Recurring evaluation activities

The evaluation activities commence from the point where ideation is drawn to a close. At this point specific parts of the project were at a stage where they could be evaluated and thus there were grounds to analyze whether the prod-uct could be commercialized. The management of the company executed these activities. From the beginning of 1972 the new product group was established as a formal platform for the management to decide on which projects would be carried out. These activities were codified in the documentation that describes the function and role of the group.

The initial condition for each of the NPD projects in this stage was that the project had generated enough information for it to be evaluated. The outcome of this process is either a decision to develop the product into a commercial solution or discarding the product development project altogether.

The evaluation activities were either carried out in a single instance or they were paced throughout a longer period of time. Thus, there was either a dis-tinct evaluation event where the new product group evaluated the whole pro-ject or the evaluation activities were carried out when enough information had been generated to make a judgment on the different facets of the project.

Table 6 depicts the activities of the new product group when they evaluated new products to be developed into commercial products. For the sake of clarity only activities and outcomes are portrayed in the figure, as the initial condi-tions were very similar.

Table 6: NPD activities in the evaluation stage

A total of five recurring activities can be abstracted from the activities under-taken by the new product group in the evaluation stage. These appear to take the form of exercising simple evaluation rules as they depict the rules of thumb that guide which opportunities to pursue, taking the form of selection rules (Bingham and Eisenhardt 2011). These activities shared behavioral patterns between projects through their repetition and many of them were articulated in the founding documents of the new product group to guide how projects could be evaluated. The evaluation documentation also provides representa-tions of cognitive processes and their outcomes as many documents provide rationale and justification on why certain decisions were made. This follows the suggestion of Bingham, Eisenhardt and Furr (2007) in identifying simple rules. Specifically, the simple rules applied at Vaisala were: 1) product evalua-tion, 2) competition evaluaevalua-tion, 3) market evaluaevalua-tion, 4) product policy coher-ence and 5) risk evaluation. Next, I will describe these rules in more detail.

Product evaluation refers to exercising a rule in which the new product group examined the technical feasibility of the new product or concept in the light of the available information. For instance when NASTA was developed, the new product group deemed the product to be worthwhile as it had been tested at the Danish Meteorological Institute for an extensive period of time and the test results were positive. This rule is codified in the founding docu-ments of the new product group, as their task was to set the standard level of quality for new products. This rule appears to be the most persistent in the evaluation stage as it was conducted when evaluating each of the commercial-ized products.

Product characteristics such as technological sophistication have been iden-tified in the extant literature as a key predictor of new product performance (Henard and Szymanski 2001). It is these characteristics that the new product group evaluated when doing product evaluation. Therefore, in doing so the managers evaluated whether decision to deploy resources in a specific project would be effective use of them. This follows the suggestions of Mahoney (1995) on the role of management in optimizing resource allocation. Such is the case with the other evaluation rules as well.

Competition evaluation refers to exercising a rule where the new product group examined the market for a new product in light of the current and pos-sible future competition. In the case of CK 12 aviation radiophone and elec-tronic microscope the competition was deemed too fierce for Vaisala to suc-ceed in it. In the case of HUMICAP and Kemi lighthouse competition did exist but it could be usurped with the offering that was being developed. This rule is codified in the founding documents of the new product group as their respon-sibility was to be capable of evaluating competition and relating the situation to the decision whether products would be commercialized or discarded. The rule appears to be present in conjunction with market evaluation, where these two rules in conjunction enable the new product group to evaluate the market potential of the new product.

Analyzing and maintaining an understanding of the strengths and weakness-es of competitors has been identified as being central for succweakness-essful NPD

(Atuahene-Gima 2005). Marketplace characteristics that relate to competition have also been identified as potential antecedent for new product performance (Henard and Szymanski 2001). Therefore, in doing competition evaluation, the management evaluated the new product in light of competition to deter-mine whether it is effective to allocate resources for the project or not.

Market evaluation refers to exercising a rule where the new product group evaluates the potential of the new offering to fulfill existing customer needs in light of the available evidence. When the RS 21 and RS 24 radiosondes were developed they were deemed to fulfill a new customer need in the sense that they would fit into the ground equipment of other manufacturers and thus fulfill a need voiced out by customers. This rule enabled the new product group to fulfill its goal in defining whether a new product would fill the commercial and quality related goals. The rule appears to be present in conjunction with product evaluation, where these two rules together enable the new product group to evaluate the potential of the new product in the market.

Understanding the needs of the customers has been identified as being cen-tral for successful NPD (Atuahene-Gima 2005) so as to be able to respond to these needs. Danneels (2002) has also stressed the importance of integrating customer knowledge into the new product development process. By doing market evaluation on a product, the new product group determines whether, according to their perception, the product responds to customer needs.

Product policy evaluation refers to the evaluation of whether the product fits with the current product policy of the company. Deciding on whether a certain product fits with the product policy was one of the central tasks of the new product group as one of their main tasks was to think and formulate product policy for the company. For instance, this was a central consideration when new radiosondes were approved for commercialization, as they would continue the product line. Oftentimes the use of this rule was accompanied by product and market evaluations.

The fit of a new product with both technological and marketing resources has been identified as a driver of NPD performance (Harmancioglu, Droge and Calantone 2009). Product policy evaluation could be claimed to function to-wards these ends. Furthermore, this evaluation enables the management to evaluate possible synergy benefits generated by the product with regards to technology and marketing (Henard and Szymanksi 2001). Therefore, the product policy evaluation directs the management towards analyzing how ef-fective resource allocation would be in a specific project.

Risk evaluation refers to exercising a rule where the new product group evaluated the financial risk related to the final development of a new product.

Throughout the period of inquiry, Vaisala applied for extensive amounts of money for product development from the Finnish Ministry of Trade and In-dustry and also from SITRA (The Finnish Innovation Fund). While this rule is not codified in the operating principles of the group, evaluation of the financial risk of advancing projects was done frequently. For instance, when developing the CK 12 aviation radiophone exercising the other rules resulted in a negative outcome but still the availability of external financing was deemed a positive

factor when the project was evaluated. In many instances this was a central consideration when products were made for new markets.

As the mortality rate of NPD activities is high (e.g. Barczak, Griffin and Kahn 2009; Griffin 1997), risk evaluation enabled the management to mitigate it by explicitly evaluating the risk associated with commercialization. The rule therefore mainly deals with the amount of external resources the company can use in the development to supplant the use of own resources. Therefore, through this the managers aim to optimize the resource allocation of the or-ganization by evaluating the balance and risk related to the use of both their own as well as external resources. Next I proceed into depicting the activities that relate to the outcomes stage.