Most product-development managers of our competitors are always struggling to bring in projects on time and on budget. They never have enough resources to get the job done, and their bosses demand predictable schedules and deliverables. So the managers push their teams to be more parsimonious, to write more-detailed plans, and to minimize schedule variations and waste. But that approach, which may work well in turning around underperforming factories, can actually hurt product-development efforts.

Although many companies treat product development as if it were similar to manufacturing, the two are profoundly different. In the world of manufacturing physical objects, tasks are repetitive, activities are reasonably predictable, and the items being created can be in only one place at a time. In product development many tasks are unique, project requirements constantly change, and the output—thanks, in part, to the widespread use of advanced computer-aided design and simulation and the incorporation of software in physical products—is information, which can reside in multiple places at the same time.

The failure to appreciate those critical differences has given rise to several fallacies that undermine the planning, execution, and evaluation of product development projects.