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NPD

Job Crafting to Increase Creativity

Working as product, project, and engineering managers, we often balance quality with deadlines.  Product concept tests must be completed before the engineer designs for the plant can be locked in. Customer testing – while ongoing – must be limited by budgets and workforce availability.  

These trade-offs are frustrating to both managers and new product development (NPD) team members alike.  Too many project boundaries can constrain innovation, yet infrequent or fuzzy milestones can delay a market launch.  NPD managers ask their team members for both rigorous adherence to schedules and budgets and creative, out-of-the-box problem-solving.

One solution to improve the trade-offs that are inherent in a complex innovation project is to increase the role of job crafting.  Job crafting is a set of tools that allows team members to frame their work to capitalize on their most important skills, to increase learning and engagement.

Job Enhancement

Enhancing a job typically means adding horizontal tasks to improve the skill sets of the worker.  To a point, job enhancement will improve employee motivation.  But job enhancement sometimes means just adding more tasks without re-balancing the staff’s existing job responsibilities.  Managers have good intentions in expanding a team member’s work, including learning and growth, increased exposure, and skill development.

Years ago, in one of my earlier assignments as an engineering manager, I specifically sought job enhancement for a star employee.  Darcy, as I’ll call her, was a smart engineer, had great interpersonal skills, and was dedicated to her work.  Knowing that the performance ranking system at the corporation was treating her (and many others) unfairly, I wanted to improve her potential and give a new opportunity to showcase her competency as an engineer.  To that end, I assigned Darcy to lead a small, customer-focused research study.  As the project lead, she would gain visibility with senior management and would be able to demonstrate skills in which I knew she excelled.  Compared to her peers, Darcy was best positioned to successfully deliver the results of the research study.

To my chagrin, Darcy responded negatively when I offered her the opportunity to lead the research project.  What I thought was a job enhancement, she interpreted simply as “more work”.  At the time, I didn’t know she was attending night school to get an MBA and was also trying to start a family.  Of course, any “job enhancement” in those circumstances would be viewed as “more work.”

Job Crafting

A better alternative to job enhancement is job crafting.  Job crafting allows team members to select the majority of their work tasks based on their likes and dislikes, anticipated learning opportunities, personal career trajectories.  When you allow your team members to work on what they like and what they choose, creativity and motivation skyrocket. 

At first, many managers think that job crafting will leave them with no one to do the steady, boring work like printing and sending invoices, conducting sales calls, or bookkeeping.  Yet, everyone is different and while a Type A personality team member wants to press ahead on a new technical product design, a quiet detail-oriented team member is happy to immerse herself in the statistical analysis of big data.  Together, these team members can tackle all the necessary tasks for an innovation project to reach completion, on-time and on-budget.

Agile Teams

This collaborative approach to NPD is precisely called out in the agile philosophy.  Working as generalist-specialists, the agile NPD team will take on product development projects with a high degree of motivation that is driven from within themselves.  The generalist-specialist on an agile NPD team will work on whatever tasks are necessary to complete a sprint and will do the “heads-down” work of his or her specialty to ensure overall team success.  Collaboration among team members wand with the customer is easy because the generalist-specialist desires to learn new skills and is inspired by the project rather a self-serving ego.

It is natural for an agile team to craft their jobs according to skills and competencies and to do tasks that give them joy.  These types of teams have higher rates of output and their work is more creative as a result of the deep trust and collaboration.

Another characteristic of agile teams is the determination to complete a project for the benefit of the customer.  An agile NPD project is continually driven by customer needs which are tested and validated throughout the product development life cycle.  Rapid concept and prototype testing is used to weed out bad ideas and to ensure customer needs are properly incorporated into the product design requirements.  Frequent customer interaction leads to better designs, faster time-to-market, and higher market share upon product launch.

Job Crafting for Innovation

Successful innovations require a clear understanding of customer needs, good market timing, and excellent design of product and service features.  To generate successful innovation, NPD teams must be motivated, creative, and collaborative.  Allowing team members to craft their work assignments within the NPD project boundaries leads to greater success.

Job crafting is different than job enhancement (as I learned the hard way).  In the latter case, managers try to motivate and engage team members by expanding their roles and responsibilities.  And while job enhancement can increase team engagement, the most motivated and inspired workers are ones that craft their daily work to use skills that they value most.  Team members that craft their own jobs, as in an agile project management environment, are more creative and inspired.  Project work is balanced among team members with different skills and desires.

Learn More

To learn more about job crafting and agile NPD, please join me and other inspired and creative innovation workers in a master mind group where we exchange ideas and hold each other accountable to achieve the highest level innovation goals.  We are currently accepting new applicants to the Life Design Master Mind group with a new cohort starting 21 May 2019.  The discounted upfront payment ends soon, so you’ll want to join soon to learn how to apply Design Thinking tools to craft your own best job!  Contact me at area code (281) plus 280-8717 or at info@simple-pdh.com for more information.  

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A Division of Global NP Solutions, LLC  

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Innovation, Curiosity, and Questions

A recent study (Harvard Business Review states that 70% of employees say they face barriers to asking questions at work.  Managers are often afraid of letting employees pursue their interests because it might create inefficiencies in the organization.  Leaders don’t ask questions of their staff because they don’t want to appear incompetent or indecisive.

Yet, studies also show when leaders do ask questions, they appear more likeable and trustworthy.  Trust, in turn, builds collaboration and motivation, yielding higher degrees of curiosity.  Curiosity then leads to better performance and more creative innovations.  And, higher levels of innovation drive market performance for new products and services.  How can leaders take advantage of these benefits?

A Questioning Mindset

First, leaders must get over themselves.  Ego and self-consciousness are often what holds back an executive or manager from asking questions.  Leaders fear asking questions of direct reports and employees down-the-line will make them look dumb, incompetent, or unable to make decisions.  Many executives harbor the false belief that they should know all the answers and talk more than listen.

