Marketing
New Product Development Pitfalls: Stretching Too Thinby David Goldsmith
Wheelwright and Clark, two gurus in new product development (NPD) start their book "Revolutionizing Product Development" by stating that "firms that get to market faster and more efficiently with products that are well matched to the needs and expectations of target customers create significant competitive leverage." Ed Bobrow, a friend and author of several books, begins "The Complete Idiots Guide to New Product Development" with, "In the beginning ... everything was a new product. Today, most businesses rely on new products and services for more than a third of their sales revenue." Finally, in the book, "Winning at New Products," Robert Cooper writes, "America is engaged in a new products war." Firms around the globe race to fill the void daily with new and creative computer software, home appliances, entertainment destinations, automotive products and publishing mega hits.
The first impression one might have is that firms do not have enough time to create new products fast enough. CNNfn, MSNBC and every publication that crosses our desks points out that companies have created both "bombs" and the next best product. The reality is far from the truth. Though our first impulse is believe that most , as they relate to new product development, err on the side of having too few projects up for development. However, the opposite is most often true: a vast number of companies have too many projects up for development, not too few. Think about every initiative, every new design, every concept that your firm has put forth for consideration. Actually take another step and write down every project you're working on.
Prior to understanding how the process of NPD is best utilized, management may find itself stuck in a rut of products late to market: ideas that never reach completion and staff that is overburdened with too many ongoing projects, further inhibiting any subject receiving enough full attention to make it to market.
A. Start to REMEDY the situation
1. List all the projects in house today. Do this before you read #2.
2. List all the design or creative resources available to NPD. This might include engineering hours and manufacturing prototype staff. Do this before you read #3
3. List all the other , such as marketing, cash, manufacturing, sales, staffing that would take the product to market.
4. List all long term and short term goals of the company.
If you're like most firms, numbers 1,2,3 and 4 will show big discrepancies. The firm is overloaded with initiatives and projects and is stretched too thin. You may have 13 projects or 51 ideas in the works, and only 3 engineers or 200 artists capable of doing the work properly. The marketing budget, manufacturing and sales staff may have too much already on their plate to bring 8 new dining room table designs to market without overload. Finance may only be able to produce 4 new prototypes at a cost of $45,000 per piece.
B. Get your firm in ALIGNMENT with its goals and resources
1. Set up a New Products Development Group (NPDG) or team. This is a cross functional members of the company that become responsible for all aspects of developing new products and services.
2. Cross off any projects that are not in line with corporate goals, especially long term or are not synergistic to the firm. This must be done cross functionally, with as many departments participating as possible. By eliminating this unnecessary clutter, you and your team can better focus on priority projects.
3. Determine how much of your resources are actually available to bring any project to completion.
4. Focus your design members on no more than 2 NPD projects at a time. Wheelwright and Clark found, "When an engineer, focused on a single project, is given a second one, utilization often rises slightly because the engineer no longer has to wait for the activities of others involved in that single project....however, if a third, fourth, or even fifth project is added, the percentage of time spent on value-added tasks drops rapidly..."
5. Set up benchmarks and a project plan that is now attainable with all parties in agreement. Then let the people do their jobs. (Interested in learning more?... Learn about the Stage-Gate Process, Strategic Mapping or the Development Funnel.)
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David & Lorrie Goldsmith are founders of the Syracuse-based MetaMatrix Consulting Group Inc. Their firm specializes in consulting and speaking services. They can be reached at 315-476-0510 or 888-777-8857 or emailed at dgoldsmith@davidgoldsmith.com.
