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Four Elements of Creativity

Product innovation is a fabulous field in which to work.  Innovation mixes several interesting ingredients – markets, technologies, creativity – to generate products that are valued by customers.  In turn, companies generate profits when they deliver products and services to consumers that delight and inspire them.

Researching markets and technologies is deliberate and structured within product innovation.  Product managers use inquiry tools and statistical analysis to understand categories of customers as well as to pinpoint areas of opportunity.  R&D practitioners analyze experiments and data to design novel technical solutions.  Market research and technology development both follow specific processes with known performance metrics.

Yet, creativity if often shrouded in mystery.  Many people assume they are not creative because they don’t view themselves as “artists”.  Others claim that only wild-eyed scientific geniuses are creative, coming up with ideas like a lightning strike.  In truth, creativity for product innovation is also a structured process with four key elements.

Cross-Functional Teams

There are two elements to creativity from a people perspective – individual and team creativity.  As individuals we all have different experiences and bring that diversity when generating ideas for new products.  Individuals with various work skills and backgrounds “see” the problem differently.  For example, a marketing specialist might define the problem in terms of product awareness while a technology specialist might see the problem as a set of puzzles and a technical code that will unlock the solution. 

Higher levels of creativity occur, however, when we collaborate as a team.  The marketer cannot successfully deliver innovation on his own by simply raising product awareness.  The technologists cannot deliver a new product by simply designing a great piece of hardware.  Instead, when we combine the viewpoints of a cross functional team, we can generate truly radical innovations.  Sharing the different perspectives of a problem – from the customer’s viewpoint as well as from each team members standpoint – enhances creativity and the end solution. 

Boundaries

While it seems counter-intuitive, creativity increases when we place reasonable constraints around the problem.  You might dream about your weekend plans if you had infinite money and no restrictions on your time.  Perhaps a trip to an exotic beach or taking in a Broadway show would be on the agenda?  Yet our dreams of limitless wealth are not actionable. 

Teams are most successful in identifying creative product solutions when there are some boundaries around the problem space.  Having infinite funds or unlimited time opens every possibility and too many choices can be overwhelming.  Instead, your weekend plans must be creative if you can only spend $100 and have two fixed time commitments.  Maybe you take the kids to the zoo just after their Little League game.  It’s a fun and unusual family activity while solving the problem within the given constraints. 

Curiosity

It goes without saying that curiosity must be a key element of creativity.  The status quo cannot serve to grow a business or to generate innovative products over the long-term.  Creative curiosity is a desire – a passion – to figure out how things work.  In new product development, the marketing representative is curious about the problems consumers face and the technical representative is curious about how to build a widget to solve that problem.  Creative curiosity is always looking for ways to improve a system and searching for the “real” problem. 

Are you curious?  How do you approach a new opportunity?  Creative curiosity involves jumping in to quickly learn the who, what, why, and how of a problem. 

Learning

The final element of creativity is learning – learning from failure and learning from each other.  Not every idea works out as we planned.  Sometimes our ideas are too radical for an existing market.  Oftentimes, we cannot find the cost-effective technology to scale for commercial application.  These are “failures” by one definition, yet there are also opportunities for learning.  Each piece of knowledge stacks up to help us solve the next problem, even if one particular approach didn’t work out perfectly. 

Another aspect of creative learning regards quality.  A lot of us are perfectionists because of our passion and love for our customers and career.  Yet, sometimes, good enough is good enough.  When a famous artist changes his style from realism to abstract, he might learn new techniques and learn to be satisfied with the quality of each new painting, even though it isn’t perfect.  A mystery author can add new twists and turns to the story line, depth of characters to her text, but the book must be written in order to be read and appreciated.  Learning to define “done” is an important feature for creativity within the bounds of product innovation. 

Four Elements of Creativity

A lot of people I know claim they are not creative.  This is troubling since I know a lot of people working in new product development.  Everyone can be creative.  I suggest you start with these four key elements of creativity. 

  1. Use a cross-functional team to build empathy across many different perspectives. 
  2. Place loose boundaries around the problem space to enhance creativity. 
  3. Encourage curiosity by offering new options and seeking to deeply understand the problem. 
  4. Practice continuous learning and accept failure by recognizing that good enough is good enough.

Creativity starts with leadership.  Please join our best practices Master Class on Leadership for Project Managers starting 18 August.  Register here. 

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Project Controls in Innovation

Controlling is often a misunderstood management function.  In everyday use, we use the term “controlling” to mean manipulating or limiting other’s behavior.  Yet in engineering management, project management, and new product development (NPD), controlling is an important process that helps the team leader assess the performance of a project and of his or her team. 

Definition of Controlling

Let’s define controlling as follows, consistent with the American Society of Engineering Management (ASEM). 

“A management function of measuring performance and comparing the results with established standards to ensure that the work conforms to requirements and brings a desired outcome.” 