Yet when we put forth questions and truly engage in listening, we learn more.  Questions can help develop a deeper understanding of needs – both internal and external – to the organization.  Open-ended questions drive discussions that yield more information and can help leaders gain insights to the health of the organization.  Some painful questions to ask of employees and of customers include the following.

  • What do you like best about the product or situation?
  • What ignites your interest in this job?
  • How could it be done easier?
  • What would make this even better?
  • What is difficult or challenging about this situation?
  • How would you measure success?

Contrary to common belief, asking questions does not indicate weakness.  However, questioning does demonstrate vulnerability, curiosity, and the will to improve.

A Curious Mindset

Curiosity is manifest in asking insightful, open questions.  This is exactly why children, with seemingly endless curiosity, repeatedly ask why and how.  Questioning curiosity is also the root of the “5 Whys” trouble-shooting method.  Asking why in response to each layer of diagnosis allows team leaders to dig deeper into a problem until the root cause is revealed.

Studies show that curiosity and creativity are linked to higher job performance.  Human beings are naturally curious and interested in “What makes it tick?”  Teams that support healthy curiosity, empower creativity, and engage powerful questions are more innovative.  These new product development (NPD) teams can identify customer needs bettered and can design products to meet those desires.

Moreover, teams bound by a common curiosity can develop solutions faster and work with a higher degree of trust.  NPD teams with deep empathy for customers are better able to resolve conflicts and drive focus to the product over personalities.  In short, curiosity improves both team and innovation performance.

Innovation as a Competency

Organizations can use questioning and curiosity as skills to empower innovation.  Innovation is more than just a great idea and requires customer empathy and technical finesse in addressing market challenges.  Innovation requires understanding technology as well as financial models in providing product and service solutions for customer needs.

While leaders are often reluctant to ask questions, innovation cannot be successful without questions.  NPD teams must ask questions to discover and define customer problems.  Innovators need powerful questions to drive creative insights in concept development and testing.  And, NPD teams must challenge the success of a new product or service in the marketplace with questions designed to understand customer acceptance and profitability.

Innovation, Curiosity, and Questioning

Consider a technology company that asks its customers about their interest in mobile fitness tracking apps.  With open-ended questions, the design team can learn that people want to track heart rate as well as steps.  They may also learn, through root cause questioning, such as the 5 Whys, that users want to know their fitness progress at a touch of a button.  The NPD team can design these features and functionalities quickly and test prototypes.

Because questioning and curiosity are at the core of the product development effort, an innovative fitness watch can be released quickly to this target market.  Further, since users are engaged throughout the design process, needs are satisfied, and employees reach higher levels of performance.

Next Steps

How can you take your innovation performance to the next level?  First, senior executives must demonstrate vulnerability to the organization, building trust and understanding, both internally and externally.  Next, innovation teams must approach problems from the perspective of the customer, asking questions and engaging creative curiosity in developing solutions.  Finally, organization must strive for a culture that supports open questioning and inherent curiosity.

To learn more, we discuss and diagnose your team’s leadership capabilities in Virtual Team Training.  This training is built on the Virtual Team Model as featured in PDMA Essentials Volume 3 (published October 2018).  We also incorporate elements of Ken Blanchard’s Situational Leadership model to help you accelerate your team’s productivity and growth.  Contact me at info@simple-pdh.com or 281-280-8717.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

Note that VTM self-study is included in the Innovation Master Mind (IMM) membership.  IMM is a 6-month peer coaching group that allows you to extend your NPD knowledge beyond NPDP certification and to collaborate with other CIOs and innovation managers.  We also offer independent coaching and consulting to new leaders or teams anywhere on the S-curve!

 

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A division of Global NP Solutions, LLC  

Seeking Alignment

Innovation managers, project leaders, and engineering directors are all charged with seeking alignment in an organization.  But, what does “alignment” mean and how do you do it?

Strategic Alignment

All successful companies have a strategy.  The strategy comprises the mission, vision, and values of the firm.  It describes the purpose for being in business, beyond making a profit and delves into how the organization can influence the world around it.  A strategy describes what work will be done, how it will be done, and when it will be done.

Anyone working for a company in a role of new product development (NPD), in R&D, or in market research, must clearly understand the corporation’s overall strategic mission and act accordingly.  This is the heart of “strategic alignment”.

Each project that is undertaken will have its own set of goals and objectives, yet these expected outcomes must align and support the overall mission of the firm.  A project that adds language and accessibility features is supporting the company goals that seek to grow international sales.  A new product project that uses less expensive raw materials is aligned with the firm’s operational objectives to minimize manufacturing costs.

Innovation, NPD, and R&D managers are most successful when they can translate the high-level organizational strategies into tactical and operational goals.  These objectives then drive project selection and execution.

Aligning Resources

Certainly, it is the responsibility of project, engineering, and functional managers to execute projects with fiscal accountability.  It is also a project manager’s objective to deliver the scope of work on-time.  And while financial and equipment resources are important, long-term innovation success depends on the human resources dedicated to growing and improving.

People are generally split in action between taking creative risks and making predictable bets.  Innovation requires a balance, too, and a trade-off among variables that lead to radical innovation and those that support the existing business.  Managers and leaders must encourage new ideas, yet screen concepts for profitability.

Managing teams is a tough task because with micromanagement or in applying too much process structure, we can stymie the creation of new ideas.  New ideas provide competitive advantage and build customer satisfaction.  On the other hand, many managers believe that giving too much free rein to teams can lead to chaos in the endless churn of problem-identification and infinite brainstorming.

Thus, aligning resources requires balancing team member strengths with project objectives.  Using the tools of the Virtual Team Model (VTM), for example, can help a leader identify which individuals are novices and which are experts.  The leader can pair these people to create customer solutions that are both novel and practical.  Meanwhile, the transfer of tacit organizational knowledge occurs flawlessly – and almost magically – as a mentor coaches a new team member.

