Artificial Intelligence (AI) is poised to revolutionize all aspects of business, particularly new-product development (NPD). Currently, our approach to NPD has remained largely unchanged for decades, ...yielding stubbornly poor results: only 30% of NP development projects become commercial successes. However, the Artificial Intelligence revolution is set to alter this landscape significantly!. Leading early-adopter firms demonstrate that AI not only finds many applications in NPD, but also offers substantial payoffs, such as 50% reductions in development times. Thes article provides an outline of the diverse and powerful applications of AI in NPD, offering numerous examples from leading companies. Examples include GE's use of digital models and twins to quickly test product design time in turbine development; BASF's use of AI to identify new molecules for use in customer's formulations; and AI to generate new-product ideas, identify new product opportunities, and even create new product concepts. Our exploratory journey begins at the idea stage and traverses the entire new-product process to the post-launch period. While AI might still resemble science fiction to many, that future is no longer fiction - it's here now. AI has arrived in full force! With an adoption window of about 13 years, the time is now to embrace AI in NPD in your business: AI will become a major milestone in NPD, perhaps the most important, within the decade (Figure 1)
The popular business press and academic articles have promoted the virtues of failure, particularly in the pursuit of innovation. Surprisingly, there has been very little systematic empirical study ...to support this belief. This article distinguishes two organizational approaches to failure: normalizing it (tolerating failure as a necessary part of the innovation process) and analyzing it (purposeful attempts to convert failure experiences into knowledge). A longitudinal study of 106 U.S. manufacturing firms indeed finds that mere tolerance for failure has no effect on firm product innovativeness. In contrast, firms that make deliberate efforts to analyze past failures introduce more innovative new products. Further, this effect is contingent on a climate of constructive conflict within the firm. Hence, to foster firm innovativeness, organization members need to extract lessons from failure, and such analysis must take place in a climate of constructive conflict that enables open and honest discussion.
•Calls into question the common recommendation to embrace failure in order to promote firm innovation•Distinguishes two ways in which organizations cope with failure: (tolerance) and reflection (analysis)•Only analysis promotes innovation, contingent on constructive conflict.
Existing research provides mixed insights concerning the impact of effectuation on new product advantages. We address these contradictions by highlighting the dual nature of the relationship between ...effectuation and new product advantages. By arguing that effectuation differentially affects two types of new product advantages, namely new product development (NPD) speed and new product quality (NPQ), we hypothesize that effectuation is positively related to NPD speed but has an inverted U-shaped relationship with NPQ. Moreover, we reveal that competitive intensity strengthens the relationship between effectuation and these two types of new product advantages. Using a questionnaire survey of 180 sample firms in China, we test and find strong support for our hypotheses. This study highlights trade-offs in new product advantages associated with effectuation and provides important theoretical and managerial implications.
The purpose of this paper is to investigate the processes underlying the relationship between creativity processes and new product performance. Drawing on the literature of new product development ...(NPD) and organizational creativity, we hypothesize that NPD speed mediates the relationship between creativity processes and new product performance and that encouragement by leadership moderates this mediating model. Using a sample of 245 companies in China, we found that (1) not all components of creativity processes related positively to new product performance. Specifically, information search and encoding (ISE) and idea and alternative generation (IG) are respectively and positively related to new product performance, but problem identification (PI) is not. (2) NPD speed fully mediates the influence of PI and ISE on new product performance, but it only partially mediates the relationship between IG and new product performance. (3) Encouragement by leadership positively moderates the relationship of PI and NPD speed, as well as the relationship of ISE and NPD speed; however, it does not significantly moderate the relationship between IG and NPD speed. The implications of these findings and directions for future research in NPD performance are discussed.
Effective interaction across organisational boundaries is a critical success factor in new product development (NPD). However, few studies have investigated how different mechanisms enable effective ...interaction across organisational and particularly hierarchical boundaries.
