Over the last decade or so, the nature of the business world has become increasingly competitive and dynamic. As a result, companies had to develop new models to increase productivity and respond to increasing demand. New product development had to be carried out faster, as product life cycles shortened, in order for companies to stay competitive. As a result, companies have reduced the time that's needed to launch new products and have dramatically raised their sales of new products and their market share. The key to the new approach is an entirely different way of making product development decisions. By improving the quality, timing and synthesis of product and process information throughout the development cycle, such companies have turned a linear and sequential process into a flexible one that reacts to information continually rather than at intervals and in batches.

The new approach does have its challenges. Without skilled leadership and some new organizational capabilities, companies may lose control of a disciplined process that has improved performance significantly. They will have to manage their resources more flexibly and monitor their teams’ ability to generate the right information and to use it effectively. Yet for many companies, the opportunity to change products significantly later in the development cycle while also developing better ones more quickly is just too compelling to pass up.

The changes currently required in product development resemble the lean manufacturing techniques that have transformed mass-production lines. Besides optimizing the efficiency of each station on the factory floor, lean procedures create a flexible, efficient work flow that's intended to meet customer demand just in time. To minimize waste and inventory and to optimize the efficiency of the line, parts are fed into the process as they are needed.

By contrast, the current approach to developing new products resembles the traditional mass-production line: Companies follow a fixed sequence of steps, moving from market research to product concept, design specification, prototype testing and so on. Like a production line, this process can be improved significantly by ensuring a continual flow of work.

Instead of using a linear approach to collect information, make a decision and then base other decisions on the first one, information-based teams solve problems continually and combine their findings frequently. Like the medical device company’s team, they work in a way that allows them to converge on the best solution. This style of work resembles the "daily-build" method that many software companies use: The code produced by individual programmers is compiled every day so that project leaders can test it for bugs and functions. Problems are reported immediately, and the team knows, on a daily basis, how close it is to its ultimate goal.

Measuring the quality of information processing is equally important. How, for example, did initial market forecasts or cost estimates compare with actual results? Did information gaps become apparent during the process and, if so, why? Were customer complaints fully addressed while the concept was under development and, if not, why not?

For the past couple of decades, product developers have improved their performance largely by making the process more disciplined and rigorous. Such improvements can no longer satisfy the increasing demand for better products that are launched more frequently and aimed at ever-narrower customer segments. Companies must now turn their attention to building a more nimble and flexible product-development organization. To do so, they will have to focus on information flows within the development team, coordinate the efforts of dozens of sub-teams more successfully, learn to solve problems and synthesize results on an ongoing basis and give more decision-making authority to project leaders.

Those companies that meet the challenge will have an undeniable edge over their competitors, because they will succeed not only in responding to customer and market changes right up to a fairly late stage in the process, but they will also succeed in bringing their products to market more quickly and efficiently.