Customer Satisfaction and Alignment

Our final topic in seeking alignment is built form customer satisfaction.  In innovation, we seek customer alignment through design thinking.  Design thinking is a collaborative approach to new product development that focuses on customer empathy to create the best solutions to a problem.  Tools in design thinking include in-depth customer observation and experimenting with various possible solutions.

A lot of products fail in a marketplace because the customer is not involved in the process.  Successful innovators align product development efforts with consumers and end-users.  The process of immersing the innovation team in the customer’s situation allows deep insights that clarify the definition of the true problem.  For example, by observing people change tapes or CDs frequently, Apple noted customers wanted to have more variety of music available on their portable devices.  Then, through rapid experimentation, the found consumers were willing to trade-off sound quality for more selection.  It is only through such close observation of users that customer alignment is achieved.

The Crucial Business of Alignment

Sometimes it is fun to be the dissenting voice at a party.  And sometimes it is adventurous to take the less-travelled pathway.  But, typically, being aligned with the group will reap the largest rewards.

Alignment in business leads to the greatest rewards, too.  From an innovation perspective, strategic alignment leads to greater financial success since NPD programs take advantage of opportunities and strengths within the firm to outpace the competition.  These results depend on resource alignment, so managers and leaders must create job opportunities that build on employees’ and team members’ skills.  Successful innovation teams are diverse yet strive for a common goal.

Finally, the most successful innovators align NPD with customer wants and needs.  Observation and rapid experimentation demonstrate customer collaboration in the design process yielding faster time-to-market and higher levels of consumer satisfaction.

Learn More

There are two ways to learn more about aligning business goals with innovation.  First, New Product Development Professional (NPDP) certification addresses best practices in innovation from devising a business strategy to idea generation and to market research for product concept testing.  Second, CIOs, NPD leaders, and R&D managers who are committed to taking their innovation program to the next level must participate in the Innovation Master Mind (IMM).  IMM is a 6-month peer coaching group that allows you to extend your NPD knowledge beyond NPDP certification and to collaborate with other CIOs and innovation managers.  You will realize improved efficiency and growth from our Life Design Master Mind (LDMM), IMM, or through NPDP certification which entails a deep dive into strategy and NPD processes, including design thinking.  Feel free to contact me at info@simple-pdh.com or 281-280-8717.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

Design Thinking for Innovation

I recently read an article in which the author proposed that design thinking was nothing new and simply repackaged a known set of tools. While I can agree somewhat with the author’s perspective on tools, I cannot agree that design thinking for innovation fits with the status quo. Design thinking proves a unique perspective for innovation and new product development (NPD) that is often missed with more systematic, institutionalized processes.

What is Design Thinking?

Design thinking is a collaborative and creative problem-solving methodology utilizing customer empathy to drive innovation. The design thinking process is very simple: identify the problem and solve the problem. However, the steps to identify the problem (discover and define) are iterative as are the steps to solve the problem (create and test). It is important to cycle between the “identify” and “solve” steps to ensure the right customer challenge is being addressed with a user-friendly solution.

Design thinking uses several tools throughout this simple process to help innovators and NPD practitioners understand and build empathy for the end-user. Some of these tools include:

  • Personas,
  • Customer journey maps,
  • Customer empathy maps,
  • Brainstorming,
  • Brainwriting,
  • Concept testing, and
  • Rapid prototyping.

What is Innovation?

While design thinking provides a methodology, framework, and a set of tools to identify and solve customer problems, it is not innovation by itself. Innovation is an act of creating and introducing something new or different to a marketplace in which consumers exchange their hard-earned dollars for a product, service, or application that gives them some benefit.

Thus, innovations are different than inventions since utilization of the features is more important than the recognition of the possibilities. Most innovations deliver a profit to a company; though, some government agencies and non-profit organizations pursue innovation to increase productivity or efficiency without a profit motive.

Innovations can improve or enhance existing products, services, or applications. Process improvements that remove manufacturing or distribution bottlenecks are innovations, and even processes and systems that improve innovation itself are considered innovations. Typically, we think of innovations as adding features or functionalities to new products. Other common innovations involve the introduction of new products or services that use new technology.

For example, the ability to scan various hotels and pricing through a smartphone app is an innovation because it utilizes new technology to deliver a new service and brings a profit to the parent company. Individual consumers are happy to exchange money (directly or indirectly) for the app because it offers them a benefit of convenience and cost-savings in booking a hotel room.

Design Thinking to Improve Innovation

Unfortunately, too many companies simply jump to the “creating” part of innovation without truly understanding customer needs. Failed products and service litter the R&D and marketing histories of most firms. Why does this happen?

In presuming a customer’s problem and devising a technical solution with a rigorous, institutionalized NPD process, many firms end up failing. Innovation success is built on understanding customer needs and desires. And this is where design thinking offers a unique perspective to NPD.

Recall that design thinking is a collaborative problem-solving method relying on empathy to design and develop innovative solutions. Empathy is different than observation. Empathy involves walking in someone else’s shoes to gain a holistic understanding in experiencing their problems. Once you have empathy, you “own” the problem, and you are vested in the right solution.

For example, nursing students are often taught empathy for their elderly patients by wearing vision-restricting goggles, bulky gloves, and over-sized shoes. These odd clothing items help future nurses empathize with their patients because they have actually experienced what it feels like to have a challenge in seeing, handling items, and walking. NPD practitioners can use these same tools to better understand challenges of the elderly across a wide spectrum and to develop novel products and services for this target market.

Design thinking also helps to ensure that innovators solve the right problem. Rather than assuming an elderly person has difficulty opening a pill bottle, an empathic developer might identify the problem as the number of different pills that the elderly patient must take. Crating a solution to the administration of many prescriptions is very different than creating an easy-to-open pill bottle.