This study explores how the formality of the NPD process influences the nature of interactions across different organisational boundaries and specifically identifies interaction mechanisms used across hierarchical boundaries. Cross-sectional interviews were conducted in nine firms. Findings highlight that in firms with a formalised NPD process, interactions tend to have a transactional/managerial bias. In contrast, in firms where the NPD process is flexible, interactions have a more social objective.
Although the returns of customer participation on new product development (NPD) performance can vary substantially, the current literature lacks a systematic conceptual and empirical integration ...showing when customer participation is valuable in enhancing NPD performance. Building on knowledge management theory, the authors present a conceptual framework that synthesizes a variety of contingency factors. A meta-analysis empirically examines the moderating effects of contextual factors between customer participation and NPD performance. The analysis reveals that involving customers in the ideation and launch stages of NPD improves new product financial performance directly as well as indirectly through acceleration of time to market, whereas customer participation in the development phase slows down time to market, deteriorating new product financial performance. Furthermore, the benefits of customer participation on NPD performance are greater in technologically turbulent NPD projects, in emerging countries, in low-tech industries, for business customers, and for small firms. The authors discuss several theoretical and managerial implications about when to engage customers in the innovation process.
This paper examines three different ways to balance market exploration and market exploitation in product innovation. First, following the knowledge-based view, we examine whether market exploration ...and market exploitation have differential effects on various new product outcomes based on their different learning mechanisms. We find that market exploration facilitates new product innovativeness, whereas market exploitation is more beneficial for new product development speed. This indicates that market exploration and market exploitation influence new product financial performance via distinct paths. Second, we examine the interaction between market exploration and market exploitation on new product outcomes. Our findings indicate that the joint effects of market exploration and market exploitation reduce new product development speed and have no significant impact on new product innovativeness. Third, we examine the contingent role of customer need tacitness in influencing the effects of market exploration and market exploitation. Our results show that customer need tacitness strengthens the effects of market exploration on both new product innovativeness and new product development speed. In contrast, it weakens the effect of market exploitation on new product innovativeness, and has no significant influence on new product development speed. Our results provide specific guidelines for managers regarding how to achieve a balance between market exploration and market exploitation in product innovation.
This study examines different roles of new product alliance partners in enhancing responsive market orientation (RMO) and proactive market orientation (PMO) of industrial manufacturing firms in the ...context of learning in business-to-business (B2B) relationships. A survey of 146 firms shows that horizontal new product alliances with competitors provide access to similar industrial knowledge and know-how and thus help improve a manufacturing firm's RMO through exploitative learning. Although vertical new product alliances with suppliers may grant access to similar domains of knowledge, the findings of this study do not provide any support for their effect on a manufacturing firm's RMO. In contrast, the study shows that vertical new product alliances with research institutions provide access to a broader knowledge base and greater know-how with higher levels of non-redundancy and thus help improve a PMO through explorative learning. In addition, the results suggest that both RMO and PMO developed in different types of new product alliances enable a manufacturing firm to improve its new product performance and eventually its overall performance.
ABSTRACT
We develop an easy‐to‐implement programmed method for generating new product ideas from existing products. In this method, whose core is a compatibility matrix, each pair of components or ...each pair of attributes used in a new design is already part of one or more existing products produced by the firm or its competitors. The method has theoretical significance because such new designs might exist. The method also has practical significance because in most cases, a firm can use this programmed approach almost routinely.
This paper examines the effect of lighting conditions in the decision environment on new product adoption. Drawing on prior research, we propose that bright lighting evokes a desire to explore, which ...is echoed by the novel target for exploration offered by a new product. This match between desire to explore and target for exploration results in high curiosity toward the new product and leads to greater new product adoption. We provide robust evidence to support the positive effect of bright lighting on new product adoption across six studies and confirm the mediating role of new product curiosity. We identify the level of product novelty as a boundary condition of this effect. Specifically, the positive effect of bright lighting is realized when the product novelty is high, and it is attenuated or even reversed when the product novelty is low. These findings contribute to the literature on new product adoption and the effect of atmospherics on decision-making, offering readily applicable implications for marketing managers in designing retail atmospheres and promoting new products.
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