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Research-Technology Management

ISSN 0895-6308 (Print) 1930-0166 (Online) Journal homepage httpswwwtandfonlinecomloiurtm20

Providing Clarity and A Common Language to theldquoFuzzy Front Endrdquo

Peter Koen Greg Ajamian Robert Burkart Allen Clamen Jeffrey DavidsonRobb DAmore Claudia Elkins Kathy Herald Michael Incorvia AlbertJohnson Robin Karol Rebecca Seibert Aleksandar Slavejkov amp Klaus Wagner

To cite this article Peter Koen Greg Ajamian Robert Burkart Allen Clamen Jeffrey DavidsonRobb DAmore Claudia Elkins Kathy Herald Michael Incorvia Albert Johnson Robin KarolRebecca Seibert Aleksandar Slavejkov amp Klaus Wagner (2001) Providing Clarity and A CommonLanguage to the ldquoFuzzy Front Endrdquo Research-Technology Management 442 46-55 DOI10108008956308200111671418

To link to this article httpsdoiorg10108008956308200111671418

Published online 27 Jan 2016

Submit your article to this journal

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Citing articles 104 View citing articles

PROVIDING CLARITY AND A COMMONLANGUAGE TO THE ldquoFUZZY FRONT ENDrdquo

Eight companies collectively determined a theoretical construct for the Fuzzy Front End ofinnovation in order to provide a common framework and language they found that highly

innovative companies have a more proficient FFE

Peter Koen Greg Ajamian Robert Burkart Allen ClamenJeffrey Davidson Robb DrsquoAmore Claudia Elkins Kathy HeraldMichael Incorvia Albert Johnson Robin Karol Rebecca Seibert

Aleksandar Slavejkov and Klaus Wagner

OVERVIEW Eight companies that were Process Effec-tiveness Network members of the Industrial ResearchInstitute attempted to collectively determine the bestpractices of the Fuzzy Front End (FFE) of innovationComparing one companyrsquos processes to those of anotherproved insurmountable because there was neither acommon language nor clear and consistent definition ofthe key elements of the front end As a result the groupdeveloped a theoretical construct defined as the NewConcept Development (NCD) model in order to providea common language and insights on the front end activi-ties The model consists of three key parts five front endelements the engine that powers the elements and externalinfluencing factors Proficiency of the FFE was evaluatedat 19 companies by using the NCD model Highly innova-tive companieswere found to be more proficient in the FFEand in several elements of the NCD model

The front end of innovation or what is often called theFuzzy Front End (FFE) presents one of the greatestopportunities for improving the overall innovationprocess This stage which we define by those activitiesthat take place prior to the formal well-structured NewProduct and Process Development (1) or ldquoStage Gatetraderdquoprocess (2) is the target of increasing attention becauseof the widely-perceived lack of high-profit ideas enteringthe New Product and Process Development (NPPD)process Moreover considerable literature exists on bestpractices for the start of the NPPD process (3) as well aswithin it (4ndash6)

In contrast there has been little research to date on bestpractices for the front end Furthermore many of thepractices carried out during the NPPD donrsquot apply to the

front end because as indicated in Table 1 the nature ofthe work commercialization date funding level revenueexpectations and other factors are fundamentallydifferent (see ldquoWhat is the Front Endrdquo page 49)

It was for these reasons that an Industrial ResearchInstitute (IRI) project team from eight companies (AirProducts Akzo Nobel BOC DuPont Exxon HenkelMobil and Uniroyal Chemical) began studying the frontend with the optimistic objective to develop a list of bestpractices for the FFE The team members all ldquoownersrdquoof the product development process within their firmsfound it impossible to determine the best practices ateach company Comparing one companyrsquos front-endprocesses to those of another proved insurmountablebecause there was no common language or definition ofthe key elements of the front end To address this short-coming a theoretical constructmdashdefined as the NewConcept Development (NCD) modelmdashwas developed toprovide insight and a common language

For the remainder of the article we use the term ldquoFrontEnd of Innovationrdquo (FEI) as opposed to Fuzzy Front End(FFE) We strongly believe that FFE implies that thisportion of the innovation process is mysterious and thisattitude often results in a lack of accountability and dif-ficulty in determining who is responsible to manage theactivities in this area The use of the term FFE incorrectlysuggests that unknowable and uncontrollable factorsdominate the front end implying that this initial part ofthe innovation process can never be managed

New Concept Development Model

The NCD model shown in Figure 1 consists of three keyparts

Research z Technology Management460895-630801$500 copy 2001 Industrial Research Institute Inc

Figure 1mdashThe New Concept Development Model (NCD) provides a common languageand definition of the key components of the Front End of Innovation The engine whichrepresents senior and executive-level management support powers the five elements ofthe NCD model The outer area denotes the influencing factors that affect the decisions ofthe two inner parts

Table 1mdashDifferences Between the Front End of Innovation (FEI) and the New Product Process Development(NPPD) Process

Front End of Innovation (FEI) New Product Process Development (NPPD)

Nature of Work Experimental often chaotic Difficult to planEureka moments

Structured disciplined and goal-orientedwith aproject plan

CommercializationDate Unpredictable Definable

Funding Variable In the beginning phases manyprojects may be ldquobootleggedrdquowhile otherswill need funding to proceed

Budgeted

Revenue Expectations Often uncertain Sometimes done with a greatdeal of speculation

Believable and with increasing certainty analysisand documentation as the product release dategets closer

Activity Both individual and team in areas to minimizerisk and optimize potential

Multi-functionalproduct andor processdevelopment team

MarchmdashApril 2001 47

1 The inner area defines the five key elements compris-ing the Front End of Innovation (FEI)2 The Engine or ldquobullrsquos eyerdquo portion which drives thefive front-end elements and is fueled by the leadershipand culture of the organization3 The Influencing Factors or environment on theperiphery consists of Organizational CapabilitiesBusiness Strategy the Outside World (ie distributionchannels customers and competitors) and the EnablingScience that will be utilized These same influencingfactors affect the entire innovation process including the

FEI NPPD and commercialization as schematized inFigure 2

Several characteristics of the model are worth notingThe inner parts of the NCD were specifically designatedas elements rather than processes Processes imply astructure that may not be applicable and could force a setof poorly designed NPPD controls to be used to managefront-end activities The circular shape is meant tosuggest that ideas are expected to flow circulate anditerate between and among all the five elements in any

About the Authors

Peter Koen PhD is an associate professor of managementat Wesley J Howe School of Technology ManagementStevens Institute of Technology in Hoboken New JerseyHe is currently director of the Consortium for CorporateEntrepreneurship at Stevens whose mission is to stimulatehighly profitable corporate entrepreneuring activities at thefront end of the innovation processpkoenstevens-techedu

Greg Ajamian is a senior consultant at DuPont ConsultingSolutions in Wilmington Delaware He is the corporateprocess owner and leading consultant for businessprocesses for growth and renewal including new productdevelopment new technology development opportunityidentification and idea generation and capturegregmajamianusadupontcom

Robert Burkart is director of professional developmentservices at the Industrial Research Institute WashingtonDC In addition to the responsibilities for the leadershipdevelopmentprograms he is the staff liaison to the ProcessEffectiveness Network Women Innovators NetworkHuman Resources Directors Network and the Small RampDUnit Network burkartiriincorg

Allen Clamen is technology processes manager at Exxon-Mobil Chemicalrsquos Polymer Center in Baytown Texas Heis responsible for the companyrsquos stage-gate process tomanage the translation of ideas from conception to com-mercial implementation allenclamenexxoncom

Jeffrey Davidson is information management businessdirector Process Systems at The BOC Group in MurrayHill New Jersey During his 16 years with BOC he hasheld various technical and managerial positions related tomaterials technology innovation management and infor-mation managementjeffdavidsonprocessplantsboccom

Robb DrsquoAmore is e-commerce marketing manager atCorning Incorporated in CorningNew York He is respon-sible for the coordination and development of CorningrsquoseCommerce strategies and initiativesdamoreracorningcom

ClaudiaElkins is the manager of research services at Akzo-Nobel Chemicals Inc Dobbs Ferry New York She is

responsible for information resources quality and otherservices and has worked in process improvement for RampDsince 1992 claudiaelkinsakzo-nobelcom

Kathy Herald (now retired) was quality and organizationeffectiveness manager at ExxonMobil Research and Engi-neering Center in Florham Park New Jersey She wasresponsible for working with leadership and work groups todevelop effective and efficient management and worksystems

Michael Incorvia is at InternationalFlavors and Fragrancesin Union Beach New Jersey Before joining IFF as a seniorproject leader he was responsible for Henkelrsquos RampD ISO9001 quality program and certificationmichaelincorviaiffcom

Albert Johnson is senior analyst at Corning IncorporatedScienceamp TechnologyDivision in CorningNew York Heconducts and coordinates advanced business-orientedanalysis for strategic planning johnsonalcorningcom

Robin Karol PhD is a manager at DuPont ConsultingSolutions in Wilmington Delaware She manages a groupof internal business consultantswho are responsible for theinstallationof business processes for growth and renewal ofDuPontrsquos businesses robinakarolusadupontcom

Rebecca Seibert is petroleum additive technology managerat Crompton CorporationMiddleburyConnecticut She isresponsible for the commercialization of new products andprocesses the creation of their internal stage-gate andportfolio managementrsquos processes and manages the tech-nology portfolio for the petroleum additives businessrebecca-seibertcromptoncorpcom

Aleksandar SlavejkovPhD is combustioncenter of excel-lence lead and corporate stage-gate process manager at AirProducts and Chemicals Inc AllentownPennsylvaniaHemanages research and development activities related tocombustion and is also responsible for overseeing thecorporate-wide stage-gate process slavejagapcicom

Klaus Wagner (now retired) was manager technicalprogram development ExxonMobil Chemical CompanyHe was responsible for research project portfolio manage-ment stage-gating of technology projects competitiveintelligence and technology monitoring activities for thePE Business group and RampD kpwagnerhomecom

Research z Technology Management48

order or combination and may use one or more elementsmore than once This approach is in contrast to thesequential NPPD process in which ldquolooping backrdquo andldquoredirect or redordquo activities are associated with signifi-cant delays added costs and poorly managed projects

While the front-end elements will be discussed in aclockwise progression they are expected to actuallyproceed in a more random and non-sequential fashion asdenoted by the arrows that show ldquoleakagesrdquo ormovement between the areas Finally the separationbetween the influencing factors (ie environment) andthe front end should be considered a continuum sinceinteractions are expected between the influencing factorsand the five front-end elements

Influencing Factors (The Environment)

The FEI exists in an environment that consists of the cor-porationrsquos business strategies competitive factors itsorganizational capabilities and the maturity of the tech-nologies to be utilized The entire innovation process

(both the FEI and NPPD) needs to be aligned with thebusiness strategy to ensure an uninterrupted flowingpipeline of new products and processes with value to thecorporation Sustained successful product developmentcan only occur when the FEI activities can be accom-plished with the organizational capabilities of thecompany Understanding enabling sciences and tech-nologies that will be part of the FEI is also critical sincetechnology typically advances by building on earlierachievements These influencing factors constantlyacting upon peoplersquos minds are primary contributors toldquoserendipitous discoveryrdquo of new ideas Just as a healthymarine environment is essential for a healthy populationof aquatic species so is a supportive climate essential fora productive FEI

The Engine (Leadership and Culture)

Although leadership and culture have been identified ascritical to new-product development we have not foundany study that systematically links the culture to the

What Is the Front End

We define the front end by those activities that come beforethe formal and well structured New Product and ProcessDevelopment (NPPD) or Stage Gatetrade process Eventhough there is a continuumbetween the Front End of Inno-vation (FEI) and the NPPD the activities in the FEI areoften chaotic unpredictable and unstructured In compari-son the NPPD is typically structured which assumesformalism with a prescribed set of activities and questionsto be answered In contrast Khurana and Rosenthal (11 p59) defined the FEI as being complete when a business unitcommits to funding and launch of a new-product develop-ment project or decides to redirect or stop the project (iethe continueno-go decision)We felt this definitionwas toorestrictive because many projects receive substantivefunding in the FEI

Literature on the Front End

Cooper has discussed a Stage-Gatetrade process that indicatedthat the front end consisted of a single ldquoideationrdquo elementthat was responsible for the idea generation system (2)There was no discussion of how the ideationprocess worksor the key elements Cooperrsquos major contribution was indescribing a Stage-Gatetrade system for the whole NPPD

Moenart DeMeyer Souder and Deschoolmeester (12) inone of the first studies that specifically evaluated front-endactivities investigated the integration of marketing andRampD activities and how information exchange affects thesuccess of the Front End of Innovation (FEI) This studyfocused on the critical information exchanges occurring inthe front end

In 1997 Eldred and McGrath described a process formanaging technology uncertainty in the FEI (78) Theprocess termed Technology Realization and Com-

mercialization uses many elements similar to those of themore traditional SG system However the focus of thisprocess is on technology development rather than productdevelopment Cohen Kamienski and Espino in 1998 (9)expanded Cooperrsquos (2) ideation stage into three new stagesto manage technical uncertainty The additional gatesprovide a function similar to the process discussed previ-ously for managing technologyuncertainty(78) Howevermanaging technology uncertainty is only part of front-endactivities

Perhaps the most comprehensive study to date on the FEIwas published by Khurana and Rosenthal in 1998 (11)Their study presents important insights ldquo of the front endprocess at the point just preceding the continueno-godecision rdquo (11 p 59) Specifically they indicate thatsuccessful organizations follow a holistic approach to thefront end This study provides important insights on thenecessary conditions for success when the FEI is complete

A recent article by Smith Herbein and Morris began toexamine the inner processes of the front end and describesspecific methodologies being implemented at AlliedSignaland Alcoa for improving and measuring parts of the FEI(13) New metrics are described thatmay be able to improvethe screening of projects in the FEI

Reinertsen who coined the term Fuzzy Front End alsodescribes methodologies for screening ideas and indicatesthat fast idea screening methodologies make moreeconomic sense than improving screening efficiency (14)Both articles focus on effective screening methodologiestoimprove cycle time and create a ldquofast-failurerdquo process sothat only high-impact opportunities will be developedHowever effective screening represents only one elementof the FEImdashThe Authors

MarchmdashApril 2001 49

success of the FEI Further the micro-culture of the FEIis different from the NPPD process as indicated inTable 1

Five Front-End Elements

1 Opportunity IdentificationmdashThis is where the orga-nization by design or default identifies the opportunitiesthat the company might want to pursue Business andtechnological opportunities are explicitly considered sothat resources will eventually be allocated to new areas ofmarket growth andor operating effectiveness and effi-ciency This element is typically driven by the goalsof the business For example the opportunity maybe a near-term response to a competitive threat abreakthrough possibility for capturing competitiveadvantage or a means to simplifyspeed-upreduce thecost of operations The opportunity could be an entirelynew direction for the business or a minor upgrade to anexisting product It could also be a new product platforma new manufacturing process a new service offering ora new marketing or sales approach

The sources and methods that a company uses to identifyopportunities it wishes to pursue are the essence of thiselement There may be a formal opportunity identifica-tion process that is aligned with all the influencingfactors Creativity tools and techniques (eg brainstorm-ing mind mapping and lateral thinking) as well asproblem solving techniques (eg causal analysisfishbone diagrams process mapping theory of con-

straints) may be utilized Alternatively informal oppor-tunity identification activities may occur which includead hoc sessions water coolercyberspace discussionsindividual insights or edicts from senior managementOpportunity Identification in many cases precedes IdeaGenesis but also may be an enabling step to link an unan-ticipated notion to a business or marketplace need thatwas not previously identified

2 Opportunity AnalysismdashAdditional information isneeded for translating Opportunity Identification intospecific business and technology opportunities andmaking early and often uncertain technology and marketassessments Extensive effort may be committed forfocus groups market studies andor scientific experi-ments However the amount of effort expended isdependent upon the attractiveness of the opportunity thesize of the future development effort the fit with thebusiness strategy and culture and the risk tolerance ofthe decision makers This element may be part of aformal process or may be occurring iteratively inreaction to opportunities identified such as ldquowhat-ifrdquoscenarios Hard quantifiable templates which would beused in the NPPD are typically not applied in thiselement Both competitive intelligence and trendanalyses are used extensively in this element

3 Idea GenesismdashGenesis is the birth development andmaturation of the opportunity into a concrete idea Thisrepresents an evolutionary process in which ideas arebuilt upon torn down combined reshaped modified

Examples of the Five NCD Elements

Market DrivenmdashNonfatPotatoChipsusing a FatSubstituteMolecule

Development of non-fat potato chips using a Fat Substitute(FS) molecule (ie a molecule which provides the sameflavor as fat but is not absorbed in the body nor producesany side effects) is used as an example to clarify the fiveinner elements of the NCD model for a market-drivenproduct

Opportunity Identification occurred when this hypotheticalFood Company (FC) identified the need to develop low-fatproducts due to rising consumer trends or a competitivethreat in this area

OpportunityAnalysis took placewhen the FC examined thetrends in more detailDid consumers really want low fat ordid they want low calorie andor low cholesterol Howmuch would the consumer be willing to give up on tasteWas the market mainly a small niche What are the regula-tory issues In this element the FC also examined the valueof such an effort to their portfolio and the competitivethreats if they did not develop such products

In Idea Genesis several methods of delivering non-fatpotato chips were developed Some ideas were in reducing

the total fat content others were in developing FSmolecules

In the next element Idea Selection several of the ideaswere chosen for more detailed analysis

In the final element Concept and Technology Develop-ment a scientific program was started and supported todevelop the selected FS molecules

TechnologyDrivenmdash3M Notepads(15)

Development of 3M Notepads is used as a technologyexample to clarify the five inner elements of the NCDmodel Opportunity Identification occurred when SpenceSilver created an ldquounusualrdquo glue that was more tacky thanadhesive Opportunity Analysis took place when Silverattempted to find an opportunity for this strange adhesiveHe visited every division at 3M in his quest to find abusiness opportunity for this new technology Idea Genesisoccurred when several product ideas were selected such asthe sticky bulletin board and 3M notepads Idea Selectionoccurred when the notepad opportunity was selected forcontinued development In the Concept and TechnologyDevelopment element an entirely new manufacturingprocess was developed for attaching a ldquonon-stickingrdquoadhesive to papermdashThe Authors

Research z Technology Management50

and upgraded The idea may go through many iterationsand changes as it is examined studied discussed anddeveloped Direct contact with customersusers andlinkages with other cross-functional teams as well ascollaboration with other companies and institutionsoften enhance this activity Idea Genesis may be a formalprocess including brainstorming sessions and idea banksso as to provoke the organization into generating new ormodified ideas for the identified opportunity A new ideamay also emerge outside the bounds of any formalprocessmdashan experiment that went awry a supplieroffering a new material or a user making an unusualrequest Idea Genesis may feed Opportunity Identifica-tion demonstrating that the NCD elements may proceedin a non-linear fashionmdashadvancing and nurturing ideasand opportunities wherever they occur The output of thiselement is typically a more completely developeddescription of the ldquosensedrdquo idea or product concept

4 Idea SelectionmdashIn most businesses there are somany productprocess ideas that the critical activity is tochoose which ideas to pursue in order to achieve the mostbusiness value Selection may be as simple as an indi-vidualrsquos choice among many self-generated options or asformalized as a prescribed portfolio method More for-malized project selection and resource allocation in theFEI is difficult due to the limited information and under-standing at this point Definition of the financial return inthe FEI is at best often just a ldquowildrdquo guess Betterselection models specifically designed for the FEI areneeded so that market and technology risks investmentlevels competitive realities organizational capabilitiesand unique advantages along with financial returns may

all be considered Idea Selection as in OpportunityAnalysis should be less rigorous than in the NPPD sincemany ideas must be allowed to grow and advance withless certainty