Innovation Needs Design Thinking

While many of the tools of design thinking have been known for years, innovators cannot ignore this new approach to product development. With a cross-functional focus on the customer and in developing deep empathy for his/her challenges, NPD practitioners can unlock the right problems to solve. Innovations that discover and define customer problems and that create and test solutions by collaborating with the customer are the most successful. Innovators using design thinking are more successful in meeting customer needs and can launch products faster.

To Learn More

To learn how to apply design thinking to enrich innovation, please join us in Life Design Master Mind (LDMM), Innovation Master Mind (IMM), or New Product Development Professional (NPDP) certification. LDMM is designed for your personal growth by applying design thinking tools to finding the next step in life. IMM is a 6-month peer coaching group that allows you to extend your NPD knowledge beyond NPDP certification and to collaborate with other CIOs and innovation managers. You will realize improved efficiency and growth from LDMM, IMM, or through NPDP certification which entails a deep dive into strategy and NPD processes, including design thinking. Feel free to contact me at info@simple-pdh.com or 281-280-8717. At Simple-PDH.com where we want to help you gain and maintain your professional certifications. You can study, learn, and earn – it’s simple!

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

 

Leading an Agile Team

While less than 20 years old, the agile philosophy has immensely impacted how we do projects, interact on teams, and manage resources. First applied to software and IT projects, the agile theory emphasizes people over processes, and experimentation over documentation. Today, we apply the flexibility of agile management to tangible product development as well as computer-based projects.

One of the greatest challenges for an organization that transitions from a traditional project management approach is the role of managers. In a waterfall methodology, the PM directs tasks and activities of the project by assigning work to individual team member. S/he monitors task completion as well as the overall project budget and schedule. The project manager’s role is to keep things on track and to implement corrective actions if there is a deviation from the plan.

In sharp contrast, an agile project leader is a servant leader. In this role, the project leader helps to smooth the pathway for the project team by removing roadblocks and streamlining paperwork and systems as needed. The agile project leader’s role is to engage, empower, and encourage.

Engage

In traditional projects, the project manager is a manager by definition. S/he has authority and influence. Accomplishing the written project goals is the primary objective of the project manager. Success is measured by achieving the project scope on-time and on-budget.

As the agile philosophy emphasizes people and interactions over plans and contracts, an agile project leader will focus on building relationships. Engaging the project team and the customer are within the roles and responsibility of an agile team leader.

Notice, too, that we don’t say “agile project manager;” instead we use the term “agile team leader”. This is quite intentional as a manager expects to have the organization line up behind his/her decisions and act on these. In contrast, the agile team leader engages the team in decision-making processes.

Peculiar to new product development (NPD), agile team leaders facilitate customer engagement. Products are designed, developed, and tested to meet customer needs. Engaging customers to gain insights and preferences throughout the life cycle of the NPD project is critical to success in commercializing goods and services.

Empower

It is probably apparent in the agile philosophy that the project leader serves to empower the team. Because relationships are placed higher than documentation, systems, and plans, the servant leader works to establish team autonomy. Agile NPD teams, like traditional project teams, are made up of cross-functional representatives. What’s different, however, is that the agile NPD team members are empowered to act autonomously in their creative design. The goal is to create a product desired by customers – not to match a complicated scope of work etched in stone.

Agile NPD teams are also empowered to meet with potential customers directly to test concepts, feature ideas, and prototypes. This feedback is incredibly valuable to the development of a new product and will help the team with speed-to-market. Ultimately, these relationships serve not only to empower external interactions but also help to bond the agile NPD team to a common mission.

Encourage

A final role of the agile project leader is to encourage the team. Of course, any good leader demonstrates empathy and encouragement, but it is a special characteristic of successful agile NPD team leaders.

Any NPD project faces failures and setbacks. It’s a matter of course in our chosen field. We find that the technology didn’t work as we had hoped, the market size is dwindling, or the customers didn’t like that feature after all. This is discouraging to NPD project team members who have worked hard and long hours to meet the challenge. It is normal to feel a bit depressed about these results.

An effective project leader recognizes the highs and lows in NPD project work and encourages the team. One form of encouragement is simply a reminder of the overall mission of the team. Most products and services are designed to improve customers’ lives and this focus can re-energize the team to establish new energy to accomplish goals. A benefit of the agile methodology is the frequent feedback from potential customers which is motivating in and of itself.

Traits of an Agile Leader

Agile leaders for NDP project teams are successful when they engage, empower, and encourage the team. Engaging with the team and with customers helps to provide focus on the best design. Teams accomplish goals and achieve better results when they are empowered to act autonomously and to build strong customer relationships. Finally, team leaders are effective when they encourage and reward team members as the team experiments with various ideas, concepts, and behaviors.

In our on-line tutorial on Design Thinking and in our Agile NPD course, we discuss failing fast and failing often to drive learning. However, we must first categorize the type of failure to benefit from lessons learned. Not all failures offer a growth opportunity, but we must be open and honest when we do encounter such circumstances. Join us for the Agile NPD course or check out our self-study and other NPDP Workshops. Feel free to contact me at info@simple-pdh.com or 281-280-8717. At Simple-PDH.com where we want to help you gain and maintain your professional certifications. You can study, learn, and earn – it’s simple!

 

Reading Recommendation

We discuss different customer insight methodologies in NPDP Certification Prep: A 24-Hour Study Guide, and you can find additional references at https://globalnpsolutions.com/services/npd-resources/.   Some other books you might enjoy:

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

Inverting Innovation

Experienced scientists, chefs, and artists tend to look to the familiar to create new works. Knowing that corrosion is reduced using one metallurgy under acidic processing, an engineer will choose the same metal for construction of a reactor operating under similar conditions. When a touch of basil adds flavor to one dish, a chef will add the herb to another. And as a marker of greeting cards, I find many of my designs repeat themes, patterns, or color schemes that I have used in the past.

