The way managers and their design teams go about developing products and services can deeply affect their firms' longevity, especially in highly competitive markets. New and emerging technologies are greatly expanding research and development capabilities in many industries, but how do firms apply them for optimum effectiveness? What implications do they have on the management of R&D processes? What can be learned from other disciplines to enhance the way new products and services are created?

These and related topics are the subject of ongoing research by HBS assistant professor Stefan Thomke. "The theme of my work," he says, "is the impact of new technology and innovations on problem solving, learning, and experimentation strategies in the R&D process." Thomke, who holds multiple degrees in electrical engineering, operations research, and business management, believes an interdisciplinary approach has much to offer researchers. "What I try to do," he explains, "is go deep enough into a particular area to understand the connections between seemingly unrelated fields -- connections that specialists might not notice -- and then look across the fence, so to speak, to see what can be learned from other disciplines."

Generally, design projects progress through a series of development phases, each employing increasingly sophisticated technologies and methods to solve design problems. While a typical project begins with concept development, it may then move on to drawing and documentation, materials research, computer modeling, and, in the case of products, prototype development and production tool design.

Thomke's latest research has cast fresh light on vital aspects of experimentation and learning within the product development process. His findings suggest that adopting new technologies and implementing new management approaches can often save millions of dollars while significantly improving R&D performance. Among the issues Thomke's work addresses are the effects of computer simulation on learning and the role various experimentation modes play in determining factors such as quality, development efficiency, and even market share. A related study has probed the importance of developing and maintaining greater flexibility in the R&D process, especially during a project's early phases.

Advances in computer technology are having a substantial impact on the product design field, Thomke says. In a recent article in Research Policy, for example, he explores the impact of computer simulation on automotive design. His findings reveal, among other things, that in environments where alternative testing strategies are time-consuming and costly (such as the use of physical prototypes), computer modeling can increase efficiency by reducing time and cost requirements. Without these constraints, engineers can significantly improve the learning derived from experimentation by increasing the number of experimental iterations.

Thomke cites evidence of his findings with several examples from the auto, pharmaceutical, and semiconductor industries, where much of his empirical research has been conducted. "As recently as seven years ago," he explains, "crash testing a design for a new automobile was typically done by building expensive prototypes relatively late in the development process, then using them in several other tests before actually crashing them." Today, computer models enable simulated crashes to be repeated many times over, even in extremely slow motion, and much sooner than was possible before. By learning early on how a particular design is likely to fare in a crash, engineers can test numerous options and thereby create a better product more efficiently.

Similarly, sophisticated new computer programs can now test how thousands of newly designed parts will fit together in the finished product, based solely on engineering drawings and specifications. By warning designers of potential "part interferences" while still in the drawing stage, this software can save millions of dollars in subsequent prototype development costs. In a working paper with Takahiro Fujimoto of the University of Tokyo, Thomke calls this effect "front-loading" problem solving. Resolving more problems early in the development process, he points out, can increase development performance substantially.

Like many emerging technologies and methods, however, computer simulation has limitations. Eventually, designers must build prototypes to learn what computer models cannot reveal. Managers then have to ask themselves which research method they should choose and when they should make the transition to another in order to attain optimal development performance.

To address this issue, Thomke turned to the pharmaceutical industry and a new technology known as "combinatorial chemistry," in which large numbers of compounds can be efficiently tested en masse for a particular therapeutic effect. Working with Eric A. von Hippel of MIT and Roland Franke of Natural Pharmaceuticals, Inc., he observed that conducting hundreds or thousands of experiments in parallel rather than, as is more commonly the case, in sequence, enables researchers to bring new drugs to market faster and cheaper. The drawback? Because learning gained from one experiment cannot be applied to the next, the total number of experimental trials increases. But that is a tradeoff managers are often willing to make in highly competitive markets. By understanding the effect of various experimentation modes on cost, learning, and time-to-market, companies can often enhance corporate performance through improved management of R&D processes.

A different dilemma confronting product developers is that of rapidly changing customer needs. In a current article in the California Management Review, Thomke and consultant Donald G. Reinertsen examine the benefits of adding greater flexibility to the product development cycle. Their findings led them to conclude that flexibility is, in fact, a measurable attribute and one that can be proactively managed. "By choosing design technologies and management strategies that decrease the 'turning radius' of the firm," Thomke notes, "developers become more adaptable to the demands of rapidly changing markets."

True to his interdisciplinary bent, Thomke is now delving into the nature of the relationship between product development and the areas of marketing, organizational behavior, and strategy. Ultimately, he believes, it is not new technologies and methods alone that determine marketplace success but how managers go about leveraging them to gain competitive advantage.

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