This document discusses managing new product development. It provides frameworks for assessing NPD success based on process, product, and assets. It also outlines methods, tools, and potential conflicts recommended in Schilling's book. The Pixar principles of empowering creatives and creating a peer culture are examined. Finally, IDEO's innovation system and decision to take on the Visor project within a reduced schedule are summarized.

1. MI 815 Management of Technology
and Innovation
Session #11: Managing New Product Development
• Lecture/discussion on Schilling Chapter and Pixar Reading
• IDEO Case discussion

2. How can we judge NPD success?
 Process  Product
 Within budget and schedule  Product attributes:
 Quick cycle time Innovative, meets
 Efficient use of resources needs, aesthetic,
 Adaptive to changes elegant design, user
friendly, powerful,
 Good risk management efficient, low-cost
 Market performance:
Sales, profitability,
market share, follow-on
products, positive
spillovers to other
products
 Assets
• People – new knowledge and skills
• Reusable project elements (e.g., design objects)
• Org. Capabilities – Process knowledge/refinement
• Real options (esp. on a “failed” product)

3. Methods
(Schilling Chapter 11)
 Concurrent Development
 Project Champions
 Involving Customers/
Suppliers
 Metrics

4. Linkage Between Methods and Success Measures?
(Schilling Chapter 11)
 Concurrent Development  Process
 Within budget and schedule
 Quick cycle time
 Efficient use of resources
 Adaptive to changes
 Good risk management
 Product
 Product attributes: Innovative, meets
needs, aesthetic, elegant design, user
friendly, powerful, efficient, low-cost
 Project Champions  Market performance: Sales, profitability,
market share, follow-on products, positive
spillovers to other products
 Involving Customers/  Assets
suppliers • People – new knowledge and skills
• Reusable project elements (e.g., design
objects)
• Org. Capabilities – Process
 Metrics knowledge/refinement
• Real options (esp. on a “failed” product)

5. Tools
(Schilling Chapter 11)
 Stage-Gate Process
 Quality Function Deployment
 Design for manufacturing
 CAD/CAM (PLM)

6. Linkage Between Tools and Success Measures?
(Schilling Chapter 11)
 Stage-Gate Process  Process
 Within budget and schedule
 Quick cycle time
 Efficient use of resources
 Adaptive to changes
 Good risk management
 Product
 Product attributes: Innovative, meets
needs, aesthetic, elegant design, user
 Quality Function Deployment friendly, powerful, efficient, low-cost
 Market performance: Sales, profitability,
market share, follow-on products, positive
spillovers to other products
 Assets
• People – new knowledge and skills
• Reusable project elements (e.g., design
objects)
• Org. Capabilities – Process
 Design for manufacturing knowledge/refinement
• Real options (esp. on a “failed” product)
 CAD/CAM (PLM)

7. Conflicts?
 Concurrent Development  Stage-Gate Process
 Project Champions  Quality Function Deployment

8. The Pixar “System”: Beliefs and Principles
P1. Empower your creatives. Give your P2. Create a peer culture. Encourage
creative people control over every stage of people throughout your company to help
idea development. each other produce their best work.
Basic Beliefs
• Good people are more important than good
ideas. Talent is rare.
• Management’s job is not to prevent risk but
to build the capability to recover when
failures occur.
• It must be safe to tell the truth.
• We must constantly challenge all of our
assumptions and search for the flaws that
could destroy our culture.
P3. Free up communication. The most P4. Get more out of post-mortems.
efficient way to resolve the numerous Many people dislike project post-
problems that arise in any complex project mortems. They’d rather talk about
is to trust people to address difficulties what went right than what went
directly, without having to get permission. wrong. Structure your post-mortems
So, give everyone the freedom to to stimulate discussion.
communicate with anyone.
How feasible and/or advisable is it for “regular” NPD
organizations to adopt Pixar’s principles?

9. How Compatible is the Pixar “System” with
Schilling’s “best practices”?
 Concurrent Development  Stage-Gate Process
 Project Champions  Quality Function Deployment

10. Ideo

11. Handspring Decision
1. Accept project
on reduced schedule 2. Ask for more time 3. Decline project

13. IDEO’s Innovation System
Process Organization Culture Management

14. IDEO Wrap Up
 IDEO’s unmatched track record of success is due to having a system for developing
breakthrough products in a consistent and predictable way
 System has evolved through a process of continuous innovation
 Each project can be regarded as an experiment. Not just revenue generators but
also learning opportunities
 Similar to prototypes in a design project, some projects will result in failure and little
improvement
 Key IDEO principles
 Organize design for rapid iterations: Experimenting quickly via prototypes provides
rapid feedback needed to shape and improve new ideas
 Fail early and often but avoid “mistakes”: Embrace failures that occur early in
process. Avoid “mistakes” (poorly conceived experiments that add little information)
 Leverage the value of early information: Solving problems early is inexpensive and
fast. So value of information is highest when it can be generated earlier.
 Dennis Boyle accepted Visor project. Two main reasons:
 Already had great relationship with Jeff Hawkins due to Palm V project.
 Project viewed as an experiment that would challenge IDEO’s innovation system
and provide new insights as to whether its process can be adapted to short time-to-
market projects

15. Source: Schilling Chp 11