Best practice in product development is a dynamic target. Not only are new practices being developed and refined but the differences in organisations demand the tailored application of these practices. There are eight basic principles and four basic stages in product development which are true for all companies, all projects and at all times. But the company philosophy, knowledge, skills and assets change; and these changes cause changes in the types of product innovations and the activities in product development. Successful companies recognise that product development is an important strategic issue that demands constant attention. There is a need to evaluate the product development performance and the product development success rate (product development efficiency and effectiveness), and then combine this evaluation with the company's strategic direction to determine and organise improvements in both the effectiveness and efficiency in the future. This is not simple because creativity and criticism are two opposing thought processes. Creativity, vital to product innovation, goes into the unknown and makes mistakes; the product development evaluation looks for mistakes and criticises them. Emphasis on mistakes leads to conservative product development; emphasis on creativity leads to wild product development; the successful companies intertwine the creativity and the evaluation in the project.
Product development is unique to the company and is related to the company's history, philosophy and knowledge, but the company's position relative to the best practice in the related industry and market is an indicator of the company's past and present product development effectiveness and efficiency. From this evaluation can be built up strategic plans for improving product development. As shown in Fig. 8.1, product development effectiveness and efficiency are improved together to give the strategic product success
indicated by the company top management. Product development effectiveness and efficiency are inextricably linked.
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