5 Concept and Technology DevelopmentmdashThe finalelement of the model involves the development of abusiness case based on estimates of market potentialcustomer needs investment requirements competitorassessments technology unknowns and overall projectrisk The level of formality of the business case variesaccording to the nature of the opportunity (eg newmarket new technology andor new platform) level ofresources organizational requirements to proceed to theNPPD and the business culture (formal informal orhybrid) In some organizations this is considered theinitial stage (ie Stage 0) of the NPPD process

Some companies manage technical uncertainty by usinga Technology Development Process (7ndash9) The Technol-ogy Development Process may be completely orpartially outside the NCD Technology projects thatexplore fundamental scientific relationships scout orevaluate entirely new technology platforms are usuallyunstructured at the earlier phases and thus are part of theNCD As the effort escalates technology risk is oftenreduced more resources are utilized and the decisionsbecome more structured resulting in the later portion ofthe Technology Development Process moving out of theNCD and into the NPPD In some cases the TechnologyDevelopment Process would be completely external tothe NCD if the technology activities were mostly struc-tured and with few risks or if there was a business

Figure 2mdashEntire innovation process may be divided into three parts Front End of Innovation (FEI) New Productand Process Development (NPPD) and the commercialization phases which all are affected by the sameinfluencing factors The FEI is defined as those activities that come before the formal and well-structured NPPDprocess The circular shape of the NCD is meant to suggest that ideas are expected to flow and iterate between allthe five elements In contrast the NPPD portion is illustrated as a series of sequential well-structuredchronologically-ordered steps

MarchmdashApril 2001 51

decision to specifically pursue a particular technology Incontrast the Technology Development Process wouldremain inside the NCD if these factors were reversed

Developing a business plan andor a formal projectproposal for the new concept typically represents thefinal deliverable for this element as the idea moves intothe NPPD

Proficiency of the NPPD and the FEI

A survey was conducted of 23 companies in order todetermine which elements of the NCD model were mostimportant to highly innovative companies (Table 2) Pro-ficiency of each of the elements of the model weremeasured from highly proficient (company has consid-erable expertise in this element and needs little improve-ment) to low proficiency (company needs significantimprovement in this element) See ldquoHow the ProficiencyStudy Was Conductedrdquo page 53

The proficiency with respect to the NPPD and FEI stagesof innovation is shown in Figure 3 All 23 companiesdemonstrated moderate to high proficiency in the NPPDwith a lack of significant correlation relating the profi-ciency of the NPPD process to the level of innovation Incontrast the mean levels were lower for the FEI profi-ciency and there was a strong correlation (r = 065 p =0001)between the proficiency of the FEI and the level ofinnovativeness rating In other words one contributingfactor that may account for the high level of innovation isthe proficiency of the FEI rather than proficiency of theNPPD process This reinforces the perception that theNPPD process after extensive effort has been ldquofixedrdquo in

many companies The FEI serves as the next part of theinnovation cycle for building proficiency

Proficiency of the NCD Model

The proficiency of the Engine the five elements of theNCD model and the Technology Development Processare shown in Figure 4 The proficiency of the Engine (r =058 p = 0004) Opportunity Identification (r = 059 p =0005) and the Technology Development Process (r =054 p = 001) were highly correlated with the level ofinnovativeness In other words top management supportand the culture of the organization lead to increased inno-vation levels Opportunity Identification which consistsof identifying business and technological goals that areconsistent with the environment was practiced at thehigher-innovation-level companies The TechnologyDevelopment Process was also strongly related to theinnovation level This result indicates that high-innovation companies have already begun to implementa Technology Development Process (7ndash9)

Idea Genesis the area where the concepts for a newmarket or technology product or process are conceivedwas not significantly better in highly innovativecompanies The literature is replete with numerousarticles extolling the importance of being creative andmethodologies for thinking ldquoout-of-the-boxrdquo Whilemany of these techniques ostensibly improve the qualityof ideas and are the source of new products there is nosignificant difference or correlation between highly andmid-to-low innovation companies This confirms the

Table 2mdashComparison of Companies Included in Survey

Numberof

Companies

Size ofCompany($ billions)

(mean)

Size ofBusiness

Unit($ millions)

(mean)

High-InnovationCompanies

(Large numberof really newproductsintroducedeach year)

5 $22 $439

Mid-InnovationCompanies

11 $83 $642

Low-InnovationCompanies (Few

if any newproductsintroducedeach year)

7 $59 $780

Figure 3mdashThe proficiency level of highlyinnovative companies is significantlygreater(p lt 0001) than low-innovation companies inthe Front End of Innovation (FEI) Incontrast there was no significant differencebetween high- and low-innovation companiesin the New Product and Process (NPPD) partof the innovation process Significancebetween mid- and low-innovation companieswhen compared to high-innovationcompanies(p lt 005 p lt 001)

Research z Technology Management52

frequent truth of the observation that ldquoideas are a dime adozenrdquo It is how you manage and implement the ideasthat are important Alternatively this is one area of theFEI that may need significant improvement by allcompanies Perhaps many of the creativity and brain-storming techniques are not being adequately utilized ineven the highly innovative companies

Surprisingly Concept and Technology Developmentthe area where the company develops a business plan andbuilds credibility for the idea was not found to be sig-nificantly different or correlated with highly innovativecompanies One would have assumed that highly inno-vative companies develop superb business plans inaccordance with the prevailing wisdom that the level ofpre-planning is directly correlated with success in thefuture NPPD stage (10) The highly innovativecompaniesrsquo proficiency levels were similar to those oflow-innovation companies This result is not easilyexplained Perhaps the participants from highly innova-tive companies were more critical of the planningprocess than their colleagues from less innovativecompanies Alternatively this may represent an area ofimprovement for all companies More information isneeded to be able to explain this surprising conclusion

The foregoing data and results should be viewed withcaution In order to obtain a more robust analysismultiple components of each element of the NCD modelneed to be determined and evaluated and key character-istics of each of the elements and reliable constructs needto be further developed A much larger sample is alsoneeded However despite these limitations the NCDmodel provides entirely new insight into the FEI and itsrole in innovation

Managerial Implications

The Front End of Innovation (FEI) appears to representthe greatest area of weakness in the innovation processThe high correlation between the proficiency of the FEIand the lack of correlation with the NPPD process whencompared to a companyrsquos innovation level support thisconclusion

The Engine which provides the drive and the leadershipfor the front end and the culture in which it must operatehas been shown to be a critical part of the FEI Our studyconfirmed this as indicated by the high correlationbetween Leadership and Culture and the innovation levelof the company This study also verified the work ofKhurana and Rosenthal (11) which indicated that suc-cessful companies effectively integrate their businessand product strategy when identifying new opportunitiesin their front end The importance of managing the Tech-nology Development Process also was found to be acritical component and suggested that more firms shouldadopt the methodo logies ind ica t ed in recen tResearch z Technology Management articles (7ndash9)

The pilot study discussed here provides a glimpse of thepotential success factors for the front end Progress inunderstanding the FEI may proceed through expansionof this study using more numerous and validated con-structs with a much larger data base and developing abetter understanding of the characteristics of each of theNCD elements Despite the importance of the FEI nosimilar studies have been done We believe that theprincipal reasons are the lack of a common language anddefinition of the key components of the front end It isimpossible to improve a process if one does not have away of discussing or sharing it Although more research

How the Proficiency Study Was Conducted

In order to determine which proficiencies are associatedwith highly innovative companies 23 corporate managersattending a Process Effectiveness Network meeting of theIRI were asked to fill out a confidential questionnaire andevaluate the level of innovativeness and proficiency of theFEI along with key elements of the NCD model withrespect to the division or business unit in which theyworked Each participant was intimately familiar with theproduct development processes in their company

The level of innovativeness for a division or business unitwas evaluated on a 5-point scale ranging from ldquoHighlyInnovativerdquo (ie large percentage of really new productsreleased to the market each year) to ldquoLacks Innovationrdquo(ie few or no new products released to the market eachyear)

The participants were also asked to rate the proficiency ofboth the NPPD process and the FEI within the business unit

of their company Proficiency was rated on a 5-point scalefrom ldquoHighly Proficientrdquo to ldquoNeeds Significant Improve-mentrdquo In a similar fashion the participants rated profi-ciency of the Engine each of the five elements of the NCDmodel and the Technology Development Process utilizedin their company

The collected data were split into three groups as indicatedin Table 2 Businesses rated 4 or 5 on ldquolevel of innova-tivenessrdquo were grouped as ldquoHigh-Innovation CompaniesrdquoBusinesses rated with a 1 or 2 were grouped as ldquoLow-InnovationCompaniesrdquo and ldquoMid-InnovationCompaniesrdquowere those rated with a 3 Significance was evaluatedbetween the High-Innovation companies versus Mid- andLow-Innovation Companies in each of the proficienciesdiscussed above Correlationswere determinedbetween theinnovation level and the proficiency rating There was nosignificant difference or correlation between the size of thebusiness unit or company among High- Mid- and Low-Innovation companiesmdashThe Authors

MarchmdashApril 2001 53

is needed to understand the FEI the NCD modelprovides a common language defines the front end of theinnovation process and establishes terminology todescribe its key elements The NCD model brings clarityand rationality to the front end thereby helping people tobetter articulate and manage the front end of the innova-tion process

We propose that the terminology of the ldquoFuzzy FrontEndrdquo be changed to Front End of Innovation The formerdefinition inappropriately suggests to people outside theproduct development domain that the front end is inde-finable uncontrollable impossible to manage and acontinued drain on corporate resources We believe thatthe use of the NCD model similar to the NPPD processand the adaptation of the name Front End of Innovationwill help to increase both the understanding and positiveimage of the front end of the innovation process

Acknowledgement

The research reported in this article was generously supportedby a grant from the Center for InnovationManagementStudies(CIMS) at North Carolina State University Raleigh NorthCarolina C para

References and Notes

1 The authors have utilized both product and process in their defini-tions since the innovation may be directed to the development of anentirelynew process(eg a new and more efficientmethod for manu-facturing chemicals) We prefer the definition of New Product andProcess Development (NPPD) to Stage-Gatetrade since the latter termrefers to specific embodiments as discussed in (2) In manycompanies the NPPD would be equivalent to the Stage-Gate processdiscussed by Cooper (2)2 Cooper R G Winning at New Products 2nd edition Addison-Wesley Publishing Company Reading MA 19933 Best practices for successful product development at the start ofthe NPPD are to have a project which is 1) well integrated with thecompanyrsquos productand businessstrategy2) clearly definedcustomerneeds3) well definedproductconcept4) clear project plan 5) seniormanagement support and 6) empowered project team (4)4 Brown S L and K M Eisenhardt ldquoProduct development Pastresearch present findings and future directionsrdquo Academy of Man-agement Review 20 (1995) pp 343ndash3785 Cooper R G and E J Kleinschmidt ldquoNew products Whatseparates winners from losersrdquo Journal of Product InnovationMan-agement 4 3 (1987) pp 169ndash1846 GriffenA and A L Page ldquoPDMA successmeasurementprojectrecommended measures for product development success andfailurerdquoJournal of Product InnovationManagement13 (1996) pp478ndash4967 Eldred E W and M E McGrath ldquoCommercializing NewTechnologyndashIrdquo Research z Technology Management (JanuaryndashFebruary 1997) pp 41ndash478 Eldred E W and M E McGrath ldquoCommercializing New

Figure 4mdashFor highly innovative companies the proficiency level within the Front Endof Innovation (FEI) is significantly greater in the engine (p lt 0005) opportunityidentification (p lt 005) and in the technology development process (p lt 005) whencompared to less innovative companies Significance between mid- and low-innovationcompanies when compared to high-innovation companies (p lt 005 p lt 001p lt 0005)

Research z Technology Management54

Figure 1mdashThe New Concept Development Model (NCD) provides a common languageand definition of the key components of the Front End of Innovation The engine whichrepresents senior and executive-level management support powers the five elements ofthe NCD model The outer area denotes the influencing factors that affect the decisions ofthe two inner parts

Table 1mdashDifferences Between the Front End of Innovation (FEI) and the New Product Process Development(NPPD) Process

Front End of Innovation (FEI) New Product Process Development (NPPD)

Nature of Work Experimental often chaotic Difficult to planEureka moments

Structured disciplined and goal-orientedwith aproject plan

CommercializationDate Unpredictable Definable

Funding Variable In the beginning phases manyprojects may be ldquobootleggedrdquowhile otherswill need funding to proceed

Budgeted

Revenue Expectations Often uncertain Sometimes done with a greatdeal of speculation

Believable and with increasing certainty analysisand documentation as the product release dategets closer

Activity Both individual and team in areas to minimizerisk and optimize potential

Multi-functionalproduct andor processdevelopment team

MarchmdashApril 2001 47

1 The inner area defines the five key elements compris-ing the Front End of Innovation (FEI)2 The Engine or ldquobullrsquos eyerdquo portion which drives thefive front-end elements and is fueled by the leadershipand culture of the organization3 The Influencing Factors or environment on theperiphery consists of Organizational CapabilitiesBusiness Strategy the Outside World (ie distributionchannels customers and competitors) and the EnablingScience that will be utilized These same influencingfactors affect the entire innovation process including the

FEI NPPD and commercialization as schematized inFigure 2

Several characteristics of the model are worth notingThe inner parts of the NCD were specifically designatedas elements rather than processes Processes imply astructure that may not be applicable and could force a setof poorly designed NPPD controls to be used to managefront-end activities The circular shape is meant tosuggest that ideas are expected to flow circulate anditerate between and among all the five elements in any

About the Authors

Peter Koen PhD is an associate professor of managementat Wesley J Howe School of Technology ManagementStevens Institute of Technology in Hoboken New JerseyHe is currently director of the Consortium for CorporateEntrepreneurship at Stevens whose mission is to stimulatehighly profitable corporate entrepreneuring activities at thefront end of the innovation processpkoenstevens-techedu

Greg Ajamian is a senior consultant at DuPont ConsultingSolutions in Wilmington Delaware He is the corporateprocess owner and leading consultant for businessprocesses for growth and renewal including new productdevelopment new technology development opportunityidentification and idea generation and capturegregmajamianusadupontcom

Robert Burkart is director of professional developmentservices at the Industrial Research Institute WashingtonDC In addition to the responsibilities for the leadershipdevelopmentprograms he is the staff liaison to the ProcessEffectiveness Network Women Innovators NetworkHuman Resources Directors Network and the Small RampDUnit Network burkartiriincorg

Allen Clamen is technology processes manager at Exxon-Mobil Chemicalrsquos Polymer Center in Baytown Texas Heis responsible for the companyrsquos stage-gate process tomanage the translation of ideas from conception to com-mercial implementation allenclamenexxoncom

Jeffrey Davidson is information management businessdirector Process Systems at The BOC Group in MurrayHill New Jersey During his 16 years with BOC he hasheld various technical and managerial positions related tomaterials technology innovation management and infor-mation managementjeffdavidsonprocessplantsboccom

Robb DrsquoAmore is e-commerce marketing manager atCorning Incorporated in CorningNew York He is respon-sible for the coordination and development of CorningrsquoseCommerce strategies and initiativesdamoreracorningcom

ClaudiaElkins is the manager of research services at Akzo-Nobel Chemicals Inc Dobbs Ferry New York She is

responsible for information resources quality and otherservices and has worked in process improvement for RampDsince 1992 claudiaelkinsakzo-nobelcom

Kathy Herald (now retired) was quality and organizationeffectiveness manager at ExxonMobil Research and Engi-neering Center in Florham Park New Jersey She wasresponsible for working with leadership and work groups todevelop effective and efficient management and worksystems

Michael Incorvia is at InternationalFlavors and Fragrancesin Union Beach New Jersey Before joining IFF as a seniorproject leader he was responsible for Henkelrsquos RampD ISO9001 quality program and certificationmichaelincorviaiffcom

Albert Johnson is senior analyst at Corning IncorporatedScienceamp TechnologyDivision in CorningNew York Heconducts and coordinates advanced business-orientedanalysis for strategic planning johnsonalcorningcom

Robin Karol PhD is a manager at DuPont ConsultingSolutions in Wilmington Delaware She manages a groupof internal business consultantswho are responsible for theinstallationof business processes for growth and renewal ofDuPontrsquos businesses robinakarolusadupontcom

Rebecca Seibert is petroleum additive technology managerat Crompton CorporationMiddleburyConnecticut She isresponsible for the commercialization of new products andprocesses the creation of their internal stage-gate andportfolio managementrsquos processes and manages the tech-nology portfolio for the petroleum additives businessrebecca-seibertcromptoncorpcom

Aleksandar SlavejkovPhD is combustioncenter of excel-lence lead and corporate stage-gate process manager at AirProducts and Chemicals Inc AllentownPennsylvaniaHemanages research and development activities related tocombustion and is also responsible for overseeing thecorporate-wide stage-gate process slavejagapcicom

Klaus Wagner (now retired) was manager technicalprogram development ExxonMobil Chemical CompanyHe was responsible for research project portfolio manage-ment stage-gating of technology projects competitiveintelligence and technology monitoring activities for thePE Business group and RampD kpwagnerhomecom

Research z Technology Management48

order or combination and may use one or more elementsmore than once This approach is in contrast to thesequential NPPD process in which ldquolooping backrdquo andldquoredirect or redordquo activities are associated with signifi-cant delays added costs and poorly managed projects

While the front-end elements will be discussed in aclockwise progression they are expected to actuallyproceed in a more random and non-sequential fashion asdenoted by the arrows that show ldquoleakagesrdquo ormovement between the areas Finally the separationbetween the influencing factors (ie environment) andthe front end should be considered a continuum sinceinteractions are expected between the influencing factorsand the five front-end elements

Influencing Factors (The Environment)

The FEI exists in an environment that consists of the cor-porationrsquos business strategies competitive factors itsorganizational capabilities and the maturity of the tech-nologies to be utilized The entire innovation process

(both the FEI and NPPD) needs to be aligned with thebusiness strategy to ensure an uninterrupted flowingpipeline of new products and processes with value to thecorporation Sustained successful product developmentcan only occur when the FEI activities can be accom-plished with the organizational capabilities of thecompany Understanding enabling sciences and tech-nologies that will be part of the FEI is also critical sincetechnology typically advances by building on earlierachievements These influencing factors constantlyacting upon peoplersquos minds are primary contributors toldquoserendipitous discoveryrdquo of new ideas Just as a healthymarine environment is essential for a healthy populationof aquatic species so is a supportive climate essential fora productive FEI

The Engine (Leadership and Culture)

Although leadership and culture have been identified ascritical to new-product development we have not foundany study that systematically links the culture to the

What Is the Front End

We define the front end by those activities that come beforethe formal and well structured New Product and ProcessDevelopment (NPPD) or Stage Gatetrade process Eventhough there is a continuumbetween the Front End of Inno-vation (FEI) and the NPPD the activities in the FEI areoften chaotic unpredictable and unstructured In compari-son the NPPD is typically structured which assumesformalism with a prescribed set of activities and questionsto be answered In contrast Khurana and Rosenthal (11 p59) defined the FEI as being complete when a business unitcommits to funding and launch of a new-product develop-ment project or decides to redirect or stop the project (iethe continueno-go decision)We felt this definitionwas toorestrictive because many projects receive substantivefunding in the FEI

Literature on the Front End

Cooper has discussed a Stage-Gatetrade process that indicatedthat the front end consisted of a single ldquoideationrdquo elementthat was responsible for the idea generation system (2)There was no discussion of how the ideationprocess worksor the key elements Cooperrsquos major contribution was indescribing a Stage-Gatetrade system for the whole NPPD

Moenart DeMeyer Souder and Deschoolmeester (12) inone of the first studies that specifically evaluated front-endactivities investigated the integration of marketing andRampD activities and how information exchange affects thesuccess of the Front End of Innovation (FEI) This studyfocused on the critical information exchanges occurring inthe front end