Defined in this way, controlling is a critical function that assures work meets expectations.  If at any time, the project outcomes are not meeting expectations, we make adjustments to bring the product or project work into alignment with the plan. 

Steps in Controlling

There are typically four steps that product and project managers follow in controlling. 

  1. Set a baseline,
  2. Measure performance,
  3. Compare the baseline against performance measures, and
  4. Take corrective action as necessary. 

Set a Baseline

In project management and NPD, setting baselines for performance should be easy.  In reality, however, setting baselines requires substantial planning effort on behalf of the project leader.  The baseline must reflect the best outcome of project planning.  Principles of project management dictate that during the initiation phase, the project leader and team members identify requirements from all project stakeholders.  Gathering and documenting project requirements ensures that stakeholder expectations can be met. 

In innovation projects, customer needs are documented in the PIC (product innovation charter).  During all stages of the structured NPD process, the innovation project team will test customer needs to ensure alignment with the product design.  One way in which to map customer needs to engineering design specs is to use the QFD tool (quality function deployment).  Read more about process design here. 

Measure Performance

In Step 2 of controlling, we measure the performance of engineering and project teams.  Here, both individual and team member performance are assessed as well as the project requirements.  For example, if a new product development project had a customer requirement to increase battery life by 50%, the engineering team would measure all new battery designs against the performance standard.  A new battery with just 20% increase in lifetime would be inadequate, while a battery with a life that is 48% longer is considered a successful technology.  The project is approved when it meets the technical hurdles and would move along in the NPD process. 

image from creative commons with free to share and use

Compare Baseline Against Performance

In Step 3 of controlling, the project leader and project team members assess the project performance by comparing current design elements against the baseline set forth in the project plan.  It is important to ensure that the baseline and product performance requirements are measurable so that this comparison is meaningful.  Objectives are stated in measurable terms and metrics are gathered without difficulty or subject to opinion or interpretation. 

Again, for instance, battery life extension of 50% is measurable.  The initial battery in the current product demonstrates an average of 3-hour life before requiring a recharge.  Sample batteries in lab tests demonstrate 4-hour, 4.2-hours and 4.4-hours.  These data points are easy to compare to the initial product performance level.  The product development and innovation teams strive for measurable goals and objectives to improve customer satisfaction. 

Take Corrective Action

At the heart of the controlling process is the idea that correcting errors early leads to higher quality products and that the development effort will be less expensive overall.  Thus, the final step in the controlling function is to take action based on analysis of the data from Step 3.  In the case where performance matches expectations and baseline plans, no action is required. 

Frequently, controlling will reveal that a project is over-budget and/or behind schedule.  In these situations, the project manager and sponsor must work with the customer to modify the plan.  Some tools are available to help accomplish the work within the required time frame, but these schedule adaptations normally require additional costs (e.g. crashing and compression).  Further, missing the timeline for a new product launch can impact the overall profitability of an innovative new product. 

Controlling Function

In engineering management, project management and new product development, controlling is an important management function.  The four steps in controlling are: (1) set a baseline, (2) measure performance, (3) compare the baseline against performance, and (4) take corrective action as appropriate.  To learn more about the controlling function and other ways to improve new product project execution, you must earn your New Product Development Professional (NPDP) certification.  Check out our training and speaking schedule for innovation and project management here. 

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Can Nerds Serve the Customer?

I’m a self-admitting nerd.  My educational background is in engineering and I enjoy learning how things fit together.  I love to watch movies, but I never know the names of actors or actresses.  I fail miserably at the literature questions in Trivial Pursuit™. 

Yet, I love math, logic, and reasoning.  In recent years my fondness to “figure out how things work” has become a study of people, leaders, and teams.  Successful innovation teams have a different culture than others. 

A friend and colleague mentioned that her son was studying mechanical engineering.  She encouraged him to take a Design Thinking class so he could learn about human-centered design.  I agree wholeheartedly with her!  Engineers have an isolated educational experience driven by high-level calculus an intense theory of physics.  Of course, accountants, sociologists, and architects also have educational experiences driven by depth of knowledge, rather than breadth.

So, can nerds learn to serve the customer?

The Customer

First, we have to take a step back.  Any free economy functions to produce goods and services that generate profit for the seller.  Buyers pay a price for goods and services that give them utility and functionality at their own perceived value.  The buyer (or customer) seeks a benefit in purchasing a product that is greater than the price they pay.  Moreover, the price that the buyer pays must include a margin of profit for the producer.  If not, the producer will cease to offer those goods or services. 

A seller learns what to sell by studying customers and markets.  Customers are the key element in designing and developing new products.  My friend was very astute to encourage her son to broaden his studies beyond engineering.  New Product Development Professionals (NPDP) blend the unique skills of technology understanding, market perception, and product knowledge to successfully innovate profitable goods and services. 

Engineers, like other innovation leaders, have an intense curiosity about how things work.  Yes, we are nerds because we enjoy tinkering and troubleshooting.  So, trying to solve a customer’s problem by designing a new widget is exactly a perfect fit!

