INTRODUCTION LITERATURE REVIEW DEFINITION

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1 accelerated product development INTRODUCTION Fred Langerak Accelerated product development is a competitive strategy that seeks to compress the development cycle time of new products. However, there has been little theoretical advancement and empirical model testing regarding when cycle time reduction is appropriate, what factors accelerate product development, and how cycle time reduction affects project outcomes. Since cycle time reduction has become important for managing new-product development, this article defines, organizes, and integrates the literature on accelerated product development. Specifically, we argue that the antecedents that shorten development cycle time are well known, but that there are contradictions in empirical support regarding its outcomes in terms of development expense, product quality, and new-product success. We attribute these inconclusive results to contingency effects, methodological differences, trade-offs in cycle time reduction, the hidden costs of accelerated product development, and differences in new products windows of market opportunity. DEFINITION The popularity of accelerated product development is based on the contention that being fast can facilitate either first-mover or second-mover strategies (Kessler and Chakrabarti, 1996). The faster a firm can develop a new product, the greater the likelihood that it can be the first to market with a new product and reap pioneering advantages (see FIRST-MOVER ADVANTAGE). However, being first to market is not always a guarantee for higher sales levels, particularly when a firm s pioneering advantages are dependent upon the development cycle time of its followers. In other words, a fast imitation strategy on the part of its followers can reduce the firm s first-mover advantages. Moreover, the faster a follower can develop a new product, the more lead time it can put between itself and later movers. The implication is that both pioneers and fast followers should shorten their development cycle time to build a competitive advantage over later entrants (Chen, Reilly, and Lynn, 2005). Against this background, the literature defines product development cycle time as the time elapsed between the initial development, which includes conception and definition, and commercialization, namely, the introduction of the new product in the marketplace (Griffin, 1997; Kessler and Chakrabarti, 1996). Consistent with the notions of product development time, time to market, innovation time, total time, and lead time, this definition implies that development cycle time can be reduced by increasing the new product s development speed, innovation speed, or speed to market. LITERATURE REVIEW The results of consecutive studies of product development best practices by the Product Development and Management Association (PDMA) reveal that product development cycle times have decreased significantly over the past years. During the same period, the academic and practitioner-oriented literature on accelerated product development has considerably broadened, and development cycle time has been written about extensively. However, accelerated product development is still one of the least studied subjects in new-product development. Theoretical grounding. Studies on accelerated product development may be categorized into four streams of research. The first category encompasses grounded-theory approaches and small-sample studies conducted to uncover the drivers of product development cycle time (see Kessler and Chakrabarti, 1996 for a comprehensive review of this literature). The output of these efforts are numerous factors assumed to be associated with development cycle time, including project strategy features (e.g., product complexity, strategic intent, level of innovativeness, and technical difficulty), development process characteristics (e.g., formality, stages, and structure), and organizational characteristics (e.g., team use and assignment level, leadership style, size, and innovation level). Exploratory in nature, this line of research provides a solid Wiley International Encyclopedia of Marketing, edited by Jagdish N. Sheth and Naresh K. Malhotra. Copyright 2010 John Wiley & Sons Ltd

2 2 accelerated product development ground upon which theory can be developed (Griffin, 2002). Antecedents of cycle time reduction. The second category synthesizes these exploratory findings to develop conceptual models and test the hypothesized influence(s) of accelerated product development on project strategy, and process and organizational characteristics on development time (a review of this literature is provided by Griffin (1997)). The empirical results relating to project strategy are unequivocal: newer, more complex, more technically challenging, and more innovative projects are typically associated with longer development cycle times. This suggests that firms striving for shorter development cycle times would need to undertake less complex, less innovative, and less technically demanding projects. While such a strategy may (indeed) reduce cycle time, it clearly carries long-run threats to marketplace success and long-term financial rewards (see INNOVATION METRICS; SUCCESS