Success Factors of Global New Product Development
Programs, the Definition of Project Success, Knowledge
Sharing, and Special Issues of Project Management
Journal®.
Images Authors:
Gemünden, Hans Georg1
Source:
Project Management Journal. Feb2015, Vol. 46 Issue 1, p2­11. 10p. 2 Charts. Document Type:
Editorial
Subject Terms:
*Project management
*New product development
*Information sharing
NAICS/Industry Codes:
541611 Administrative Management and General Management Consulting Services
541614 Process, Physical Distribution, and Logistics Consulting Services
541619 Other management consulting services
541613 Marketing Consulting Services
Abstract:
An introduction is presented in which the editor discusses various reports within the issue on topics including project management, global new product development and knowledge sharing.
Author Affiliations:
1
Chair, Technology and Innovation Management, Technische Universität Berlin, Berlin, Germany
ISSN:
8756­9728
DOI:
10.1002/pmj.21480
Accession Number:
101314449
Publisher Logo: Images: Translate Full Text: Choose Language Success Factors of Global New Product Development Programs,
the Definition of Project Success, Knowledge Sharing, and
Special Issues of Project Management Journal<sup>®</sup>
Contents
1. Table 1: Correlations between project performance measures (Informant Portfolio Coordinator) 2. Table 2: Correlations between project performance measures (Informant Portfolio Decision Maker) 3. References 4. Appendix: PMJ® Reviewers in 2014 ListenPauseStopSelect: Volume SettingsDownload mp3Close American Accent PlayerSpeech­enabled by ReadSpeaker
From the Editor
The first issue of this year has four major themes: (1) Success Factors of Global New Product Development
Programs, (2) the Definition of Project Success, (3) Knowledge Sharing, and (4) Special Issues of Project
Management Journal®.
1. Success Factors of Global New Product Development Programs
Innovation management is a major application field of project management, program management, and project
portfolio management, but researchers from project management are often not sufficiently aware of more
recent innovation management research. Thus, I had the idea for an invited article from two of the most
influential researchers in new product development research: Ulrike de Brentani and Elko Kleinschmidt. Along
with Robert Cooper and Scott Edgett, these colleagues have written series of seminal articles on the success
factors of new product development projects and programs, which belong to the most often cited ones in this
field.
However, the most often cited papers of this Canadian quadriga are the ones that describe the findings from
the product portfolio management study done in the late nineties (Cooper, Edgett, & Kleinschmidt, 1999, 2001);
the more recent studies, which are also very important for project management, have been neglected in the
project management literature.
The world has changed tremendously since then: One important and still ongoing trend has been strongly
neglected in traditional new product development research: the globalization of product and service offerings.
The implications of this trend for the success factors in management of new goods and services, was the key
research object of a new research program, which Ulrike de Brentani and Elko Kleinschmidt undertook in the
first decade of 2000, along with Sören Salomo, who joined later as a research partner and co­author. The first article in this issue from Ulrike de Brentani and Elko Kleinschmidt, "The Impact of Company
Resources and Capabilities on Global New Product Program Performance," summarizes the theoretical
foundation, research design, and results of this research program and elaborates on the implications for
practice and research. The article builds on an integrated framework, which has been derived from three types
of literature: new product development, globalization, and organization. The basic assumption is that success
factors can be classified into two groups: (1) 'Resources,' which are the longer­term, background factors­­that
is, the more tacit, 'softer,' and difficult­to­imitate­­factors that must be part of the internal environment of the firm
if it is to achieve a sustainable competitive advantage; and (2) 'Capabilities,' which entail more actionable and
specific skills, competencies, and routines that firms develop and adjust in line with the dynamics of the
situation in the shorter term. In this view of what leads to success, resources are seen as having an indirect
impact on performance, in that they are empowered by relevant capabilities.
The invited article from Ulrike de Brentani and Elko Kleinschmidt summarizes five of their previous articles:
(a) In the first article (de Brentani & Kleinschmidt, 2004) the three resource constructs: (1) Global innovation
culture, (2) Resource commitment, and (3) Senior management involvement are theoretically derived and
measured empirically, and they are related to four success constructs of the global new product development
programs: (1) Financial performance, (2) Exploitation of windows of opportunity, (3) Time efficiency, and (4)
Overall success.
It turns out that all three factors of the long­term "behavioral environment" are important for success, and the
cluster, which ranks high on all three factors, is also successful on all performance criteria. The other three
clusters, each lacking one different of the three critical behavioral resources only show a medium to low
performance. Thus, in order to achieve high performance firms should develop all three behavioral resources. I
want to emphasize that the items measuring the "global" aspects of corporate culture and the items capturing
well­known aspects of innovation culture, load on only one factor, which was a surprise to the authors.
