Technically, new product development (NPD) projects often fail at the end of a development process. The foundations for failure, however, often seem to be established at the very beginning, often referred to as the “fuzzy front end”. Broadly speaking, the fuzzy front end is defined as the period between when an opportunity for a new product is first considered, and when the product idea is judged ready to enter “formal” development. Hence, the fuzzy front end starts with a firm having an idea for a new product, and ends with the firm deciding to launch a formal development project or, alternatively, decides not to launch such a project.
In comparison with the subsequent development phase, our understanding of the fuzzy front end is still limited. Relatively little is known about the key activities that constitute the fuzzy front end, how these activities can be managed, which actors that participate, as well as the time needed to complete this phase. Many firms also seem to have great difficulties managing the fuzzy front end in practice. In a sense this is not surprising. The fuzzy front end is a crossroads of complex information processing, tacit knowledge, conflicting organizational pressures, and considerable uncertainty and equivocality. In addition, this phase is also often ill-defined and characterized by ad-hoc decision-making in many firms. It is therefore important to identify success factors which allow managers, and their firms, to increase their proficiency in managing the fuzzy front end. This is the purpose of this short article.
In order to increase knowledge on how the fuzzy front end can be better managed, we conducted a large-scale survey of the empirical literature on the fuzzy front end. Our analysis of the existing research identified 17 success factors for managing the fuzzy front end. In sum, the extant literature on this topic highlights a variety of different factors critical to the completion of the front-end phase.
Although successful management of the fuzzy front end requires firms to excel in individual factors and activities, this is a necessary rather than sufficient condition. Firms must also be able to integrate or align different activities and factors, as reciprocal interdependencies clearly exist among different activities and factors. In the literature this is often referred to as “a holistic perspective”, “interdependencies among factors”, or simply to as “fit”. To date, however, nobody seems to know exactly which factors should be integrated, and how this should be achieved. Still, innovation managers are strongly encouraged to view the front-end activities as a coherent whole, rather than stand-alone activities. This advice is further legitimized because the fuzzy front end process seems to vary not only among firms, but also among projects within the same firm where activities, their sequencing, degree of overlap, and relative time duration differ from project to project. Therefore, capabilities for managing the fuzzy front end are both highly valuable yet difficult to obtain. Firms therefore need first to obtain proficiency in individual success factors, but also the capability to integrate and arrange these factors into a coherent whole aligned to the circumstances of the firm.
In addition to individual success factors and their interdependencies, firms need to master several trade-off situations which we refer to as “balancing acts”.
As a first balancing act, firms need to ask if screening of ideas should be made gentle or harsh. On the one hand, firms need to get rid of bad ideas quickly, to save the costs associated with their further development. On the other hand, however, harsh screening may also kill good ideas too early. Ideas for new products often refine and gain momentum through informal discussion during development work, a fact which forces firms to balance too gentle and too harsh screening.
Another balancing act concerns formalization. The basic proposition is that formalization is good because it facilitates transparency, order and predictability. On the other hand, in striving to enforce effectiveness, formalization also risks inhibiting innovation and flexibility. Even if the empirical evidence is still scarce, the relationship between formality and performance seems to obey an inverted U-shaped curve. This means that both too little and too much formality has a negative effect on performance. From this follows that firms need to carefully consider the level of formalization they impose on the fuzzy front end.
A third balancing act concerns the trade-off between uncertainty and equivocality reduction. Market and technological uncertainty can, and need, often be reduced through environmental scanning and increased information processing in the development team, but more information often increase the level of equivocality. An equivocal situation is one where multiple meanings exist, and such a situation implies that a firm needs to construct, cohere or enact a reasonable interpretation to be able to move on, rather than to engage in information seeking and analysis. Therefore, firms need to balance their need to reduce uncertainty with the need to reduce equivocality, as trying to reduce one often implies increasing the other.
Furthermore, firms need to balance the need for allowing for flexibility in the product definition, with the need to push it to closure. A key objective in the fuzzy front end is a clear, robust and unambiguous product definition because such a definition ensures efficiency and facilitates the subsequent development phase. However, product properties, features and attributes often need to be changed during development as market needs change or problems with underlying technologies are experienced.
Finally, a final balancing act concerns the trade-off between the competing virtues of innovation and resource efficiency. In essence, this concerns balancing competing value orientations, where innovation and creativity in the front end are enabled by organizational slack and an emphasis on people management, while resource efficiency is enabled by discipline and an emphasis on process management. In addition, the fuzzy front end process needs to be adapted to the type of product under development. For physical products, different logics apply to assembled and non-assembled products respectively. Emerging research shows that a third logic applies to the development of new service concepts.
This short article advices managers and other persons involved with innovation to pay particular attention to the factors and activities which precede formal development efforts. Firms that want to increase their proficiency in the front end should do their utmost to identify individual success factors and to obtain proficiency in these, to integrate these factors into a coherent whole, to master multiple balancing acts, and to recognize that the front end process is affected by multiple contingencies, unique to each firm. To conclude, managing the fuzzy front end is indeed no easy task, but can have an enormous positive impact on performance for those firms that succeed.
By Johan Frishammar and Henrik Florén