In 1997 Eldred and McGrath described a process formanaging technology uncertainty in the FEI (78) Theprocess termed Technology Realization and Com-

mercialization uses many elements similar to those of themore traditional SG system However the focus of thisprocess is on technology development rather than productdevelopment Cohen Kamienski and Espino in 1998 (9)expanded Cooperrsquos (2) ideation stage into three new stagesto manage technical uncertainty The additional gatesprovide a function similar to the process discussed previ-ously for managing technologyuncertainty(78) Howevermanaging technology uncertainty is only part of front-endactivities

Perhaps the most comprehensive study to date on the FEIwas published by Khurana and Rosenthal in 1998 (11)Their study presents important insights ldquo of the front endprocess at the point just preceding the continueno-godecision rdquo (11 p 59) Specifically they indicate thatsuccessful organizations follow a holistic approach to thefront end This study provides important insights on thenecessary conditions for success when the FEI is complete

A recent article by Smith Herbein and Morris began toexamine the inner processes of the front end and describesspecific methodologies being implemented at AlliedSignaland Alcoa for improving and measuring parts of the FEI(13) New metrics are described thatmay be able to improvethe screening of projects in the FEI

Reinertsen who coined the term Fuzzy Front End alsodescribes methodologies for screening ideas and indicatesthat fast idea screening methodologies make moreeconomic sense than improving screening efficiency (14)Both articles focus on effective screening methodologiestoimprove cycle time and create a ldquofast-failurerdquo process sothat only high-impact opportunities will be developedHowever effective screening represents only one elementof the FEImdashThe Authors

MarchmdashApril 2001 49

success of the FEI Further the micro-culture of the FEIis different from the NPPD process as indicated inTable 1

Five Front-End Elements

1 Opportunity IdentificationmdashThis is where the orga-nization by design or default identifies the opportunitiesthat the company might want to pursue Business andtechnological opportunities are explicitly considered sothat resources will eventually be allocated to new areas ofmarket growth andor operating effectiveness and effi-ciency This element is typically driven by the goalsof the business For example the opportunity maybe a near-term response to a competitive threat abreakthrough possibility for capturing competitiveadvantage or a means to simplifyspeed-upreduce thecost of operations The opportunity could be an entirelynew direction for the business or a minor upgrade to anexisting product It could also be a new product platforma new manufacturing process a new service offering ora new marketing or sales approach

The sources and methods that a company uses to identifyopportunities it wishes to pursue are the essence of thiselement There may be a formal opportunity identifica-tion process that is aligned with all the influencingfactors Creativity tools and techniques (eg brainstorm-ing mind mapping and lateral thinking) as well asproblem solving techniques (eg causal analysisfishbone diagrams process mapping theory of con-

straints) may be utilized Alternatively informal oppor-tunity identification activities may occur which includead hoc sessions water coolercyberspace discussionsindividual insights or edicts from senior managementOpportunity Identification in many cases precedes IdeaGenesis but also may be an enabling step to link an unan-ticipated notion to a business or marketplace need thatwas not previously identified

2 Opportunity AnalysismdashAdditional information isneeded for translating Opportunity Identification intospecific business and technology opportunities andmaking early and often uncertain technology and marketassessments Extensive effort may be committed forfocus groups market studies andor scientific experi-ments However the amount of effort expended isdependent upon the attractiveness of the opportunity thesize of the future development effort the fit with thebusiness strategy and culture and the risk tolerance ofthe decision makers This element may be part of aformal process or may be occurring iteratively inreaction to opportunities identified such as ldquowhat-ifrdquoscenarios Hard quantifiable templates which would beused in the NPPD are typically not applied in thiselement Both competitive intelligence and trendanalyses are used extensively in this element

3 Idea GenesismdashGenesis is the birth development andmaturation of the opportunity into a concrete idea Thisrepresents an evolutionary process in which ideas arebuilt upon torn down combined reshaped modified

Examples of the Five NCD Elements

Market DrivenmdashNonfatPotatoChipsusing a FatSubstituteMolecule

Development of non-fat potato chips using a Fat Substitute(FS) molecule (ie a molecule which provides the sameflavor as fat but is not absorbed in the body nor producesany side effects) is used as an example to clarify the fiveinner elements of the NCD model for a market-drivenproduct

Opportunity Identification occurred when this hypotheticalFood Company (FC) identified the need to develop low-fatproducts due to rising consumer trends or a competitivethreat in this area

OpportunityAnalysis took placewhen the FC examined thetrends in more detailDid consumers really want low fat ordid they want low calorie andor low cholesterol Howmuch would the consumer be willing to give up on tasteWas the market mainly a small niche What are the regula-tory issues In this element the FC also examined the valueof such an effort to their portfolio and the competitivethreats if they did not develop such products

In Idea Genesis several methods of delivering non-fatpotato chips were developed Some ideas were in reducing

the total fat content others were in developing FSmolecules

In the next element Idea Selection several of the ideaswere chosen for more detailed analysis

In the final element Concept and Technology Develop-ment a scientific program was started and supported todevelop the selected FS molecules

TechnologyDrivenmdash3M Notepads(15)

Development of 3M Notepads is used as a technologyexample to clarify the five inner elements of the NCDmodel Opportunity Identification occurred when SpenceSilver created an ldquounusualrdquo glue that was more tacky thanadhesive Opportunity Analysis took place when Silverattempted to find an opportunity for this strange adhesiveHe visited every division at 3M in his quest to find abusiness opportunity for this new technology Idea Genesisoccurred when several product ideas were selected such asthe sticky bulletin board and 3M notepads Idea Selectionoccurred when the notepad opportunity was selected forcontinued development In the Concept and TechnologyDevelopment element an entirely new manufacturingprocess was developed for attaching a ldquonon-stickingrdquoadhesive to papermdashThe Authors

Research z Technology Management50

and upgraded The idea may go through many iterationsand changes as it is examined studied discussed anddeveloped Direct contact with customersusers andlinkages with other cross-functional teams as well ascollaboration with other companies and institutionsoften enhance this activity Idea Genesis may be a formalprocess including brainstorming sessions and idea banksso as to provoke the organization into generating new ormodified ideas for the identified opportunity A new ideamay also emerge outside the bounds of any formalprocessmdashan experiment that went awry a supplieroffering a new material or a user making an unusualrequest Idea Genesis may feed Opportunity Identifica-tion demonstrating that the NCD elements may proceedin a non-linear fashionmdashadvancing and nurturing ideasand opportunities wherever they occur The output of thiselement is typically a more completely developeddescription of the ldquosensedrdquo idea or product concept

4 Idea SelectionmdashIn most businesses there are somany productprocess ideas that the critical activity is tochoose which ideas to pursue in order to achieve the mostbusiness value Selection may be as simple as an indi-vidualrsquos choice among many self-generated options or asformalized as a prescribed portfolio method More for-malized project selection and resource allocation in theFEI is difficult due to the limited information and under-standing at this point Definition of the financial return inthe FEI is at best often just a ldquowildrdquo guess Betterselection models specifically designed for the FEI areneeded so that market and technology risks investmentlevels competitive realities organizational capabilitiesand unique advantages along with financial returns may

all be considered Idea Selection as in OpportunityAnalysis should be less rigorous than in the NPPD sincemany ideas must be allowed to grow and advance withless certainty

5 Concept and Technology DevelopmentmdashThe finalelement of the model involves the development of abusiness case based on estimates of market potentialcustomer needs investment requirements competitorassessments technology unknowns and overall projectrisk The level of formality of the business case variesaccording to the nature of the opportunity (eg newmarket new technology andor new platform) level ofresources organizational requirements to proceed to theNPPD and the business culture (formal informal orhybrid) In some organizations this is considered theinitial stage (ie Stage 0) of the NPPD process

Some companies manage technical uncertainty by usinga Technology Development Process (7ndash9) The Technol-ogy Development Process may be completely orpartially outside the NCD Technology projects thatexplore fundamental scientific relationships scout orevaluate entirely new technology platforms are usuallyunstructured at the earlier phases and thus are part of theNCD As the effort escalates technology risk is oftenreduced more resources are utilized and the decisionsbecome more structured resulting in the later portion ofthe Technology Development Process moving out of theNCD and into the NPPD In some cases the TechnologyDevelopment Process would be completely external tothe NCD if the technology activities were mostly struc-tured and with few risks or if there was a business

Figure 2mdashEntire innovation process may be divided into three parts Front End of Innovation (FEI) New Productand Process Development (NPPD) and the commercialization phases which all are affected by the sameinfluencing factors The FEI is defined as those activities that come before the formal and well-structured NPPDprocess The circular shape of the NCD is meant to suggest that ideas are expected to flow and iterate between allthe five elements In contrast the NPPD portion is illustrated as a series of sequential well-structuredchronologically-ordered steps

MarchmdashApril 2001 51

decision to specifically pursue a particular technology Incontrast the Technology Development Process wouldremain inside the NCD if these factors were reversed

Developing a business plan andor a formal projectproposal for the new concept typically represents thefinal deliverable for this element as the idea moves intothe NPPD

Proficiency of the NPPD and the FEI

A survey was conducted of 23 companies in order todetermine which elements of the NCD model were mostimportant to highly innovative companies (Table 2) Pro-ficiency of each of the elements of the model weremeasured from highly proficient (company has consid-erable expertise in this element and needs little improve-ment) to low proficiency (company needs significantimprovement in this element) See ldquoHow the ProficiencyStudy Was Conductedrdquo page 53

The proficiency with respect to the NPPD and FEI stagesof innovation is shown in Figure 3 All 23 companiesdemonstrated moderate to high proficiency in the NPPDwith a lack of significant correlation relating the profi-ciency of the NPPD process to the level of innovation Incontrast the mean levels were lower for the FEI profi-ciency and there was a strong correlation (r = 065 p =0001)between the proficiency of the FEI and the level ofinnovativeness rating In other words one contributingfactor that may account for the high level of innovation isthe proficiency of the FEI rather than proficiency of theNPPD process This reinforces the perception that theNPPD process after extensive effort has been ldquofixedrdquo in

many companies The FEI serves as the next part of theinnovation cycle for building proficiency

Proficiency of the NCD Model

The proficiency of the Engine the five elements of theNCD model and the Technology Development Processare shown in Figure 4 The proficiency of the Engine (r =058 p = 0004) Opportunity Identification (r = 059 p =0005) and the Technology Development Process (r =054 p = 001) were highly correlated with the level ofinnovativeness In other words top management supportand the culture of the organization lead to increased inno-vation levels Opportunity Identification which consistsof identifying business and technological goals that areconsistent with the environment was practiced at thehigher-innovation-level companies The TechnologyDevelopment Process was also strongly related to theinnovation level This result indicates that high-innovation companies have already begun to implementa Technology Development Process (7ndash9)

Idea Genesis the area where the concepts for a newmarket or technology product or process are conceivedwas not significantly better in highly innovativecompanies The literature is replete with numerousarticles extolling the importance of being creative andmethodologies for thinking ldquoout-of-the-boxrdquo Whilemany of these techniques ostensibly improve the qualityof ideas and are the source of new products there is nosignificant difference or correlation between highly andmid-to-low innovation companies This confirms the

Table 2mdashComparison of Companies Included in Survey

Numberof

Companies

Size ofCompany($ billions)

(mean)

Size ofBusiness

Unit($ millions)

(mean)

High-InnovationCompanies

(Large numberof really newproductsintroducedeach year)

5 $22 $439

Mid-InnovationCompanies

11 $83 $642

Low-InnovationCompanies (Few

if any newproductsintroducedeach year)

7 $59 $780

Figure 3mdashThe proficiency level of highlyinnovative companies is significantlygreater(p lt 0001) than low-innovation companies inthe Front End of Innovation (FEI) Incontrast there was no significant differencebetween high- and low-innovation companiesin the New Product and Process (NPPD) partof the innovation process Significancebetween mid- and low-innovation companieswhen compared to high-innovationcompanies(p lt 005 p lt 001)

Research z Technology Management52

frequent truth of the observation that ldquoideas are a dime adozenrdquo It is how you manage and implement the ideasthat are important Alternatively this is one area of theFEI that may need significant improvement by allcompanies Perhaps many of the creativity and brain-storming techniques are not being adequately utilized ineven the highly innovative companies

Surprisingly Concept and Technology Developmentthe area where the company develops a business plan andbuilds credibility for the idea was not found to be sig-nificantly different or correlated with highly innovativecompanies One would have assumed that highly inno-vative companies develop superb business plans inaccordance with the prevailing wisdom that the level ofpre-planning is directly correlated with success in thefuture NPPD stage (10) The highly innovativecompaniesrsquo proficiency levels were similar to those oflow-innovation companies This result is not easilyexplained Perhaps the participants from highly innova-tive companies were more critical of the planningprocess than their colleagues from less innovativecompanies Alternatively this may represent an area ofimprovement for all companies More information isneeded to be able to explain this surprising conclusion

The foregoing data and results should be viewed withcaution In order to obtain a more robust analysismultiple components of each element of the NCD modelneed to be determined and evaluated and key character-istics of each of the elements and reliable constructs needto be further developed A much larger sample is alsoneeded However despite these limitations the NCDmodel provides entirely new insight into the FEI and itsrole in innovation

Managerial Implications

The Front End of Innovation (FEI) appears to representthe greatest area of weakness in the innovation processThe high correlation between the proficiency of the FEIand the lack of correlation with the NPPD process whencompared to a companyrsquos innovation level support thisconclusion

The Engine which provides the drive and the leadershipfor the front end and the culture in which it must operatehas been shown to be a critical part of the FEI Our studyconfirmed this as indicated by the high correlationbetween Leadership and Culture and the innovation levelof the company This study also verified the work ofKhurana and Rosenthal (11) which indicated that suc-cessful companies effectively integrate their businessand product strategy when identifying new opportunitiesin their front end The importance of managing the Tech-nology Development Process also was found to be acritical component and suggested that more firms shouldadopt the methodo logies ind ica t ed in recen tResearch z Technology Management articles (7ndash9)

The pilot study discussed here provides a glimpse of thepotential success factors for the front end Progress inunderstanding the FEI may proceed through expansionof this study using more numerous and validated con-structs with a much larger data base and developing abetter understanding of the characteristics of each of theNCD elements Despite the importance of the FEI nosimilar studies have been done We believe that theprincipal reasons are the lack of a common language anddefinition of the key components of the front end It isimpossible to improve a process if one does not have away of discussing or sharing it Although more research

How the Proficiency Study Was Conducted

In order to determine which proficiencies are associatedwith highly innovative companies 23 corporate managersattending a Process Effectiveness Network meeting of theIRI were asked to fill out a confidential questionnaire andevaluate the level of innovativeness and proficiency of theFEI along with key elements of the NCD model withrespect to the division or business unit in which theyworked Each participant was intimately familiar with theproduct development processes in their company

The level of innovativeness for a division or business unitwas evaluated on a 5-point scale ranging from ldquoHighlyInnovativerdquo (ie large percentage of really new productsreleased to the market each year) to ldquoLacks Innovationrdquo(ie few or no new products released to the market eachyear)

The participants were also asked to rate the proficiency ofboth the NPPD process and the FEI within the business unit

of their company Proficiency was rated on a 5-point scalefrom ldquoHighly Proficientrdquo to ldquoNeeds Significant Improve-mentrdquo In a similar fashion the participants rated profi-ciency of the Engine each of the five elements of the NCDmodel and the Technology Development Process utilizedin their company

The collected data were split into three groups as indicatedin Table 2 Businesses rated 4 or 5 on ldquolevel of innova-tivenessrdquo were grouped as ldquoHigh-Innovation CompaniesrdquoBusinesses rated with a 1 or 2 were grouped as ldquoLow-InnovationCompaniesrdquo and ldquoMid-InnovationCompaniesrdquowere those rated with a 3 Significance was evaluatedbetween the High-Innovation companies versus Mid- andLow-Innovation Companies in each of the proficienciesdiscussed above Correlationswere determinedbetween theinnovation level and the proficiency rating There was nosignificant difference or correlation between the size of thebusiness unit or company among High- Mid- and Low-Innovation companiesmdashThe Authors

MarchmdashApril 2001 53

is needed to understand the FEI the NCD modelprovides a common language defines the front end of theinnovation process and establishes terminology todescribe its key elements The NCD model brings clarityand rationality to the front end thereby helping people tobetter articulate and manage the front end of the innova-tion process

We propose that the terminology of the ldquoFuzzy FrontEndrdquo be changed to Front End of Innovation The formerdefinition inappropriately suggests to people outside theproduct development domain that the front end is inde-finable uncontrollable impossible to manage and acontinued drain on corporate resources We believe thatthe use of the NCD model similar to the NPPD processand the adaptation of the name Front End of Innovationwill help to increase both the understanding and positiveimage of the front end of the innovation process

Acknowledgement

The research reported in this article was generously supportedby a grant from the Center for InnovationManagementStudies(CIMS) at North Carolina State University Raleigh NorthCarolina C para

References and Notes

1 The authors have utilized both product and process in their defini-tions since the innovation may be directed to the development of anentirelynew process(eg a new and more efficientmethod for manu-facturing chemicals) We prefer the definition of New Product andProcess Development (NPPD) to Stage-Gatetrade since the latter termrefers to specific embodiments as discussed in (2) In manycompanies the NPPD would be equivalent to the Stage-Gate processdiscussed by Cooper (2)2 Cooper R G Winning at New Products 2nd edition Addison-Wesley Publishing Company Reading MA 19933 Best practices for successful product development at the start ofthe NPPD are to have a project which is 1) well integrated with thecompanyrsquos productand businessstrategy2) clearly definedcustomerneeds3) well definedproductconcept4) clear project plan 5) seniormanagement support and 6) empowered project team (4)4 Brown S L and K M Eisenhardt ldquoProduct development Pastresearch present findings and future directionsrdquo Academy of Man-agement Review 20 (1995) pp 343ndash3785 Cooper R G and E J Kleinschmidt ldquoNew products Whatseparates winners from losersrdquo Journal of Product InnovationMan-agement 4 3 (1987) pp 169ndash1846 GriffenA and A L Page ldquoPDMA successmeasurementprojectrecommended measures for product development success andfailurerdquoJournal of Product InnovationManagement13 (1996) pp478ndash4967 Eldred E W and M E McGrath ldquoCommercializing NewTechnologyndashIrdquo Research z Technology Management (JanuaryndashFebruary 1997) pp 41ndash478 Eldred E W and M E McGrath ldquoCommercializing New

Figure 4mdashFor highly innovative companies the proficiency level within the Front Endof Innovation (FEI) is significantly greater in the engine (p lt 0005) opportunityidentification (p lt 005) and in the technology development process (p lt 005) whencompared to less innovative companies Significance between mid- and low-innovationcompanies when compared to high-innovation companies (p lt 005 p lt 001p lt 0005)

Research z Technology Management54

1 The inner area defines the five key elements compris-ing the Front End of Innovation (FEI)2 The Engine or ldquobullrsquos eyerdquo portion which drives thefive front-end elements and is fueled by the leadershipand culture of the organization3 The Influencing Factors or environment on theperiphery consists of Organizational CapabilitiesBusiness Strategy the Outside World (ie distributionchannels customers and competitors) and the EnablingScience that will be utilized These same influencingfactors affect the entire innovation process including the

FEI NPPD and commercialization as schematized inFigure 2

Several characteristics of the model are worth notingThe inner parts of the NCD were specifically designatedas elements rather than processes Processes imply astructure that may not be applicable and could force a setof poorly designed NPPD controls to be used to managefront-end activities The circular shape is meant tosuggest that ideas are expected to flow circulate anditerate between and among all the five elements in any

About the Authors

Peter Koen PhD is an associate professor of managementat Wesley J Howe School of Technology ManagementStevens Institute of Technology in Hoboken New JerseyHe is currently director of the Consortium for CorporateEntrepreneurship at Stevens whose mission is to stimulatehighly profitable corporate entrepreneuring activities at thefront end of the innovation processpkoenstevens-techedu

Greg Ajamian is a senior consultant at DuPont ConsultingSolutions in Wilmington Delaware He is the corporateprocess owner and leading consultant for businessprocesses for growth and renewal including new productdevelopment new technology development opportunityidentification and idea generation and capturegregmajamianusadupontcom

