The PDMA Handbook of New Product Development

4.3. What Is Implemented

There are three basic components to any NPD framework: the decision flow, the workflow, and supporting systems and practices. It is necessary to understand these components to carry out processes effectively.

4.3.1. The Decision-Making Process

NOTE

Top management participation throughout the decision flow is critical to an effective NPD framework.

A key benefit of the framework is that it enables organizations to manage risk: the risk of individual projects and the total risk of the portfolio of projects. It does this by requiring decisions at certain milestones. Investment of resources should be increased for good projects and be decreased or stopped for poor projects at each milestone. To justify investments and disinvestments, they must align with strategy. Good implementations, therefore, require setting up decision flows that (1) use specific criteria, (2) align with the product strategy, (3) evaluate the risk of a project by itself and within the full NPD portfolio, and (4) enable management to reallocate resources quickly. This approach is not just applicable to the development subprocess. Decision flows must cross the full framework.

4.3.2. Cross-Functional Workflow

The workflow across functions is another part of an NPD framework. Just as the decision-making should align with the strategy, the project activities should align with the decision flow. Two central questions for designing and performing: workflow are:

• What information or insight ...