FACTORS FOR NEW-PRODUCT DEVELOPMENT). The numerous studies on development process factors as antecedents of cycle time produce less clear results. Clear project (time) goals, partial or complete concurrent processing, acceleration of activities and tasks, detailed process planning, greater investment on both human and financial resources, and, at the fuzzy front end, increased rewards for R&D performance, lead user involvement, and a long-term orientation are associated with decreases in the development cycle time (Calantone and Di Benedetto, 2000). Development processes that use design for manufacturability tenets, new-product screening models, computer-aided design systems, and frequent product testing, and that display high levels of supplier involvement and greater number of customers involved with prototypes are linked to longer lead times (Griffin, 1997). These opposing effects suggest that firms making changes to their development process must closely monitor the impact of their interventions on both development effectiveness and cycle time efficiency, and recognize that a trade-off may be inevitable. Other studies have identified a number of organizational actions that firms can take to reduce development cycle time, in particular improving the R&D marketing manufacturing interface by establishing cross-functional teams, and simplifying the organizational structure. Increased knowledge levels of team members, greater dedication on part of the project leader, and adoption of a more participatory leadership style have been found to be associated with shorter cycle times (Griffin, 2002). Thus, the empirical results on the antecedents of accelerated product development demonstrate that a considerable number of project strategy, process, and organizational factors are closely associated with product development cycle time. However, an overarching theory to the results across the aforementioned studies is yet to be articulated. The only exception is perhaps Gerwin and Barrowman s (2002) meta-analytic finding that overlap and interaction, tools and formal methods, and team leader influence work toward reducing development cycle time. Outcomes of accelerated product development. The third stream of research comprises studies that investigate the outcomes of development cycle time reduction in terms of development costs, product quality, and project success. The studies in this category use multiple methodologies ranging from broad-based surveys and case analyses to simulations, and systematically test the hypothesized effect of cycle time reduction on the three sets of outcomes. The results of these studies do not provide unanimous evidence in favor of accelerated product development. With regard to the effect on development costs, some researchers have found negative correlations, while others have established that shortening development time lowers development costs (see Kessler and Chakrabarti, 1996 for a detailed review). The valence of the relationship between cycle time and product quality is also unclear. One team found that higher product quality is related to decreases in cycle time, while others document its association with increases in cycle time (Griffin, 2002). There is also little empirical support for the notion that reduced product development cycle is a key ingredient to project success. In a review of prior empirical studies, Chen, Reilly, and Lynn (2005) conclude that the literature has produced inconsistent, even conflicting, results on the relationship between development cycle time and project success.

3 accelerated product development 3 In sum, while many view the realization of shorter cycle times as an important means to reducing development costs, improving quality, and attaining better project success, there seems little empirical support that substantiates this contention. Contingency effects. The fourth category of research reflects on these divergent empirical results via its employment of (mainly) the survey methodology to examine the moderating effects of contextual factors, such as uncertainty, product innovativeness, new-product strategy, team improvisation, and customer participation. Mixed results have been documented in relation to market uncertainty, with some studies suggesting a weaker association between speed to market and project success, and others revealing higher correlations between these variables under conditions of uncertainty. There is, however, little dispute surrounding the finding that technological uncertainty has little, if any, effect on the speed success relationship. With regard to project innovativeness, several studies suggest that innovativeness weakens the effect of product development cycle time on project success (Ali, 2000). Concerning strategy, findings imply that pioneers and fast followers should not use the same acceleration approaches, as the impact of the majority of these approaches on cycle time and profitability is moderated by the new-product strategy of the firm (Langerak and Hultink, 2005). Moreover, reduction of development cycle time is generally considered more essential to fast followers than for pioneers since it can help reduce the pioneer s lead time over later entrants. As far as improvisation is concerned, findings show that team