Robert Burkart is director of professional developmentservices at the Industrial Research Institute WashingtonDC In addition to the responsibilities for the leadershipdevelopmentprograms he is the staff liaison to the ProcessEffectiveness Network Women Innovators NetworkHuman Resources Directors Network and the Small RampDUnit Network burkartiriincorg

Allen Clamen is technology processes manager at Exxon-Mobil Chemicalrsquos Polymer Center in Baytown Texas Heis responsible for the companyrsquos stage-gate process tomanage the translation of ideas from conception to com-mercial implementation allenclamenexxoncom

Jeffrey Davidson is information management businessdirector Process Systems at The BOC Group in MurrayHill New Jersey During his 16 years with BOC he hasheld various technical and managerial positions related tomaterials technology innovation management and infor-mation managementjeffdavidsonprocessplantsboccom

Robb DrsquoAmore is e-commerce marketing manager atCorning Incorporated in CorningNew York He is respon-sible for the coordination and development of CorningrsquoseCommerce strategies and initiativesdamoreracorningcom

ClaudiaElkins is the manager of research services at Akzo-Nobel Chemicals Inc Dobbs Ferry New York She is

responsible for information resources quality and otherservices and has worked in process improvement for RampDsince 1992 claudiaelkinsakzo-nobelcom

Kathy Herald (now retired) was quality and organizationeffectiveness manager at ExxonMobil Research and Engi-neering Center in Florham Park New Jersey She wasresponsible for working with leadership and work groups todevelop effective and efficient management and worksystems

Michael Incorvia is at InternationalFlavors and Fragrancesin Union Beach New Jersey Before joining IFF as a seniorproject leader he was responsible for Henkelrsquos RampD ISO9001 quality program and certificationmichaelincorviaiffcom

Albert Johnson is senior analyst at Corning IncorporatedScienceamp TechnologyDivision in CorningNew York Heconducts and coordinates advanced business-orientedanalysis for strategic planning johnsonalcorningcom

Robin Karol PhD is a manager at DuPont ConsultingSolutions in Wilmington Delaware She manages a groupof internal business consultantswho are responsible for theinstallationof business processes for growth and renewal ofDuPontrsquos businesses robinakarolusadupontcom

Rebecca Seibert is petroleum additive technology managerat Crompton CorporationMiddleburyConnecticut She isresponsible for the commercialization of new products andprocesses the creation of their internal stage-gate andportfolio managementrsquos processes and manages the tech-nology portfolio for the petroleum additives businessrebecca-seibertcromptoncorpcom

Aleksandar SlavejkovPhD is combustioncenter of excel-lence lead and corporate stage-gate process manager at AirProducts and Chemicals Inc AllentownPennsylvaniaHemanages research and development activities related tocombustion and is also responsible for overseeing thecorporate-wide stage-gate process slavejagapcicom

Klaus Wagner (now retired) was manager technicalprogram development ExxonMobil Chemical CompanyHe was responsible for research project portfolio manage-ment stage-gating of technology projects competitiveintelligence and technology monitoring activities for thePE Business group and RampD kpwagnerhomecom

Research z Technology Management48

order or combination and may use one or more elementsmore than once This approach is in contrast to thesequential NPPD process in which ldquolooping backrdquo andldquoredirect or redordquo activities are associated with signifi-cant delays added costs and poorly managed projects

While the front-end elements will be discussed in aclockwise progression they are expected to actuallyproceed in a more random and non-sequential fashion asdenoted by the arrows that show ldquoleakagesrdquo ormovement between the areas Finally the separationbetween the influencing factors (ie environment) andthe front end should be considered a continuum sinceinteractions are expected between the influencing factorsand the five front-end elements

Influencing Factors (The Environment)

The FEI exists in an environment that consists of the cor-porationrsquos business strategies competitive factors itsorganizational capabilities and the maturity of the tech-nologies to be utilized The entire innovation process

(both the FEI and NPPD) needs to be aligned with thebusiness strategy to ensure an uninterrupted flowingpipeline of new products and processes with value to thecorporation Sustained successful product developmentcan only occur when the FEI activities can be accom-plished with the organizational capabilities of thecompany Understanding enabling sciences and tech-nologies that will be part of the FEI is also critical sincetechnology typically advances by building on earlierachievements These influencing factors constantlyacting upon peoplersquos minds are primary contributors toldquoserendipitous discoveryrdquo of new ideas Just as a healthymarine environment is essential for a healthy populationof aquatic species so is a supportive climate essential fora productive FEI

The Engine (Leadership and Culture)

Although leadership and culture have been identified ascritical to new-product development we have not foundany study that systematically links the culture to the

What Is the Front End

We define the front end by those activities that come beforethe formal and well structured New Product and ProcessDevelopment (NPPD) or Stage Gatetrade process Eventhough there is a continuumbetween the Front End of Inno-vation (FEI) and the NPPD the activities in the FEI areoften chaotic unpredictable and unstructured In compari-son the NPPD is typically structured which assumesformalism with a prescribed set of activities and questionsto be answered In contrast Khurana and Rosenthal (11 p59) defined the FEI as being complete when a business unitcommits to funding and launch of a new-product develop-ment project or decides to redirect or stop the project (iethe continueno-go decision)We felt this definitionwas toorestrictive because many projects receive substantivefunding in the FEI

Literature on the Front End

Cooper has discussed a Stage-Gatetrade process that indicatedthat the front end consisted of a single ldquoideationrdquo elementthat was responsible for the idea generation system (2)There was no discussion of how the ideationprocess worksor the key elements Cooperrsquos major contribution was indescribing a Stage-Gatetrade system for the whole NPPD

Moenart DeMeyer Souder and Deschoolmeester (12) inone of the first studies that specifically evaluated front-endactivities investigated the integration of marketing andRampD activities and how information exchange affects thesuccess of the Front End of Innovation (FEI) This studyfocused on the critical information exchanges occurring inthe front end

In 1997 Eldred and McGrath described a process formanaging technology uncertainty in the FEI (78) Theprocess termed Technology Realization and Com-

mercialization uses many elements similar to those of themore traditional SG system However the focus of thisprocess is on technology development rather than productdevelopment Cohen Kamienski and Espino in 1998 (9)expanded Cooperrsquos (2) ideation stage into three new stagesto manage technical uncertainty The additional gatesprovide a function similar to the process discussed previ-ously for managing technologyuncertainty(78) Howevermanaging technology uncertainty is only part of front-endactivities

Perhaps the most comprehensive study to date on the FEIwas published by Khurana and Rosenthal in 1998 (11)Their study presents important insights ldquo of the front endprocess at the point just preceding the continueno-godecision rdquo (11 p 59) Specifically they indicate thatsuccessful organizations follow a holistic approach to thefront end This study provides important insights on thenecessary conditions for success when the FEI is complete

A recent article by Smith Herbein and Morris began toexamine the inner processes of the front end and describesspecific methodologies being implemented at AlliedSignaland Alcoa for improving and measuring parts of the FEI(13) New metrics are described thatmay be able to improvethe screening of projects in the FEI

Reinertsen who coined the term Fuzzy Front End alsodescribes methodologies for screening ideas and indicatesthat fast idea screening methodologies make moreeconomic sense than improving screening efficiency (14)Both articles focus on effective screening methodologiestoimprove cycle time and create a ldquofast-failurerdquo process sothat only high-impact opportunities will be developedHowever effective screening represents only one elementof the FEImdashThe Authors

MarchmdashApril 2001 49

success of the FEI Further the micro-culture of the FEIis different from the NPPD process as indicated inTable 1

Five Front-End Elements

1 Opportunity IdentificationmdashThis is where the orga-nization by design or default identifies the opportunitiesthat the company might want to pursue Business andtechnological opportunities are explicitly considered sothat resources will eventually be allocated to new areas ofmarket growth andor operating effectiveness and effi-ciency This element is typically driven by the goalsof the business For example the opportunity maybe a near-term response to a competitive threat abreakthrough possibility for capturing competitiveadvantage or a means to simplifyspeed-upreduce thecost of operations The opportunity could be an entirelynew direction for the business or a minor upgrade to anexisting product It could also be a new product platforma new manufacturing process a new service offering ora new marketing or sales approach

The sources and methods that a company uses to identifyopportunities it wishes to pursue are the essence of thiselement There may be a formal opportunity identifica-tion process that is aligned with all the influencingfactors Creativity tools and techniques (eg brainstorm-ing mind mapping and lateral thinking) as well asproblem solving techniques (eg causal analysisfishbone diagrams process mapping theory of con-

straints) may be utilized Alternatively informal oppor-tunity identification activities may occur which includead hoc sessions water coolercyberspace discussionsindividual insights or edicts from senior managementOpportunity Identification in many cases precedes IdeaGenesis but also may be an enabling step to link an unan-ticipated notion to a business or marketplace need thatwas not previously identified

2 Opportunity AnalysismdashAdditional information isneeded for translating Opportunity Identification intospecific business and technology opportunities andmaking early and often uncertain technology and marketassessments Extensive effort may be committed forfocus groups market studies andor scientific experi-ments However the amount of effort expended isdependent upon the attractiveness of the opportunity thesize of the future development effort the fit with thebusiness strategy and culture and the risk tolerance ofthe decision makers This element may be part of aformal process or may be occurring iteratively inreaction to opportunities identified such as ldquowhat-ifrdquoscenarios Hard quantifiable templates which would beused in the NPPD are typically not applied in thiselement Both competitive intelligence and trendanalyses are used extensively in this element

3 Idea GenesismdashGenesis is the birth development andmaturation of the opportunity into a concrete idea Thisrepresents an evolutionary process in which ideas arebuilt upon torn down combined reshaped modified

Examples of the Five NCD Elements

Market DrivenmdashNonfatPotatoChipsusing a FatSubstituteMolecule

Development of non-fat potato chips using a Fat Substitute(FS) molecule (ie a molecule which provides the sameflavor as fat but is not absorbed in the body nor producesany side effects) is used as an example to clarify the fiveinner elements of the NCD model for a market-drivenproduct

Opportunity Identification occurred when this hypotheticalFood Company (FC) identified the need to develop low-fatproducts due to rising consumer trends or a competitivethreat in this area

OpportunityAnalysis took placewhen the FC examined thetrends in more detailDid consumers really want low fat ordid they want low calorie andor low cholesterol Howmuch would the consumer be willing to give up on tasteWas the market mainly a small niche What are the regula-tory issues In this element the FC also examined the valueof such an effort to their portfolio and the competitivethreats if they did not develop such products

In Idea Genesis several methods of delivering non-fatpotato chips were developed Some ideas were in reducing

the total fat content others were in developing FSmolecules

In the next element Idea Selection several of the ideaswere chosen for more detailed analysis

In the final element Concept and Technology Develop-ment a scientific program was started and supported todevelop the selected FS molecules

TechnologyDrivenmdash3M Notepads(15)

Development of 3M Notepads is used as a technologyexample to clarify the five inner elements of the NCDmodel Opportunity Identification occurred when SpenceSilver created an ldquounusualrdquo glue that was more tacky thanadhesive Opportunity Analysis took place when Silverattempted to find an opportunity for this strange adhesiveHe visited every division at 3M in his quest to find abusiness opportunity for this new technology Idea Genesisoccurred when several product ideas were selected such asthe sticky bulletin board and 3M notepads Idea Selectionoccurred when the notepad opportunity was selected forcontinued development In the Concept and TechnologyDevelopment element an entirely new manufacturingprocess was developed for attaching a ldquonon-stickingrdquoadhesive to papermdashThe Authors

Research z Technology Management50

and upgraded The idea may go through many iterationsand changes as it is examined studied discussed anddeveloped Direct contact with customersusers andlinkages with other cross-functional teams as well ascollaboration with other companies and institutionsoften enhance this activity Idea Genesis may be a formalprocess including brainstorming sessions and idea banksso as to provoke the organization into generating new ormodified ideas for the identified opportunity A new ideamay also emerge outside the bounds of any formalprocessmdashan experiment that went awry a supplieroffering a new material or a user making an unusualrequest Idea Genesis may feed Opportunity Identifica-tion demonstrating that the NCD elements may proceedin a non-linear fashionmdashadvancing and nurturing ideasand opportunities wherever they occur The output of thiselement is typically a more completely developeddescription of the ldquosensedrdquo idea or product concept

4 Idea SelectionmdashIn most businesses there are somany productprocess ideas that the critical activity is tochoose which ideas to pursue in order to achieve the mostbusiness value Selection may be as simple as an indi-vidualrsquos choice among many self-generated options or asformalized as a prescribed portfolio method More for-malized project selection and resource allocation in theFEI is difficult due to the limited information and under-standing at this point Definition of the financial return inthe FEI is at best often just a ldquowildrdquo guess Betterselection models specifically designed for the FEI areneeded so that market and technology risks investmentlevels competitive realities organizational capabilitiesand unique advantages along with financial returns may

all be considered Idea Selection as in OpportunityAnalysis should be less rigorous than in the NPPD sincemany ideas must be allowed to grow and advance withless certainty

5 Concept and Technology DevelopmentmdashThe finalelement of the model involves the development of abusiness case based on estimates of market potentialcustomer needs investment requirements competitorassessments technology unknowns and overall projectrisk The level of formality of the business case variesaccording to the nature of the opportunity (eg newmarket new technology andor new platform) level ofresources organizational requirements to proceed to theNPPD and the business culture (formal informal orhybrid) In some organizations this is considered theinitial stage (ie Stage 0) of the NPPD process

Some companies manage technical uncertainty by usinga Technology Development Process (7ndash9) The Technol-ogy Development Process may be completely orpartially outside the NCD Technology projects thatexplore fundamental scientific relationships scout orevaluate entirely new technology platforms are usuallyunstructured at the earlier phases and thus are part of theNCD As the effort escalates technology risk is oftenreduced more resources are utilized and the decisionsbecome more structured resulting in the later portion ofthe Technology Development Process moving out of theNCD and into the NPPD In some cases the TechnologyDevelopment Process would be completely external tothe NCD if the technology activities were mostly struc-tured and with few risks or if there was a business

Figure 2mdashEntire innovation process may be divided into three parts Front End of Innovation (FEI) New Productand Process Development (NPPD) and the commercialization phases which all are affected by the sameinfluencing factors The FEI is defined as those activities that come before the formal and well-structured NPPDprocess The circular shape of the NCD is meant to suggest that ideas are expected to flow and iterate between allthe five elements In contrast the NPPD portion is illustrated as a series of sequential well-structuredchronologically-ordered steps

MarchmdashApril 2001 51

decision to specifically pursue a particular technology Incontrast the Technology Development Process wouldremain inside the NCD if these factors were reversed

Developing a business plan andor a formal projectproposal for the new concept typically represents thefinal deliverable for this element as the idea moves intothe NPPD

Proficiency of the NPPD and the FEI

A survey was conducted of 23 companies in order todetermine which elements of the NCD model were mostimportant to highly innovative companies (Table 2) Pro-ficiency of each of the elements of the model weremeasured from highly proficient (company has consid-erable expertise in this element and needs little improve-ment) to low proficiency (company needs significantimprovement in this element) See ldquoHow the ProficiencyStudy Was Conductedrdquo page 53

The proficiency with respect to the NPPD and FEI stagesof innovation is shown in Figure 3 All 23 companiesdemonstrated moderate to high proficiency in the NPPDwith a lack of significant correlation relating the profi-ciency of the NPPD process to the level of innovation Incontrast the mean levels were lower for the FEI profi-ciency and there was a strong correlation (r = 065 p =0001)between the proficiency of the FEI and the level ofinnovativeness rating In other words one contributingfactor that may account for the high level of innovation isthe proficiency of the FEI rather than proficiency of theNPPD process This reinforces the perception that theNPPD process after extensive effort has been ldquofixedrdquo in

many companies The FEI serves as the next part of theinnovation cycle for building proficiency

Proficiency of the NCD Model

The proficiency of the Engine the five elements of theNCD model and the Technology Development Processare shown in Figure 4 The proficiency of the Engine (r =058 p = 0004) Opportunity Identification (r = 059 p =0005) and the Technology Development Process (r =054 p = 001) were highly correlated with the level ofinnovativeness In other words top management supportand the culture of the organization lead to increased inno-vation levels Opportunity Identification which consistsof identifying business and technological goals that areconsistent with the environment was practiced at thehigher-innovation-level companies The TechnologyDevelopment Process was also strongly related to theinnovation level This result indicates that high-innovation companies have already begun to implementa Technology Development Process (7ndash9)

Idea Genesis the area where the concepts for a newmarket or technology product or process are conceivedwas not significantly better in highly innovativecompanies The literature is replete with numerousarticles extolling the importance of being creative andmethodologies for thinking ldquoout-of-the-boxrdquo Whilemany of these techniques ostensibly improve the qualityof ideas and are the source of new products there is nosignificant difference or correlation between highly andmid-to-low innovation companies This confirms the

Table 2mdashComparison of Companies Included in Survey

Numberof

Companies

Size ofCompany($ billions)

(mean)

Size ofBusiness

Unit($ millions)

(mean)

High-InnovationCompanies

(Large numberof really newproductsintroducedeach year)

5 $22 $439

Mid-InnovationCompanies

11 $83 $642

Low-InnovationCompanies (Few

if any newproductsintroducedeach year)

7 $59 $780

Figure 3mdashThe proficiency level of highlyinnovative companies is significantlygreater(p lt 0001) than low-innovation companies inthe Front End of Innovation (FEI) Incontrast there was no significant differencebetween high- and low-innovation companiesin the New Product and Process (NPPD) partof the innovation process Significancebetween mid- and low-innovation companieswhen compared to high-innovationcompanies(p lt 005 p lt 001)

Research z Technology Management52

frequent truth of the observation that ldquoideas are a dime adozenrdquo It is how you manage and implement the ideasthat are important Alternatively this is one area of theFEI that may need significant improvement by allcompanies Perhaps many of the creativity and brain-storming techniques are not being adequately utilized ineven the highly innovative companies

Surprisingly Concept and Technology Developmentthe area where the company develops a business plan andbuilds credibility for the idea was not found to be sig-nificantly different or correlated with highly innovativecompanies One would have assumed that highly inno-vative companies develop superb business plans inaccordance with the prevailing wisdom that the level ofpre-planning is directly correlated with success in thefuture NPPD stage (10) The highly innovativecompaniesrsquo proficiency levels were similar to those oflow-innovation companies This result is not easilyexplained Perhaps the participants from highly innova-tive companies were more critical of the planningprocess than their colleagues from less innovativecompanies Alternatively this may represent an area ofimprovement for all companies More information isneeded to be able to explain this surprising conclusion

The foregoing data and results should be viewed withcaution In order to obtain a more robust analysismultiple components of each element of the NCD modelneed to be determined and evaluated and key character-istics of each of the elements and reliable constructs needto be further developed A much larger sample is alsoneeded However despite these limitations the NCDmodel provides entirely new insight into the FEI and itsrole in innovation

Managerial Implications

The Front End of Innovation (FEI) appears to representthe greatest area of weakness in the innovation processThe high correlation between the proficiency of the FEIand the lack of correlation with the NPPD process whencompared to a companyrsquos innovation level support thisconclusion

The Engine which provides the drive and the leadershipfor the front end and the culture in which it must operatehas been shown to be a critical part of the FEI Our studyconfirmed this as indicated by the high correlationbetween Leadership and Culture and the innovation levelof the company This study also verified the work ofKhurana and Rosenthal (11) which indicated that suc-cessful companies effectively integrate their businessand product strategy when identifying new opportunitiesin their front end The importance of managing the Tech-nology Development Process also was found to be acritical component and suggested that more firms shouldadopt the methodo logies ind ica t ed in recen tResearch z Technology Management articles (7ndash9)

