The idea-to-launch framework must feature solid performance metrics, so that senior management can assess how well new product development and the process is working, and, most important, so that project teams are held accountable for results. According to the APQC study, putting metrics in place is indeed a best practice with a strong positive impact, a distinguishing feature of top-performing businesses.15
How does one establish new product performance metrics? For individual new product projects, success metrics often include:
• First-year sales (versus the sales forecast in the business case at Gate 3)
• Product profitability (for example, NPV) versus that forecast in the business case
• On-time performance: actual versus promised launch date16
Top performers build in a postlaunch review point twelve to eighteen months after launch, as in Figure 7.1-1, where these metrics are used to gauge the ultimate success of the project. Here the project's actual results are assessed versus those results promised back when the project was approved at Gate 3. In addition, sales, profits, and on-time performance results for individual projects can be aggregated or averaged to yield performance metrics for the business's entire new product effort.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.