However, the items reflecting the global dimension show higher factor loadings and correlate stronger with
performance measures. Thus, the global aspect of developing new goods and services had already become
the more important one in the early 2000s. In a new research study on the trends of project management until
2025, we surveyed a global sample of experienced project management researchers and practitioners.
Globalization is still a major ongoing trend in project management and has a strong impact on project
management practices. (Gemünden & Schoper, 2014)
The other four articles address the capability constructs: (1) Global NPD Process, (2) Global NPD Strategy, (3)
Global NPD Team, and (3) IT and Communication Capability supporting Global NPD. The articles document
the direct influences of these capability constructs; show how they mediate the behavioral resources, i.e.,
explain why and how the behavioral resources influence performance; and they analyze to which extent the
capabilities moderate the behavioral resources, i.e., change the magnitude and/or direction of their impact.
(b) The second article (Kleinschmidt, de Brentani, & Salomo, 2007) investigates the influence of three global
NPD process capabilities: (1) Global knowledge integration, (2) Homework activities, and (3) Global launch
preparation. The significant positive influence of the behavioral environment resources on performance is
mediated by these three global NPD process capabilities. Global knowledge integration is the most important
process capability showing a significant influence on financial performance and on windows of opportunity. The
other capabilities influence only one of these performance measures in a significantly positive way.
The second article analyzes a fourth dimension of the behavioral environment: the formality of the global NPD
process. This is a measure of maturity of the processes for the global new product development program.
However, the authors explicitly state that just having established such a process is not sufficient: "But the mere
existence of such a process does not make it a resource by which firms sustain a competitive advantage, as
required by resource based theory. A formal NPD process becomes valuable and rare only once it undergoes
company­specific tuning (e.g., adjustment for industry, firm size, NPD experience, domestic versus global). In
practical terms, this means that the process needs full buy­in from NPD personnel, team leaders, and senior
managers and is implemented for most of the firm's NPD ventures. Added requirements are (1) explicit and
tacit knowledge of applying the process to different product and market scenarios; (2) understanding by
different functions in the firm; (3) knowledge of its limitations; and (4) steady adjustment to help speed up the development cycle, to increase flexibility, and to ensure its relevance to changing technological and market
conditions." (Kleinschmidt, de Brentani, & Salomo, 2007, p. 425). The formality of the process for global NPD
projects has significant positive influences on all three global NPD process capabilities, "indicating that a more
formal process­­that is, clearly defined phases and decision points, a high degree of buy­in by senior
managers, and system implementation for NPD throughout the organization­­permits the effective deployment
of NPD process capabilities that significantly impact global NPD program outcome. This supports the notion
that a higher degree of NPD process formality provides the base needed for NPD process capabilities to cope
with the increased complexity and diversity of NPD efforts that are of a globalized scope" (Kleinschmidt, de
Brentani, & Salomo, 2007, p. 431).
However, holding constant the three NPD global process capabilities and the other resources, formality of the
process for global NPD projects shows no significant direct effect on financial performance, and even a
significant negative direct effect on windows of opportunity. A closer analysis of the negative effect documents
a significant inverted U­shaped relationship of process formality and windows of opportunity. This means that
an over­formalization of global NPD processes may lead to losing opportunities and reducing entrepreneurial
activities and initiatives for radical innovations. (See Salomo, Weise & Gemünden, 2007, confirming this
argument).
In a similar vein, the second article documents potential negative effects of senior management involvement.
Here, it is not a question of the amount of involvement, but of the focus of senior management activities:
"However, indiscriminate highly active involvement on the part of senior managers, meddling in all areas of
global NPD, may have a deteriorating effect." (Kleinschmidt, de Brentani, & Salomo, 2007, p. 433. See Bonner,
Ruekert, & Walker, 2002, and Unger, Kock, Gemünden, & Jonas, 2012, for similar findings.)
Thus, two very popular success factors in the project management literature: process maturity and senior
management involvement deserve some qualification.
(c) The third article brings in the global NPD strategy: "Resources and capabilities alone do not make outcome.
Only once these are focused on specific strategic initiatives can they result in competitive advantage." (De
Brentani, Kleinschmidt, & Salomo, 2010, p. 145). The authors use two constructs: (1) Global presence strategy
and (2) Global product harmonization strategy. The findings show that global NPD strategies are essential for
ensuring successful NPD for international markets. Taken together, the market­ and product­based strategies
identified in this study have a significant impact on all three dimensions of global NPD program performance.
These market­ and product­based strategies are themselves driven by a global innovation culture and by senior
management involvement in global NPD.
(d) The fourth article analyzes the influence of global NPD teams (Salomo, Kleinschmidt, & de Brentani, 2010).
