Critical Review of Contemporary NPD Issues - Term Paper Example

Critical Review of Contemporary NPD Issues Introduction: The articles ed by Bjork, Boccardelli and Magnusson and Laforet provide comparable and contrasting views on one of the primary aspects concerning the businesses and organizations of today, which encompasses key concepts such as New-Product Development (NPD), Ideation and Innovation, all of which are integral ingredients in the development of a dynamic outlook towards a business’s competitive advantage. The sample, however for the two competing conclusions is different such that Bjork et al. (2010) focuses on the analysis of organizations that can be termed as large considering all four of the companies in his sample employ at least 500 staff members or above, on the contrary the findings of Laforet (2011) focus on the innovation processes at SMEs, that are organizations categorized as those which provide employment to a limited or specific number of employees depending on the legislations set by the particular country being studied. Both the research findings acknowledge that the scale of a company’s operations is irrelevant to the chances of favorable outcomes related to the application of innovation, as Laforet (2011) suggests that the innovative capabilities of small and medium enterprises are comparable to that of large organizations. Another finding asserts that ideation has paradoxical managerial impacts by presenting both negative and positive consequences of the said process in organizations. The scale of the company however, does impact the choices it makes related to innovation, for example, why would a business wish to expand its ideation and innovation capabilities in the first place? Certainly as represented by the findings of the articles which are assessed, it can be noted that large organizations in comparison with small and medium enterprises realize the need to create a strategic fit between their resource capacities and assets as a comprehension of their ideation capabilities is directly related to the distribution of resources which ultimately allows the formulation of an idea into an innovation. On the other hand, the objectives of a small or medium sized business in engaging in new product development maybe entirely associated with its objective of seeking success or to achieve short-term gain. Hence, the purpose of this paper is to critically analyze the competing ideologies of how New Product Development and Innovation should take place and how it actually takes place, which is either by entirely basing the framework of innovation at an organization upon the components of the ideation process or by engaging in an innovative practice by implementing system wide innovation procedures. Furthermore, the paper will also discuss the managerial implications of the articles’ findings by determining the variables and factors that are dependent upon the success of measures such as NPD, process improvement and ideation potential. Factors affecting innovation: According to Bjork et al. (2010) the foundation of innovation is idea generation or ideation which is dependent upon the level of creativity and inventiveness of the employees and groups within an organization. Once this principle is recognized by the management, it should try to develop channels through which employees can successfully voice their ideas, such channels can range from technology centered pathways or the utilization of teams that should range across functional departments of an organization. Cooper (2008) favors computer-based ideation techniques such as webpages which can allow external parties to supply ideas related to new products, such facilities are readily used by organizations such as Procter and Gamble which are at the forefront of an ideation revolution. Procter and Gamble’s Connect and Develop ideation model is an example of an open system that invites and welcomes idea stimulation from a range of contributors. Laforet (2011) presents a more traditional and conventional view of the factors that may influence innovation, this view stems from the idea that innovation, particularly in SMEs is highly dependent upon resources and the system of the organization rather than the depth and management of idea generation. This view postulates that factors such as business networking, planning, organizational tactics, strategies and most importantly human capital determine the path of innovation and its ultimate success, which also includes the primary external force that a business must respond to which are its customers. Huang et al. (2002) notes that the quality of the organization’s resources such as the mental and manual expertise of its labor force is directly related to the success of any New-Product Development initiative. Therefore, an organization should effectively deal with the external structures and influences affecting its innovation processes, such as the competitive situation of the market and its market orientation as well as internal aspects such as teams and groups within the organization. Approaches to New-Product Development: According to Bjork et al. (2010), the ideation capabilities of an organization constitute of four distinctive components. These components essentially follow a chronological order in the researchers’ assessment of their managerial applications at an organization. Despite of the fact that all the four components are a part of the ideation capabilities of each firm in the study’s sample, it can be evaluated that each firm has entirely different methodologies and techniques of conducting and assessing its innovation procedure. The stimulation of ideas is at the forefront of ideation and may require the expertise of an innovation manager to overlook the brainstorming process as well as the administration of a rewards system that recognizes employees who have generated novel and creative ideas. Once the brainstorming process generates a wide range of ideas that can be applied to promote innovation