improvisation in the context of a structured development process increases the likelihood of reduced cycle time and increased new-product profitability. Finally, research shows that customer participation as an information resource has a positive effect on speed to market when downstream customer connectivity is high, but no significant effect when it is low. In addition, customer participation as codeveloper undermines new-product speed to market when process interdependence is high. When interdependence is low, the effect of customer participation as codeveloper on speed to market is significant and positive. DIFFERENCES RELATED TO MEASUREMENT METHODS The conflicting results of research on accelerated product development are commonly attributed to methodological differences in measurement approach and unit of analysis, and the relative importance of development cycle time reduction for new-product success (Chen, Reilly, and Lynn, 2005). Measures. One source of inconsistency across studies stems from different assertions regarding the appropriate starting and end points of the product development cycle, and the consequent differences in cycle time assessment. Moreover, many studies suffer from a lack of rigor in data presentation, rendering the comparison of measures problematic in the face of different time frames (Griffin, 1997). Other discrepancies arise due to the variability in the conceptualization of cycle time and the diversity of approaches employed for its measurement. One approach, for instance, uses the actual elapsed time between the spark and the launch of the new product in the market. Alternatively, relative product development cycle time is based on a comparison of the elapsed time with planned or expected time to facilitate comparisons across development projects of firms from different industries. Cycle time is also measured as a comparison of the elapsed time of a particular project against schedule, or with the elapsed time of other projects within the firm or those of competitors. Unit of analysis. A related problem involves the unit of analysis at which accelerated product development is studied: the organization or the project (Kessler and Chakrabarti, 1996). Some variables (e.g., project leader influence, cross-functional teams) that are necessarily measured at the project level may be neither operational nor meaningful at the organizational level. In addition, studies at the organizational level tend to collapse the results of a firm s development projects, obscuring not only the particular characteristics of individual projects, but also the effect of development cycle time on a specific project s success. Analysis at the

4 4 accelerated product development project level enables a study to capture unique situational attributes that influence the project processes and outcomes. Not surprisingly, there is a growing consensus in the academic literature that theory and research on accelerated product development should focus at the project level. Impact. With regard to the conflicting outcomes it has also been argued that the importance of cycle time reduction for new-product success is small compared with other key drivers, and that its effect is thus swamped in the noise. This explanation is certainly a possibility because the financial benefits of accelerated product development, while potentially significant, are likely to be small in comparison with the financial leverage exerted by other factors such as product advantage, the ability of the product to meet customer needs, predevelopment task proficiency, dedicated R&D resources, technological proficiency, and launch proficiency (Henard and Szymanski, 2001). Another line of reasoning is that certain development time thresholds must be exceeded in the concept generation and volume production stages of the development process for any significant effect of cycle time reduction on project success to be detected. TRADE-OFFS IN ACCELERATED PRODUCT DEVELOPMENT Another explanation for the conflicting outcomes of accelerated product development comes from a theory of trade-offs in new-product development projects (Swink, Talluri, and Pandejpong, 2006). According to this theory, certain practices used to shorten development cycle may be counterproductive in other ways. Most studies on accelerated product development, however, have limited their examination to the extent of development cycle time reduction without any reference to its possible implications on development expense, product performance quality, and/or product profitability. At the same time, these studies suggest that trade-offs may exist between pairs of these development outcomes, requiring that the objectives in accelerated product development should be balanced. Several studies suggest that the relationship between cycle time and development expenses is U-shaped (Bayus, 1997; Langerak, Hultink, and Griffin, 2008). Reducing development cycle time to below the minimum of the U-shaped curve increases the pressure on financial resources due to higher coordination costs, additional expenses for overtime work, correcting for errors that may have resulted from skipping process steps, and an intensified need for support resources, particularly, among teams involved in accelerated projects. Allowing