How close to the “ideal” product development process does your NPD system approach? Where the output of your development process consistently delivers “ideal” products on time and on budget. Where an ideal product has the following characteristics:
- Customer’s reception of the product is overwhelming!
- The product performance is absolutely amazing – beats all the competition
- The cost is extremely low – much lower than all the competitors!
- The product is so unique that nobody else delivers a similar product
- Quality and reliability is best in class
An Ideal product development process sounds fantastic, but is it realistic?
Though they are far and few between, there are good examples of companies who have master the product development process and turn out ideal products consistently. Disney and Apple are two examples of companies that get it right more often than not.
Of course not every product they launch is successful (e.g. the movie John Carter – haven’t seen the move myself but was reported to be the biggest movie flop of all time ). But over the long haul, Disney has consistently created and delivered entertainment value for customers at a price and cost that pleases shareholders.
The principles of lean development.
It may not be possible to develop and launch winning products all the time, but it is always possible to give each product development effort a fighting chance to be successful by implementing a process that strives to consistently deliver ideal products and kill off marginal development projects (me-too undifferentiated products) early in the development cycle.
Lean addresses the critical transformation of knowledge (understanding what the customer wants and values – and creating and delivering value) from the early stages of market validation & requirements through design, production and customer support. Lean recognizes that new product development is a multi-discipline task and team effort. It doesn’t wait till the end of design to involve manufacturing engineering to produce the product. It involves all the necessary functions at the right times.
All successful new products share a set of common success factors:
1) Customers have a big enough pain, problem or desire worth solving. They have an important job-to-be-done that they want done better, faster, cheaper, etc. Their current desired outcomes are not being served and they are open to “hiring” a better solution.
2) The product solution provides clear and differentiated customer value that addresses underserved desired outcomes at a price customers believe is worth paying for (see value)
3) And the product is delivered at a cost that provides good margins for predictable and stable growth. When a company can’t make money offering a product, they discontinue the product and seek more fertile ground.
Creating value and driving out waste.
Lean product development is all about creating value and driving out waste. It’s about learning what customers want and learning how to deliver value efficiently. If a development activity isn’t creating market share or improving product margins – it is waste and should be eliminated from the product development process.
Not all products are created equally.
Lean product development is adaptable, flexible and scalable. It allows an NPD team to apply the right level of structure, resources and design efforts to address the specific type of development project at hand. For example, a product extension effort requires far less market research and design resources than a new breakthrough innovation. Running a product extension through the same process rigor is unnecessary and a waste. It also causes the NPD team to become bureaucratic and unimaginative. The process becomes the end and not the means.
On the other hand, when a new to market product is under development, not testing the value proposition and designs early, often and cheaply, with real customers, is a formula for even greater waste and unnecessary risk.
We talk about Apple’s great success, and indeed it has been phenomenal. As consumers and outsiders, what we see coming out of Apple’s stores are ideal products – they understand what customers want and value, even though the average customer could never describe the ideal product to them (that’s why Steve Job’s didn’t use market research – but of course, market research has many tools and definitions). What we don’t see is all the experiments and test Apple conducts in understanding customers, creating value and coming up with designs that leave competitors scrambling.
The Apple way is to enter new product areas patiently and slowly, putting customers first. It may seem slow to some product development firms, but sometimes it is better to slow down and do it right the first time because in a mainstream consumer market, you may never get a next time. Apple could not have afforded to launch a multi-million unit product line without getting it right the first time. Just like Walt Disney knew he had to get the movie Snow White and the Seven Drafts right the first time to be successful (see what Walt Disney Taught Us on Innovation: Snow White).
Lean product development process puts development projects into the proper context. It accounts for project risk and uncertainties and creates an efficient game plan to go from transforming a good idea into a great new product. At each event and milestone along the way, the process adapts to new information and changing conditions. It applies the right level of resources and tools, at the right time, to get it right the first time.
If your firm is stuck with launching “me-too” undifferentiated products and/or launching “solutions looking for a problem,” then perhaps it’s time to rethink your NPD strategy and adapt lean principles to create ideal products.
Be lean and strive for creating ideal products. Your customers will reward you by opening their wallets and hiring your solutions.