Design Thinking

Again, my friend gave her son a huge gift toward his employability by encouraging him to supplement engineering classes with Design Thinking.  Design Thinking is both a process and a set of tools.  From the process perspective, Design Thinking teaches us to collaborate with fellow nerds, customers, and any function that will help solve the problem.  From the tools point of view, Design Thinking gives us templates and techniques to elicit even the most obscure unarticulated customer needs. 

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At the core of Design Thinking is empathy – an understanding of the feelings, thoughts, and attitudes of another person.  In the case of product development, the product development engineers build empathy for the customers by interviewing, shadowing, and observing their interactions with the product.  When we understand the struggle that a customer has to open a package or assemble the parts, we improve the features and functions of that product. 

For example, IKEA includes a small (cheap) hex wrench with its ready-to-assemble furniture (such as a bookshelf).  The packaging is small (a benefit to customers and transportation) but only nerds have a full tool chest available to assemble a bookshelf.  So, for most folks, the cheap hex wrench is a huge time-saver.  Parts are clearly labeled and the visual instruction sheet from IKEA gives simple directions to assemble the parts using the tools (hex wrench) provided.  Both the seller and buyer benefit – higher profit margins and enhanced perception of the product’s value. 

Image from Creative Commons

Engineers and Design Thinking

Yes, nerds can serve the customer!  Engineers are great at trouble-shooting and finding creative solutions to problems.  Augmenting our technical training with customer empathy creates a superhero innovation leader. 

If you don’t know the basic tools and process of design thinking, that’s okay.  Register here for an interactive, online workshop, led by a full-fledged nerd. 

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Innovation in the Product Life Cycle

I recently ran across notes I had taken while reading a book that summarized management skills.  I no longer remember the title or author’s name, but the book was an overview of all the subjects covered in an MBA program 20 years ago.  Of course, MBA programs have changed a lot in this time frame, yet a lot of the basic tools we use for decisions have not changed.   

For instance, managers need to understand finance and accounting.  Managers need to know how to create a strategic plan.  And managers need to understand operations, distribution, and supply chain.  Managers also need to understand the product development process, including aspects of technology and marketing.   

The Product Life Cycle

The product life cycle (PLC) is not a new concept, yet it supports the work of a product manager today still.  Just like every living thing has a life cycle – birth, growth, maturity, and death – so do products.  The PLC covers the introduction of a new product to a market, growth of the product in both market share and market penetration, maturity to a commodity-like product, and decline.   

image from creative commons

Introduction

In the introductory stage of the PLC a product is first released for sale.   Sometimes new products are new-to-the-world and sometimes they are only new-to-the-company.  The decision to develop a new product, though, starts long before it is introduced to the market

Product managers are constantly on the lookout for new product ideas.   They gather concept ideas from existing customers.  Innovation managers also continually scan the horizon for new product opportunities.  A new product might consist of a new technology applied to an existing market or a new market altogether.   

I found a new product the other day – most likely an application of existing technology to a new market.  My cats love gravy.  They will drink the gravy out of the bowl and leave the particles of food behind.  They really love a treat, called “Gravy-licious”.   It is a crunchy treat with a “gravy” coating.  At the store the other day , I found a 3-pound bag of regular food made entirely of gravy-coated particles.   I knew it would be a hit – the bowl was empty in no time!  

While gravy-covered treats and gravy-covered food are not radically different from my point of view (or apparently the cats’ view either), these are different products.   Consider the scale of manufacturing for a treat versus that of a large volume food product.  Also consider packaging, distribution, and promotion.   Each element must be adequately addressed to introduce a new product to consumers.   

Growth

During the growth stage, a new product is adopted by a majority of consumers in a market.  Remember that adoption by a passionate few can then drive mainline purchases by your target market.  In fact, product innovation leaders will gain insights to the quality, pricing, and feature sets of new products from the introduction and early growth stages.   

Growth is characterized by extended promotion of the product.   For a new-to-the-world product, profits begin to accumulate.   Manufacturing is streamlined as are supply chain and distribution.   

Maturity

As the product continues to grow in market penetration, competitors enter the market.  The term market penetration means that existing customers are buying more of the product and as many customers that want the product can buy it.  Market saturation occurs when every customer who wants a product can – and does – purchase it.   

This maturation of a market means that the product is becoming commoditized.  There is often little differentiation among competitors and profit margins decline due to pricing pressures.  A lot of companies take the strategy of lowest cost during the maturity stage which, unfortunately, sinks the whole market.   

Decline

Fighting for the lowest cost leads to overall decline of the product – or death in the product life cycle.   Manufacturers do not want to make a product that has no profit margin as there is greater utility for equipment to make another product.  In some cases, it is more cost effective to sell a factory rather than continue to produce goods that generate financial losses.   

