Business Enterprise Mapping partners with clients from a variety of industries, and company sizes, shapes and types. When we begin new client relationships, we are often asked about our relevant experience within that client’s industry. While we most likely have experience in their industry, we always caution clients that the most useful ideas for innovation, improvement and best practices often come from outside of the industry in which they compete. There is probably no business system where this timeless principle applies more than in the Product Development System. We spend substantial time with new product introductions and find the same product development management challenges can be found across all industries.
Top Ten Product Development Management Challenges
“You chase every good idea that sales throws over the wall”
When organizations try to tackle too many good ideas they ultimately don’t do anything really well. An efficient and effective new product development system requires discipline at the front end to select products and services that are strategically essential for growth and profitability. Too many good ideas can become the enemy of successful new product introductions.
“You develop new products because competitors have it”
Too often organizations launch new product ideas with an unclear vision of the target customer and exactly what purpose the product will fulfill. Every new product should have a well-developed value proposition that includes 1) the target customer, 2) the painful problem the product (or service) solves, 3) the unique way the product solves the customer’s problem and 4) the net benefit the product provides that customer. By not understanding the new product’s value proposition, an organization risks expending valuable resources for a non-essential purpose.
“Senior leadership must approve all new product decisions”
When organizations have undefined product development business processes and workflows, the end result is typically an excessive layer of reviews and approvals. By not understanding cause-and-effect relationships between problems and their source, organizations often add layers of bureaucracy to double and triple check for errors and problems. What they don’t understand is that these added reviews and approvals not only don’t fix the problem, but actually make it worse.
“You count on superstars to make great things happen.”
Very few organizations intentionally design their NPD system workflow. More typical is that a series of individual workflows grow up a bit randomly over time. Collectively these business processes form a very inefficient (wasteful) and ineffective (failed product launches) method for competing in the marketplace.
“You can’t articulate the difference between verification and validation.”
Less than 20% of senior executives that we meet with can name the business processes operating within their span of control. By not understanding the business processes that are necessary to successfully execute a new product development system, senior executives leave the performance of that system to chance.
“You don’t know who’s responsible & accountable.”
Beginning work with new client organizations, we rarely find good relationships between organization accountabilities and workflow. By assigning work based upon department and functional specialties and silos across the organization, the company is dramatically increasing the likelihood of a problem occurring prior to successful launch. NPD systems must be broken down into connected and aligned business processes that fully capture the workflow and accountabilities necessary to successfully launch new products.
“You don’t know if/when/why a product got killed.”
We find that a phase gate review process is an essential element of successful new product development management. Few organizations deploy a phase gate review and those that do rarely have a discipline decision-making process that supports it. It is essential that an organization have a good record of decisions made, the backup information supporting those decisions, and the why that led to that outcome.
“You don’t manage important deliverables”
The effectiveness of an NPD system is heavily dependent upon a clear set of business process-based deliverables along the way and an understanding of the extent to which the specifications are met at each phase gate. Most organizations do not have defined deliverables for both inputs and outputs that are necessary to launch new products faster, better, cheaper.
“You don’t know your internal customers or what they need to be successful”
Every business process has a customer and internal customers connect and align to ultimately satisfy customers external to the NPD System. Along with understanding the needs of internal customers, the NPD System must specifically connect and align those needs to create fully specified NPD deliverables. The NPD system leadership must fully understand its internal customers, the essential deliverables, and the target specifications for each of those deliverables. This alignment is the key to successful new products introduction.
“You don’t measure essential performance”
Generally speaking, there are only a few essential elements to an NPD system and most organizations don’t measure these elements. The essential measures involved require defining process deliverables, measuring the extent to which these process deliverables are delivered on time and to specification and then measuring the elapsed time to create these process deliverables. Rather than measure what is essential, we find that most organizations measure what is easy.
Addressing these common product development opportunities should begin by first defining what business processes should exist within the Product Development System, understanding the customers of those processes and what they value, determining what key deliverables are produced by each of these processes, and measuring the execution of those deliverables. At the end of the day, the key to faster, better, cheaper is to design and execute a tighter, more operationally controlled Product Development System that delivers the desired product target created by marketing’s new product concept.