Like the residents of Lake Woebegone, all our children are above average. And all our new product programs are going to be successful with strong revenue growth.
Back in the real world, that’s not always how it works. That’s because few growth plans actually anticipate the obstacles constraining new product growth.
A few years ago, a frustrated new product executive from a large manufacturer shared one of her most frustrating experiences with me. Her team spent three years and millions of dollars designing a line of battery-powered products for their DIY channel. Then at the last moment, her sales and brand colleagues sank the program. They were concerned about the technology partner’s supply reliability and the brand reputation effects they might suffer if the new technology was not as robust or serviceable as required.
Maybe they were being overly conservative. But there is a tremendous amount of buying power consolidated in a handful of DIY retailers. So maybe their concerns were justified. We’ll never know for sure. But more importantly, how did the program get so far through the innovation pipeline when it was really doomed from the start?
The Problem is Not Anticipating Obstacles
This is a common issue in new product pipelines with some seriously negative effects for the companies that don’t manage it. A study from the telephony industry (Ogawa & Ketner, 1997) showed that the bottom 80% of performers canceled nearly 20% of their projects late in the process—after detailed design and engineering. Companies in the top 20% canceled the same percentage of projects overall. But they did so early—before wasting constrained resources.
By weeding out losing projects early, companies in the top 20% were able to focus on better execution. As a result, they got products to market in half the time and generated twice the volume of new product profits.
Crush Obstacles Early
So what could our frustrated new products executive have done differently to plan for the obstacles to new product growth? One of the most important things she could have done was to conduct what we refer to as Guided Innovation Planning using an Obstacle Crusher Inventory. New product innovation requires risk. But the Obstacle Inventory identifies the risks. Then you can either find ways around them or if they are fatal flaws come up with a way to retire the risk early or shelve the project.
That inventory includes 5 key areas of feasibility —commercial, technical, manufacturability, regulatory, and intellectual property/freedom to operate. You ask stakeholders from across the organization, “What are all the things that could go wrong during this program?” After that, the team assesses the likelihood and the impact of each. Then you identify the ones that could be truly harmful or even fatal and includes steps to resolve them in the project plan.
In the example above, the inventory would have identified the risk of reliability and brand damage as higher than stakeholders could stomach. That would have freed up years of resources to work on better opportunities. Or maybe to find a technology partner or design alternative with the reliability required to protect their brand.
If this is an area where you could use some help, our complimentary Obstacle Crusher Planner is available for free and comes with easy instructions on how to take your team through the process. To get it, simply enter your contact information and hit the blue button below.
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And if you are curious about how better pipeline visibility can help you manage your risks and reap more rewards, our AcceleTrak software can streamline that for you.