As you kick-off your growth efforts for this year, have you given any consideration to what you should be feeding the teams in your new product development process?
Just as we all need to start the day off with a healthy breakfast and limit our intake of junk food, your new product development efforts will also be stronger if you provide them a diet rich in these five innovation nutrients:
Time in the marketplace – Unless you already have more high quality opportunities than you need, getting technical folks out into the marketplace can pay great dividends. While most industrial companies leave this work solely to product managers, it’s a great way to identify unmet needs that are a better fit with your technological capabilities – opportunities that others may not see.
Time with charter customers – Even if your company uses requirements tools, like Voice of Customer, there is no substitute for getting technical folks in front of charter customers where they can hear those requirements firsthand – and more importantly where they can ask questions and get clarification on them.
Good information on the value their work can create – Most industrial companies set prices using a cost plus margin approach. Without understanding the value that filling that unmet need represents, it’s difficult to do anything else.
Spend the time upfront to understand how your new product creates value and you’ll see higher margin as a result. If you know how it helps them increase sales, reduce investment, or reduce operating expenses, you’ll have a much better understanding of how much you can charge and still be delivering exceptional value.
Clear understanding of the cost of delays – Every day that a new product launch is delayed is a day of cash flow that is lost forever. Depending on the scope of your project, that can be tens or even hundreds of thousands of dollars per day. Making sure that your team members know that cost, is critical to making good economic decisions about the project timeline.
If a new product meets the requirements for 50% of the market, but is going to take another 3 months to add the features required to get to 65%, should the time be invested? Does increasing the market size by 30% add significantly more in cash flow than the delay costs? If not, maybe those features should be saved for version two. But how can your team assess that trade-off without knowing the cost of a days delay?
Unequivocal knowledge of what task they should be working on next – A surprisingly large number of new product development projects are initiated without up-front project planning and many of those still aren’t planned cross-functionally, but are just SWAG’s by the project manager.
In a critical chain project environment, project managers have a clear picture of how much of each project’s protective buffer has been consumed. They can easily communicate which project is at greatest risk of finishing late, thereby giving team members a clear picture of which task to start on next.
This approach also prevents team members from bad multitasking or being assigned to multiple project tasks at the same time. This ensures that tasks get completed much more quickly and that team members are delivering results – not just being busy.
Simple Bottom Line
Add these ingredients to your new product development team’s diet and you’ll see healthier results this coming year.