While having “go-to” solutions is useful and saves time when we need to solve a problem quickly, innovation can be hampered by not seeking novel or unique approaches to challenges that appear to be like those we’ve faced in the past. This is the core philosophy described by Clayton Christensen’s The Innovator’s Dilemma.

Traditional Innovation

In traditional innovation, we understand the importance of deep focus on our existing customers. We must learn their wants and needs if we are going to continue to serve them. We also must add features to existing products to keep competition at bay. However, as we continue to rely on more of the same, we fall into the trap of creating sustaining innovations.

This manner of new product development (NPD) starts with the existing customer (who) and asks why they buy our products. We then move to what we can do to increase the attractiveness of these products and services versus the competition. Thus, we fall into the trap of increasing performance along a known trajectory, trying to glean more and more improvements to serve an increasingly elite customer base.

Inverting Innovation

Disruptive innovation, on the other hand, first identifies a market need – something that customers want and cannot easily find to solve their problems. Most often, these novel ideas and product solutions come from start-ups and entrepreneurs that are not hindered by pre-determined answers or expected profit margins. These new market participants view all customers as potential sales targets and strive to understand their fundamental problems.

What

The question of what to create and design as a new product is determined by the firm’s strategic intent. What is the business? What is the mission or purpose of the firm? What are the long-term and short-range goals?

Why

The next question an innovation team must answer is why is this product solution different? The NPD team should look at the entire business model, including how the product is delivered to the customers as well as complementary or platform products and services. A whole business model approach to solving a customer’s problems is often more attractive to consumers than when they must cobble together various pieces of the product solution.

Take, for example, travel web sites. Instead of looking just for the best hotel in your price range, a platform solution offers full vacation planning. These sites scour the internet for the best airfare, hotel, and rental car rates, and then package them together for a customer’s ease of performance.

Who

Finally, the disruptive innovation answers the question of who is the customer? You’ll recall that incumbent firms focus heavy NPD efforts on existing customers and in moving up-scale in consumer markets. They already know who the customer is.

Disruptive innovations, on the other hand will identify who the customer is by addressing what the need is. Yet they will also address vendors, suppliers, and distributors across the value chain. Again, this leads to a holistic vision of the business model and not just a single product development initiative.

Be Disruptive by Inverting Innovation

Many times, we get truck in the trap of developing new products for existing customers that must deliver a certain profit margin. Knowing what worked in the past, incumbent firms add features to existing products, often in response to competition. Innovation is approached from knowing who the customer is, why they are your existing customer already, and what you can do to improve the product performance.

Inverting innovation, instead, forces an NPD team to think like an entrepreneur. What does the market need? Why is my business model different? Who, in the value chain, helps us meet customer needs?

To learn more about disruptive innovation, see our special class on Disruptive Innovation and you earn 1 PDU credit! Also, check out self-study and other NPDP Workshops. Feel free to contact me at info@simple-pdh.com or 281-280-8717. At Simple-PDH.com where we want to help you gain and maintain your professional certifications. You can study, learn, and earn – it’s simple!

 

Reading Recommendation

One of my favorite new books on innovation is The Power of Little Ideas by David C. Robertson and Kent Lineback. Clayton Christensen’s The Innovator’s Dilemma and The Innovator’s Solution are classics for this field (affiliate links). Another good book focusing on customer perspectives is Strategy from the Outside In by George Day and Christine Moorman. We also discuss application of strategy via disruptive innovation in NPDP Certification Prep: A 24-Hour Study Guide, and you can find additional references at https://globalnpsolutions.com/services/npd-resources/.

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

Three Factors to Master in New Product Development

New product development (NPD) is inherently risky but is also a necessary function of any firm that sustains long-term business success. CEOs are demanding more innovation and Wall Street echoes the cry. NPD teams are adopting systems and approaches to create repetitive processes and gain customer insights. Yet, commercialization of new products remains somewhat lackluster.

In this post, we discuss three factors in new product development that are often missing in the quest for innovation success. Commercialization of a new idea, concept, or technology cannot be successful without addressing these three arenas. And to be effective at repeated innovation success, companies must thoughtfully consider each factor before deciding to commercialize a new product.

Industry

The first important factor for sustainable innovation is the industry. This includes addressing questions of where the company is positioned in the industry – a core product, a distributor, or a reseller. What sort of R&D capabilities does the firm have? Are new technologies developed in-house, outsourced, or licensed-in?

These questions focus on how a firm participates under current market conditions. If a company is positioned in a slow-moving industry, it needs to evaluate the impacts of new technologies on its existing business models. New entrants to the market can disrupt supply and distribution chains as well as allow consumers to find new solutions outside of existing product categories.

For example, a few years ago, ExxonMobil jumped on a new technology, offering “SpeedPass”. The small device hung from your key chain and by waving it at the gas pump, your ExxonMobil credit card was charged for the fill-up. The idea was to ease the transaction and give some time back to customers. The SpeedPass innovation certainly grasped the concepts of new technology but was far outside the typical markets and industry specializations of the oil giant. ExxonMobil’s core competency is in finding oil, extracting, and refining it. The SpeedPass was abandoned in early 2018.

The Innovation

As indicated by the demise of the SpeedPass, the innovation itself plays a huge role in successful commercialization. Companies need to consider the product life cycle. Balancing the investment in manufacturing with a product expected to have a long-life cycle with many derivatives is a good bet. A firm should evaluate tolling or other manufacturing arrangements if the product is expected to fill a niche among a small group of consumers for a shorter time.

In addition, some radical innovations and breakthrough technologies require extensive spending to educate a new market. Some years ago, one of my clients had designed a terrific new home insulation product to increase the R-value in a home. The product did not see sales take off until the firm invested in educating home remodeling contractors. Radical innovations may be obvious to the NPD team, but need an explanation for general market use.

Risks

Innovation in inherently risky but failing to move forward is a guarantee to disappear. Commercialization of a new product requires balancing risks with market opportunities.