at the organization, the management must identify and distinguish between ideas that have credibility, in comparison with ideas that are impractical or costly to implement. This is where the need for a comprehensive idea management system arises, which in some cases could be managed through the intranet or via direct correspondence between the groups responsible for the collection of ideas within an organization and the employee who wishes to suggest or recommend an idea. Farris et al. (2003) highlights the emerging importance of an idea management system, also known as the management of ‘knowledge’ which is a pivotal part of the innovation process for new-product development, such a system allows the business to have its own framework of information management which can be readily accessed by all its members. Once the management or the idea group responsible for supervising the ideation process is able to identify the results of the preceding steps, Bjork (2010) notes that ideas are then evaluated on varying dimensions that define their applicability as well as their quotient of novelty. It should be mentioned that in a larger organizational setup, selection of ideas that are associated with a high measure of risk is often overlooked owing to the highly formalized NPD procedures of large companies, McDermott et al. (2003) states that radical innovation is the fundamental decider of whether an organization is able to succeed in the long term. On the contrary, Laforet (2011) notes that the engagement of innovation orientation in SMEs is a crucial indicator of their willingness to follow procedures and techniques that are more unconventional, particularly in an external environment where ease of entry into the industry greatly impacts the opportunities of SMEs if they decide to follow a route that has fewer financial risks, such as rarely engaging in NPD. In assessing the factors that determine the degree of novelty or creativity of ideas generated by a firm, Spanjol (2011) concludes that compared to firms whose primary focus or orientation during the process of new-product development and innovation revolves around its competitors and customers, organizations whose focal point is a drive to incorporate technology-driven techniques in their new-product development processes are more likely to generate novel, unique and imaginative ideas. This conclusion contradicts with Laforet’s (2011) assessment which suggests that a high level of competition in the external environment of a firm is related to superior product innovation results, which is reflected in the System-wide innovation approach’s high dependency on requiring a constant update on the data and information related to the organization’s competitors. Bjork et al. (2010) states that once the ideation process has gone through its first three stages, the most crucial factor in the technique’s application arrives when the ideas that have been generated, identified and selected must finally be integrated and applied to the organization. This process involves storing ideas as an electronic database, so that their accessibility is made easier thereby, whenever a project team seeks both primary and secondary information related to an NPD issue it can access a wide-range of information with great ease. Conclusion: An evaluation of the two competing views related to the contemporary issues, processes and questions facing new-product development at organizations suggests that, why companies wish to engage in innovation and how they develop the procedures related to innovation to some degree is dependent upon the capacity of their operations which decides the availability, usage and development of resources in an organization. However, the impending success of any NPD procedure cannot be directly attributed to the scale of operations but how well a company is able to implement its ideas and strategies considering the external forces, its market orientation and the competitive environment. The application of an ideation process encompassing every detail pertaining to the management of novel ideas is highly important in today’s dynamic business environment, especially when advancement in technology has the ability to play an integral role in modern procedures of new-product development. It can also be concluded that in comparison with large organizations, SMEs may undertake innovative procedures to pursue entirely different objectives that have more to do with short term gain rather than long term development, which can be attributed to the competitive environment in which a majority of the SMEs operate in. A critical aspect of NPD also appears to be the understanding that, innovation is not always a positive occurrence for SMEs as a range of negative outcomes are also associated with the process. Bibliography BJORK, BOCCARDELLI AND MAGNUSSON (2010) Ideation Capabilities for Continuous Innovation, Creativity and Innovation Management, 19 (4), 385-396. LAFORET (2011) A framework of organisational innovation and outcomes in SMEs, International Journal of Entrepreneurial Behaviour & Research, 17 (4), 380-408. COOPER, R. G. (2008). What Leading Companies are Doing to Re-invent their NPD Processes. PDMA Visions Magazine, 6-10. FARRIS, G. F., HARTZ, C. A., KRISHNAMURTHY, K., MCILVAINE, B., POSTLE, S. R., TAYLOR, R. P., & WHITWELL, G. E. (2003). Web-enabled innovation in new product development. Research-Technology Management, 46(6), 24-35. SPANJOL, J., QUALLS, W. J., & ROSA, J. A. (2011). How Many and What Kind? The Role of Strategic Orientation in New Product Ideation*. Journal of Product Innovation Management, 28(2), 236-250. HUANG, X., SOUTAR, G. N., & BROWN, A. (2002). New Product Development Processes in Small and Medium‐Sized Enterprises: Some Australian Evidence.Journal of Small Business Management, 40(1), 27-42. MCDERMOTT, C. M., & OCONNOR, G. C. (2002). Managing radical innovation: an overview of emergent strategy issues. Journal of product innovation management, 19(6), 424-438. Read More