Ideation-Execution Transition in Product Development: Experimental Analysis

44 Pages Posted: 6 Aug 2016

See all articles by Evgeny Kagan

Evgeny Kagan

Johns Hopkins University - Carey Business School

Stephen Leider

University of Michigan, Stephen M. Ross School of Business

William S. Lovejoy

University of Michigan, Stephen M. Ross School of Business

Date Written: August 2016

Abstract

Bringing a new product to market involves both a creative ideation stage, and an execution stage. When time-to-market constraints are binding it is an important question how to divide limited time between the two stages and who should make this decision. We introduce a laboratory experiment that closely resembles this setting: it features a product development task with an open design space, a downstream cost increase and two development stages. We show that performance is significantly worse when designers choose for themselves when to transition from ideation to execution and that decision control explains a large share of performance variation even after controlling for individual differences. How the time is allocated between ideation and execution does not affect mean performance, but later transition increases risk. One driver of poor design outcomes in the designer-initiated transition regime are delays in physical construction and testing of designs. We show that such delays can be prevented by "nudging" designers towards early prototyping. However, the most important performance driver is the lack of task structure in endogenous regimes, which can be remedied by demanding a concrete, performance-oriented deliverable prior to a transition.

Keywords: New product development, Behavioral operations, Innovation

Suggested Citation

Kagan, Evgeny and Leider, Stephen and Lovejoy, William S., Ideation-Execution Transition in Product Development: Experimental Analysis (August 2016). Ross School of Business Paper No. 1325. Available at SSRN: https://ssrn.com/abstract=2819065 or http://dx.doi.org/10.2139/ssrn.2819065

Evgeny Kagan (Contact Author)

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

Stephen Leider

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

HOME PAGE: http://www-personal.umich.edu/~leider/

William S. Lovejoy

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

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