Of course, there is always a financial risk of product failure. That’s why understanding the industry and the innovation itself are important upfront in any NPD project. Other risks include technical and quality outcomes. The product must function technically as advertised and be intuitive for customers to use. If not, repeat purchase will never materialize. A product also must be reliable and meet a customer’s expectations. Quality is always defined as customer satisfaction.

Three Factors of NPD

Customers, especially loyal consumers who make repeat purchases and spread good word-of-mouth about your products are at the heart of successful commercialization of any new product. A company can minimize the odds of a failed product launch by paying attention to three key factors in NPD.

First, understanding your industry and the pace of change drives successful innovation. Competitors may jump on a technological band wagon but if that technology is far removed from your core competencies, is it a good investment? Consider the supply and distribution chains, geographical dispersion, and manufacturing costs as part of any industry assessment.

Next, a company must be intimately familiar with the innovation itself for successful commercialization. Incremental innovations and product derivatives are easily marketed to existing customers. Growing market share or increasing market penetration may require educating new users, especially if the technology or application is new-to-the-world.

Finally, no commercialization of a new product is successful without considering the potential risks. What if the product fails? What if consumers are not satisfied with technical features or product reliability? A firm must decide whether to re-invest in the product or to pull the plug. And these decisions build off the upfront, strategic industry and innovation assessments.

To learn more about new product development management, check out self-study and other NPDP Workshops. Feel free to contact me at info@simple-pdh.com or 281-280-8717. At Simple-PDH.com where we want to help you gain and maintain your professional certifications. You can study, learn, and earn – it’s simple!

 

Reading Recommendation

One of my favorite new books on innovation is The Power of Little Ideas by David C. Robertson and Kent Lineback. Of course, anyone interested supporting a repetitive NPD process should read Bob Cooper’s Winning at New Products and New Product Forecasting by Ken Kahn. Other good books that should be on the shelf of any innovator are The Innovator’s Solution and Crossing the Chasm (affiliate links). I also dedicate an entire chapter to NPD processes in NPDP Certification Prep: A 24-Hour Study Guide, and you can find additional references at https://globalnpsolutions.com/services/npd-resources/.

 

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  1. A division of Global NP Solutions, LLC  

The Pros and Cons of Traditional NPD Systems

If you enjoy our blog, be sure to check out the reading recommendations at the end for more information.

New product development (NPD) is most successful when a systematic process is utilized to create repetitive product or service commercialization.  “Success” means hitting a sales volume target or profitability goal.  In benchmarking studies, “success” also means that a firm is among the top performer for innovation in its industry.

The benefit of a systematic NPD process is that everyone throughout the firm, and including customers and suppliers, understands the status of a project in progress, the steps required for technical and market development, and the necessary market approvals.  NPD processes do not have to be complicated and certainly should not be onerous, but the must ensure that each project is reviewed consistently and fairly.  Moreover, NPD processes must be applied to every innovation idea, concept, and prototype within the firm.  The most common NPD process is the Stage-Gate™ model, designed by Robert Cooper and documented in his famous book, Winning at New Products.

Benefits of a Stage-Gate Model

In a traditional stage-gate model for new product development, work on the product is done in “stages” and decisions are made at “gates”.  About 80% of US companies use a stage-gate model for innovation today.  Various incarnations of phased and gated models are utilized for traditional engineering and construction projects as well.

A key benefit of a phased process model, like a stage-gate system, is that investment risk is minimized.  Relatively few dollars are committed in the early stages to study market opportunities and ideas.  If the options prove out, then more money is invested to build prototypes and conduct customer tests.  Then, if these experiments are also positive, further investment occurs to build or enhance manufacturing facilities and to formally commercialize the product.  At any point in the process, a project can be killed if the tests do not return expected outcomes.  In this way, the investment in any given idea is minimized and risk-adjusted.

Steps in a Traditional NPD System

A traditional NPD process, like a stage-gate system, is considered a “waterfall” approach to project management.  As water flows downhill, it cannot flow uphill to return from whence it came.  Likewise, once a step in the stage-gate framework is completed and funding is consumed, it is not easy to go back and repeat a prior step.  However, the purpose of the gate decisions is to validate prior work on the project and to approve future plans.  Assuming that all work is accurate, there should be no need to repeat earlier steps.  Waterfall processes require that upfront planning and requirements are correct at the beginning of each phase.  Traditional phases in an NPD process are as follows.

  • Stage 1 – Opportunity identification
  • Stage 2 – Concept generation
  • Stage 3 – Concept testing
  • Stage 4 – Technical development
  • Stage 5 – Product launch and commercialization

In the “fuzzy front end,” investment is not high as there are typically no physical assets involved.  The work done in these early phases (Stages 1 through 3) involves gathering market and customer insights, testing proofs and prototypes, and narrowing design characteristics of the new product.

Cautions in Deploying Stage-Gate Models

As with any waterfall process, the biggest disadvantage of stage-gate systems is the upfront planning.  In theory, a traditional NPD process is designed to test customer feedback and gather end-user insights during each phase of work.  Market attractiveness and customer need are major criteria reviewed at gates, and a project must deliver positive results for a project to pass a gate and move to the next stage.  Customer interactions are built into the work and the approvals of each phase of NPD work.

In practice, however, many firms are sloppy in customer testing.  After all, a lot of smart people work in the R&D department and have the greatest knowledge of technical advances in their field.  Further, just asking a customer what s/he wants in a next generation product does not yield insights into disruptive innovations.  And, finally, we often work on NPD projects that flow through the system because a high-level manager thinks the idea is great, even though there is not one iota of supporting data.

A traditional stage-gate system works for NPD.  But, senior management must make tough and honest decisions at the gates.  Projects that won’t deliver expected commercial value or solve a customer’s needs must be killed.  Oddball product ideas that show promise must be nurtured, even if they appear to be outside the standard operating mantra of the firm.

