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.”

Simple

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.

Repeatable

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.

Profitability

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!

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Innovation is hard work. While we often imagine a really clever guy in his garage creating the next big thing, reality teaches us that discipline is a far more important trait to successful innovation than is imagination. Discipline supports creativity and frames the context of an innovation ecosystem.

Key Components of Innovation

Innovation certainly requires discipline and creativity – as well as flexibility – for new product development (NPD) team members and leaders. An innovation ecosystem requires pertinent processes, tools, and metrics to lead to repeatable success. Some of these elements are:

A well-considered innovation strategy,
Product portfolio management and knowledge management,
An NPD process, and
Ongoing team and leadership training.

Let’s take a look at each element in turn.

Innovation Strategy

Every company, large or small, has a strategy. Usually, the strategy is documented and reviewed annually. A corporate strategy describes why the business exists and how it expects to accomplish its mission. An innovation strategy is a subset of the organizational mission and specifically describes the details of the new product development programs.

For instance, I worked with a company that wanted to be viewed as “Number One” in an organic food category. Their vision included customers choosing their brand over all other competitors because the food was healthy. The innovation strategy, therefore, built on the vision of delivering healthy products to the marketplace, yet also had to strike a balance between customer tastes, product features, and the labels of “healthy” and “organic”.

Thus, the innovation strategy breaks down the corporate strategy into specific goals and objectives for a new product development program. Healthy foods must be tasty and have textures and flavors that consumers enjoy. The innovation strategy includes, then, a focus on customer needs and definitions (what does “healthy” really mean?) and on technology development (can we manufacture a low-fat, high fiber product?).

Product Portfolio Management (PPM)

Product portfolio management (PPM) is the system to identify in which projects to invest. Knowledge management (KM) captures technical, product, and market data for future use. Both PPM and KM are critical to long-term success of an innovation ecosystem. Yet, historically, both PPM and KM fail in implementation.

PDMA studies show that only about half of companies have a well-functioning PPM process. This is a disappointing statistic since PPM is how we make decisions regarding which NPD projects to advance and which to halt. PPM provides an evaluation and comparison of all innovation projects based on competitive advantage, market attractiveness, technical feasibility, and profit potential. An effective innovation ecosystem uses PPM to guide data-driven project decisions.

Likewise, an effective knowledge management system captures the tacit knowledge of customers, subject matter experts, and key stakeholders and translates these disparate bits of information into explicit knowledge. It is inherently difficult to ask a customer what features they want in a new product, but KM allows us to save and share customer challenges, desires, and feelings about product usage. KM goes hand-in-hand with PPM by supporting clear definitions of customer needs.

NPD Process

Established NPD processes are also critical to an organization’s long-term success with repeatable innovation. An NPD process needs to be formal and structured with key steps, roles, and responsibilities determined in advance for all innovation projects. However, the specific NPD process deployed by a company should fit its culture, scale of operations, and degree of innovativeness sought. The standard NPD processes that my clients use include traditional staged-and-gated processes, Scrum, and hybrid processes.

A traditional staged-and-gated NPD process follows a linear pathway through a project. Designed by Robert G. Cooper in the late 20^th century, the NPD team will set project requirements early in the process and will build the product according to this pre-determined feature set. Cooper recommends – as do I – to continually test the product assumptions with a wide range of users throughout each stage of the NPD process.

A Scrum process follows the Agile philosophy by adapting the work in a short sprint (e.g. two to four weeks) to the highest priority feature or feature set. Customer involvement is intimate in a Scrum NPD process as the customer both sets sprint priorities and approves the incremental product output from each sprint.

Finally, hybrid NPD processes are becoming the norm in innovation as neither a traditional staged-and-gated process nor an agile/Scrum approach is ideal. Hybrid NPD processes support the innovation ecosystem through continuous communication with the customer while utilizing a formal requirements design and development methodology. Keep in mind that no NPD process is perfect, and an NPD process should be updated regularly to reflect organizational, market, and technology needs.

Team and Leadership Training

A successful ecosystem relies on a clear strategy and established practices and procedures (PPM, KM, and NPD processes). To make the cogs turn, however, people must be motivated and inspired to do creative work while at the same time understanding organizational boundaries and limits. Team and leadership training is the last, but perhaps most critical piece, of the innovation ecosystem puzzle.

NPD teams and innovation leaders benefit from New Product Development Professional (NPDP) and Best Practice Training. In these public or customized workshops, team members safely learn how to clearly identify the innovation strategy, implement PPM and KM, and streamline the NPD process. Moreover, teams learn the tools in market research to understand, test, and validate customer needs with concept tests, prototypes, and post-launch reviews.

Likewise, teams need to develop cross-functional and conflict management skills. These are learned and practiced through Situational Team Leadershipand Virtual Team Training. Virtual teams offer a huge advantage for innovators to tap into local market information while designing a product for global reach.

Finally, leaders need to approach innovation with flexibility, adaptability, and patience. Leaders should be trained in situational leadership, virtual team management, and change management in addition to understanding the overall NPDP best practices. Innovation leaders also need ongoing support since other the NPD function is often isolated from other business functions and requires special skills and business frameworks.

I recommend an ongoing sharing and exchange for innovation leaders with a trusted group of like-minded product management professionals. Having your own personal advisory board facilitated by an innovation expert can help you advance and accelerate your innovation ecosystem. Check out the Innovation Master Mind as a way to rapidly improve your innovation programs through industry collaboration and problem-solving. (Register here for a FREE pilot session of the Innovation Master Mind on 23 January 2019.)

A Successful Innovation Ecosystem

I am constantly reminded of the delicate balance in nature’s ecosystem. Rain, sunshine, and fertilizer allow plants to grow and thrive. An innovation ecosystem requires feeding and nourishment to also grow and thrive. Key elements of an innovation ecosystem are the innovation strategy, product portfolio and knowledge management, an established NPD process, and team and leadership skills development.

Innovation is fun and exciting! When we apply and formalize these elements in an innovation ecosystem, we realize both personal and professional success while delighting our customers.

Learn More

Feel free to contact me more information on customized NPDP training. I can be reached at info@simple-pdh.com or 281-280-8717. I love helping individuals, teams, and organizations achieve their highest innovation goals!

A Division of Global NP Solutions, LLC

Study. Learn. Earn. Simple.