Is Your Product Development Strategy Increasing Your Time-to-Market?

It is my experience that many companies have relatively relaxed product development strategies. Most declare lofty goals like "delight the customers" or "be the leader in performance" but these statements lack clarity for the development teams that are supposed to help the organizations meet their business goals.

Product development performance and effectiveness requires clarity in two areas:

1. New product development (NPD) strategy,
2. Product portfolio strategy.

Let me explain what these two concepts are and how they are different.

NPD Strategy is the way an organization introduces new products to its target markets. This is the "how," and it should lay out, in clear detail, how the organization handles all the tasks and activities related to product development. Examples of NPD strategies are development through mergers and acquisitions, technology partnerships, or in-house research and development.

Product Portfolio Strategy is the "what," which lays out what the company is offering to its target markets over time. It contains life-cycle of each product, from introduction to market till removal from use. Examples of product portfolio strategies are relevant product families, product platforms for different markets, legacy compatibility (or not), product and service packages.

There are two ways these strategies affect your time-to-market:

1. The content of the strategies: For example, if your product portfolio strategy involves inter-dependent products, development teams will have to ensure that a reasonable combination is tested before launch, significantly adding to the development time. Similarly, if your NPD strategy is based on in-house development, your teams may need to acquire new skills for a new product line.
2. The clarity of the strategies: Lack of clarity leads to interpretations and filling the blanks. As expected, none of these will resemble the intent of the organization and will differ even within the development teams. As a result, each team member or sub-group will work to a different objective, resulting in frustration, conflicts and significant delays in delivery. 

In conclusion, organizations need to pay attention to articulating two product development strategies clearly and thoroughly. Further, these strategies need to be regularly communicated, reviewed and updated.

I hope you find this posting helpful. I invite comments and feedback on my posting. You may reach me by writing to ferhan.bulca@intrascope.ca.

Start Your Product Development with Price

Yes, it is a great idea! And, your research shows that customers are willing to part with their hard-earned cash for your next product. Provided, of course, your price fits within the perceived value of the product. You are convinced your team can develop it with a reasonable profit margin. You give the "go ahead" to the team, they work diligently and, voila, the product is ready. Next, the suppliers' final quotes come for production runs. Opps, now your product is too expensive to produce, eating away all the profits you accounted for. What happened here?

Is this scenario your "regular" product development? It should not be. It is very possible to meet cost targets with a level of discipline and diligent enforcement of the target price during development. Here are the basic steps towards eliminating product cost surprises:

1. Determine your target selling price BEFORE the start of product development.
   It is difficult to set a price to a yet-to-be-developed product but this is where the strength of your market research team shows. At this stage, there are many assumptions around the target price, record them. Derive from it the target cost for the development team to meet.
   
2. Make the target cost a requirement for the development team.
   The target cost and the assumptions for it need to be visible and transparent for the development team. Identify an owner, who monitors the estimated cost of as-designed product during development.
   
3. Make product cost a component of regular design reviews.
   Estimated cost and the assumptions need to be reviewed regularly. Treat any indicators for creeping cost seriously and immediately. Do not allow "it will come down when we start producing in quantity" to be an excuse for high-cost designs to get by.
   
4. Feedback to design team the actual cost of product after development is complete.
   It is educational for the design team to know the actual cost of their design when it hits production. Make it a point to gather the design team after the product is in the market and compare the cost estimations from design reviews to the actuals.
   

These simple and effective steps were successfully implemented in a number of development projects I managed or oversaw. While the steps are simple, just like everything else, the devil is in the details. I would be more than happy to help you with your product development needs and tailor solutions to meet your objectives.

I hope you find this posting helpful. I invite comments and feedback on my posting. You may reach me by writing to ferhan.bulca@intrascope.ca.

Necessary But Not Sufficient

During these tough times, many employees have observed their companies taking very difficult decisions. These decisions helped some and were not enough to keep afloat some others. I experienced the latter, and unfortunately observed a once-profitable company go into bankruptcy protection.

This sounds like one of many stories we are hearing today. The situation I experienced is different in one major way: The company was a business experiment to apply a theory. Well, it did not work in the end but the path to the end was interesting and enlightening, if I may say so.

The CEO, President and the Board of the company strongly believed in "the combination of clever, committed people working together with a powerful approach could achieve any goal." And, they either hired accomplished people or re-positioned those already in the company to significant roles. They explained, in excruciating detail, the methodology to apply and tools to use. People were committed to making the company successful.

What went wrong then? Some accuse the economic downturn, I beg to differ. Clever and accomplished people, thrown together and given tools, is not sufficient to achieve a goal. This is good leadership; place capable people to effective roles, give them the tools and show them the vision. It is necessary but not sufficient by itself.

The path to success is full with obstacles, detours and misconceptions. Good managerial skills and operational savvy is also necessary to navigate through ever-changing conditions, personality issues and communication problems. In my opinion, that is what caused the company meet its unfortunate end.

In summary, creating a vision and setting a goal is only a beginning to a business journey. Success depends on the capability to take the team to the goal, one day at a time, through good management.

I hope you find this posting helpful. I invite comments and feedback on my posting. You may reach me by writing to ferhan.bulca@intrascope.ca.