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Implementing a performance measurement system (PMS) for research and new product development (R&NPD) is fundamental for supporting decision making but is a challenging task, because effort levels are not measurable and success is highly uncertain. The purpose of this paper is to investigate the design of a PMS in R&NPD in a case study based on the balanced scorecard and Lynch and Cross's pyramidal framework.

The case study regards Whitehead Alenia Sistemi Subacquei that was thought to be a proper company for the empirical analysis for its strong reliance on R&NPD activities, the adoption of a PMS in the R&NPD department and the lack of contributions in the literature that investigate the design of a PMS for R&NPD function in the context of the military industry.

Relevant managerial implications can be drawn: there is the need for different perspectives in measuring performance in an NPD environment, beyond the iron triangle (time, cost and quality); the use of different perspectives/indicators allows tailoring PMS to the specific object of control, coherently with the need to identify specific responsibilities for each measured performance; the adoption of different performance perspectives/indicators should not prevent a holistic view of performance, in which the different performance perspectives/indicators are related with the overall R&NPD economic performance and implementation matters: sharing with people the measurement aim/characteristics make the PMS understandable and acceptable.

Although this subject has been debated in the literature, more study of applications in real contexts is needed.