Product Development

The Art of Managing New Product Transitions

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Faster time to market and shorter product life cycles are pushing companies to introduce new products more frequently. While new products can offer tremendous value, product introductions and transitions pose enormous challenges to managers. In studying product introductions, the authors found that a common handicap was the lack of a formal process to guide managerial decisions. Drawing from research at Intel and examples from General Motors and Cisco Systems, the article develops a process to facilitate decision making during new product transitions. The proposed process analyzes the risks impacting a transition, identifies a set of factors across departments tracking those risks, monitors the evolution of these factors over time, and develops playbook mapping scenarios of risks and responses. The process helps level expectations across the organization, lessens the chance and impact of unanticipated outcomes, and helps synchronize responses among different departments. It assists managers in designing and implementing appropriate policies to ramp up sales for new products and ramp down sales for existing products, balancing the supply and the demand for both so that combined sales can grow smoothly.

Feryal Erhun is an assistant professor of management science and engineering at Stanford University, in Palo Alto, California. Paulo Gonçalves is an assistant professor of management science at the University of Miami, in Coral Gables, Florida. Jay Hopman is a strategic analyst and researcher at Intel Corp., in Folsom, California. Comment on this article or contact the authors through smrfeedback@mit.edu.

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