Commercial New Product Development: Rules of the Game
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The new new product development game Stop running the relay race and take up rugby
Hirotaka Takeuchi and
Ikujiro Nonaka
In today's fast-paced, fiercely competitive world of commercial new product development, speed and flexibility are essential. Companies are increasingly realizing that the old, sequential approach to developing new products simply won't get the job done. Instead, companies in Japan and the United States are using a holistic method—as in rugby, the ball gets passed within the team as it moves as a unit up the field.
This holistic approach has six characteristics: built-in instability, self-organizing project teams, overlapping development phases, "multilearning," subtle control, and organizational transfer of learning. The six pieces fit together like a jigsaw puzzle, forming a fast and flexible process for new product development, fust as important, the new approach can act as a change agent: it is a vehicle for introducing creative, market-driven ideas and processes into an old, rigid organization.
Mr. Takeuchi is an associate professor and
Mr. Nonaka, a professor at Hitotsubashi University in fapan. Mr. Takeuchi's research has focused on marketing and global competition. Mr Nonaka has published widely in
Japan on organizations, strategy, and marketing.
The rules of the game in new product development are changing. Many companies have discovered that it takes more than the accepted basics of high quality, lov^ cost, and differentiation to excel in today's competitive market. It also takes speed and flexibility. This change is reflected in the emphasis companies are placing on new products as a source of new sales and profits. At 3M, for example, products less than five years old account for 25%* of sales. A 1981 survey of 700 U.S. companies indicated that new products would account for one-third of all profits in the
1980s, an increase from one-fifth in the 1970s.'
This new emphasis on speed and
The new new product development game Stop running the relay race and take up rugby
Hirotaka Takeuchi and
Ikujiro Nonaka
In today's fast-paced, fiercely competitive world of commercial new product development, speed and flexibility are essential. Companies are increasingly realizing that the old, sequential approach to developing new products simply won't get the job done. Instead, companies in Japan and the United States are using a holistic method—as in rugby, the ball gets passed within the team as it moves as a unit up the field.
This holistic approach has six characteristics: built-in instability, self-organizing project teams, overlapping development phases, "multilearning," subtle control, and organizational transfer of learning. The six pieces fit together like a jigsaw puzzle, forming a fast and flexible process for new product development, fust as important, the new approach can act as a change agent: it is a vehicle for introducing creative, market-driven ideas and processes into an old, rigid organization.
Mr. Takeuchi is an associate professor and
Mr. Nonaka, a professor at Hitotsubashi University in fapan. Mr. Takeuchi's research has focused on marketing and global competition. Mr Nonaka has published widely in
Japan on organizations, strategy, and marketing.
The rules of the game in new product development are changing. Many companies have discovered that it takes more than the accepted basics of high quality, lov^ cost, and differentiation to excel in today's competitive market. It also takes speed and flexibility. This change is reflected in the emphasis companies are placing on new products as a source of new sales and profits. At 3M, for example, products less than five years old account for 25%* of sales. A 1981 survey of 700 U.S. companies indicated that new products would account for one-third of all profits in the
1980s, an increase from one-fifth in the 1970s.'
This new emphasis on speed and