The pilot study discussed here provides a glimpse of thepotential success factors for the front end Progress inunderstanding the FEI may proceed through expansionof this study using more numerous and validated con-structs with a much larger data base and developing abetter understanding of the characteristics of each of theNCD elements Despite the importance of the FEI nosimilar studies have been done We believe that theprincipal reasons are the lack of a common language anddefinition of the key components of the front end It isimpossible to improve a process if one does not have away of discussing or sharing it Although more research

How the Proficiency Study Was Conducted

In order to determine which proficiencies are associatedwith highly innovative companies 23 corporate managersattending a Process Effectiveness Network meeting of theIRI were asked to fill out a confidential questionnaire andevaluate the level of innovativeness and proficiency of theFEI along with key elements of the NCD model withrespect to the division or business unit in which theyworked Each participant was intimately familiar with theproduct development processes in their company

The level of innovativeness for a division or business unitwas evaluated on a 5-point scale ranging from ldquoHighlyInnovativerdquo (ie large percentage of really new productsreleased to the market each year) to ldquoLacks Innovationrdquo(ie few or no new products released to the market eachyear)

The participants were also asked to rate the proficiency ofboth the NPPD process and the FEI within the business unit

of their company Proficiency was rated on a 5-point scalefrom ldquoHighly Proficientrdquo to ldquoNeeds Significant Improve-mentrdquo In a similar fashion the participants rated profi-ciency of the Engine each of the five elements of the NCDmodel and the Technology Development Process utilizedin their company

The collected data were split into three groups as indicatedin Table 2 Businesses rated 4 or 5 on ldquolevel of innova-tivenessrdquo were grouped as ldquoHigh-Innovation CompaniesrdquoBusinesses rated with a 1 or 2 were grouped as ldquoLow-InnovationCompaniesrdquo and ldquoMid-InnovationCompaniesrdquowere those rated with a 3 Significance was evaluatedbetween the High-Innovation companies versus Mid- andLow-Innovation Companies in each of the proficienciesdiscussed above Correlationswere determinedbetween theinnovation level and the proficiency rating There was nosignificant difference or correlation between the size of thebusiness unit or company among High- Mid- and Low-Innovation companiesmdashThe Authors

MarchmdashApril 2001 53

is needed to understand the FEI the NCD modelprovides a common language defines the front end of theinnovation process and establishes terminology todescribe its key elements The NCD model brings clarityand rationality to the front end thereby helping people tobetter articulate and manage the front end of the innova-tion process

We propose that the terminology of the ldquoFuzzy FrontEndrdquo be changed to Front End of Innovation The formerdefinition inappropriately suggests to people outside theproduct development domain that the front end is inde-finable uncontrollable impossible to manage and acontinued drain on corporate resources We believe thatthe use of the NCD model similar to the NPPD processand the adaptation of the name Front End of Innovationwill help to increase both the understanding and positiveimage of the front end of the innovation process

Acknowledgement

The research reported in this article was generously supportedby a grant from the Center for InnovationManagementStudies(CIMS) at North Carolina State University Raleigh NorthCarolina C para

References and Notes

1 The authors have utilized both product and process in their defini-tions since the innovation may be directed to the development of anentirelynew process(eg a new and more efficientmethod for manu-facturing chemicals) We prefer the definition of New Product andProcess Development (NPPD) to Stage-Gatetrade since the latter termrefers to specific embodiments as discussed in (2) In manycompanies the NPPD would be equivalent to the Stage-Gate processdiscussed by Cooper (2)2 Cooper R G Winning at New Products 2nd edition Addison-Wesley Publishing Company Reading MA 19933 Best practices for successful product development at the start ofthe NPPD are to have a project which is 1) well integrated with thecompanyrsquos productand businessstrategy2) clearly definedcustomerneeds3) well definedproductconcept4) clear project plan 5) seniormanagement support and 6) empowered project team (4)4 Brown S L and K M Eisenhardt ldquoProduct development Pastresearch present findings and future directionsrdquo Academy of Man-agement Review 20 (1995) pp 343ndash3785 Cooper R G and E J Kleinschmidt ldquoNew products Whatseparates winners from losersrdquo Journal of Product InnovationMan-agement 4 3 (1987) pp 169ndash1846 GriffenA and A L Page ldquoPDMA successmeasurementprojectrecommended measures for product development success andfailurerdquoJournal of Product InnovationManagement13 (1996) pp478ndash4967 Eldred E W and M E McGrath ldquoCommercializing NewTechnologyndashIrdquo Research z Technology Management (JanuaryndashFebruary 1997) pp 41ndash478 Eldred E W and M E McGrath ldquoCommercializing New

Figure 4mdashFor highly innovative companies the proficiency level within the Front Endof Innovation (FEI) is significantly greater in the engine (p lt 0005) opportunityidentification (p lt 005) and in the technology development process (p lt 005) whencompared to less innovative companies Significance between mid- and low-innovationcompanies when compared to high-innovation companies (p lt 005 p lt 001p lt 0005)

Research z Technology Management54

order or combination and may use one or more elementsmore than once This approach is in contrast to thesequential NPPD process in which ldquolooping backrdquo andldquoredirect or redordquo activities are associated with signifi-cant delays added costs and poorly managed projects

While the front-end elements will be discussed in aclockwise progression they are expected to actuallyproceed in a more random and non-sequential fashion asdenoted by the arrows that show ldquoleakagesrdquo ormovement between the areas Finally the separationbetween the influencing factors (ie environment) andthe front end should be considered a continuum sinceinteractions are expected between the influencing factorsand the five front-end elements

Influencing Factors (The Environment)

The FEI exists in an environment that consists of the cor-porationrsquos business strategies competitive factors itsorganizational capabilities and the maturity of the tech-nologies to be utilized The entire innovation process

(both the FEI and NPPD) needs to be aligned with thebusiness strategy to ensure an uninterrupted flowingpipeline of new products and processes with value to thecorporation Sustained successful product developmentcan only occur when the FEI activities can be accom-plished with the organizational capabilities of thecompany Understanding enabling sciences and tech-nologies that will be part of the FEI is also critical sincetechnology typically advances by building on earlierachievements These influencing factors constantlyacting upon peoplersquos minds are primary contributors toldquoserendipitous discoveryrdquo of new ideas Just as a healthymarine environment is essential for a healthy populationof aquatic species so is a supportive climate essential fora productive FEI

The Engine (Leadership and Culture)

Although leadership and culture have been identified ascritical to new-product development we have not foundany study that systematically links the culture to the

What Is the Front End

We define the front end by those activities that come beforethe formal and well structured New Product and ProcessDevelopment (NPPD) or Stage Gatetrade process Eventhough there is a continuumbetween the Front End of Inno-vation (FEI) and the NPPD the activities in the FEI areoften chaotic unpredictable and unstructured In compari-son the NPPD is typically structured which assumesformalism with a prescribed set of activities and questionsto be answered In contrast Khurana and Rosenthal (11 p59) defined the FEI as being complete when a business unitcommits to funding and launch of a new-product develop-ment project or decides to redirect or stop the project (iethe continueno-go decision)We felt this definitionwas toorestrictive because many projects receive substantivefunding in the FEI

Literature on the Front End

Cooper has discussed a Stage-Gatetrade process that indicatedthat the front end consisted of a single ldquoideationrdquo elementthat was responsible for the idea generation system (2)There was no discussion of how the ideationprocess worksor the key elements Cooperrsquos major contribution was indescribing a Stage-Gatetrade system for the whole NPPD

Moenart DeMeyer Souder and Deschoolmeester (12) inone of the first studies that specifically evaluated front-endactivities investigated the integration of marketing andRampD activities and how information exchange affects thesuccess of the Front End of Innovation (FEI) This studyfocused on the critical information exchanges occurring inthe front end

In 1997 Eldred and McGrath described a process formanaging technology uncertainty in the FEI (78) Theprocess termed Technology Realization and Com-

mercialization uses many elements similar to those of themore traditional SG system However the focus of thisprocess is on technology development rather than productdevelopment Cohen Kamienski and Espino in 1998 (9)expanded Cooperrsquos (2) ideation stage into three new stagesto manage technical uncertainty The additional gatesprovide a function similar to the process discussed previ-ously for managing technologyuncertainty(78) Howevermanaging technology uncertainty is only part of front-endactivities

Perhaps the most comprehensive study to date on the FEIwas published by Khurana and Rosenthal in 1998 (11)Their study presents important insights ldquo of the front endprocess at the point just preceding the continueno-godecision rdquo (11 p 59) Specifically they indicate thatsuccessful organizations follow a holistic approach to thefront end This study provides important insights on thenecessary conditions for success when the FEI is complete

A recent article by Smith Herbein and Morris began toexamine the inner processes of the front end and describesspecific methodologies being implemented at AlliedSignaland Alcoa for improving and measuring parts of the FEI(13) New metrics are described thatmay be able to improvethe screening of projects in the FEI

Reinertsen who coined the term Fuzzy Front End alsodescribes methodologies for screening ideas and indicatesthat fast idea screening methodologies make moreeconomic sense than improving screening efficiency (14)Both articles focus on effective screening methodologiestoimprove cycle time and create a ldquofast-failurerdquo process sothat only high-impact opportunities will be developedHowever effective screening represents only one elementof the FEImdashThe Authors

MarchmdashApril 2001 49

success of the FEI Further the micro-culture of the FEIis different from the NPPD process as indicated inTable 1

Five Front-End Elements

1 Opportunity IdentificationmdashThis is where the orga-nization by design or default identifies the opportunitiesthat the company might want to pursue Business andtechnological opportunities are explicitly considered sothat resources will eventually be allocated to new areas ofmarket growth andor operating effectiveness and effi-ciency This element is typically driven by the goalsof the business For example the opportunity maybe a near-term response to a competitive threat abreakthrough possibility for capturing competitiveadvantage or a means to simplifyspeed-upreduce thecost of operations The opportunity could be an entirelynew direction for the business or a minor upgrade to anexisting product It could also be a new product platforma new manufacturing process a new service offering ora new marketing or sales approach

The sources and methods that a company uses to identifyopportunities it wishes to pursue are the essence of thiselement There may be a formal opportunity identifica-tion process that is aligned with all the influencingfactors Creativity tools and techniques (eg brainstorm-ing mind mapping and lateral thinking) as well asproblem solving techniques (eg causal analysisfishbone diagrams process mapping theory of con-

straints) may be utilized Alternatively informal oppor-tunity identification activities may occur which includead hoc sessions water coolercyberspace discussionsindividual insights or edicts from senior managementOpportunity Identification in many cases precedes IdeaGenesis but also may be an enabling step to link an unan-ticipated notion to a business or marketplace need thatwas not previously identified

2 Opportunity AnalysismdashAdditional information isneeded for translating Opportunity Identification intospecific business and technology opportunities andmaking early and often uncertain technology and marketassessments Extensive effort may be committed forfocus groups market studies andor scientific experi-ments However the amount of effort expended isdependent upon the attractiveness of the opportunity thesize of the future development effort the fit with thebusiness strategy and culture and the risk tolerance ofthe decision makers This element may be part of aformal process or may be occurring iteratively inreaction to opportunities identified such as ldquowhat-ifrdquoscenarios Hard quantifiable templates which would beused in the NPPD are typically not applied in thiselement Both competitive intelligence and trendanalyses are used extensively in this element

3 Idea GenesismdashGenesis is the birth development andmaturation of the opportunity into a concrete idea Thisrepresents an evolutionary process in which ideas arebuilt upon torn down combined reshaped modified

Examples of the Five NCD Elements

Market DrivenmdashNonfatPotatoChipsusing a FatSubstituteMolecule

Development of non-fat potato chips using a Fat Substitute(FS) molecule (ie a molecule which provides the sameflavor as fat but is not absorbed in the body nor producesany side effects) is used as an example to clarify the fiveinner elements of the NCD model for a market-drivenproduct

Opportunity Identification occurred when this hypotheticalFood Company (FC) identified the need to develop low-fatproducts due to rising consumer trends or a competitivethreat in this area

OpportunityAnalysis took placewhen the FC examined thetrends in more detailDid consumers really want low fat ordid they want low calorie andor low cholesterol Howmuch would the consumer be willing to give up on tasteWas the market mainly a small niche What are the regula-tory issues In this element the FC also examined the valueof such an effort to their portfolio and the competitivethreats if they did not develop such products

In Idea Genesis several methods of delivering non-fatpotato chips were developed Some ideas were in reducing

the total fat content others were in developing FSmolecules

In the next element Idea Selection several of the ideaswere chosen for more detailed analysis

In the final element Concept and Technology Develop-ment a scientific program was started and supported todevelop the selected FS molecules

TechnologyDrivenmdash3M Notepads(15)

Development of 3M Notepads is used as a technologyexample to clarify the five inner elements of the NCDmodel Opportunity Identification occurred when SpenceSilver created an ldquounusualrdquo glue that was more tacky thanadhesive Opportunity Analysis took place when Silverattempted to find an opportunity for this strange adhesiveHe visited every division at 3M in his quest to find abusiness opportunity for this new technology Idea Genesisoccurred when several product ideas were selected such asthe sticky bulletin board and 3M notepads Idea Selectionoccurred when the notepad opportunity was selected forcontinued development In the Concept and TechnologyDevelopment element an entirely new manufacturingprocess was developed for attaching a ldquonon-stickingrdquoadhesive to papermdashThe Authors

Research z Technology Management50

and upgraded The idea may go through many iterationsand changes as it is examined studied discussed anddeveloped Direct contact with customersusers andlinkages with other cross-functional teams as well ascollaboration with other companies and institutionsoften enhance this activity Idea Genesis may be a formalprocess including brainstorming sessions and idea banksso as to provoke the organization into generating new ormodified ideas for the identified opportunity A new ideamay also emerge outside the bounds of any formalprocessmdashan experiment that went awry a supplieroffering a new material or a user making an unusualrequest Idea Genesis may feed Opportunity Identifica-tion demonstrating that the NCD elements may proceedin a non-linear fashionmdashadvancing and nurturing ideasand opportunities wherever they occur The output of thiselement is typically a more completely developeddescription of the ldquosensedrdquo idea or product concept

4 Idea SelectionmdashIn most businesses there are somany productprocess ideas that the critical activity is tochoose which ideas to pursue in order to achieve the mostbusiness value Selection may be as simple as an indi-vidualrsquos choice among many self-generated options or asformalized as a prescribed portfolio method More for-malized project selection and resource allocation in theFEI is difficult due to the limited information and under-standing at this point Definition of the financial return inthe FEI is at best often just a ldquowildrdquo guess Betterselection models specifically designed for the FEI areneeded so that market and technology risks investmentlevels competitive realities organizational capabilitiesand unique advantages along with financial returns may

all be considered Idea Selection as in OpportunityAnalysis should be less rigorous than in the NPPD sincemany ideas must be allowed to grow and advance withless certainty

5 Concept and Technology DevelopmentmdashThe finalelement of the model involves the development of abusiness case based on estimates of market potentialcustomer needs investment requirements competitorassessments technology unknowns and overall projectrisk The level of formality of the business case variesaccording to the nature of the opportunity (eg newmarket new technology andor new platform) level ofresources organizational requirements to proceed to theNPPD and the business culture (formal informal orhybrid) In some organizations this is considered theinitial stage (ie Stage 0) of the NPPD process

Some companies manage technical uncertainty by usinga Technology Development Process (7ndash9) The Technol-ogy Development Process may be completely orpartially outside the NCD Technology projects thatexplore fundamental scientific relationships scout orevaluate entirely new technology platforms are usuallyunstructured at the earlier phases and thus are part of theNCD As the effort escalates technology risk is oftenreduced more resources are utilized and the decisionsbecome more structured resulting in the later portion ofthe Technology Development Process moving out of theNCD and into the NPPD In some cases the TechnologyDevelopment Process would be completely external tothe NCD if the technology activities were mostly struc-tured and with few risks or if there was a business

Figure 2mdashEntire innovation process may be divided into three parts Front End of Innovation (FEI) New Productand Process Development (NPPD) and the commercialization phases which all are affected by the sameinfluencing factors The FEI is defined as those activities that come before the formal and well-structured NPPDprocess The circular shape of the NCD is meant to suggest that ideas are expected to flow and iterate between allthe five elements In contrast the NPPD portion is illustrated as a series of sequential well-structuredchronologically-ordered steps

MarchmdashApril 2001 51

decision to specifically pursue a particular technology Incontrast the Technology Development Process wouldremain inside the NCD if these factors were reversed

Developing a business plan andor a formal projectproposal for the new concept typically represents thefinal deliverable for this element as the idea moves intothe NPPD

Proficiency of the NPPD and the FEI

A survey was conducted of 23 companies in order todetermine which elements of the NCD model were mostimportant to highly innovative companies (Table 2) Pro-ficiency of each of the elements of the model weremeasured from highly proficient (company has consid-erable expertise in this element and needs little improve-ment) to low proficiency (company needs significantimprovement in this element) See ldquoHow the ProficiencyStudy Was Conductedrdquo page 53

The proficiency with respect to the NPPD and FEI stagesof innovation is shown in Figure 3 All 23 companiesdemonstrated moderate to high proficiency in the NPPDwith a lack of significant correlation relating the profi-ciency of the NPPD process to the level of innovation Incontrast the mean levels were lower for the FEI profi-ciency and there was a strong correlation (r = 065 p =0001)between the proficiency of the FEI and the level ofinnovativeness rating In other words one contributingfactor that may account for the high level of innovation isthe proficiency of the FEI rather than proficiency of theNPPD process This reinforces the perception that theNPPD process after extensive effort has been ldquofixedrdquo in

many companies The FEI serves as the next part of theinnovation cycle for building proficiency

Proficiency of the NCD Model

The proficiency of the Engine the five elements of theNCD model and the Technology Development Processare shown in Figure 4 The proficiency of the Engine (r =058 p = 0004) Opportunity Identification (r = 059 p =0005) and the Technology Development Process (r =054 p = 001) were highly correlated with the level ofinnovativeness In other words top management supportand the culture of the organization lead to increased inno-vation levels Opportunity Identification which consistsof identifying business and technological goals that areconsistent with the environment was practiced at thehigher-innovation-level companies The TechnologyDevelopment Process was also strongly related to theinnovation level This result indicates that high-innovation companies have already begun to implementa Technology Development Process (7ndash9)

Idea Genesis the area where the concepts for a newmarket or technology product or process are conceivedwas not significantly better in highly innovativecompanies The literature is replete with numerousarticles extolling the importance of being creative andmethodologies for thinking ldquoout-of-the-boxrdquo Whilemany of these techniques ostensibly improve the qualityof ideas and are the source of new products there is nosignificant difference or correlation between highly andmid-to-low innovation companies This confirms the

Table 2mdashComparison of Companies Included in Survey

Numberof

Companies

Size ofCompany($ billions)

(mean)

Size ofBusiness

Unit($ millions)

(mean)

High-InnovationCompanies

(Large numberof really newproductsintroducedeach year)

5 $22 $439

Mid-InnovationCompanies

11 $83 $642

Low-InnovationCompanies (Few

if any newproductsintroducedeach year)

7 $59 $780

Figure 3mdashThe proficiency level of highlyinnovative companies is significantlygreater(p lt 0001) than low-innovation companies inthe Front End of Innovation (FEI) Incontrast there was no significant differencebetween high- and low-innovation companiesin the New Product and Process (NPPD) partof the innovation process Significancebetween mid- and low-innovation companieswhen compared to high-innovationcompanies(p lt 005 p lt 001)

Research z Technology Management52

frequent truth of the observation that ldquoideas are a dime adozenrdquo It is how you manage and implement the ideasthat are important Alternatively this is one area of theFEI that may need significant improvement by allcompanies Perhaps many of the creativity and brain-storming techniques are not being adequately utilized ineven the highly innovative companies

