Product Development: Managing Uncertainty and Knowledge Integration

Product development activities are aimed at transforming new feasible product ideas into profitable products. This transformation requires the progressive reduction of uncertainty about market needs and technological choices. Market uncertainty arises from the complexity in translating customer needs (which change over time) into functional and emotional product attributes; technical uncertainty is linked to the degree of novelty in product and manufacturing process design decisions. In designing a product development process, it is essential to distinguish two kinds of problems: the strategic problem of risk and uncertainty reduction; and the organizational problem of cross-functional integration in the formulation of design decisions. In this chapter we first address the strategic problem of uncertainty reduction with the Stage-Gate model, exploring the concept of anticipation: the idea that the product development must be front-loaded with activities that allow to anticipate the resolution of knowledge gaps and aggressively reduce uncertainty in the early phases of the process. Then we present the recent evolution of the Stage-Gate model towards a process that is consistent with turbulent market conditions, in which the focus on anticipation is combined with reaction—the ability to keep the product concept open, preserving options in the advanced stages of development (flexible Stage-Gate). Finally, we focus on the role of integration events in tackling the organizational problem of cross-functional integration and the emergence of spiral and lean approaches to product development.