Suitably composed, supportive, and cohesive global NPD teams offer an effective and efficient way of
coordinating and integrating globally and functionally dispersed knowledge with internal knowledge and
capabilities. The empirical findings confirm this by significant positive influences on the success measure
chosen in this article, i.e., exploring and exploiting windows of opportunity: Teams that integrate the diverse
talents, knowledge, and cultures from different parts of the global organization are effective in opening new
technology, market, and product opportunities. Resource commitment and senior management involvement are
the drivers of globalized NPD teams.
When resource spending for global NPD is highly dispersed worldwide then the influences change: In case of
low dispersion, global NPD teams show no significant influence on performance, in case of high dispersion, the
influence is very strong.
The dispersion of spending also moderates the impact of senior management: In the case of low dispersion,
senior management has no significant direct influence on performance; in the case of high dispersion, there is
a significant direct positive influence, in addition to the influence of global NPD teams.
Finally, resource commitment shows a direct significant positive influence on performance only in the case of
low dispersion. These moderating influences are very interesting, because they indicate that two very well founded resources
need to be qualified in managing global teams, depending on the dispersion if NPD spending.
(e) The fifth article analyzes the influence of IT­Communication Competency, which is captured by two
constructs (1) IT­Communication Infrastructure and (2) IT­Communication Capability (Kleinschmidt, de
Brentani, & Salomo, 2010). These two capabilities are assumed to influence global NPD performance
positively, and their impact is assumed to be even higher in the case of high senior management involvement
and in the case of high resource commitment to global NPD. The empirical results show significant positive
main effects of the two communication competency constructs, but confirm only two of the four postulated
interaction effects. The positive effect of IT Communication infrastructure is lower in the case of high resource
commitment­­which the authors explain by overspending beyond requirements, and the positive effect of IT
Communication Capability is lower in the case of high senior management involvement­­which the authors
explain with meddling of senior management too much into the details.
Overall, these five articles, which are summarized and assessed in the present article from the two experts,
Ulrike de Brentani and Elko Kleinschmidt, in an excellent way, have several important implications for project
management and project management research.
(1) The ultimate goal of new product development projects, programs, and portfolios is long­term value creation
for its customers, suppliers, and for the firms running these activities. This dedication to value creation and
realization has not always been a core performance measure in project management with its dedication to the
"iron triangle" and extensions of this.
(2) Long­term value creation through new products, including goods and services, is taking place in a global
economy with interdependent regional markets. Thus, the competence to explore and exploit these global
markets is a major challenge for the survival of firms. Product innovation has to consider this global dimension,
and empirical research has to document what this means for success factors.
(3) De Brentani, Kleinschmidt, and their co­author Salomo, establish a causal chain with two layers: long­term
behavioral resources, which are mediated by more mid­term actionable capabilities and the constructs of these
two layers, which may also moderate each other. In project management and in project management research
the softer background resources appear to be neglected, and the focus is much more on the processes and
actionable capabilities.
(4) Further context constructs­­like e.g., global dispersion of NPD spending­­may act as contingency factors
that have to be considered in research and management activities.
(5) Overall, the behavioral environment resources (1) global innovation culture, (2) resource commitment, and
(3) senior management involvement show remarkable influences by driving a variety of paths of capability
development, and are therefore very important. Regarding global innovation culture­­the "global" has become a
very important feature.
(6) However, the findings also show that overspending may occur, or that senior management can get too
involved in details, or has the wrong focus. Regarding the challenges of mastering diversity, the articles do not
provide much evidence, but diversity of global teams has been documented to be a double­edged sword,
whose impact on the performance of global NPD performance depends on critical moderator variables:
Diversity has a potential positive impact on elaborating more diverse information, alternatives, and performance
criteria, thus improving decision quality, but it also has a potential negative effect by supporting social
categorization and affective tensions and conflicts between team members (Kearney, Gebert, & Voelpel 2009).
Thus, more research is needed, to find out when less is more, when and why champions fail, and when a too
open culture may become a drawback.
(7) In sum, I highly recommend reading this marvelous article and considering its theoretical and empirical
parts in future research or on management decisions. 2. Defining Project Success: How Important Is the Fulfillment of the Iron Triangle?
Finding the "right" measure for project success has a long history. Over the years engaged debates have taken
place of what, when, how, by whom, and for whom such performance measures should be made. Thus, it is not
new, that such a discussion is also led these days at the project, program, and project portfolio levels, and that
these levels are linked with each other and with corporate and business unit success.
The traditional measure was to assess the success of a single project by comparing its actual performance with
its targeted performance regarding the criteria of budget, time, and functionality (respectively scope), which are
sometimes called the "iron triangle." This simple measure has been criticized for neglecting the following three
aspects:
(1) Stakeholder aspect: Value lies in the eye of the beholder. Considering multiple, potentially contradictory,
stakeholder perspectives gives a comprehensive view on project success. Projects can deliver additional value
or loss by considering the requirements and needs of stakeholders beyond the project sponsor and the project
contractor. In recent years, the sustainability of projects results for the long­term benefits of future generations
has become a much more critical issue than before.