Yet, a lot of product managers fail to recognize the signs of decline.   Heroic efforts will not save a dying product.  Instead, innovation leaders must take a long, hard look at customers markets, technologies, brands, competitors, and products to generate a strategic plan.   Do you sunset the product or reinvest to launch a next a next generation new product?  Not an easy decision.   

Innovating in the PLC

One word that repeats itself when describing the product life cycle is competition.   Even with a new-to-the-world product, we do not operate in a vacuum.  Competition is working on new technologies and new promotions in our target markets.  We must be ready – at every stage of the PLC – to address competitive threats.   

Do you know your competition?  Do you have a formal strategy to address new product competition?  Are your profit margins strong against all product competition?

If you answered “NO” to just one of these questions, it’s time for a tune-up in your PLC!  Join the self-paced Competitive Analysis course here.  You will earn 2 PDH and save 20% with discount code “Intro” through 15 April 2021.

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Innovation Project Scheduling

Time.  It is the only resource for which there is no true price and the only resource that cannot be recovered.  Once we spend a minute, an hour, or a day, it is gone.  We cannot re-use the time or re-purpose it. 

image from creative commons with free to use and share designation

Yet, time is a resource that is often wasted.  Personally, I can waste time by watching television or chasing rabbit trails on the Internet.  On a recent evening, for instance, I watched a re-run of “I Dream of Jeannie” and then spent several minutes looking at the Wikipedia histories of Larry Hagman and Barbara Eden.  While I might guess a trivia question correctly in the future, I probably did not use my time to my highest productive ability. 

Innovation Project activities

Likewise, we do not always use our project time effectively when we develop new products.  Innovation can present a lot of “rabbit trails” from both the technology and market perspectives.  When a lab test looks interesting, organizations often devote all their resources (including time) to duplicating and validating the result.  Similarly, when a focus group gives positive feedback on a feature, our innovation focus narrows, and we dedicate more time to understanding that particular customer need.  In retrospect, these might be the right (or wrong) decisions.  Only time will tell.

Dedicated innovation project resources are the hallmark of a successful new product development (NPD) strategy.  However, a singular focus can lead us to miss alternate approaches or business models.  Not only do we have to be aware of our natural biases as an organization, we also must be aware of competitor actions in the field. 

One way to counter a narrow innovation focus is to conduct parallel product development activities.  Especially in the early phases of NPD project work, innovation teams can – and should – investigate multiple ideas, concepts, and feature sets.  Some key activities in early phase new product development are as follows. 

  • Ideation
  • Concept Trials
  • Customer Shadowing
  • Needs Assessment
  • Strategy Alignment
  • Competitive analysis
  • Prototype Testing
  • Pilot Testing
  • Quality validation
  • Market Tests
  • Performance Verification

Roadmapping

At the highest level, scheduling of innovation activities occurs through roadmapping.  A roadmap is a visual representation of key product development activities and milestones that guide the product innovation team to an expected outcome.  For example, if we know we need to launch a new product at a specific trade show in December, then we can draw a roadmap of activities that will allow us to meet that deadline. 

Example of a Simple Product Roadmap

Backward Pass Scheduling

In formal project management “language,” the term backward pass scheduling is used to describe building a roadmap (or schedule) from the required end date to our current date.  So, if we must have a new product ready in December, we will have to do prototype testing in September.  To have a realistic prototype in September, we will need to have a feature list by July period to have a list of critical features in July, we need to conduct focus groups on different concepts by May.  And that means we need to hold ideation and design thinking workshops in March.  We plot our key innovation activities on the roadmap which gives us a rough schedule for the project. 

Detailed Scheduling

Once we have generated a roadmap of activities for the new product project, we will undertake detailed scheduling.  Software tools are invaluable for both roadmapping and detailed scheduling.  All project development tasks are input along with the required resources (by name and position) and activity duration.  Capacity management is key to success at this stage.  Some tasks include dependencies with other tasks and resources cannot be used twice in the same period.  A typical output of scheduling software is a Gantt chart, which we overlay on the roadmap. 

Innovation Project Scheduling

In this post, we’ve only touched on a few of the important elements in creating an innovation project schedule.  The figure below summarizes these steps.  (Note that monitoring and controlling a project is a separate topic.)

While getting the details right is important, the most crucial element for successful innovation leaders is getting the process right.  This includes understanding customer needs and required innovation activities.  Join me on 22 and 23 April 2021 for the WAGILE Product Development workshop.  In this interactive online class, you will tackle your biggest innovation scheduling challenges, streamline customer feedback processes, and improve speed-to-market.  If you find you are launching ho-hum products too late in a crowded marketplace, you must learn WAGILE now!  Register here.

Learn how to make your innovation process flexible!

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Four Stages of Competition

According to Dictionary.com, the origin of the word “competition” is Latin, around 1600 AD.  One definition is “a contest for some prize, honor, or advantage”.  Another definition is “the act of competing; rivalry for supremacy”.  In business, we often think of our competition as other organizations that compete with similar products in a marketplace. 

