going product and reward key and core steps/processes (i.e. which are different for each company and each industry). Individual incentives offer a business the ability to identify and reward the right NPD behaviors, creating consistent and positive results. A View Point The American Express Incentive Services team continually looks for ways and approaches to help businesses succeed. We are strong believers in the power of incentives and what incentives offer a business. Properly structured programs utilizing individual incentives give a business the ability to focus its resources on those behaviors that generate the best results. In the simplest of terms individual incentives will create a spotlight on those actions, activities, steps, and processes that can make a difference between success and failure. Most businesses assume that what they say, what they write, what they demand will get done. But what is missing is the classical, “WIIFM: What’s In It For Me?” Don’t take this for granted, because if you do, most people will overlook the obvious. They will do what is common, what is comfortable, what is easy. But by rewarding key behaviors with individual awards, activities and behaviors a business can increase their chances of success — mobilizing the whole team in the same direction. One area of business that seems to need support in generating consistent and team “mind- share/focus” is the world of new product development. The authors of this document have a combined history of over 30 years of product development interactions. What we have found is the majority of documents, reports, metrics, etc., are great tools and 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 16
  • 17. methods. Yet, time and time again what are overlooked is the basics of the human element. All development is carried out, lead, and involves people. These individuals have needs, wants, pre-conceived notions, fears, likes, dislikes, etc. How do you manage these core emotions and core abilities to generate a positive NPD result for your business? You can have input via motivation and incentive tactics to focus and guide a team and individuals to higher levels of performance and results. Beyond a salary it is important to reward people for their support — “what gets rewarded gets done.” It is important to combine both “at a-boy” rewards (i.e., thank you's, lunches, etc.) with monetary awards. By bringing both together you are helping to ensure that what needs to be done will get done. This is especially true in group development efforts, where people are most likely assigned to assist in a development project. This extra task can be looked at as a burden “on top of” their existing responsibilities. Also, getting a team to focus on the necessary processes and elements of solid product development requires rewarding proper action and behavior – as a team. The goal of this paper was to highlight those elements in the NPD process that have shown to improve the end results of NPD. 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 17
  • 18. References Cited Crow, Kenneth A. “Benchmarking Best Practices to Improve Product Development,” DRM Associates. 1997. http://members.aol.com/drmassoc/pdt.html Dimancescu, Dan and Dwenger, Kemp. World-Class New Product Development: Benchmarking Best Practices of Agile Manufacturers. 1966. Dooley, Kevin. The Impact of Best Practices and Maturity in New Product Development, ASU Conference on Quality & Management. 1997. Fey, Victor R. and Rivin, Eugene I. The Science of Innovation. 1997. Frohman, Mark and Pascarella, Perry. “Don't Abdicate: Teams’ Effectiveness Starts and Ends at the Top,” Industry Week. November 6, 1995. Griffin, Abbie. Drivers of NPD Success: The 1997 PDMA Report. 1997. Henkoff, Ronald and Kover, Amy R. “Growing Your Company: Five Ways to Do It Right,” Fortune. November 25, 1996. Jerry M. Newman, Frank J. Krzystofiak, “Value-Chain Compensation,” Compensation & Benefits Review. April 17, 1998. Keown, Shawn. “Reducing Time-to-Market in Developing Med Tech products,” PricewaterhouseCoopers. 1998. http://www.pwc.com Laton McCartney, “The Internet Zone,” OEM Magazine, December 1, 1996. McMath, Robert M. “What Were They Thinking?” American Demographics, February 1998. McMath, Robert M. “What Were They Thinking?” American Demographics, April 1998. McMath, Robert M. “What Were They Thinking?” American Demographics, May 1998. McMath, Robert M. “What Were They Thinking?” American Demographics, January 1998. Pacanowsky, Michael, ”Team tools for wicked problems,” Organizational Dynamics, January 1, 1995. Palo, Joseph D. and Rule, Erik “The Drive to Reduce Time-To-Market,” PricewaterhouseCoopers. 1998. http://www.pwc.com Sherman, Stratford Takeuchi, Hirotaka and Davies, Erin M. “Hot Products from Hot Tubs or How Middle Managers Innovate,” Fortune. April 29, 1996. 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 18
  • 19. Thomas, Robert J. New Product Success Stories: Lessons from Leading Innovators. 1994. Tushman ,Michael L. and O'Reilly, Charles A., III. Winning Through Innovation: A Practical Guide to Leading Organizational Change and Renewal. 1997. Boehm, Barrett L., Mistor, Paul G. and Reinwart, Richard. “Partnering with Customers and Suppliers,” PricewaterhouseCoopers. 1998. http://www.pwc.com Saunnier, Anne M. and Hawk, Elizabeth J. “Realizing the Potential of Teams through Team-based Rewards,” Compensation & Benefits Review. July 1, 1994. 06/10/13 Jumping the Curve: Getting from Mind to Market The Use of Incentives in New Product Development 19