(2) Exploitation aspect: A project usually ends with the delivery of certain outputs. Only when these outputs are
exploited and transformed to outcomes that have an impact, can benefits emerge­­possibly not earlier than
years after project completion.
(3) Strategic aspect: Nowadays organizations implement their strategic goals by the entirety of their projects,
which they perform. In order to select, prioritize, and fund the right projects accordingly, the value contribution
of projects to strategic goals, and the generation of future business opportunities have to be planned and
controlled.
Notwithstanding the value of these contributions, the question arises: What difference do these increasingly
complex frameworks make? How strong is the empirical relationship between the fulfillment of the iron triangle
criteria and broader defined project success measures that are realized much later?
In their article, "The Relationship Between Project Success and Project Efficiency," Pedro Serrador and
Rodney Turner pose this question. The authors define project efficiency: as meeting cost, time, and scope
goals; and project success: as meeting wider business and enterprise goals as defined by key stakeholders.
Through a survey of 1,386 projects, they show that the fulfillment of the iron triangle ("project efficiency")
correlates moderately strongly to overall project success. Efficiency is thus neither the only aspect of project
success nor an aspect of project success that can be ignored.
Project performance criteria are rated by the participants of a web­based survey on a five­point ordinal scale.
Project efficiency is measured as the mean rating of meeting time­line, budget, and scope goals. Project
success measured as the mean rating of sponsor, team, and client, and end­user assessment. A single
informant, who assessed two projects, made all rankings for a more successful and a less successful project.
The items of the two performance measure constructs project efficiency and project success load on two
different factors, with scope having a high loading (around 0.50) on both factors. However, according to their
research question, the authors do not delete this item because it has no clear single­factor loading, but assign it
to the efficiency factor only. The correlations of meeting timeline, budget, and scope goals with project success
are 0.51, 0.42, and 0.58, respectively, which are substantially high correlations (see Table 9). Efficiency
correlates with project success at 0.60 (see Table 8). The correlation between efficiency and project success is
also analyzed within industries (see Table 10): In nine of the twelve industries the correlation is higher than
0.60, and the remaining three either have a lower proficiency in project management (government, other) or a
high uncertainty (high technology). Thus, the findings indicate that achieving project efficiency might be a good
early warning indicator for a broader defined project success.
However, I want to emphasize that the reviewers of this paper raised several questions: (1) The first is that one single informant made all the performance ratings of one project and this may create a
common methods variance, which increases the correlation coefficients. Ideally, the researchers should have
asked the different stakeholders how they assessed the project's performance.
(2) Ideally, the measurement of project efficiency should have taken place at completion of a project, and the
measurement of project success should have taken place one or two years later. However, this would have
been a much more difficult research task.
(3) The correlation coefficients may have also increased by the fact that the respondents assessed two
projects, one, which was successful, and the other, which had failed. It is very likely that in the case of the
failed project, several success measures were rated low, and in the case of the successful project, several
success measures were rated high. Since the respondents knew that the one project was a success and the
other was a failure, a certain halo­effect of rating them accordingly cannot be excluded­­a longitudinal analysis
would avoid such a hindsight bias.
In order to assess the validity of these concerns, I present additional data, taken from the sixth wave of the
2013 study on success factors in project portfolio management, performed at my chair of Technology and
Innovation Management at TU Berlin. I use these findings to illustrate that Pedro Serrador and Rodney Turner
make a valid point. In our study, we have a sample of 177 firms with matched pairs of project portfolio
coordinators, and project portfolio decision makers, who are usually decisive members of the project portfolio
board. Our items for measuring the iron triangle were similar, but we also measured reaching customer
satisfaction, target cost, and revenue goals of the projects in a portfolio and these measures are used as
performance indicators of realized project success.
In contrast to Serrador and Turner we can use the data from two different kinds of stakeholders, and thus test
the stability of the findings, and we can look at the consensus between the two informants. In our study, the
real correlations are probably underestimated, because we take per portfolio, only one measure, i.e., the
average fulfillment of a goal of all projects in the portfolio, and this leads to a truncation of variance. Thus, we
deliver more of a lower bound for the real correlation, whereas Serrador and Turner deliver a kind of upper
bound. However, we still share some shortcomings in our study, in that we also do not offer a longitudinal
analysis.
We see that the performance indicators time, budget, and scope correlate highly and significantly positively
with the performance measures for customer satisfaction, target cost, and revenue goals. These correlations
are somewhat higher for the decision makers than for the coordinators. The correlat...

 

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