”Speed has become the new competitive weapon. The ability to reduce one’s cycle time in product development is increasingly viewed as the key to innovation success and profitability” [22].
APD was the big management fad in NPD in the 1980s, and massive reductions in development cycle times were claimed by some big corporations. However this was starting from a baseline that by modern standards would be regarded as appallingly low. I wonder if we’ve gained most of what there is to be had from APD, and are doing ourselves more harm than good by chasing it too hard.
There is considerable practitioner and consultant literature emphasizing the benefits of APD. However the linkage between speed and success has not been heavily studied (as recently as five years ago, Griffith [23] was commenting “while many practitioners perceive that decreasing NPD cycle is important to NPD success, there is very little empirical support that substantiates this perception.”) and it is rarely quoted directly as an NPD success factor in the academic literature. What studies there have been have not come down universally in favour of more rapid product development. Chen, Reilly, & Lynn list 14 previous empirical studies and note that “The existing literature has produced inconsistent or conflicting predictions with regard to the relationship between speed and success for NPD projects” [24].
More recent empirical work has focused on correlating the speed-success relationship with other factors. Chen et al. surveyed 692 projects in US technology companies and concluded that speed was generally correlated with success, but that this effect was stronger where market uncertainty was high. Langerak & Hultink surveyed 233 Dutch industrial manufacturers and derived an inverted-U relationship between speed and success, further concluding that the optimum speed is higher where innovativeness is lower [25] – this latter conclusion is shared by other studies [26, 27]. Ledwith’s study of NPD success factors in Irish tech SMEs noted that time-to-market appeared to be less of an issue for small firms than mid-sized ones [28]. It’s worth also noting that in general the success factor studies look at the correlation between success and achieved speed, so to my mind inherently factor out the less sucessful APD implementations (those that don’t actually speed things up), giving a falsely rosy picture.
Having said that, it’s hard to argue that speed should not, all other thing being equal, be beneficial. Faster development gives a more rapid return on investment, reduced interest costs, and reduced risk of obsolescence and market change. It also allows access to the possibility of first-mover advantages, and of an extended product life cycle. Unfortunately, in NPD as in other facets of human endeavour, all other things are never equal. The fact that speed is not strongly and obviously correlated with increased returns, therefore, can be explained in two ways:
- The importance of speed is small compared with other factors. Its effects are thus “swamped in the noise” in large-scale comparative surveys.
- Some or all of the techniques used to achieve speed are themselves counterproductive in other ways. The advantages gained by accelerating development are thus largely offset by consequential effects of doing so.
Explanation (1) is certainly a possibility. The “soft” advantages of APD are less compelling than generally perceived [29], while the “hard” (i.e. direct financial) benefits, although potentially significant, [30], are in many cases small in comparison with the financial leverage exerted by other factors such as product merit, manufacturing cost, or selling capability. This argument is consistent with the results of Cooper & Kleinschmidt’s study of methods of achieving timeliness in NPD projects in the chemical industry, which concluded that “84% of profitability was explained by factors other than timeliness. Moreover, financial performance appears to be an almost distinct and separate concept (or construct) from timeliness” [22].
Explanation (2) is also reasonable. Langerak & Hultink investigated effects of different acceleration techniques on speed and financial performance, and concluded that although five of the nine APD approaches considered were linked with improved speed, only two (lead user involvement and training and rewarding of employees) correlated with both speed and profitability [31]. They also concluded that one approach (speeding up activities & tasks), while positively linked with speed, was also linked with decreased profitability.
They defined [32] the “speeding up activities and tasks” approach as including the techniques of:
- Speed up carrying out of activities
- Link up activities
- Carry out activities simultaneously
- Elimination of slack time
- Reduction of time between idea generation, screening, and development
- Reduction of interdependencies between activities
- Emphasising schedules & deadlines
This list is consistent with activities described in support of the commonly stated academic thesis that hurrying and cutting corners is counterproductive [29, 33, 34]. From my own experience, the list also reads like a list of standard acceleration techniques within SME’s!
Further analysis of Langerak & Hultnik’s study reveals some interesting observations:
- The most commonly used acceleration technique (reduction of parts count) was not linked with increased speed
- The two most commonly used acceleration techniques (reduced parts count and speeding up activities & tasks) were both adversely linked with profitability.
- Both of the techniques which were positively correlated with both speed and profitability were in the lower 50% of usage rates.
This study seems to show that (at least in the companies under survey) APD is frequently not effectively implemented. If it’s generally applicable, it goes some way to explain the inconclusive results with respect to speed-profitability linkage referred to above.