Airbnb is an example of a new platform that pressed forward even when faced with multiple innovation and sales challenges.  Customer insights were positive in concept tests and the market need was genuine.  Tweaking how properties were photographed allowed Airbnb to move out of the technical development stage and into widespread, successful commercialization.

Traditional Stage-Gate Models in NPD

Traditional waterfall processes are successful in brining new ideas to market.  A stage-gate system minimizes investment risk because each stage of work is carefully matched to escalating goals and objectives.  When customer insights and feedback are held as sacred gate pass criteria, a traditional stage-gate system yields repetitive market successes.

To learn more about new product development management, check out self-study and other NPDP Workshops.  Feel free to contact me at info@simple-pdh.com or 281-280-8717.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

 

Reading Recommendations

One of my favorite new books on innovation strategy is The Power of Little Ideas by David C. Robertson and Kent Lineback.  Of course, anyone interested supporting a repetitive NPD process should read Bob Cooper’s Winning at New Products and New Product Forecasting by Ken Kahn.  Stories of entrepreneurial success, like Airbnb, are artfully included in The Creator’s Code and Barking Up the Wrong Tree (affiliate links).  I also dedicate an entire chapter to NPD processes in NPDP Certification Prep:  A 24-Hour Study Guide, and you can find additional references at https://globalnpsolutions.com/services/npd-resources/.

 

Stage-Gate™ is a trademark of Stage-Gate International

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

4 Elements of Strategy

Working with both individuals and companies to accelerate innovation, I get a lot of questions about strategy.  Strategy sets the objectives of a firm and establishes the boundaries for any new product development (NPD) effort.  It provides direction for innovation programs and ensures that investments are consistent with the long-term goals of the organization

While strategy is easy to define, it’s hard to enact.  For instance, Dictionary.com defines strategy as “the science or art of planning.”  Organizations plan their business activities in four areas.  By aligning projects with these four strategic arenas, quality execution follows naturally.

Product

First, a strategy defines a product.  Product development efforts expand both individual products and entire product families.  Product development may include addition of new features, new technologies, or service enhancements.

The advantage of a product-focused strategy is the ability to measure success.  Strategic business goals include increased revenues, increased sales, and reduced costs.  NPD projects ranging from improved product functionality to streamlined marketing and distribution help a firm meet these business objectives.

However, a strategy that concentrates exclusively on product enhancements can miss emerging customer trends and/or industry disruptors.  A competitor may learn a new, less expensive technology to produce the same goods.  Or fashions and trends may yield a scattering of customers to new product solutions outside of the basic product category.  For example, multi-CD players became popular in automobiles a few years ago only to lose to a trend of Bluetooth connections with smartphone allowing customers access to nearly endless collections of their own favorite music.

Problem

The second strategic category for innovation is solving problems.  Not just any problem, but a customer’s most vexing problem.

Solving problems is a tougher strategic issue than improving or enhancing product performance.  First, the correct problem must be identified and a variety of solutions tests to ensure customer satisfaction.  Finding customer problems requires commitment by all levels of the organization.

The easy customer problems to solve are reported to the customer hotline.  Next, sales teams and account managers can report customer problems that are directly described to them.  Finally, NPD teams conduct observations (“ethnographic research”) to identify unarticulated customer problems.

This latter category of problems – the ones customers have but don’t know how to explain – are fertile for solving.  Many consumers just “live with” products that do part of the job or are just “good enough”.  You know you’ve identified a valuable customer problem when you can simplify their use of the product or you can eliminate parts and interconnections.

For instance, consumers used to need a cleaning solution and a special brush for the unpleasant job of cleaning the toilet.  People would say they hated cleaning the toilet but wouldn’t be able to specify all of the yucky aspects of the job.  Along came a new product solution that combines the brush and cleaning solution, with the added bonus that you flush the brush after use.  (Yea!  We don’t have to handle any more yucky, dirty stuff!)  The entire process is shortened and simplified to improve the customer’s solution to an unarticulated problem.

Mission

A company’s mission statement explains its purpose for existing.  Starbucks wants to nurture relationships, one cup of coffee at a time.  ADM (a supplier of agricultural products and ingredients) wants to unlock the power of nature and improve the quality of life.  The Humane Society wants to confront animal cruelty.  As you see, the mission statement frames a firm’s beliefs, actions, and activities over the short-, medium-, and long-term.

New product development projects are often undertaken to deliver the organization’s mission.  These types of project focus on the organization’s core capabilities and in generating new technologies.  Often the investments are in R&D programs to establish foundational knowledge, onto which specific new product solutions are built later.

For instance, pharmaceutical companies research specific chemical formulations and compounds.  A target drug may end up addressing multiple market needs or diseases for which the drug was not initially designed.  Viagra® was supposed to be a heart medicine yet found a different – and popular – market application.

People

The last category of innovation strategies invokes people.  Here, we are focused on the internal structure and function of the organization.  There are two aspects to successful innovation associated with people – one is motivation and the other is process.

Innovation leaders will implement innovation projects but often face limited resources to accomplish project efforts.  People are motivated to work harder and identify more creative solutions when they have a vested interest in the NPD project.  Moreover, people are also motivated by completing projects.  A tool to use for staffing of complex innovation projects is self-assignment.  In this way, resource capabilities are aligned with the best use of skills and knowledge.

Second, processes can either support innovation work or drain the energy of the team.  Self-organizing teams are one aspect of agile product development.  Not everyone should convert to agile NPD processes, but the system does encourage increased communication with target customers, rapid experimentation, and fast failure (learning).  Further, limiting multi-tasking frees the technical experts to collaborate on the best solutions for product design and development.

Four Elements to Strategy

Strategy is often easy to conceptualize as an approach to planning product development work.  Yet, enacting strategy in executable innovation programs is more difficult.  By defining a strategic goal within the four elements of strategy, innovations are more successful.

