Accelerating adaptive processes: Product innovation in the global computer industry
Eisenhardt and Tabrizi offer use data from 72 product development projects from around the world to argue to make a broad strategic argument about product development processes. The authors treat more traditional project management strategies (e.g., Clark and Fujimoto, 1991) as the compression strategy. They argue that, in high-velocity environments at least, adapatation and flexibility are more important. They present evidence in favor of this experiential strategy and show that the compression strategy only seems advantage in mature industries.
Eisenhardt and Tabrizi's main research question is, how do firms develop products quickly? They argue that the existing literature tends to answer these questions in terms of increased planning, coordination with suppliers, and other methods of rational planning planning and decision-making which emphasize understanding the process and then squeezing or compressing it so that it can go faster. This assumes that product development is a set of predictable steps that can be known, at least to some degree, in advance.The authors suggest that a more experiential model marked by more prototyping, earlier customer feedback, and more experience with multiple generations will be more appropriate in industries like the high-tech industry where adaptation will be critically important in product development.
The authors offer explicit hypothesis for both the compression and the experiential models. They test these hypotheses using data from 36 computer companies with data on two projects (one major and one minor) from each. They collected 107 pages surveys from each and sent researches to validate data in each firm. They sample included Japanese, European, and English firms (the survey was administered in three languages) roughly in proportion to the population.
The basic result supported a contingent view of fast product development. The compression strategy was more relevant for predictable products in mature industries while the experiential strategy was more appropriate for unpredictable projects.
Part of the authors goals is not only to test their theory but, in the process, to contribute to organizational theory by opening up conceptions of firms and their work to a more dynamic conception.
Theoretical and practical relevance:
In the 15 years since its publication the article has been cited more than 1000 times. Although the article is framed as a product development article, it has been cited by highly cited organization theory and strategy pieces highly as well.