Surprisingly Concept and Technology Developmentthe area where the company develops a business plan andbuilds credibility for the idea was not found to be sig-nificantly different or correlated with highly innovativecompanies One would have assumed that highly inno-vative companies develop superb business plans inaccordance with the prevailing wisdom that the level ofpre-planning is directly correlated with success in thefuture NPPD stage (10) The highly innovativecompaniesrsquo proficiency levels were similar to those oflow-innovation companies This result is not easilyexplained Perhaps the participants from highly innova-tive companies were more critical of the planningprocess than their colleagues from less innovativecompanies Alternatively this may represent an area ofimprovement for all companies More information isneeded to be able to explain this surprising conclusion

The foregoing data and results should be viewed withcaution In order to obtain a more robust analysismultiple components of each element of the NCD modelneed to be determined and evaluated and key character-istics of each of the elements and reliable constructs needto be further developed A much larger sample is alsoneeded However despite these limitations the NCDmodel provides entirely new insight into the FEI and itsrole in innovation

Managerial Implications

The Front End of Innovation (FEI) appears to representthe greatest area of weakness in the innovation processThe high correlation between the proficiency of the FEIand the lack of correlation with the NPPD process whencompared to a companyrsquos innovation level support thisconclusion

The Engine which provides the drive and the leadershipfor the front end and the culture in which it must operatehas been shown to be a critical part of the FEI Our studyconfirmed this as indicated by the high correlationbetween Leadership and Culture and the innovation levelof the company This study also verified the work ofKhurana and Rosenthal (11) which indicated that suc-cessful companies effectively integrate their businessand product strategy when identifying new opportunitiesin their front end The importance of managing the Tech-nology Development Process also was found to be acritical component and suggested that more firms shouldadopt the methodo logies ind ica t ed in recen tResearch z Technology Management articles (7ndash9)

The pilot study discussed here provides a glimpse of thepotential success factors for the front end Progress inunderstanding the FEI may proceed through expansionof this study using more numerous and validated con-structs with a much larger data base and developing abetter understanding of the characteristics of each of theNCD elements Despite the importance of the FEI nosimilar studies have been done We believe that theprincipal reasons are the lack of a common language anddefinition of the key components of the front end It isimpossible to improve a process if one does not have away of discussing or sharing it Although more research

How the Proficiency Study Was Conducted

In order to determine which proficiencies are associatedwith highly innovative companies 23 corporate managersattending a Process Effectiveness Network meeting of theIRI were asked to fill out a confidential questionnaire andevaluate the level of innovativeness and proficiency of theFEI along with key elements of the NCD model withrespect to the division or business unit in which theyworked Each participant was intimately familiar with theproduct development processes in their company

The level of innovativeness for a division or business unitwas evaluated on a 5-point scale ranging from ldquoHighlyInnovativerdquo (ie large percentage of really new productsreleased to the market each year) to ldquoLacks Innovationrdquo(ie few or no new products released to the market eachyear)

The participants were also asked to rate the proficiency ofboth the NPPD process and the FEI within the business unit

of their company Proficiency was rated on a 5-point scalefrom ldquoHighly Proficientrdquo to ldquoNeeds Significant Improve-mentrdquo In a similar fashion the participants rated profi-ciency of the Engine each of the five elements of the NCDmodel and the Technology Development Process utilizedin their company

The collected data were split into three groups as indicatedin Table 2 Businesses rated 4 or 5 on ldquolevel of innova-tivenessrdquo were grouped as ldquoHigh-Innovation CompaniesrdquoBusinesses rated with a 1 or 2 were grouped as ldquoLow-InnovationCompaniesrdquo and ldquoMid-InnovationCompaniesrdquowere those rated with a 3 Significance was evaluatedbetween the High-Innovation companies versus Mid- andLow-Innovation Companies in each of the proficienciesdiscussed above Correlationswere determinedbetween theinnovation level and the proficiency rating There was nosignificant difference or correlation between the size of thebusiness unit or company among High- Mid- and Low-Innovation companiesmdashThe Authors

MarchmdashApril 2001 53

is needed to understand the FEI the NCD modelprovides a common language defines the front end of theinnovation process and establishes terminology todescribe its key elements The NCD model brings clarityand rationality to the front end thereby helping people tobetter articulate and manage the front end of the innova-tion process

We propose that the terminology of the ldquoFuzzy FrontEndrdquo be changed to Front End of Innovation The formerdefinition inappropriately suggests to people outside theproduct development domain that the front end is inde-finable uncontrollable impossible to manage and acontinued drain on corporate resources We believe thatthe use of the NCD model similar to the NPPD processand the adaptation of the name Front End of Innovationwill help to increase both the understanding and positiveimage of the front end of the innovation process

Acknowledgement

The research reported in this article was generously supportedby a grant from the Center for InnovationManagementStudies(CIMS) at North Carolina State University Raleigh NorthCarolina C para

References and Notes

1 The authors have utilized both product and process in their defini-tions since the innovation may be directed to the development of anentirelynew process(eg a new and more efficientmethod for manu-facturing chemicals) We prefer the definition of New Product andProcess Development (NPPD) to Stage-Gatetrade since the latter termrefers to specific embodiments as discussed in (2) In manycompanies the NPPD would be equivalent to the Stage-Gate processdiscussed by Cooper (2)2 Cooper R G Winning at New Products 2nd edition Addison-Wesley Publishing Company Reading MA 19933 Best practices for successful product development at the start ofthe NPPD are to have a project which is 1) well integrated with thecompanyrsquos productand businessstrategy2) clearly definedcustomerneeds3) well definedproductconcept4) clear project plan 5) seniormanagement support and 6) empowered project team (4)4 Brown S L and K M Eisenhardt ldquoProduct development Pastresearch present findings and future directionsrdquo Academy of Man-agement Review 20 (1995) pp 343ndash3785 Cooper R G and E J Kleinschmidt ldquoNew products Whatseparates winners from losersrdquo Journal of Product InnovationMan-agement 4 3 (1987) pp 169ndash1846 GriffenA and A L Page ldquoPDMA successmeasurementprojectrecommended measures for product development success andfailurerdquoJournal of Product InnovationManagement13 (1996) pp478ndash4967 Eldred E W and M E McGrath ldquoCommercializing NewTechnologyndashIrdquo Research z Technology Management (JanuaryndashFebruary 1997) pp 41ndash478 Eldred E W and M E McGrath ldquoCommercializing New

Figure 4mdashFor highly innovative companies the proficiency level within the Front Endof Innovation (FEI) is significantly greater in the engine (p lt 0005) opportunityidentification (p lt 005) and in the technology development process (p lt 005) whencompared to less innovative companies Significance between mid- and low-innovationcompanies when compared to high-innovation companies (p lt 005 p lt 001p lt 0005)

Research z Technology Management54

success of the FEI Further the micro-culture of the FEIis different from the NPPD process as indicated inTable 1

Five Front-End Elements

1 Opportunity IdentificationmdashThis is where the orga-nization by design or default identifies the opportunitiesthat the company might want to pursue Business andtechnological opportunities are explicitly considered sothat resources will eventually be allocated to new areas ofmarket growth andor operating effectiveness and effi-ciency This element is typically driven by the goalsof the business For example the opportunity maybe a near-term response to a competitive threat abreakthrough possibility for capturing competitiveadvantage or a means to simplifyspeed-upreduce thecost of operations The opportunity could be an entirelynew direction for the business or a minor upgrade to anexisting product It could also be a new product platforma new manufacturing process a new service offering ora new marketing or sales approach

The sources and methods that a company uses to identifyopportunities it wishes to pursue are the essence of thiselement There may be a formal opportunity identifica-tion process that is aligned with all the influencingfactors Creativity tools and techniques (eg brainstorm-ing mind mapping and lateral thinking) as well asproblem solving techniques (eg causal analysisfishbone diagrams process mapping theory of con-

straints) may be utilized Alternatively informal oppor-tunity identification activities may occur which includead hoc sessions water coolercyberspace discussionsindividual insights or edicts from senior managementOpportunity Identification in many cases precedes IdeaGenesis but also may be an enabling step to link an unan-ticipated notion to a business or marketplace need thatwas not previously identified

2 Opportunity AnalysismdashAdditional information isneeded for translating Opportunity Identification intospecific business and technology opportunities andmaking early and often uncertain technology and marketassessments Extensive effort may be committed forfocus groups market studies andor scientific experi-ments However the amount of effort expended isdependent upon the attractiveness of the opportunity thesize of the future development effort the fit with thebusiness strategy and culture and the risk tolerance ofthe decision makers This element may be part of aformal process or may be occurring iteratively inreaction to opportunities identified such as ldquowhat-ifrdquoscenarios Hard quantifiable templates which would beused in the NPPD are typically not applied in thiselement Both competitive intelligence and trendanalyses are used extensively in this element

3 Idea GenesismdashGenesis is the birth development andmaturation of the opportunity into a concrete idea Thisrepresents an evolutionary process in which ideas arebuilt upon torn down combined reshaped modified

Examples of the Five NCD Elements

Market DrivenmdashNonfatPotatoChipsusing a FatSubstituteMolecule

Development of non-fat potato chips using a Fat Substitute(FS) molecule (ie a molecule which provides the sameflavor as fat but is not absorbed in the body nor producesany side effects) is used as an example to clarify the fiveinner elements of the NCD model for a market-drivenproduct

Opportunity Identification occurred when this hypotheticalFood Company (FC) identified the need to develop low-fatproducts due to rising consumer trends or a competitivethreat in this area

OpportunityAnalysis took placewhen the FC examined thetrends in more detailDid consumers really want low fat ordid they want low calorie andor low cholesterol Howmuch would the consumer be willing to give up on tasteWas the market mainly a small niche What are the regula-tory issues In this element the FC also examined the valueof such an effort to their portfolio and the competitivethreats if they did not develop such products

In Idea Genesis several methods of delivering non-fatpotato chips were developed Some ideas were in reducing

the total fat content others were in developing FSmolecules

In the next element Idea Selection several of the ideaswere chosen for more detailed analysis

In the final element Concept and Technology Develop-ment a scientific program was started and supported todevelop the selected FS molecules

TechnologyDrivenmdash3M Notepads(15)

Development of 3M Notepads is used as a technologyexample to clarify the five inner elements of the NCDmodel Opportunity Identification occurred when SpenceSilver created an ldquounusualrdquo glue that was more tacky thanadhesive Opportunity Analysis took place when Silverattempted to find an opportunity for this strange adhesiveHe visited every division at 3M in his quest to find abusiness opportunity for this new technology Idea Genesisoccurred when several product ideas were selected such asthe sticky bulletin board and 3M notepads Idea Selectionoccurred when the notepad opportunity was selected forcontinued development In the Concept and TechnologyDevelopment element an entirely new manufacturingprocess was developed for attaching a ldquonon-stickingrdquoadhesive to papermdashThe Authors

Research z Technology Management50

and upgraded The idea may go through many iterationsand changes as it is examined studied discussed anddeveloped Direct contact with customersusers andlinkages with other cross-functional teams as well ascollaboration with other companies and institutionsoften enhance this activity Idea Genesis may be a formalprocess including brainstorming sessions and idea banksso as to provoke the organization into generating new ormodified ideas for the identified opportunity A new ideamay also emerge outside the bounds of any formalprocessmdashan experiment that went awry a supplieroffering a new material or a user making an unusualrequest Idea Genesis may feed Opportunity Identifica-tion demonstrating that the NCD elements may proceedin a non-linear fashionmdashadvancing and nurturing ideasand opportunities wherever they occur The output of thiselement is typically a more completely developeddescription of the ldquosensedrdquo idea or product concept

4 Idea SelectionmdashIn most businesses there are somany productprocess ideas that the critical activity is tochoose which ideas to pursue in order to achieve the mostbusiness value Selection may be as simple as an indi-vidualrsquos choice among many self-generated options or asformalized as a prescribed portfolio method More for-malized project selection and resource allocation in theFEI is difficult due to the limited information and under-standing at this point Definition of the financial return inthe FEI is at best often just a ldquowildrdquo guess Betterselection models specifically designed for the FEI areneeded so that market and technology risks investmentlevels competitive realities organizational capabilitiesand unique advantages along with financial returns may

all be considered Idea Selection as in OpportunityAnalysis should be less rigorous than in the NPPD sincemany ideas must be allowed to grow and advance withless certainty

5 Concept and Technology DevelopmentmdashThe finalelement of the model involves the development of abusiness case based on estimates of market potentialcustomer needs investment requirements competitorassessments technology unknowns and overall projectrisk The level of formality of the business case variesaccording to the nature of the opportunity (eg newmarket new technology andor new platform) level ofresources organizational requirements to proceed to theNPPD and the business culture (formal informal orhybrid) In some organizations this is considered theinitial stage (ie Stage 0) of the NPPD process

Some companies manage technical uncertainty by usinga Technology Development Process (7ndash9) The Technol-ogy Development Process may be completely orpartially outside the NCD Technology projects thatexplore fundamental scientific relationships scout orevaluate entirely new technology platforms are usuallyunstructured at the earlier phases and thus are part of theNCD As the effort escalates technology risk is oftenreduced more resources are utilized and the decisionsbecome more structured resulting in the later portion ofthe Technology Development Process moving out of theNCD and into the NPPD In some cases the TechnologyDevelopment Process would be completely external tothe NCD if the technology activities were mostly struc-tured and with few risks or if there was a business

Figure 2mdashEntire innovation process may be divided into three parts Front End of Innovation (FEI) New Productand Process Development (NPPD) and the commercialization phases which all are affected by the sameinfluencing factors The FEI is defined as those activities that come before the formal and well-structured NPPDprocess The circular shape of the NCD is meant to suggest that ideas are expected to flow and iterate between allthe five elements In contrast the NPPD portion is illustrated as a series of sequential well-structuredchronologically-ordered steps

MarchmdashApril 2001 51

decision to specifically pursue a particular technology Incontrast the Technology Development Process wouldremain inside the NCD if these factors were reversed

Developing a business plan andor a formal projectproposal for the new concept typically represents thefinal deliverable for this element as the idea moves intothe NPPD

Proficiency of the NPPD and the FEI

A survey was conducted of 23 companies in order todetermine which elements of the NCD model were mostimportant to highly innovative companies (Table 2) Pro-ficiency of each of the elements of the model weremeasured from highly proficient (company has consid-erable expertise in this element and needs little improve-ment) to low proficiency (company needs significantimprovement in this element) See ldquoHow the ProficiencyStudy Was Conductedrdquo page 53

The proficiency with respect to the NPPD and FEI stagesof innovation is shown in Figure 3 All 23 companiesdemonstrated moderate to high proficiency in the NPPDwith a lack of significant correlation relating the profi-ciency of the NPPD process to the level of innovation Incontrast the mean levels were lower for the FEI profi-ciency and there was a strong correlation (r = 065 p =0001)between the proficiency of the FEI and the level ofinnovativeness rating In other words one contributingfactor that may account for the high level of innovation isthe proficiency of the FEI rather than proficiency of theNPPD process This reinforces the perception that theNPPD process after extensive effort has been ldquofixedrdquo in

many companies The FEI serves as the next part of theinnovation cycle for building proficiency

Proficiency of the NCD Model

The proficiency of the Engine the five elements of theNCD model and the Technology Development Processare shown in Figure 4 The proficiency of the Engine (r =058 p = 0004) Opportunity Identification (r = 059 p =0005) and the Technology Development Process (r =054 p = 001) were highly correlated with the level ofinnovativeness In other words top management supportand the culture of the organization lead to increased inno-vation levels Opportunity Identification which consistsof identifying business and technological goals that areconsistent with the environment was practiced at thehigher-innovation-level companies The TechnologyDevelopment Process was also strongly related to theinnovation level This result indicates that high-innovation companies have already begun to implementa Technology Development Process (7ndash9)

Idea Genesis the area where the concepts for a newmarket or technology product or process are conceivedwas not significantly better in highly innovativecompanies The literature is replete with numerousarticles extolling the importance of being creative andmethodologies for thinking ldquoout-of-the-boxrdquo Whilemany of these techniques ostensibly improve the qualityof ideas and are the source of new products there is nosignificant difference or correlation between highly andmid-to-low innovation companies This confirms the

Table 2mdashComparison of Companies Included in Survey

Numberof

Companies

Size ofCompany($ billions)

(mean)

Size ofBusiness

Unit($ millions)

(mean)

High-InnovationCompanies

(Large numberof really newproductsintroducedeach year)

5 $22 $439

Mid-InnovationCompanies

11 $83 $642

Low-InnovationCompanies (Few

if any newproductsintroducedeach year)

7 $59 $780

Figure 3mdashThe proficiency level of highlyinnovative companies is significantlygreater(p lt 0001) than low-innovation companies inthe Front End of Innovation (FEI) Incontrast there was no significant differencebetween high- and low-innovation companiesin the New Product and Process (NPPD) partof the innovation process Significancebetween mid- and low-innovation companieswhen compared to high-innovationcompanies(p lt 005 p lt 001)

Research z Technology Management52

frequent truth of the observation that ldquoideas are a dime adozenrdquo It is how you manage and implement the ideasthat are important Alternatively this is one area of theFEI that may need significant improvement by allcompanies Perhaps many of the creativity and brain-storming techniques are not being adequately utilized ineven the highly innovative companies

Surprisingly Concept and Technology Developmentthe area where the company develops a business plan andbuilds credibility for the idea was not found to be sig-nificantly different or correlated with highly innovativecompanies One would have assumed that highly inno-vative companies develop superb business plans inaccordance with the prevailing wisdom that the level ofpre-planning is directly correlated with success in thefuture NPPD stage (10) The highly innovativecompaniesrsquo proficiency levels were similar to those oflow-innovation companies This result is not easilyexplained Perhaps the participants from highly innova-tive companies were more critical of the planningprocess than their colleagues from less innovativecompanies Alternatively this may represent an area ofimprovement for all companies More information isneeded to be able to explain this surprising conclusion

The foregoing data and results should be viewed withcaution In order to obtain a more robust analysismultiple components of each element of the NCD modelneed to be determined and evaluated and key character-istics of each of the elements and reliable constructs needto be further developed A much larger sample is alsoneeded However despite these limitations the NCDmodel provides entirely new insight into the FEI and itsrole in innovation

Managerial Implications

The Front End of Innovation (FEI) appears to representthe greatest area of weakness in the innovation processThe high correlation between the proficiency of the FEIand the lack of correlation with the NPPD process whencompared to a companyrsquos innovation level support thisconclusion

The Engine which provides the drive and the leadershipfor the front end and the culture in which it must operatehas been shown to be a critical part of the FEI Our studyconfirmed this as indicated by the high correlationbetween Leadership and Culture and the innovation levelof the company This study also verified the work ofKhurana and Rosenthal (11) which indicated that suc-cessful companies effectively integrate their businessand product strategy when identifying new opportunitiesin their front end The importance of managing the Tech-nology Development Process also was found to be acritical component and suggested that more firms shouldadopt the methodo logies ind ica t ed in recen tResearch z Technology Management articles (7ndash9)

The pilot study discussed here provides a glimpse of thepotential success factors for the front end Progress inunderstanding the FEI may proceed through expansionof this study using more numerous and validated con-structs with a much larger data base and developing abetter understanding of the characteristics of each of theNCD elements Despite the importance of the FEI nosimilar studies have been done We believe that theprincipal reasons are the lack of a common language anddefinition of the key components of the front end It isimpossible to improve a process if one does not have away of discussing or sharing it Although more research

How the Proficiency Study Was Conducted

In order to determine which proficiencies are associatedwith highly innovative companies 23 corporate managersattending a Process Effectiveness Network meeting of theIRI were asked to fill out a confidential questionnaire andevaluate the level of innovativeness and proficiency of theFEI along with key elements of the NCD model withrespect to the division or business unit in which theyworked Each participant was intimately familiar with theproduct development processes in their company

The level of innovativeness for a division or business unitwas evaluated on a 5-point scale ranging from ldquoHighlyInnovativerdquo (ie large percentage of really new productsreleased to the market each year) to ldquoLacks Innovationrdquo(ie few or no new products released to the market eachyear)

