| New
Product Development: Process
Stage
Systems
TEC expert Nick
Webb likens the new product development
process to the diagnostic medical pathway
employed by physicians: "When developing
a product, start with the least invasive
and least expensive option. Don't design
overly complex models and prototypes until
the product demonstrates it's worthy of
this kind of organizational resource."
The traditional stages
of development, broadly defined, include
(1) exploration; (2) product
description; (3) development;
(4) testing; and (5) launch.
More specific elements include:
- Marketing opportunity identification
- Strategic alignment
- Concept development or new product idea
generation
- Competitive positioning
- Resource identification
- Design-to-cost analysis
- Manufacturing development
- Commercialization
According to fellow
TEC expert Mitch Goozé,
"There are no predetermined criteria
or specific number of stages for every
new product. In most cases, companies
set up what are called 'gates' -- points
at which a significant incremental investment
of resources has to occur in order to
go forward."
A product development
process that takes place in phases --
typically called "stage-gate process"
-- was originally designed by Dr. Robert
G. Cooper in 1986. The stage-gate system
defines specific phases and tasks that
the cross-functional team must meet and
complete in order to move through the
product development process.
"A stage-gate
system is used, often by larger companies,
as a road-map for advancing the process,"
Goozé says. "Each stage consists
of a set of stipulated periods, with an
'entry point' that serves both as quality
control and as a checkpoint. If certain
criteria haven't been met at the entry
to each stage, the process can't go forward."
Multistage systems
vary from one company to the next, but
they frequently incorporate a template
for meticulous reviews at each stage.
At each "gate," the project
team is charged with reevaluating the
product and determining whether it should
progress to the next level.
"Stage-gate
systems generally benefit companies larger
in scale than TEC-sized companies,"
Webb observes. "Smaller companies
find the process overly bureaucratic and
paper-intensive."
Both Webb and Goozé
feel more efficient methods exist for
smaller companies to pursue in the development
of new products. Says Webb: "A good
way of moving forward is by modeling the
idea, gathering ever more market data,
measuring production costs and, as much
as possible, getting input from key customers."
(See "The Voice of the Customer"
in Additional
Resources below)
[top]
The
CARETM Process
Goozé describes
a four-step process called CARETM
(Inscape Corp.), for Creating, Advancing,
Refining and Execution. In the first phase,
the project team generates an unfettered
stream of ideas and concepts. "The
creating step is characterized by a lack
of constraints regarding existing rules
or boundaries. Success in this step requires
a view of the 'big picture' and a mind
open to alternative solutions."
The best individuals
to enlist for this process include those
who:
- Are good at exploring alternatives and
discussing concepts
- Are capable of realizing the master
plan
- Can easily move from one subject to
another
- Don't necessarily follow tradition
- Go with "gut feelings" when
making decisions
In the "Advancing"
phase, ideas and concepts are moved forward.
Using past experience and successful methods,
a plan for implementation is developed.
People who perform well as advancers:
- Recognize ideas and directions early
- Think of how a new idea could actually
be implemented
- Give the team a purpose
- Focus on the purpose of achieving objectives
efficiently
- Can easily deal with more than one thing
at a time
In the third phase,
"Refining," the team methodically
analyzes flaws or problems with the innovation
ideas from the creating step. "You
have an idea, you think it's a good idea,
but you have to ask: What's wrong with
it? As you move forward, there's intensive
review: What did I leave out? What did
I forget? This is the 'yes, but' step."
At this stage, he
adds, you sometimes discover things that
change everything and that may bring everything
to a halt. But that's part of the process,
especially if you risk exceeding resources
available to support the project.
Finally, in the "Execution"
or implementation phase, marketing activities
take top priority. "The focus is
on an orderly implementation that achieves
a high-quality outcome. Successful execution
requires focused objectives and guidelines.
These will be natural results of the prior
three steps, if they're done well."
The best executors:
- Pay attention to details
- Are methodical
- Are cautious with new approaches
- Finish everything they start
"Successful
execution requires focused objectives
and guidelines," Goozé says.
"These will be natural results of
the prior three steps -- if they're done
well."
[top]
Description
and Testing
Two phases -- one
at the very beginning and one nearer the
end -- are essential components of the
development process.
The "product
description" serves as a working
blueprint and should be included early
on in the development stage. This includes:
- Detailed product specifications
- Summary of features and benefits
- Primary areas of application
- Performance and cost requirements
- Analysis of competing products
- Rationale for development
- Outline of working plan
"A strong definition
of the proposed product inspires innovation
while at the same time encouraging the
project team to stay focused on what the
product must ultimately provide to customers,"
Webb says.
Similarly, the testing
phase completes the process of meeting
customer needs and expectations.
"In this phase,
the product is tested for design flaws
and checked to ensure that everything's
working as it should," Webb adds.
"This crucial point in the process
demands that many different functions
-- including engineering, parts, tools
and equipment, assembly sequences, operators,
technicians and production supervisors
-- all work together efficiently."
Testing also serves
as a useful information-gathering component.
"Actually, it's a good idea to be
collecting data at every stage of the
development process, focusing in the early
phases on customer interaction and creativity,"
Goozé says. "Later, when the
product is near launch, a pilot production
test is conducted for quality, cost and
user-friendliness."
With a pilot (or
prototype) product, the project team can
test and verify its capacity to perform
as originally conceived. An "engineering
prototype" (essentially a simplified
version of the final product) is most
useful as a means of "getting the
bugs out," while an advanced prototype
enables the team to conduct formal internal
and field testing.
In some cases, say
the TEC experts, it may be useful to conduct
detailed computer modeling and evaluation
(saving time and money over an actual
physical prototype).
Last but not least,
the product is introduced to the market
under conditions such as limited scope
and control of the marketing mix (price,
promotion and distribution), with results
carefully analyzed afterward. (See "New
Product Launch" in Additional
Resources below.)
[top]
Go/Kill
Whether a company
adheres strictly to the "stage-gate"
system or moves the development process
along according to other guidelines, it's
important to build in a way to abort what
may be determined to be a failed enterprise.
This veto mechanism is often referred
to as "Go/Kill."
"One reason
so many new product ventures fail is that
no one does truly rigorous scrutiny along
the way," Webb notes. "Instead,
misconceived or needlessly expensive projects
are allowed to go through the pipeline
until it's too late to stop them. Unfortunately,
when these flawed products fall short
in the marketplace, the costs are even
greater."
What criteria apply
to the Go/Kill decision? These include:
Positive
- The project demonstrates unique strategic
value to company.
- The complexity of the project is manageable
and not excessive.
- High profitability is anticipated.
- The new product will be cheap and fast
to produce.
Negative
- The project doesn't align with business
strategy.
- The project fails to meet customer needs
better than existing products.
- The project doesn't leverage company's
technological resources and expertise.
Goozé says:
"Most entrepreneurs think the new
product development process goes from
A to B -- A being an original idea and
B being execution. Often they say to themselves,
'All my ideas are great!' The hard truth
is, not all ideas are great. A product
development system that involves careful
planning and prioritization, followed
by a strong commitment to marketing, significantly
increases the odds of success."
[top]
Additional
Resources
Below are links to
more best practices as defined by our
expert panel:
|
