Configurations Driving Npd Performance Fit with Market Demands and Time Constraints

The research reported in this paper is aimed at developing knowledge on organizing NPD systems to optimize their contribution to performance. To this end, a systems approach to fit is used to explain the context-structure-performance relationships for NPD performance, specifically in terms of fit with market demands of the product concept and fit with time constraints of the development process. From a sample of 164 US firms, the top 15 % performers in terms of both fit with market demands and fit with time constraints have been identified. An optimized ‘Ideal Profile’ for the organization of NPD systems, formed by a consistent pattern of: NPD Process, NPD Project Structure and Management, Innovation Climate, and NPD Goal Setting and Portfolio Management, followed from the analysis of the NPD configuration of these top performers. For the calibration sample (the other 85%) significant deviation from the ideal profile on all elements of the configuration was found, the correlations between NPD Performance Fit with Market Demands and Fit with Time Constraints and total Euclidean distance are also significant. Overall, these results provide evidence for the proposition that (1) new product success is a function of a set of NPD development system decisions and (2) to truly understand the impact of those decisions, they must be considered as a holistic system. The contribution of this research is in the empirical validation of the internal consistency of an ideal organizational profile for NPD systems achieving both a high NPD performance in terms of market acceptance of their new products as well in terms of the satisfactory level of the development times of those products. By also examining ideal profiles for each of these NPD performance dimensions separately, the conflicting demands created by multiple performance metrics are highlighted as well as the organizational trade-offs necessary for optimal performance. In terms of managerial implications, this also gives direction for organizational redesign to firms either wanting to maximize their product concept (Fit with Market Demands) or development process (Fit with Time Constraints) performance. INTRODUCTION A variety of studies have explored the factors that drive successful new product development (e.g., Brown and Eisenhardt 1995; Cooper and Kleinschmidt 1995; Ernst 2002; Griffin 1997; Griffin and Page 1993; 1996, Kahn et al. 2006; Montoya-Weiss and Calantone 1994). These studies have tended to focus on the relations between single success factors and performance. Drazin and Van de Ven (1985) have argued that this type of analysis assumes that the “anatomy of an organization” is “decomposable into elements that can be examined independently. The knowledge gained from each element can then be aggregated to understand the whole organizational system” (Drazin and Van de Ven 1985, p. 519). In contrast, the systems approach advocated by Miller (1981) and Van de Ven and Drazin (1985) emphasizes the search for patterns of contextual and structural variables that influence performance. They assert that the understanding of context-structure-performance relationships can only advance by addressing simultaneously the many contingencies, structural alternatives, and performance criteria that must be considered holistically to understand organizational design. The systems approach emphasizes the need to adopt multivariate analysis to examine patterns of consistency among dimensions of