The Impact of Front-End Innovation Activities on Product Performance

This paper describes and tests a model of the impact of front-end innovation activities on product performance. Data were collected from 272 companies to test the hypothesis that front-end performance impacts new product performance in the marketplace while controlling for new product development (NPD) processes and strategy. The data support the hypothesis that front-end performance favorably and independently impacts overall product success, time to market, market penetration, and financial performance. Front-end performance is predicted by a set of activities, including: the actual amount of front-end work done in various areas, specifically marketing, R&D, and concept development; the existence of a front-end process; the existence of a champion; and agreement on the order of developmental steps in the front end. Front-end activities are related to front-end performance, and front-end performance is related to NPD performance. This relationship highlights the distinction between front-end activities and standard product development practices and the importance of building competency in the front end. This is the first study that quantifies both the nature and amount of work done in the front end and relates that work to commercial performance. This research empirically demonstrates the distinction between the front-end and formal stages and gates types of systems. This suggests that the concept of the front end needs it own set of theoretical constructs to adequately describe and predict this categorically different set of activities. While this study demonstrates the difference between front-end and stage-gate systems, it does not establish the limits of those activities. From a managerial point of view recognizing that formal development and front-end activities are different mandates that these activities must be managed differently. In particular, the skills, structures, processes, governance, leadership, performance metrics, and resources must be assessed separately and differently. These findings suggest that firms should actively manage the flow of ideas from the front end into the more formal development programs.