It seems that the formal definitions of competition are stronger, harsher than what we experience in our day-to-day business lives.  There is only one prize in sports, for example.  Many teams compete each year, but only one is the “national champion”.  Many individuals compete in the Olympics, but only one can win the gold medal.  In business, only a single product or brand can be number one in a given category.  And winning means the highest profit. 

Competition and the Product Life Cycle

In sports, the “best” teams usually are sorted out early in the season.  Unfortunately, players suffer injuries that can decrease the skill level and balance of a team.  When Klay Thompson suffered back-to-back injuries, the chances dwindled for the Golden State Warriors to win an NBA championship this year.  That injury on top of losing Kevin Durant to another team, reduced the skill and balance of the team from a position of “winner” to “needing to recruit”.  While Golden State has been a perennial competitor in the NBA, their losses created space for stronger competition in the league by Utah and the LA Clippers, for instance.  (Read more about Who is Your Competition here.)

In business, early market entrants might be the strongest competitors.  Yet, over time, different companies produce and market products that offer competitive advantages.  Just like NBA teams have an initial ranking that morphs and adjusts throughout the season, new products also have different competitors throughout the product life cycle (PLC). 

The Product Life Cycle (PLC)

Most products go through a similar life cycle, though the speed of the life cycle varies.  New-to-the-world products are launched into the introductory phase of the PLC.  Often there is little direct competition at this stage.  The new product is designed to meet a unique market need and the target customer might represent a small market. 

Product Life Cycle (PLC)

As more customers adopt the product and via intensive product promotion, the market share grows.  This is, of course, called the growth stage of the PLC.  Companies focus on building brand awareness and increasing distribution during this phase.  However, as more firms view the success of the product in meeting customer needs, competition also grows. 

As a market becomes saturated with the availability of a high number of like products, a product enters the maturity phase.  In this stage of the PLC, companies face price pressures and begin to focus on cost-cutting.  Products with differentiation can maintain profit margins but, in general, the product faces commoditization. 

Finally, an organization must make the tough decision to abandon the product or reinvest.  This decision occurs in the decline phase of the PLC.  Competition actually dries up because profit margins are so low.  Unfortunately, paying customers also dry up. 

Your Product, Your Competition

Knowing where the product is at on the PLC is a starting point to analyzing its competitiveness.  You have to understand if the market presents an opportunity for growth in market share or in market penetration.  It is also crucial for firms to make the (sometimes unpleasant) decision to abandon a product when it is in decline. 

Analyzing the number and type of competitors (direct or indirect) can help organizational leaders make the best, most profitable decisions.  These decisions also must include alignment of new product innovation programs, business acquisition strategies, and overall growth goals and objectives.  Economic and regulatory factors, external to the firm, impact markets and innovation as well. 

Next Steps

Do you know your strategy to address competitive threats?  If not, learn to Analyze the Competition in a self-paced, online course.  Register here and earn 2PDUs. 

image of computer with key for competitive analysis

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Who Is Your Competition?

Recently, I was asked to submit a proposal for work with an existing client.  The work broadened their horizons, pushing both their approach and my creativity.  After learning their scope of work (boundaries and constraints), budget, and time frame, I submitted a proposal. 

As is the case sometimes, the company chose a different consultant.  In fact, I was pretty sure they had someone else in mind to do the work when I held conversations with them.  What is important to learn is not just what the winning bid was but who was the competition. 

Elements of Competition

Competition as a consultant, a product development professional, or engineering manager is not always obvious.  Our response to competition is part of our organizational strategy.  As I say over and over again, strategies overarching framework for innovation.  Strategy defines who we are as an organization and directs our actions.  So, the first element of competition is strategy. 

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  1. Strategy
  2. Presence
  3. Willingness
  4. Capacity

Strategy

Strategy seems simple.  Just decide what you’re going to do.  Yet, in product innovation, strategy is more than that.  Our organizational mission drives decisions and rate of technical expansion.  Our values direct how we interact in marketplaces.  Our vision determines how aggressive we are in development. 

Strategy also determines the tactics of everyday business life.  How big is the budget?  How many resources are committed to R&D?  What is our quality goal?  Spend some time on your strategy to be successful.  Learn more in our Exclusive Strategy Reset Workshop here. 

Presence

The second element of competition is presence.  Though it is annoying, campaign posters and yard signs spring up every election season.  Why?  Name recognition results in votes.  You may not know the candidate’s stand on a policy, but you’ve seen his face on a campaign poster and you know his name.  The same goes with real estate agents and personal injury lawyers.  Their advertising – including billboards, television spots, and newspaper ads – all include a photograph.  When we see a face, we know they are present. 

In product development, we must establish presence by interacting with our customers on a regular basis.  They know us, trust us, and give us feedback.  Working directly with customers in co-creation leads to competitive advantage. 

Do you have presence in your industry?