First, the product is the outcome of any strategic investment in NPD.  Designing competitive features and functions can deliver top-line growth to the firm.  Next, the NPD teams can address strategic objectives by truly understanding customer needs and wants.  This includes their unarticulated needs which often lead to the most creative and innovative product solutions.  Strategy is frequently expressed by the organization’s mission statement.  This is the core purpose of the business.  Innovation that advances technical processes and core capabilities can lock in market share.

It goes without saying that integration of human resources (people) with the product, problem, and mission is necessary for innovation success.  NPD teams thrive under open, self-organizing processes that reward learning over planning.

To learn more about innovation strategies and new product development, check out self-study and other NPDP Workshops.  Feel free to contact me at info@simple-pdh.com or 281-280-8717.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

 

Reading Recommendation

One of my favorite new books on innovation strategy is The Power of Little Ideas by David C. Robertson and Kent Lineback.  Of course, anyone interested is disruptive innovation should read Clayton Christensen’s The Innovator’s Dilemma and Geoffrey Moore’s Crossing the Chasm (affiliate links).  I also have a section on disruptive innovation in NPDP Certification Prep:  A 24-Hour Study Guide and additional references at https://globalnpsolutions.com/services/npd-resources/.

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

New Products and Loyalty Programs

Marketing strategies are a key focal point for new product development (NPD) teams during the later stages of development (commercialization and launch).  Market research methods include testing the new product with a limited customer base at the same time as testing the advertising campaigns and positioning statements.  New products are typically designed to serve both existing and new customers.

In the case of existing customers, a firm may use existing distribution channels to reach the customer and to inform him/her of the new product.  Customer loyalty programs are one way to inform existing customers of new offerings and to target increased sales in a product or brand category.

What is a Loyalty Program?

Loyalty programs are marketing programs designed to generate increased sales revenue and profit for a company by offering rewards to customer who make repeat purchases.  In a B2B situation, for instance, a loyalty program might offer free shipping or discounted prices through contractual agreements that assure long-term buyer/seller relationships.  In a B2C situation, loyalty programs are instituted as frequent flyer programs, frequent shopper cards, points per purchase, and the like.

As an example, many of us carry a grocery store frequent shopper card.  Items are priced at a small reduction for customers using the grocery chain’s shopper card.  Airlines and hotel encourage repeat purchases through loyalty programs in which customers accumulate reward points by using their exclusive reservations systems.  Reward points can be redeemed for free flights or free hotel stays in the future.

Goals of Loyalty Programs

The goal of a loyalty program is, of course, to generate loyalty among customers to yield a competitive advantage.  It is often cited that the cost of new customer acquisition is significantly higher (up to 10X) than maintaining a strong relationship with an existing customer.  Thus, one goal of a loyalty program is to decrease marketing costs by encouraging increased purchases by existing customers.

A second objective of a loyalty program is to encourage a greater number and variety of purchases by repeat customers.  This is accomplished by up-selling or cross-selling.  As an example, I worked in the children’s department of a department store while I was in college.  The end-user was rarely the purchaser, and, in fact, many grandmothers did more shopping than moms and dads!  My boss constantly prodded the sales staff to push cross-selling opportunities.  During the check-out transaction, we were supposed to ask each customer if they needed a belt or sock with their purchase of shirts, pants, or dresses.  These cross-selling opportunities often involved high margin products.

Behavioral Loyalty

At the department store, I did encounter a lot of repeat purchasers.  Many of these grandmothers were exhibiting behavioral loyalty.  That is, they made the purchased based on convenience or price.  Behavioral loyalty is observed by a customer making similar, routine purchases at the same store over and over again.

In contrast to behavioral loyalty is attitudinal loyalty.  A customer exhibiting attitudinal loyalty is a true believer in the company, brand, or product.  They choose the product because of a preference for its features, benefits, and/or quality.  True attitudinal loyalty results in customer satisfaction and behavioral loyalty manifested in repeat purchases.

Marketing New Products

A new product is offered to customers with both behavioral or attitudinal loyalty.  However, the marketing approach should be different since the customer relationship with the firm is different in these two situations.  Customers with behavioral loyalty are treated transactionally in an attempt to garner profits.  Hard-selling tactics, such as direct mail and frequent coupon delivery, are effective to promote a new product with this group of customers.

On the other hand, the relationship is more complex with a customer who has attitudinal loyalty and the firm does not want to risk that relationship by over-promotion or with hard-selling tactics.  These customers require a gentle introduction to new products and should be made to feel special in the marketing campaign.

For example, a grocery store may offer a special event with wine and cheese sampling to a target segment of frequent shoppers with attitudinal loyalty.  The new product will be introduced as part of the event, but the marketing approach does not overshadow the recognition of the customer relationship.  The consumer feels special to be invited to the exclusive event in the first place.  Discount coupons (encouraging behavioral loyalty) can be used after the event to encourage a new purchase, but only for a limited time.  It is more important to maintain the relationship than push a product.

New Product Marketing with Loyalty Programs

The fundamental concept of marketing for a new product is to inform potential customers of the benefits and value of the new product.  Existing customers, with a lower cost to identify and segment, can be targeted for new product introduction through loyalty and reward programs.  Companies must, however, differentiate between those customers with behavioral loyalty and those with a deep, lasting relationship that goes beyond the transaction.  Customers with attitudinal loyalty support and evangelize the brand or firm.  Marketing campaigns adjust from hard-selling tactics to continued relationship building as customers migrate from behavioral to attitudinal loyalty.

A great book on customer loyalty programs is Customer Relationship Management by V. Kumar and Werner Reinartz.  (affiliate link)

If you’d like to learn more about customer relationships and marketing for new product development, please join use one of our popular NPDP Workshops.  Feel free to contact me at info@simple-pdh.com or 281-280-8717.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC