Measuring Results of New Product Development

Abstract

It is necessary to measure the results of new product development in order to establish the current level of product innovation and define what has to be done for its improvement. The subject of research in the article is measuring the results of product innovation. The article is aimed at identifying the directions in terms of which the measuring of results is to be considered. Our goal is to shed light on the different points of view thereon. The need of measuring results of new product development is justified. It is shown that each determinant of product innovation performance serves three functions: of a goal; of an indicator and of grounds for personnel motivation. It is proved that, albeit different, the said three functions are interrelated. The article defines the difficulties in measuring the results of new product development. It is proved that the main difficulties in measuring results are related to their use by a broad circle of managers, to the intangible nature of the new product development performance, to the fact that product innovation is related to nonstandard and extraordinary tasks and the development of a new product is related to both insecurity and the organizational complexity and of lack of concentration on the new product development activities. A system of indicators for measuring the results of new product development where different indicators are used at each company level is proposed. There are three levels of measurement using their relevant indicators: level of the separate new product project; level of the product innovation process and strategic level. The concept that it is necessary to choose an optimal number of indicators that could facilitate the efficient management of product innovation within the company is defended.