the new product s cycle time to go above the function s minimum has the similar effect of increasing costs due to decay of know-how, loss of motivation, and the emergence of additional setup costs. An overly loose schedule thus wastes resources because of dissipated efforts and lapses of attention (Langerak, Hultink, and Griffin, 2008). Researchers have also studied trade-offs among other pairs of development objectives. Calantone and Di Benedetto (2000), for example, provide an analytical model of the link between development cycle time and product performance. They conclude that keeping a new product in development is preferable to the accelerating time to market if the base product performance is low. The trade-off between development cycle time and product performance has also been investigated empirically, and yielded mixed findings (Swink, Talluri, and Pandejpong, 2006). Likewise, support for a development expense product performance trade-off has been mixed. Finally, timing and performance decisions have been reported to depend on the asymmetries in competitors market estimates and development efficiencies (Bayus, Jain, and Rao, 1997). In summary, the literature identifies many mixed findings on the hypothesized trade-offs between development project objectives, suggesting the need for a broader theory that explains the nature of the trade-offs, and empirical research that addresses multiple project outcomes and relevant boundary conditions (e.g., maximum development expenses or minimum product performance) in a more holistic manner. ACCELERATION TECHNIQUES Within the literature on accelerated product development, a notable number of studies have

5 accelerated product development 5 sought to identify those acceleration techniques that new-product teams actually use to reduce development time. The earliest framework for the use of techniques was developed by Millson, Raj, and Wilemon (1992) who suggested a hierarchy of acceleration approaches. Each approach is composed of similar techniques aimed at simplifying development operations, eliminating unnecessary development activities, paralleling development activities, eliminating delays in the process, and speeding up development operations. They concluded that a firm s time to develop new products can be significantly reduced to the extent these five acceleration approaches are employed in a thoughtful manner. In similar vein, Langerak, Peelen, and Nijssen (1999) specified a set of 50 individual acceleration techniques that development teams can adopt to achieve cycle time reduction. They formed nine approaches to shorten development time by clustering similar techniques. In a follow-up study, Langerak and Hultink (2005) investigated the effect of each cluster on development cycle time and new-product profitability. The results revealed five out of nine acceleration approaches (i.e., supplier involvement, lead user involvement, speeding up activities and tasks, training and rewarding of employees, and simplifying organizational structure) to be associated with reduced development cycle times. Implementing support systems and techniques and stimulating interfunctional coordination, on the other hand, were found to be linked to increased cycle times. The results further showed that three approaches (i.e., lead user involvement, training and rewarding of employees, and an emphasis on the customer) improve new-product profitability, while three other approaches (i.e., speeding up activities and tasks, reduction of parts and components, and implementation of support systems and techniques) decrease new-product profitability. A closer inspection of these results reveals that the use of only two approaches (i.e., lead user involvement and training and rewarding of employees) simultaneously reduces development time and improve new-product profitability. The adoption of one approach (i.e., speeding up activities and tasks) reduces development time to the detriment of profitability, an observation consistent with theories that suggest a trade-off between development time and new-product profitability. RISKS INCYCLE TIMEREDUCTION Crawford (1992) argues that the existence of trade-offs also imply risks associated with the practices aimed at cycle time reduction. A firm may focus on incremental new products at the expense of true breakthroughs and necessary information search steps may be sacrificed. Launching a new product too early, particularly when the product is qualitatively not ready for the market, is a notable risk. An overly tight time schedule also raises the probability of mistakes being made because it pushes the development project beyond the limits of R&D, engineering, and marketing capabilities. There are also people costs involved in managing cross-functional teams; time budget cuts can constrain the amount of innovation achieved; and a speeded-up team can consume an inordinate share of firm resources. Furthermore, team members in a functionally organized firm may be under work stress not only because of divided loyalties between their functional area and the development team, but also because of the increase in their workload as a consequence of being a part of the development team. In light of these risks, some researchers have suggested that