Willingness

Another element of competition is willingness.  Some of you might remember that willingness is my word of the year for 2021 (read more here).  Willingness means acceptance and patience while being bold and courageous at the same time.  Willingness also means working in areas that are strategically aligned with business goals and objectives.  The work that my existing client was seeking was work I was willing to do.  My competition was also willing to do it.  But there are hundreds of consultants who would have said “no” right off the bat. 

licensed by Creative Commons

It is important in product innovation to know what you’re willing to do – again, what is the strategy?  If your organizational vision is to serve a global market, you might turn away local-only product development effort.  If your mission statement includes “being a cost leader” you are putting reasonable boundaries on the target customer. 

Determine your markets and willingness to serve them.  Focus on design and development for product innovation where the organization is willing and able to work profitably. 

Capacity

In thinking about who is your competition, you want to also consider capacity to do project work.  If your design team is stretched thin on multiple next generation products already, should you enter another competitive market?  On the other hand, if your products are entering maturity and decline phases in the product life cycle, should you strategically increase capacity and R&D?

While your organizational capacity to take on new product development innovation work is different than your competitors, you must gauge their approach versus market growth.  A tool that I love for this is the SWOT analysis – strengths, weakness, opportunities, and threats.  It’s a simple way to thoroughly analyze internal capabilities and consider external factors impacting business growth. 

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Understand your Competition

Competition comes at us from known sources and unexpected places.  Taking a look at the four key elements of competition can help you be more successful in product innovation (and save both time and money!).  First, be firm in your strategy – what are you doing, how are you doing it, and why are you doing it?

Next, understand that a market presence gives the impression of a competitive advantage.  If your customers are involved with you in product development, you will shorten project development times and achieve higher levels of customer satisfaction.  Then, determine your willingness to design and develop new products within various target markets.  In some situations, leave the new products to competitors – especially if they do not align with your strategy.  Finally, if you’ve got strategic alignment, market presence, and a willingness to do the work, check your capacity.  Hiring and training more staff for new product development projects might be viewed as expensive but you don’t want to miss any key opportunities!

Learn More

If you want to learn how to implement effective strategic goals to beat the competition, please join me for the Exclusive Reset Your Strategy Workshop on Monday, 15 March (Part 1) and on Monday, 22 March 2021(Part 2).  Special discounts for the unemployed as you navigate new competition.  Contact me at info@simple-pdh.com for more information.

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About Me

I am inspired by writing, teaching, and coaching.  I tackle life with an infusion of rigor, zeal, and faith.   It brings me joy to help you build innovation leaders.  Teresa Jurgens-Kowal is an experienced innovation professional with a passion for lifelong learning with a PhD in Chemical Engineering and an MBA in Computer and Information Decision Making.  My credentials include PE (State of Louisiana), NPDP, PMP®, and CPEM, and I am a DiSC® certified facilitator.  Contact me at info@simple-pdh.com or area code 281 + phone 787-3979 for more information on coaching for entrepreneurs and innovators.

Managing Team Communications

Have you ever wondered what somebody “really” meant when they said something to you?  What was the hidden message?  Did they criticize your idea when it was still in the forming phase?  In Texas, we might hear, “Bless her heart” and wonder what sarcasm was concealed in a perfectly innocent statement.

Gossip, rumors, criticism, and sarcasm are deadly to innovation and team communications.  You can say the words, “What a great idea” but if you roll your eyes at the same time, we know you think it is a stupid idea.  On the other hand, if you smile and lean in when you say the exact same words, we know you are interested.

Image from Sagacious News

Communicating in a 2D World

Even before the corona-panic, many organizations were switching to virtual team meetings.  The rationale was to save money on travel expenses.  Another element is based on saving time – in a city like Houston, your travel time to and from a meeting can easily exceed the length of the meeting.  So, we use virtual meetings instead.

Of course, we lose body language in our 2D, virtual communications.  There are some people who refuse to turn on their cameras – probably because they are multitasking and not paying attention to the meeting anyway.  I readily admit to not using my camera during mid-day webinars since I can eat lunch while I listen to the lecture. 

However, aside from food crumbs and slurping soup, we can learn to communicate in a 2D world.  Even after the corona-panic ends, many of us will continue to use webinars and virtual meetings to reach a larger audience.  In fact, in the VTM-Virtual Team Model (Chapter 6 of Leveraging Innovation Constraints), I personally advocate for virtual teams in innovation to increase access to global markets.

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One of the practices in the VTM is to ensure you build time into your agenda for team-building.  Innovation requires creativity and creativity requires trust.  We only trust our teammates when we know them through a personal relationship.  These relationships teach us values and principles of other team members as we observe their behaviors.  Values and trust are foundational to successful team communications.

Work Styles

While some people are adamant that they will not turn on their camera, others hesitate to speak freely.  These behaviors, I believe, are exacerbated in a 2D world and impact our trust ability.  While a quiet person finds it difficult to offer a differing opinion in a face-to-face environment, it is even more challenging for her to do so in a virtual conversation.

