New product development (NPD) is a set of processes and systems that convert ideas into saleable products and services. Successful NPD means that those processes are simple, repeatable, and lead to profit. Nearly every organization – big or small – creates new products and services in order to stay competitive. But, to win the competition, the business must be successful at continuous NPD. As Peter Drucker said, “The best way to predict the future is to create it.”
NPD processes and systems must be simple to lead to repetitive success in innovation. As an engineer, I appreciate simplicity. The most elegant systems that humans have ever created are truly the least complicated. And as an engineer, I know that when a system breaks down, it is much quicker and easier to troubleshoot a simple system then a complex one.
Simple NPD processes include traditional staged-and-gated systems as well as emerging agile processes, like Scrum. A typical staged-and-gated system for innovation requires the NPD team to lay out goals and action plans for the next stage of work. A set of gatekeepers, will approve the course of work along with an appropriate budget and by assigning adequate resources. In this way, each stage of work is evaluated for risk and the gate reviews ensure progress on the project as the new product moves from idea to concept to prototype and, finally, to commercialization.
Scrum processes are also simple systems to develop new products. In this case, flexibility in design is valued and product specifications are varied to ensure customer satisfaction. Risk is managed via frequent customer feedback, and prototypes are created in parallel while the NPD team scopes the remainder of the project.
Regardless of whether an organization chooses to follow traditional staged-and-gated NPD systems or more flexible Scrum project management frameworks, innovation processes must be repeatable. Processes should repeatedly eliminate poor concepts early and rapidly advance the most promising ideas. Project advancement decisions are made on a consistent and predictable basis. As a result of repeatable innovation, investment in design and marketing is steady while new products grow in contribution to the overall product portfolio.
I recently heard someone say that if you’re not making sales, you are just playing with a hobby. New product development must lead to business profits or the business will suffer. Of course, there is an expected time period in which the investment in design and development will exceed sales, but at some point, every successful product or service turns a profit.
As a kid, I really loved doing plastic canvas needlepoint. I made all kinds of cool items from coasters to tissue box covers and tic-tac-toe games. During the course of a summer, I completely saturated my mom, sisters, and grandmothers with my clever crafts. So, I put the rest up for sale at the shop of a family friend. After Christmas, half of my “wonderful” products came back to me. I made a teensy, tiny profit and learned the difference between a hobby and a business.
Fundamentals of Product Development
New product development requires three facets to be successful: simple processes, repeatable systems, and profitable endeavors. Without these three fundamentals an idea might be converted into a reality but not a commercial, saleable product.
To learn more about product development fundamentals, join our easy online course at www.simple-pdh.com. Learning about Product Development Fundamentals is the first step in your journey to becoming an innovation leader. Contact me for more information!
A Division of Global NP Solutions, LLC
Study. Learn. Earn. Simple. r