Business Enterprise Mapping has worked with over 300 enterprises from 60 different industries on 6 continents and in every type of organization function. Clients often ask about our experience within their industry and, while we probably have relevant industry experience, we caution that our learnings in other industries will likely be more valuable to their improvement efforts. This is especially true in the New Product Development (NPD) System.
Getting new products to market is a topic that is eternal and essential and impacts most organizations. At BEM, we frequently work with clients to improve performance of their Product Development System and we see common problems with common solutions.
The Most Common Problems in NPD Systems
Chase every good idea. When organizations try to tackle too many good ideas they ultimately don’t do anything really well.
Launch a new product because a competitor has it. Too often organizations launch new product ideas with an unclear vision of the target customer and exactly what purpose the product will fulfill.
Senior VP 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.
Superstars are hired to overcome broken processes. Very few organizations intentionally design their NPD workflow, so they turn to talent (superheroes) and tools (automation) as the key to their solution quest. This typically leads to frustration and turnover.
Leadership doesn’t know NPD business processes. Less than 20% of senior executives can name the business processes operating within their span of control.
Lack defined responsibilities and accountabilities. Beginning work with new client organizations, we rarely find established relationships between organization accountabilities and workflow.
Unclear decision criteria. Few organizations deploy a phase gate review and those that do rarely have a discipline decision-making process that supports it.
Don’t know the deliverables. Most organizations do not have defined deliverables for both the inputs and outputs that are necessary to control product development.
Can’t name internal customers. Along with understanding the needs of internal customers, the NPD System must specifically connect and align those needs to create fully specified NPD deliverables.
Don’t measure what matters. Generally speaking, there are only a few essential measurement elements to an NPD system and most organizations don’t measure them.
Business Process for the Best Practice NPD System
Develop and Align Business Processes. Best practice NPD Systems overcome gaps by adopting well-defined, purposeful business processes that are aligned through active customer/supplier relationships. Defining, organizing, aligning and continually improving business processes is foundational to operating a best practice NPD System.
Define and Specify Deliverables. The NPD System is comprised of a series of deliverables that progressively build a go-to-market new product specification, along with a physical or intellectual product to be produced that meets that specification. By clearly defining the main deliverables produced by each business process, the NPD leader can systematically monitor and manage the quality and progress of the new product project.
Create Clean Decision Making. Best practice NPD Systems contain regular and highly structured phase gate events, where defined business processes produce specified deliverables to be considered at an organized and synchronized decision opportunity. Clear decision records are produced with dates, actions taken and reasons behind those actions.
Establish System Measures that Add Value. There are only a few KPIs that are needed to monitor NPD system performance. These KPIs include the quality of the deliverables produced at each phase gate, the time required to produce those deliverables, and the extent to which those deliverables are delivered on time, accurate and complete. While this seems straightforward, few companies collect data and monitor these measures.
Distribute Accountability and Responsibility. When business systems don’t achieve their objectives, leadership’s bias is often to draw decision-making closer to top management and to add reviews, approvals, and checks into the workflow. Of course, this actually works against their good intentions by slowing down progress, adding many more opportunities for error and reducing ownership of the work itself. We see this tendency in the NPD system more than anywhere else in the organization. The best practice NPD System clearly assigns accountabilities and responsibilities closest to the source of the work, and regularly measure and monitor improvement in the system.
Best practice NPD System execution begins by first defining what business processes exist within the NPD 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. The key to a faster, better, cheaper NPD system is to develop a business process structure that consistently executes the desired product target created by marketing’s new product concept.
Interested in learning more? Click here!