It is the job of the innovation leader to generate trust and open communication pathways among team members.  I like using work style assessments with teams so that each person understands their own communication preferences, strengths, and conflict triggers.  When we share our work styles with other teammates, we can explain our values and behaviors with non-judgmental language and build trust more quickly.

Conflict

Most of us don’t like conflict.  Many leaders have not been trained in conflict management.  So, when a debate arises, it either is swept under the rug to percolate or is blown way out of proportion.  Yet, the crazy thing is that we need conflict for innovation and creativity.  We need to challenge perspectives, biases, and experiences to create new technical and market opportunities for our customers.  Conflict and debate are central to successful ideation.

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Manage Your Team Communications

Join me on Friday, 26 February 2021, with the Tucson PMI Chapter to learn more about Managing Team Communications.  You might also enjoy listening to a podcast on the same topic here and you can read more here.  When we start with each team member’s preferred working style, we can design the jobs of innovation to balance their strengths.  This results in healthy conflict where we focus on idea generation to improve new product features and functionality.

Learn More

In addition to the Tucson PMI meeting, join me starting on 29 April for the NPDP Certification and Innovation Best Practices workshop (four weekly, 2-hour sessions).  A key topic for success as an innovation leader is managing team communications.  Contact me at info@simple-pdh.com if you want to implement effective tools for innovation team communications.

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Forecasting for Product Management

I live in Texas, so this past week has been interesting.  Normally our winters have low temperatures around 40°F.  A couple of times each winter, we will experience a “hard freeze” of less than 32°F for more than a couple of hours. Often, the weather forecasters predict lower temperatures and harsher conditions and materialize.

Snow covered palm tree
Image from Flickr (The_Doodler)

This winter, we had a storm of a lifetime.  Instead of over-predicting, the weather forecast gave low temperatures 5 to 10°F higher than observed.  There was snow and ice in the Corpus Christi area, right on the Gulf of Mexico with low temperatures dipping to just 19°F (-7°C).  Thick ice covered every surface, including the wind turbines which were providing about 40% of power to the state.  Iced up, they could turn no more, so the state has been gripped in massive power outages, leading to loss of water supply in many places as well. 

What is Forecasting?

While we often think of the weather when we hear the term “forecast,” we also make business predictions.  A business forecast allows us to plan production, distribution, and resources.  These forecasts are usually based on sales projections into the future, sometimes called a “demand forecast”. 

Time Frames for Forecasting

Business forecasting covers a wide range of time periods.  We use short-term forecasts for immediate job assignments, shipping, and purchasing.  Medium-term forecasts also include plans for inventory, warehousing, and raw material supplies.  Finally, long-term forecasts involve strategic product planning with potential capital investments. 

Role of the Product Manager

A product manager has a broad role, including new product development (NPD) and brand management.  Understanding and predicting customer needs means a product manager must be proficient in making demand forecasts.  Functional departments look to the product manager for guidance in production, logistics, and purchasing.

Market trends often dictate which products will experience growth and which will experience decline.  Additionally, the stage of the product in the overall product life cycle (PLC) also contributes to expected consumer demand.  (Recall that the stages in the product life cycle are introduction, growth, maturity, and decline.  Read more here.)

Other factors that influence the demand for a new product include competition, technology, and regulatory factors.  When the US government banned incandescent light bulbs, demand initially spiked as consumers hoarded a product that was inexpensive and efficient for use.  Suppliers, however, ramped up production of fluorescent bulbs.  The forecast was tricky to manage – fluorescent bulbs are more expensive, tend to have a longer life, but are far more damaging to the environment if broken.  In this case, the product manager’s job is to make an educated guess for light bulbs sales and where to invest product innovation dollars.  New technologies, such as LED bulbs, are an optional replacement product.

Types of Forecasts

There are two main categories of forecasting:  qualitative and quantitative.  Qualitative forecasts use the opinions and intuition of a group of experts.  Often the sales team provides valuable input to predict new product sales because they know how their customers feel about existing and competitive products, features, and needs.  It is qualitative approach because no mathematical models are explicitly applied to the prediction. 

A quantitative forecast, on the other hand, normally relies on historical data to predict future sales.  In product innovation, we may use data from similar products or use adoption rates in similar markets.  Customer surveys yield data ranges for selling price and volume.  We use mathematical models and statistical analysis to predict future product sales.

It’s important to check your assumptions frequently, especially during the product introduction phase.  Assumptions and risks are built into any qualitative or quantitative forecast.  You’ll also want to validate your predictions with an evaluation of their accuracy to improve all future forecasts. 

Forecasting for Product Managers

Because a forecast is a prediction of the future, it will most definitely be wrong.  However, product managers need to master the skills of forecasting to manage product development efforts, strategic initiatives, and customer needs.  If you under-predict production, customers can be left without products they want to purchase.  If you over-predict demand, you might be stuck with a warehouse full of useless products (a situation one client described to me).  Balancing customer needs and profitability efficiently is the definition of a successful product manager.

image from 123rf.com license, author kebox.

