This article is based on the works of Professor R. G. Cooper and his colleagues, and shared information from the Stanski Group, who incorporate Professor Cooper’s studies.
New Product Development
New products account for 33 percent of all business sales, and some companies have been remarkably successful at developing and launching new products. Others, not so much, with some even going bankrupt! Why were some businesses successful, while others failed?
To this end, Cooper et al (and colleagues) have conducted around 2,000 projects with
500 companies. The success rate of the ‘poor performers’ within the surveys and studies is only 38 percent. A huge profit potential can be achieved by improving new product performance.
In the top 25 percent, the businesses with the greatest success rate, 78 percent of their new products earn significant profits. These businesses also develop their projects more efficiently and with greater speed. A statistical analysis has shown “the most successful companies” employed behavior patterns which have come to be called, ‘Best Practices’.
Best Practices for New Product Development (per the Stanski Group)
- Upper Management ‘Must’ Support New Product Development And Innovation
- Without strong support from upper management the
process will fail, due to standard in house cultural resistance to change and continuous cost cutting efforts.
Choose The Right Projects, With A Sense Of Timing
- Understanding the market is key. Failing to understand
customer needs and desires, a poor market analysis,and/or poor attention to the marketplace, are consistently listed as major reasons for new product
development failure. - Recognize windows of opportunity for a product’s introduction
to the market.
Prep Work
- Develop a clear, sharp, and understandable definition of the product.
- Create a detailed plan of progress prior to the product’s development.
- Include tested feedback from the customer base.
- Incorporate the use of “true” cross functional teams.
- Take a hard stand on mandatory project costs and investments (don’t skimp).
- Avoid situations causing a sense of panic and urgency by good preplanning and by developing the philosophical practice of not making hasty decisions.
Empowering the Product Development Manager
- A specific management team made up of reps from different departments should be formed to monitor product development and provide marketing and company updates.
- The PD manager is an important part of this team, perhaps even the leader.
- The PD manager is responsible for his/her respective projects.
- The PD manager is responsible for understanding and representing the customer base.
- Product development will be more successful if the PD manager is enthusiastic about promising projects.
- The PD manager develops and maintains external business connections with partners and the customer base.
Behavior Patterns To Avoid
- Lack of Market Orientation- Poor market analysis and a failure to understand customer needs and wants..
- Poor Planning- Product development plans are omitted, ignored, or erroneous..
- Moving Too Quickly- Missing crucial steps due to poor planning and attempting to take shortcuts. When corners are cut, mistakes get made, the focus drifts, and efforts have to be repeated. This invariably results in wasted time and money.
Dismissing the Market
- Bypassing a market study or cutting a pilot trial will often lead to disaster.
- A poor market analysis, will result in a poorly defined product innovation.
- Having a vague understanding of customer needs will also lead to poorly defined product innovation.
- If the new product does not provide added value or benefits to the customer, they will not purchase it.
Spreading Research and Development Too Thin
- Overloading the R & D department is a very most common situation. A shortage of time, money, and people will result in failure. People need time and resources to perform their jobs and accomplish their goals. Poorly researched projects take time and money away from more, deserving more profitable projects.