The participants were also asked to rate the proficiency ofboth the NPPD process and the FEI within the business unit

of their company Proficiency was rated on a 5-point scalefrom ldquoHighly Proficientrdquo to ldquoNeeds Significant Improve-mentrdquo In a similar fashion the participants rated profi-ciency of the Engine each of the five elements of the NCDmodel and the Technology Development Process utilizedin their company

The collected data were split into three groups as indicatedin Table 2 Businesses rated 4 or 5 on ldquolevel of innova-tivenessrdquo were grouped as ldquoHigh-Innovation CompaniesrdquoBusinesses rated with a 1 or 2 were grouped as ldquoLow-InnovationCompaniesrdquo and ldquoMid-InnovationCompaniesrdquowere those rated with a 3 Significance was evaluatedbetween the High-Innovation companies versus Mid- andLow-Innovation Companies in each of the proficienciesdiscussed above Correlationswere determinedbetween theinnovation level and the proficiency rating There was nosignificant difference or correlation between the size of thebusiness unit or company among High- Mid- and Low-Innovation companiesmdashThe Authors

MarchmdashApril 2001 53

is needed to understand the FEI the NCD modelprovides a common language defines the front end of theinnovation process and establishes terminology todescribe its key elements The NCD model brings clarityand rationality to the front end thereby helping people tobetter articulate and manage the front end of the innova-tion process

We propose that the terminology of the ldquoFuzzy FrontEndrdquo be changed to Front End of Innovation The formerdefinition inappropriately suggests to people outside theproduct development domain that the front end is inde-finable uncontrollable impossible to manage and acontinued drain on corporate resources We believe thatthe use of the NCD model similar to the NPPD processand the adaptation of the name Front End of Innovationwill help to increase both the understanding and positiveimage of the front end of the innovation process

Acknowledgement

The research reported in this article was generously supportedby a grant from the Center for InnovationManagementStudies(CIMS) at North Carolina State University Raleigh NorthCarolina C para

References and Notes

1 The authors have utilized both product and process in their defini-tions since the innovation may be directed to the development of anentirelynew process(eg a new and more efficientmethod for manu-facturing chemicals) We prefer the definition of New Product andProcess Development (NPPD) to Stage-Gatetrade since the latter termrefers to specific embodiments as discussed in (2) In manycompanies the NPPD would be equivalent to the Stage-Gate processdiscussed by Cooper (2)2 Cooper R G Winning at New Products 2nd edition Addison-Wesley Publishing Company Reading MA 19933 Best practices for successful product development at the start ofthe NPPD are to have a project which is 1) well integrated with thecompanyrsquos productand businessstrategy2) clearly definedcustomerneeds3) well definedproductconcept4) clear project plan 5) seniormanagement support and 6) empowered project team (4)4 Brown S L and K M Eisenhardt ldquoProduct development Pastresearch present findings and future directionsrdquo Academy of Man-agement Review 20 (1995) pp 343ndash3785 Cooper R G and E J Kleinschmidt ldquoNew products Whatseparates winners from losersrdquo Journal of Product InnovationMan-agement 4 3 (1987) pp 169ndash1846 GriffenA and A L Page ldquoPDMA successmeasurementprojectrecommended measures for product development success andfailurerdquoJournal of Product InnovationManagement13 (1996) pp478ndash4967 Eldred E W and M E McGrath ldquoCommercializing NewTechnologyndashIrdquo Research z Technology Management (JanuaryndashFebruary 1997) pp 41ndash478 Eldred E W and M E McGrath ldquoCommercializing New

Figure 4mdashFor highly innovative companies the proficiency level within the Front Endof Innovation (FEI) is significantly greater in the engine (p lt 0005) opportunityidentification (p lt 005) and in the technology development process (p lt 005) whencompared to less innovative companies Significance between mid- and low-innovationcompanies when compared to high-innovation companies (p lt 005 p lt 001p lt 0005)

Research z Technology Management54

and upgraded The idea may go through many iterationsand changes as it is examined studied discussed anddeveloped Direct contact with customersusers andlinkages with other cross-functional teams as well ascollaboration with other companies and institutionsoften enhance this activity Idea Genesis may be a formalprocess including brainstorming sessions and idea banksso as to provoke the organization into generating new ormodified ideas for the identified opportunity A new ideamay also emerge outside the bounds of any formalprocessmdashan experiment that went awry a supplieroffering a new material or a user making an unusualrequest Idea Genesis may feed Opportunity Identifica-tion demonstrating that the NCD elements may proceedin a non-linear fashionmdashadvancing and nurturing ideasand opportunities wherever they occur The output of thiselement is typically a more completely developeddescription of the ldquosensedrdquo idea or product concept

4 Idea SelectionmdashIn most businesses there are somany productprocess ideas that the critical activity is tochoose which ideas to pursue in order to achieve the mostbusiness value Selection may be as simple as an indi-vidualrsquos choice among many self-generated options or asformalized as a prescribed portfolio method More for-malized project selection and resource allocation in theFEI is difficult due to the limited information and under-standing at this point Definition of the financial return inthe FEI is at best often just a ldquowildrdquo guess Betterselection models specifically designed for the FEI areneeded so that market and technology risks investmentlevels competitive realities organizational capabilitiesand unique advantages along with financial returns may

all be considered Idea Selection as in OpportunityAnalysis should be less rigorous than in the NPPD sincemany ideas must be allowed to grow and advance withless certainty

5 Concept and Technology DevelopmentmdashThe finalelement of the model involves the development of abusiness case based on estimates of market potentialcustomer needs investment requirements competitorassessments technology unknowns and overall projectrisk The level of formality of the business case variesaccording to the nature of the opportunity (eg newmarket new technology andor new platform) level ofresources organizational requirements to proceed to theNPPD and the business culture (formal informal orhybrid) In some organizations this is considered theinitial stage (ie Stage 0) of the NPPD process

Some companies manage technical uncertainty by usinga Technology Development Process (7ndash9) The Technol-ogy Development Process may be completely orpartially outside the NCD Technology projects thatexplore fundamental scientific relationships scout orevaluate entirely new technology platforms are usuallyunstructured at the earlier phases and thus are part of theNCD As the effort escalates technology risk is oftenreduced more resources are utilized and the decisionsbecome more structured resulting in the later portion ofthe Technology Development Process moving out of theNCD and into the NPPD In some cases the TechnologyDevelopment Process would be completely external tothe NCD if the technology activities were mostly struc-tured and with few risks or if there was a business

Figure 2mdashEntire innovation process may be divided into three parts Front End of Innovation (FEI) New Productand Process Development (NPPD) and the commercialization phases which all are affected by the sameinfluencing factors The FEI is defined as those activities that come before the formal and well-structured NPPDprocess The circular shape of the NCD is meant to suggest that ideas are expected to flow and iterate between allthe five elements In contrast the NPPD portion is illustrated as a series of sequential well-structuredchronologically-ordered steps

MarchmdashApril 2001 51

decision to specifically pursue a particular technology Incontrast the Technology Development Process wouldremain inside the NCD if these factors were reversed

Developing a business plan andor a formal projectproposal for the new concept typically represents thefinal deliverable for this element as the idea moves intothe NPPD

Proficiency of the NPPD and the FEI

A survey was conducted of 23 companies in order todetermine which elements of the NCD model were mostimportant to highly innovative companies (Table 2) Pro-ficiency of each of the elements of the model weremeasured from highly proficient (company has consid-erable expertise in this element and needs little improve-ment) to low proficiency (company needs significantimprovement in this element) See ldquoHow the ProficiencyStudy Was Conductedrdquo page 53

The proficiency with respect to the NPPD and FEI stagesof innovation is shown in Figure 3 All 23 companiesdemonstrated moderate to high proficiency in the NPPDwith a lack of significant correlation relating the profi-ciency of the NPPD process to the level of innovation Incontrast the mean levels were lower for the FEI profi-ciency and there was a strong correlation (r = 065 p =0001)between the proficiency of the FEI and the level ofinnovativeness rating In other words one contributingfactor that may account for the high level of innovation isthe proficiency of the FEI rather than proficiency of theNPPD process This reinforces the perception that theNPPD process after extensive effort has been ldquofixedrdquo in

many companies The FEI serves as the next part of theinnovation cycle for building proficiency

Proficiency of the NCD Model

The proficiency of the Engine the five elements of theNCD model and the Technology Development Processare shown in Figure 4 The proficiency of the Engine (r =058 p = 0004) Opportunity Identification (r = 059 p =0005) and the Technology Development Process (r =054 p = 001) were highly correlated with the level ofinnovativeness In other words top management supportand the culture of the organization lead to increased inno-vation levels Opportunity Identification which consistsof identifying business and technological goals that areconsistent with the environment was practiced at thehigher-innovation-level companies The TechnologyDevelopment Process was also strongly related to theinnovation level This result indicates that high-innovation companies have already begun to implementa Technology Development Process (7ndash9)

Idea Genesis the area where the concepts for a newmarket or technology product or process are conceivedwas not significantly better in highly innovativecompanies The literature is replete with numerousarticles extolling the importance of being creative andmethodologies for thinking ldquoout-of-the-boxrdquo Whilemany of these techniques ostensibly improve the qualityof ideas and are the source of new products there is nosignificant difference or correlation between highly andmid-to-low innovation companies This confirms the

Table 2mdashComparison of Companies Included in Survey

Numberof

Companies

Size ofCompany($ billions)

(mean)

Size ofBusiness

Unit($ millions)

(mean)

High-InnovationCompanies

(Large numberof really newproductsintroducedeach year)

5 $22 $439

Mid-InnovationCompanies

11 $83 $642

Low-InnovationCompanies (Few

if any newproductsintroducedeach year)

7 $59 $780

Figure 3mdashThe proficiency level of highlyinnovative companies is significantlygreater(p lt 0001) than low-innovation companies inthe Front End of Innovation (FEI) Incontrast there was no significant differencebetween high- and low-innovation companiesin the New Product and Process (NPPD) partof the innovation process Significancebetween mid- and low-innovation companieswhen compared to high-innovationcompanies(p lt 005 p lt 001)

Research z Technology Management52

frequent truth of the observation that ldquoideas are a dime adozenrdquo It is how you manage and implement the ideasthat are important Alternatively this is one area of theFEI that may need significant improvement by allcompanies Perhaps many of the creativity and brain-storming techniques are not being adequately utilized ineven the highly innovative companies

Surprisingly Concept and Technology Developmentthe area where the company develops a business plan andbuilds credibility for the idea was not found to be sig-nificantly different or correlated with highly innovativecompanies One would have assumed that highly inno-vative companies develop superb business plans inaccordance with the prevailing wisdom that the level ofpre-planning is directly correlated with success in thefuture NPPD stage (10) The highly innovativecompaniesrsquo proficiency levels were similar to those oflow-innovation companies This result is not easilyexplained Perhaps the participants from highly innova-tive companies were more critical of the planningprocess than their colleagues from less innovativecompanies Alternatively this may represent an area ofimprovement for all companies More information isneeded to be able to explain this surprising conclusion

The foregoing data and results should be viewed withcaution In order to obtain a more robust analysismultiple components of each element of the NCD modelneed to be determined and evaluated and key character-istics of each of the elements and reliable constructs needto be further developed A much larger sample is alsoneeded However despite these limitations the NCDmodel provides entirely new insight into the FEI and itsrole in innovation

Managerial Implications

The Front End of Innovation (FEI) appears to representthe greatest area of weakness in the innovation processThe high correlation between the proficiency of the FEIand the lack of correlation with the NPPD process whencompared to a companyrsquos innovation level support thisconclusion

The Engine which provides the drive and the leadershipfor the front end and the culture in which it must operatehas been shown to be a critical part of the FEI Our studyconfirmed this as indicated by the high correlationbetween Leadership and Culture and the innovation levelof the company This study also verified the work ofKhurana and Rosenthal (11) which indicated that suc-cessful companies effectively integrate their businessand product strategy when identifying new opportunitiesin their front end The importance of managing the Tech-nology Development Process also was found to be acritical component and suggested that more firms shouldadopt the methodo logies ind ica t ed in recen tResearch z Technology Management articles (7ndash9)

The pilot study discussed here provides a glimpse of thepotential success factors for the front end Progress inunderstanding the FEI may proceed through expansionof this study using more numerous and validated con-structs with a much larger data base and developing abetter understanding of the characteristics of each of theNCD elements Despite the importance of the FEI nosimilar studies have been done We believe that theprincipal reasons are the lack of a common language anddefinition of the key components of the front end It isimpossible to improve a process if one does not have away of discussing or sharing it Although more research

How the Proficiency Study Was Conducted

In order to determine which proficiencies are associatedwith highly innovative companies 23 corporate managersattending a Process Effectiveness Network meeting of theIRI were asked to fill out a confidential questionnaire andevaluate the level of innovativeness and proficiency of theFEI along with key elements of the NCD model withrespect to the division or business unit in which theyworked Each participant was intimately familiar with theproduct development processes in their company

The level of innovativeness for a division or business unitwas evaluated on a 5-point scale ranging from ldquoHighlyInnovativerdquo (ie large percentage of really new productsreleased to the market each year) to ldquoLacks Innovationrdquo(ie few or no new products released to the market eachyear)

The participants were also asked to rate the proficiency ofboth the NPPD process and the FEI within the business unit

of their company Proficiency was rated on a 5-point scalefrom ldquoHighly Proficientrdquo to ldquoNeeds Significant Improve-mentrdquo In a similar fashion the participants rated profi-ciency of the Engine each of the five elements of the NCDmodel and the Technology Development Process utilizedin their company

The collected data were split into three groups as indicatedin Table 2 Businesses rated 4 or 5 on ldquolevel of innova-tivenessrdquo were grouped as ldquoHigh-Innovation CompaniesrdquoBusinesses rated with a 1 or 2 were grouped as ldquoLow-InnovationCompaniesrdquo and ldquoMid-InnovationCompaniesrdquowere those rated with a 3 Significance was evaluatedbetween the High-Innovation companies versus Mid- andLow-Innovation Companies in each of the proficienciesdiscussed above Correlationswere determinedbetween theinnovation level and the proficiency rating There was nosignificant difference or correlation between the size of thebusiness unit or company among High- Mid- and Low-Innovation companiesmdashThe Authors

MarchmdashApril 2001 53

is needed to understand the FEI the NCD modelprovides a common language defines the front end of theinnovation process and establishes terminology todescribe its key elements The NCD model brings clarityand rationality to the front end thereby helping people tobetter articulate and manage the front end of the innova-tion process

We propose that the terminology of the ldquoFuzzy FrontEndrdquo be changed to Front End of Innovation The formerdefinition inappropriately suggests to people outside theproduct development domain that the front end is inde-finable uncontrollable impossible to manage and acontinued drain on corporate resources We believe thatthe use of the NCD model similar to the NPPD processand the adaptation of the name Front End of Innovationwill help to increase both the understanding and positiveimage of the front end of the innovation process

Acknowledgement

The research reported in this article was generously supportedby a grant from the Center for InnovationManagementStudies(CIMS) at North Carolina State University Raleigh NorthCarolina C para

References and Notes

1 The authors have utilized both product and process in their defini-tions since the innovation may be directed to the development of anentirelynew process(eg a new and more efficientmethod for manu-facturing chemicals) We prefer the definition of New Product andProcess Development (NPPD) to Stage-Gatetrade since the latter termrefers to specific embodiments as discussed in (2) In manycompanies the NPPD would be equivalent to the Stage-Gate processdiscussed by Cooper (2)2 Cooper R G Winning at New Products 2nd edition Addison-Wesley Publishing Company Reading MA 19933 Best practices for successful product development at the start ofthe NPPD are to have a project which is 1) well integrated with thecompanyrsquos productand businessstrategy2) clearly definedcustomerneeds3) well definedproductconcept4) clear project plan 5) seniormanagement support and 6) empowered project team (4)4 Brown S L and K M Eisenhardt ldquoProduct development Pastresearch present findings and future directionsrdquo Academy of Man-agement Review 20 (1995) pp 343ndash3785 Cooper R G and E J Kleinschmidt ldquoNew products Whatseparates winners from losersrdquo Journal of Product InnovationMan-agement 4 3 (1987) pp 169ndash1846 GriffenA and A L Page ldquoPDMA successmeasurementprojectrecommended measures for product development success andfailurerdquoJournal of Product InnovationManagement13 (1996) pp478ndash4967 Eldred E W and M E McGrath ldquoCommercializing NewTechnologyndashIrdquo Research z Technology Management (JanuaryndashFebruary 1997) pp 41ndash478 Eldred E W and M E McGrath ldquoCommercializing New

Figure 4mdashFor highly innovative companies the proficiency level within the Front Endof Innovation (FEI) is significantly greater in the engine (p lt 0005) opportunityidentification (p lt 005) and in the technology development process (p lt 005) whencompared to less innovative companies Significance between mid- and low-innovationcompanies when compared to high-innovation companies (p lt 005 p lt 001p lt 0005)

Research z Technology Management54

decision to specifically pursue a particular technology Incontrast the Technology Development Process wouldremain inside the NCD if these factors were reversed

Developing a business plan andor a formal projectproposal for the new concept typically represents thefinal deliverable for this element as the idea moves intothe NPPD

Proficiency of the NPPD and the FEI

A survey was conducted of 23 companies in order todetermine which elements of the NCD model were mostimportant to highly innovative companies (Table 2) Pro-ficiency of each of the elements of the model weremeasured from highly proficient (company has consid-erable expertise in this element and needs little improve-ment) to low proficiency (company needs significantimprovement in this element) See ldquoHow the ProficiencyStudy Was Conductedrdquo page 53

The proficiency with respect to the NPPD and FEI stagesof innovation is shown in Figure 3 All 23 companiesdemonstrated moderate to high proficiency in the NPPDwith a lack of significant correlation relating the profi-ciency of the NPPD process to the level of innovation Incontrast the mean levels were lower for the FEI profi-ciency and there was a strong correlation (r = 065 p =0001)between the proficiency of the FEI and the level ofinnovativeness rating In other words one contributingfactor that may account for the high level of innovation isthe proficiency of the FEI rather than proficiency of theNPPD process This reinforces the perception that theNPPD process after extensive effort has been ldquofixedrdquo in

many companies The FEI serves as the next part of theinnovation cycle for building proficiency

Proficiency of the NCD Model

The proficiency of the Engine the five elements of theNCD model and the Technology Development Processare shown in Figure 4 The proficiency of the Engine (r =058 p = 0004) Opportunity Identification (r = 059 p =0005) and the Technology Development Process (r =054 p = 001) were highly correlated with the level ofinnovativeness In other words top management supportand the culture of the organization lead to increased inno-vation levels Opportunity Identification which consistsof identifying business and technological goals that areconsistent with the environment was practiced at thehigher-innovation-level companies The TechnologyDevelopment Process was also strongly related to theinnovation level This result indicates that high-innovation companies have already begun to implementa Technology Development Process (7ndash9)

Idea Genesis the area where the concepts for a newmarket or technology product or process are conceivedwas not significantly better in highly innovativecompanies The literature is replete with numerousarticles extolling the importance of being creative andmethodologies for thinking ldquoout-of-the-boxrdquo Whilemany of these techniques ostensibly improve the qualityof ideas and are the source of new products there is nosignificant difference or correlation between highly andmid-to-low innovation companies This confirms the

Table 2mdashComparison of Companies Included in Survey

Numberof

Companies

Size ofCompany($ billions)

(mean)

Size ofBusiness

Unit($ millions)

(mean)

High-InnovationCompanies

(Large numberof really newproductsintroducedeach year)

5 $22 $439

Mid-InnovationCompanies

11 $83 $642

Low-InnovationCompanies (Few

if any newproductsintroducedeach year)

7 $59 $780

Figure 3mdashThe proficiency level of highlyinnovative companies is significantlygreater(p lt 0001) than low-innovation companies inthe Front End of Innovation (FEI) Incontrast there was no significant differencebetween high- and low-innovation companiesin the New Product and Process (NPPD) partof the innovation process Significancebetween mid- and low-innovation companieswhen compared to high-innovationcompanies(p lt 005 p lt 001)

