Effectively managing the front end of innovation (FEI) has become an essential element in the successful development of innovative products, thereby enhancing the sustainable competitive advantage of high-tech industry. In spite of researchers and practitioners' realization of the importance of FEI, owing to front-end fuzziness, it is not so easy to manage serious weaknesses in FEI. This study, in order to achieve improved FEI performance, creates a holistic FEI view and explores the impact of front-end fuzziness on situation factors, based on contingency theory. This study tested the hypotheses, using data collected from a survey of Taiwanese high-tech firms. The results support the hypothesis by showing that strategic goal, proficient procedure, and innovative culture relate positively in contributing to FEI performance, and, the moderating impact of front-end fuzziness on the relationship between dedicated team and FEI performance, as well as between proficient procedure and FEI performance, particularly in regard to technology fuzziness and competitor fuzziness. This pattern of results suggests that high-tech firms should emphasize FEI management under different fuzziness situations to foster continuous FEI performance improvement.
New product development (NPD) with high failure rates has often been related to the little effort put in during the front-end phases (Cooper, 2001, Dwyer and Mellor, 1991, Herstatt et al., 2004, Khurana and Rosenthal, 1998, Kim and Wilemon, 2002b, Ozer, 2007, Verganti, 1999 and Verworn, 2009). The main objective of front-end activities is to provide strong product concepts that can be refined and developed during the NPD process (Elmquist & Segrestin, 2007). Backman, Borjesson, and Setterberg (2007) indicate that the greatest opportunities for improving the overall innovation process lie in the front-end phases of NPD, with the so called “front end of innovation” (FEI) regarded as the most critical phase of the innovation process (Brem and Voigt, 2009 and Poskela and Martinsuo, 2009). It is surprising that little research has been done on the issue thus far.
Researchers and practitioners realize the importance of FEI (Brem and Voigt, 2009, Dwyer and Mellor, 1991, Herstatt et al., 2004, Khurana and Rosenthal, 1998, Kim and Wilemon, 2002b, Ozer, 2007, Shenhar et al., 2002, Verworn, 2009 and Verworn et al., 2008), yet many practitioners also acknowledge a serious weakness in the FEI of their product innovation process (Khurana and Rosenthal, 1997 and Kim and Wilemon, 2002b). Managing the front-end is not easy; the main reasons include: (1) features of FEI have fuzziness complexities, uncertainties and uncontrollable factors; (2) it is difficult to gather reliable information; and (3) as FEI is a dynamic process, it is often unstructured and exhibits low levels of formalization (Brem and Voigt, 2009, Herstatt et al., 2004, Khurana and Rosenthal, 1998, Kim and Wilemon, 2002b, Murphy and Kumar, 1997 and Ozer, 2007).
Effectively managing the FEI can enhance sustainable competitive (innovation) advantage, but innovation management is a difficult challenge for managers (Brem and Voigt, 2009 and Kim and Wilemon, 2002b). During FEI, quality, costs, and timings have large opportunities to achieve improvements for time-to-market (Kim and Wilemon, 2002b, Smith and Reinertsen, 1998 and Verworn et al., 2008). From a cost viewpoint, avoiding unrecoverable sunk costs and resource consumption is crucial if there is an immediate termination of a poor product concept leading to product development. FEI also is a stage where one can shorten development time and reduce delays (Murphy & Kumar, 1997). Many researches point out that effectively performing FEI can directly contribute to the success of a new product (Cooper, 2001, Dwyer and Mellor, 1991 and Kim and Wilemon, 2002b).
The high-tech industry is very complex (Albors-Garrigos et al., 2009, Hoyt and Matuszek, 2001 and Willoughby, 2004). The need for developing innovative products is incontestable; the ability to create novel product concepts has become an essential prerequisite for the long-term survival of high-tech industries (Elmquist & Segrestin, 2007). Cooper (2001) stresses the importance of both market-related and technical activities in the front-end. The high-tech industry has traditionally been primarily technology driven over the last decade; however, exterior design and internal product design features have increasingly been related to knowledge of the market and customer demands (Backman et al., 2007 and Cooper, 2001). Front-end fuzziness has hampered product innovation success (Zhang & Doll, 2001); some authors argue that there are no front-end activities which are suitable for all situations (Elmquist & Segrestin, 2007), and this remains a neglected topic in the relevant literature on product development. Thus, in order to achieve improved FEI performance, this study creates a holistic FEI view and investigates the impact of different situational factors based on contingency theory, to help managers to more effectively manage front-end activities.
In the following sections, first, a brief review of the relevant FEI literature will be provided to highlight the importance of FEI and its performance. Following this discussion, a theoretical conception is introduced, incorporating crucial internal and external firm factors and their relation to performance. Next, a detailed description is provided of the methodology for testing a set of hypotheses derived from the theoretical conception. The paper concludes with a summary of the findings, followed by a discussion on the research implications.