Learn more about Forecasting for Product Managers in our upcoming online class on Tuesday, 6 April 2021.  Check out the full course calendar here and catalog of facilitated and online courses here.   Contact me at info@globalnpsolutions.com for more information about Forecasting for Product Managers or any other innovation topic – I love to learn and share! 

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Study.       Learn.       Earn.       Simple.

Customers and Product Development

As product development professionals, we often think of our customer.  What do customers feel?  What do they need?  What are their expectations?  Our responses, generally, focus on features and functionality of the product.

Of course, we have many types of customers and the best new product development (NPD) processes address customer needs throughout the value chain.  Let’s take a look at the various types of customers and their role in NPD.

Types of Customers

One of the fundamental decisions you make in product innovation is who is the customer.  We must consider several types of customers.

Internal Customers

First, we have internal customers.  These are departments or units that are downstream within a single company.  It is folly to ignore logistics or sales during product design and development.  No new product makes its way into the hands of a customer without first being manufactured (supply chain logistics), being delivered (distribution), and being purchased (sales).

Supply chain is an internal provider and customer to the NPD effort.  Working with the purchasing department early in concept development can reduce costs of raw materials.  Perhaps your purchasing department can work a deal that gives a component discount as production ramps up after new product introduction. Your purchasing department should be a partner not an adversary.

You also need your internal customers to provide timely actions to get a new product to market.  Legal teams must work with the NPD team throughout design and development for functional patent protection and trademarking of new logos, etc.  Many other functional departments serve to assist the development effort as well.

External Customers

External customers are who we typically think of when we hear the term “customer”.  These are folks outside the firm that buy the product and consume it (thus, the oft-used, interchangeable term of “consumer”).  Our communication with external customers is frequently one-way by telling them about a product’s features.

However, the most successful innovators use two-way communication with external customers. We must know the thoughts and feelings of our customers to design and develop new products. External customers provide infinitely valuable feedback on our ideas and concepts.  They test prototypes and lead us to the designs that will best satisfy their needs.

External customer feedback is at the heart of the WAGILE process.  WAGILE takes the best of the traditional waterfall development processes and the best of Agile design to create a disciplined yet flexible customer-focused NPD process.  Register here for our interactive WAGILE product development course (online 18 and 19 February 2021).

End-Users

Not all customers are end-users.  Most of the time, a consumer purchases a product and uses it herself.  There are many situations, though, in which other people use the product after it is purchased by someone else.

The easiest example of a non-purchasing end-user is a child.  Mom and Dad buy toys, books, games, and snacks for Little Johnny often without his input.  Of course, Little Johnny does not have money (and sometimes doesn’t know how to talk yet), so he is incapable of buying a product.  However, Little Johnny does play, read, and eat so he “consumes” the product.

In product innovation and in the WAGILE process, we test not only the market response of the decision-maker (see below) but also the end-user.  If :ittle Johnny prefers to play with the box instead of the toy inside, should we proceed with development of that particular product?  We also might find that parts and components need different assembly for children than in a product built by adults.  The end-user is an important customer in NPD.

Decision-Maker

Little Johnny’s mom and dad are the decision-makers in this scenario.  Naturally, other products and services have customers that are decision-makers different from the end-user.  Medicine has tons of examples.

For example, your insurance provider (private or government) determines which physicians you can afford to visit.  Insurance companies often pay for pharmaceutical drugs but not naturopathic therapies.  They may tell you which hospital is okay for you to go to for a knee surgery, regardless of the distance from your home.

Decision-makers are likely to look primarily at cost for a new product.  Effectiveness and satisfaction by the end-user (unless it’s Little Johnny) may not be the defining characteristic of a purchase.  For corporate decision-makers, “average performance” might be more important than delivering a quality experience to the ultimate consumer.

Who is Your Customer? 

As you design a new product innovation, you must consider the customer.  It is extremely unwise to ignore your internal customers.  Use the various departments in your firm as partners to find the best solutions (especially for supply chain and distribution).

One our external customers, likewise, often are ignored.  Why wouldn’t you want to test concepts and ideas with the person whom you ultimately want to sell?  Customer feedback is essential to successful product innovation.

Finally, don’t confuse the decision-maker with the end-user.  Satisfying the needs of both of these customers might mean a trade-off in cost versus quality.  Make sure your NPD process involves testing for all external customers, including decision-makers and end-users.

Learn More

I’m excited to share my podcast interview with Kevin Brennan.  You can listen to a summary of WAGILE here.  Then, register for the interactive online WAGILE Product Development course on 18 and 19 February 2021 (register here).  You will have homework because you must understand customer needs to be successful in product innovation!  Contact me at info@Simple-PDH.com for more information.

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A Division of Global NP Solutions, LLC  

Study.       Learn.       Earn.       Simple.