timely development of a new product, given a new product s window of opportunity, is more important than achieving the shortest development cycle time possible. Market window of opportunity. The majority of existing work has not taken the new product s window of opportunity into account while investigating the effect of cycle time reduction on the success of the product. The concept of window of opportunity is, however, important because the sales of a new product that is launched ahead or behind its time will suffer (Calantone and Di Benedetto, 2000). Research suggests that by rushing a new product to market, a firm risks facing a strategic window yet to open, because in the early stages of the new product s life cycle there is likely to exist incompatibility with customers existing way of doing business, and a greater perceived risk of adoption. Moreover, cycle time reduction may negatively affect

6 6 accelerated product development product performance. Conversely, by taking too long to develop a new product, a firm may miss the window of opportunity. Customers already exposed to existing products are not likely to postpone their purchase decision, especially if competitors have already introduced similar new products. Contemporary research even suggests that the firm s ability to get the market-entry timing right, in view of the market window, is more important for new-product profitability than reduced cycle time, although it should be kept in mind that market-entry timing is contingent upon the completion of the new product s development cycle (Langerak, Hultink, and Griffin, 2008). CONCLUSION This discussion of accelerated product development provides scholars with a theoretical foundation for rigorous, empirical research. The challenge is, of course, to build on prior studies to investigate and further clarify some of the issues without losing sight of the complex relationships pertaining to the context, antecedents, and outcomes of development cycle time reduction. In doing so, researchers should consider the need for consistency in the unit of analysis and the measurement of development cycle time. From a practitioner s perspective, this discussion is useful in its clarification of the merits of cycle time reduction and the situations in which it is most appropriate, delineation of the ways in which interventions can be applied, explanation of the risks, trade-offs and pitfalls of development time reduction, and exploration of the competitive implications of accelerated product development. ACKNOWLEDGMENT The author thanks Pinar Cankurtaran for her insightful and helpful comments. Bibliography Ali, A. (2000) The impact of innovativeness and development time on new product performance for small firms. Marketing Letters, 11 (2), Bayus, B.L. (1997) Speed-to-market and new product performance trade-offs. Journal of Product Innovation Management, 14 (6), Bayus, B.L., Jain, S., and Rao, A.G. (1997) Too little, too early: introduction timing and new product performance in the personal digital assistant industry. Journal of Marketing Research, 34, Calantone, R.J. and Di Benedetto, C.A. (2000) Performance and time to market: accelerating cycle time with overlapping stages. IEEE Transactions on Engineering Management, 47 (2), Chen, J., Reilly, R.R., and Lynn, G.S. (2005) The impacts of speed-to-market on new product success: the moderating effects of uncertainty. IEEE Transactions on Engineering Management, 52 (2), Crawford, C.M. (1992) The hidden costs of accelerated product development. Journal of Product Innovation Management, 9 (3), Gerwin, D. and Barrowman, N.J. (2002) An evaluation of research on integrated product management. Management Science, 48 (7), Griffin, A. (1997) Modeling and measuring product development cycle time across industries. Journal of Engineering and Technology Management, 14 (1),1 24. Griffin, A. (2002) Product development cycle time for business-to-business products. Industrial Marketing Management, 31 (4), Henard, D.H. and Szymanski, D.M. (2001) Why some new products are more successful than others. Journal of Marketing Research, 38 (3), Kessler, E.H. and Chakrabarti, A.K. (1996) Innovation speed: a conceptual model of context, antecedents, and outcomes. Academy of Management Review, 21 (4), Langerak, F. and Hultink, E.J. (2005) The impact of new product development acceleration approaches on speed and profitability: lessons for pioneers and fast followers. IEEE Transactions on Engineering Management, 52 (1), Langerak, F., Hultink, E.J., and Griffin, A. (2008) Exploring mediating and moderating influences on the links among cycle time, proficiency in entry timing and new product profitability. Journal of Product Innovation Management, 25 (4), Langerak, F., Peelen, E., and Nijssen, E.J. (1999) A laddering approach to the use of methods and techniques to reduce the cycle time of new-to-the-firm products. Journal of Product Innovation Management, 16 (2), Millson, M.R., Raj, S.P., and Wilemon, D. (1992) A survey of major approaches for accelerating new product development. Journal of Product Innovation Management, 9 (1), Swink, M., Talluri, S., and Pandejpong, T. (2006) Faster, better, cheaper: a study of NPD project efficiency and performance tradeoffs. Journal of Operations Management, 24 (5),