Research z Technology Management52

frequent truth of the observation that ldquoideas are a dime adozenrdquo It is how you manage and implement the ideasthat are important Alternatively this is one area of theFEI that may need significant improvement by allcompanies Perhaps many of the creativity and brain-storming techniques are not being adequately utilized ineven the highly innovative companies

Surprisingly Concept and Technology Developmentthe area where the company develops a business plan andbuilds credibility for the idea was not found to be sig-nificantly different or correlated with highly innovativecompanies One would have assumed that highly inno-vative companies develop superb business plans inaccordance with the prevailing wisdom that the level ofpre-planning is directly correlated with success in thefuture NPPD stage (10) The highly innovativecompaniesrsquo proficiency levels were similar to those oflow-innovation companies This result is not easilyexplained Perhaps the participants from highly innova-tive companies were more critical of the planningprocess than their colleagues from less innovativecompanies Alternatively this may represent an area ofimprovement for all companies More information isneeded to be able to explain this surprising conclusion

The foregoing data and results should be viewed withcaution In order to obtain a more robust analysismultiple components of each element of the NCD modelneed to be determined and evaluated and key character-istics of each of the elements and reliable constructs needto be further developed A much larger sample is alsoneeded However despite these limitations the NCDmodel provides entirely new insight into the FEI and itsrole in innovation

Managerial Implications

The Front End of Innovation (FEI) appears to representthe greatest area of weakness in the innovation processThe high correlation between the proficiency of the FEIand the lack of correlation with the NPPD process whencompared to a companyrsquos innovation level support thisconclusion

The Engine which provides the drive and the leadershipfor the front end and the culture in which it must operatehas been shown to be a critical part of the FEI Our studyconfirmed this as indicated by the high correlationbetween Leadership and Culture and the innovation levelof the company This study also verified the work ofKhurana and Rosenthal (11) which indicated that suc-cessful companies effectively integrate their businessand product strategy when identifying new opportunitiesin their front end The importance of managing the Tech-nology Development Process also was found to be acritical component and suggested that more firms shouldadopt the methodo logies ind ica t ed in recen tResearch z Technology Management articles (7ndash9)

The pilot study discussed here provides a glimpse of thepotential success factors for the front end Progress inunderstanding the FEI may proceed through expansionof this study using more numerous and validated con-structs with a much larger data base and developing abetter understanding of the characteristics of each of theNCD elements Despite the importance of the FEI nosimilar studies have been done We believe that theprincipal reasons are the lack of a common language anddefinition of the key components of the front end It isimpossible to improve a process if one does not have away of discussing or sharing it Although more research

How the Proficiency Study Was Conducted

In order to determine which proficiencies are associatedwith highly innovative companies 23 corporate managersattending a Process Effectiveness Network meeting of theIRI were asked to fill out a confidential questionnaire andevaluate the level of innovativeness and proficiency of theFEI along with key elements of the NCD model withrespect to the division or business unit in which theyworked Each participant was intimately familiar with theproduct development processes in their company

The level of innovativeness for a division or business unitwas evaluated on a 5-point scale ranging from ldquoHighlyInnovativerdquo (ie large percentage of really new productsreleased to the market each year) to ldquoLacks Innovationrdquo(ie few or no new products released to the market eachyear)

The participants were also asked to rate the proficiency ofboth the NPPD process and the FEI within the business unit

of their company Proficiency was rated on a 5-point scalefrom ldquoHighly Proficientrdquo to ldquoNeeds Significant Improve-mentrdquo In a similar fashion the participants rated profi-ciency of the Engine each of the five elements of the NCDmodel and the Technology Development Process utilizedin their company

The collected data were split into three groups as indicatedin Table 2 Businesses rated 4 or 5 on ldquolevel of innova-tivenessrdquo were grouped as ldquoHigh-Innovation CompaniesrdquoBusinesses rated with a 1 or 2 were grouped as ldquoLow-InnovationCompaniesrdquo and ldquoMid-InnovationCompaniesrdquowere those rated with a 3 Significance was evaluatedbetween the High-Innovation companies versus Mid- andLow-Innovation Companies in each of the proficienciesdiscussed above Correlationswere determinedbetween theinnovation level and the proficiency rating There was nosignificant difference or correlation between the size of thebusiness unit or company among High- Mid- and Low-Innovation companiesmdashThe Authors

MarchmdashApril 2001 53

is needed to understand the FEI the NCD modelprovides a common language defines the front end of theinnovation process and establishes terminology todescribe its key elements The NCD model brings clarityand rationality to the front end thereby helping people tobetter articulate and manage the front end of the innova-tion process

We propose that the terminology of the ldquoFuzzy FrontEndrdquo be changed to Front End of Innovation The formerdefinition inappropriately suggests to people outside theproduct development domain that the front end is inde-finable uncontrollable impossible to manage and acontinued drain on corporate resources We believe thatthe use of the NCD model similar to the NPPD processand the adaptation of the name Front End of Innovationwill help to increase both the understanding and positiveimage of the front end of the innovation process

Acknowledgement

The research reported in this article was generously supportedby a grant from the Center for InnovationManagementStudies(CIMS) at North Carolina State University Raleigh NorthCarolina C para

References and Notes

1 The authors have utilized both product and process in their defini-tions since the innovation may be directed to the development of anentirelynew process(eg a new and more efficientmethod for manu-facturing chemicals) We prefer the definition of New Product andProcess Development (NPPD) to Stage-Gatetrade since the latter termrefers to specific embodiments as discussed in (2) In manycompanies the NPPD would be equivalent to the Stage-Gate processdiscussed by Cooper (2)2 Cooper R G Winning at New Products 2nd edition Addison-Wesley Publishing Company Reading MA 19933 Best practices for successful product development at the start ofthe NPPD are to have a project which is 1) well integrated with thecompanyrsquos productand businessstrategy2) clearly definedcustomerneeds3) well definedproductconcept4) clear project plan 5) seniormanagement support and 6) empowered project team (4)4 Brown S L and K M Eisenhardt ldquoProduct development Pastresearch present findings and future directionsrdquo Academy of Man-agement Review 20 (1995) pp 343ndash3785 Cooper R G and E J Kleinschmidt ldquoNew products Whatseparates winners from losersrdquo Journal of Product InnovationMan-agement 4 3 (1987) pp 169ndash1846 GriffenA and A L Page ldquoPDMA successmeasurementprojectrecommended measures for product development success andfailurerdquoJournal of Product InnovationManagement13 (1996) pp478ndash4967 Eldred E W and M E McGrath ldquoCommercializing NewTechnologyndashIrdquo Research z Technology Management (JanuaryndashFebruary 1997) pp 41ndash478 Eldred E W and M E McGrath ldquoCommercializing New

Figure 4mdashFor highly innovative companies the proficiency level within the Front Endof Innovation (FEI) is significantly greater in the engine (p lt 0005) opportunityidentification (p lt 005) and in the technology development process (p lt 005) whencompared to less innovative companies Significance between mid- and low-innovationcompanies when compared to high-innovation companies (p lt 005 p lt 001p lt 0005)

Research z Technology Management54

frequent truth of the observation that ldquoideas are a dime adozenrdquo It is how you manage and implement the ideasthat are important Alternatively this is one area of theFEI that may need significant improvement by allcompanies Perhaps many of the creativity and brain-storming techniques are not being adequately utilized ineven the highly innovative companies

Surprisingly Concept and Technology Developmentthe area where the company develops a business plan andbuilds credibility for the idea was not found to be sig-nificantly different or correlated with highly innovativecompanies One would have assumed that highly inno-vative companies develop superb business plans inaccordance with the prevailing wisdom that the level ofpre-planning is directly correlated with success in thefuture NPPD stage (10) The highly innovativecompaniesrsquo proficiency levels were similar to those oflow-innovation companies This result is not easilyexplained Perhaps the participants from highly innova-tive companies were more critical of the planningprocess than their colleagues from less innovativecompanies Alternatively this may represent an area ofimprovement for all companies More information isneeded to be able to explain this surprising conclusion

The foregoing data and results should be viewed withcaution In order to obtain a more robust analysismultiple components of each element of the NCD modelneed to be determined and evaluated and key character-istics of each of the elements and reliable constructs needto be further developed A much larger sample is alsoneeded However despite these limitations the NCDmodel provides entirely new insight into the FEI and itsrole in innovation

Managerial Implications

The Front End of Innovation (FEI) appears to representthe greatest area of weakness in the innovation processThe high correlation between the proficiency of the FEIand the lack of correlation with the NPPD process whencompared to a companyrsquos innovation level support thisconclusion

The Engine which provides the drive and the leadershipfor the front end and the culture in which it must operatehas been shown to be a critical part of the FEI Our studyconfirmed this as indicated by the high correlationbetween Leadership and Culture and the innovation levelof the company This study also verified the work ofKhurana and Rosenthal (11) which indicated that suc-cessful companies effectively integrate their businessand product strategy when identifying new opportunitiesin their front end The importance of managing the Tech-nology Development Process also was found to be acritical component and suggested that more firms shouldadopt the methodo logies ind ica t ed in recen tResearch z Technology Management articles (7ndash9)

The pilot study discussed here provides a glimpse of thepotential success factors for the front end Progress inunderstanding the FEI may proceed through expansionof this study using more numerous and validated con-structs with a much larger data base and developing abetter understanding of the characteristics of each of theNCD elements Despite the importance of the FEI nosimilar studies have been done We believe that theprincipal reasons are the lack of a common language anddefinition of the key components of the front end It isimpossible to improve a process if one does not have away of discussing or sharing it Although more research

How the Proficiency Study Was Conducted

In order to determine which proficiencies are associatedwith highly innovative companies 23 corporate managersattending a Process Effectiveness Network meeting of theIRI were asked to fill out a confidential questionnaire andevaluate the level of innovativeness and proficiency of theFEI along with key elements of the NCD model withrespect to the division or business unit in which theyworked Each participant was intimately familiar with theproduct development processes in their company

The level of innovativeness for a division or business unitwas evaluated on a 5-point scale ranging from ldquoHighlyInnovativerdquo (ie large percentage of really new productsreleased to the market each year) to ldquoLacks Innovationrdquo(ie few or no new products released to the market eachyear)

The participants were also asked to rate the proficiency ofboth the NPPD process and the FEI within the business unit

of their company Proficiency was rated on a 5-point scalefrom ldquoHighly Proficientrdquo to ldquoNeeds Significant Improve-mentrdquo In a similar fashion the participants rated profi-ciency of the Engine each of the five elements of the NCDmodel and the Technology Development Process utilizedin their company

The collected data were split into three groups as indicatedin Table 2 Businesses rated 4 or 5 on ldquolevel of innova-tivenessrdquo were grouped as ldquoHigh-Innovation CompaniesrdquoBusinesses rated with a 1 or 2 were grouped as ldquoLow-InnovationCompaniesrdquo and ldquoMid-InnovationCompaniesrdquowere those rated with a 3 Significance was evaluatedbetween the High-Innovation companies versus Mid- andLow-Innovation Companies in each of the proficienciesdiscussed above Correlationswere determinedbetween theinnovation level and the proficiency rating There was nosignificant difference or correlation between the size of thebusiness unit or company among High- Mid- and Low-Innovation companiesmdashThe Authors

MarchmdashApril 2001 53

is needed to understand the FEI the NCD modelprovides a common language defines the front end of theinnovation process and establishes terminology todescribe its key elements The NCD model brings clarityand rationality to the front end thereby helping people tobetter articulate and manage the front end of the innova-tion process

We propose that the terminology of the ldquoFuzzy FrontEndrdquo be changed to Front End of Innovation The formerdefinition inappropriately suggests to people outside theproduct development domain that the front end is inde-finable uncontrollable impossible to manage and acontinued drain on corporate resources We believe thatthe use of the NCD model similar to the NPPD processand the adaptation of the name Front End of Innovationwill help to increase both the understanding and positiveimage of the front end of the innovation process

Acknowledgement

The research reported in this article was generously supportedby a grant from the Center for InnovationManagementStudies(CIMS) at North Carolina State University Raleigh NorthCarolina C para

References and Notes

1 The authors have utilized both product and process in their defini-tions since the innovation may be directed to the development of anentirelynew process(eg a new and more efficientmethod for manu-facturing chemicals) We prefer the definition of New Product andProcess Development (NPPD) to Stage-Gatetrade since the latter termrefers to specific embodiments as discussed in (2) In manycompanies the NPPD would be equivalent to the Stage-Gate processdiscussed by Cooper (2)2 Cooper R G Winning at New Products 2nd edition Addison-Wesley Publishing Company Reading MA 19933 Best practices for successful product development at the start ofthe NPPD are to have a project which is 1) well integrated with thecompanyrsquos productand businessstrategy2) clearly definedcustomerneeds3) well definedproductconcept4) clear project plan 5) seniormanagement support and 6) empowered project team (4)4 Brown S L and K M Eisenhardt ldquoProduct development Pastresearch present findings and future directionsrdquo Academy of Man-agement Review 20 (1995) pp 343ndash3785 Cooper R G and E J Kleinschmidt ldquoNew products Whatseparates winners from losersrdquo Journal of Product InnovationMan-agement 4 3 (1987) pp 169ndash1846 GriffenA and A L Page ldquoPDMA successmeasurementprojectrecommended measures for product development success andfailurerdquoJournal of Product InnovationManagement13 (1996) pp478ndash4967 Eldred E W and M E McGrath ldquoCommercializing NewTechnologyndashIrdquo Research z Technology Management (JanuaryndashFebruary 1997) pp 41ndash478 Eldred E W and M E McGrath ldquoCommercializing New

Figure 4mdashFor highly innovative companies the proficiency level within the Front Endof Innovation (FEI) is significantly greater in the engine (p lt 0005) opportunityidentification (p lt 005) and in the technology development process (p lt 005) whencompared to less innovative companies Significance between mid- and low-innovationcompanies when compared to high-innovation companies (p lt 005 p lt 001p lt 0005)

Research z Technology Management54

is needed to understand the FEI the NCD modelprovides a common language defines the front end of theinnovation process and establishes terminology todescribe its key elements The NCD model brings clarityand rationality to the front end thereby helping people tobetter articulate and manage the front end of the innova-tion process

We propose that the terminology of the ldquoFuzzy FrontEndrdquo be changed to Front End of Innovation The formerdefinition inappropriately suggests to people outside theproduct development domain that the front end is inde-finable uncontrollable impossible to manage and acontinued drain on corporate resources We believe thatthe use of the NCD model similar to the NPPD processand the adaptation of the name Front End of Innovationwill help to increase both the understanding and positiveimage of the front end of the innovation process

Acknowledgement

The research reported in this article was generously supportedby a grant from the Center for InnovationManagementStudies(CIMS) at North Carolina State University Raleigh NorthCarolina C para

References and Notes

1 The authors have utilized both product and process in their defini-tions since the innovation may be directed to the development of anentirelynew process(eg a new and more efficientmethod for manu-facturing chemicals) We prefer the definition of New Product andProcess Development (NPPD) to Stage-Gatetrade since the latter termrefers to specific embodiments as discussed in (2) In manycompanies the NPPD would be equivalent to the Stage-Gate processdiscussed by Cooper (2)2 Cooper R G Winning at New Products 2nd edition Addison-Wesley Publishing Company Reading MA 19933 Best practices for successful product development at the start ofthe NPPD are to have a project which is 1) well integrated with thecompanyrsquos productand businessstrategy2) clearly definedcustomerneeds3) well definedproductconcept4) clear project plan 5) seniormanagement support and 6) empowered project team (4)4 Brown S L and K M Eisenhardt ldquoProduct development Pastresearch present findings and future directionsrdquo Academy of Man-agement Review 20 (1995) pp 343ndash3785 Cooper R G and E J Kleinschmidt ldquoNew products Whatseparates winners from losersrdquo Journal of Product InnovationMan-agement 4 3 (1987) pp 169ndash1846 GriffenA and A L Page ldquoPDMA successmeasurementprojectrecommended measures for product development success andfailurerdquoJournal of Product InnovationManagement13 (1996) pp478ndash4967 Eldred E W and M E McGrath ldquoCommercializing NewTechnologyndashIrdquo Research z Technology Management (JanuaryndashFebruary 1997) pp 41ndash478 Eldred E W and M E McGrath ldquoCommercializing New

Figure 4mdashFor highly innovative companies the proficiency level within the Front Endof Innovation (FEI) is significantly greater in the engine (p lt 0005) opportunityidentification (p lt 005) and in the technology development process (p lt 005) whencompared to less innovative companies Significance between mid- and low-innovationcompanies when compared to high-innovation companies (p lt 005 p lt 001p lt 0005)

Research z Technology Management54

TechnologyndashIIrdquo Research z Technology Management (MarchndashApril1997) pp 29ndash339 Cohen L Y P W Kamienski and R L Espino ldquoGate SystemFocuses IndustrialBasic ResearchrdquoResearch z TechnologyManage-ment (JulyndashAugust 1998) pp 34ndash3710 Cooper R G and E J Kleinschmidt ldquoAn investigationinto thenew product process Steps deficiencies and impactrdquo Journal ofProduct Innovation Management 3 (1986) pp 71ndash8511 Khurana A and S R Rosenthal ldquoTowards holistic ldquofront endsrdquoin new product developmentrdquo Journal of Product Innovation Man-agement 15 (1998) pp 57ndash7412 Moenaert R K A De Meyer W E Souder and D Deschool-

meester ldquoRampDMarketing Communication During the Fuzzy FrontEndrdquo IEEE Transactionsof EngineeringManagement 42 3 (August1995) pp 243ndash25813 Smith G R W C Herbein and R C Morris ldquoFront-End Inno-vation at AlliedSignal and Alcoardquo Research z Technology Manage-ment (NovemberndashDecember 1999) pp 15ndash2414 Reinertsen D G ldquoTaking the Fuzziness Out of the Fuzzy FrontEndrdquo Research z Technology Management (NovemberndashDecember1999) pp 25ndash3115 Story from P R Nayak and J M KetteringhamBreakthroughsPfeiffer and Co San Diego CA 1994

Reprints

IMPROVING THE PROCESS OF PRODUCT DEVELOPMENT

Thirty-one RESEARCH z TECHNOLOGY MANAGEMENT articles on this subject are now available inpaperback To order see inside back cover

Learning from the Best New Product DevelopersSpeeding Development CyclesBest Practices for Managing RampD PortfoliosLeading the Technology Development ProcessDeveloping New Products On Time In TimeCritical Success Factors for New Product DevelopmentWhat First-to-Market Companies Do DifferentlyAssessing the Risks New Products FaceRoadmapping Integrates Business and TechnologyAmericarsquos Edge in New Product RampDImproving the Performance of New Product TeamsRevitalize Your Product Line Through Continuous Platform RenewalStrategic Partnering for Developing New ProductsCommercializing New Technology AND MORE

Information for AuthorsRESEARCH TECHNOLOGY MANAGEMENT welcomes manuscripts that deal with enhancingthe effectiveness of technological innovation

Manuscripts are reviewed by the Board of Editors which looks for ideas and information to helpindustrial RampDtechnology leaders run their operations more effectively This means an emphasison ldquoreal-worldrdquo experience that can be put to use by practitioners across a spectrum of industries

Articles based primarily on research studies should therefore deemphasize methodology in favor ofexplaining 1) what the investigators learned and 2) why those findings could be useful to industryleaders

Manuscripts submitted for review should be on good paper (not faxed) double-spaced andpaginated References should be numbered in the order in which they are cited and listed togetherat the end of the manuscript

Illustrations should be individually numbered furnished one per page on 8-12 times 11-inch whitepaper and be suitable for black-and-white reproduction without redrawing

Send manuscripts to the Editorial Office RESEARCH TECHNOLOGY MANAGEMENTIndustrial Research Institute Suite 1100 1550 M St NW Washington DC 20005-1712

MarchmdashApril 2001 55