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“Wagile” in New Product Development

Most businesses today employ a new product development (NPD) process to manage innovation.  Studies indicate that over 80% of leading US companies use a phased and gated framework to convert embryonic ideas to commercial products.  Yet research also shows that about half of all new products fail.

So, it is not surprising that companies are looking for other systems to manage NPD projects.  Because Agile has been successful in software development, many firms are considering project management frameworks, like Scrum, for physical new product development.  You can learn more about traditional, waterfall NPD processes here and Scrum for NPD here.

A disadvantage of Scrum in physical product development is that while features can be designed during a typical two- to four-week long sprint, it is often difficult to test a feature without the availability of the whole product solution.  Consider, for example, testing automatic collision avoidance on a vehicle without knowing the weight, horsepower, or tire diameter of that vehicle.

“Wagile” for NPD

So, we know that NPD projects must be faster and more responsive to customer needs than we can normally deliver in a traditional phased and gated process.  We also know that going fully agile is not practical in many situations.  What’s the answer?  “Wagile!”

“Wagile” is a hybrid of waterfall and agile processes, adopting the positive aspects of each project management framework to physical product development.  Wagile processes are faster and more flexible than conventional staged and gated processes but recognize the whole system as a product.  Moreover, wagile processes interface with customers at key intervals to determine functional needs and to garner important design insights at the right times in the project life cycle.

Iterative Wagile

Iterative wagile processes are often used for new product development projects that have a few, higher risk technical or market uncertainties.  The market is known and developing so speed-to-market is a critical factor in commercial success.  Frequently the firm has significant technical competency in the product category and is skilled at quality production in this product arena.

In this variety of wagile NPD project management, sprints are applied early in the process to address specific technical questions or to gain customer feedback for a particular product feature.  The business case is documented upfront and project requirements are known within a wide bandwidth.

The iterative sprints are used to answer some specific questions so that the product design can be locked.  Once those design requirements are determined, through a series of iterative technology or market experiments, a traditional waterfall process is followed for prototype generation, technical development, and commercial launch.

An example of a product for iterative wagile development is the iPad™.  The market was generally known and growing as the use of eReaders was expanding in 2010.  However, the iPad touchscreen required technical design beyond the smaller iPhone™ screens and some user interactions needed testing.  However, once these design specifications were frozen, technical development and product manufacturing followed Apple’s traditional project management models – the same used for other existing products.

Incremental Wagile

In other cases, new products are really new platforms built to serve customers and users with new technologies and with novel applications.  Consider, for instance, wearable fitness trackers.  The goal of the NPD project is to deliver quality and to meet customer satisfaction objectives.  Customers needed to be educated on how the product worked yet were knowledgeable about the intention and utility of the product.

For fitness trackers, an incremental wagile NPD process was appropriate.  While technical and market uncertainties were both high, it was important to test proofs and prototypes in the marketplace.  A minimally viable product (MVP) that simply counted steps was a first version of the product.  The company gains market insights from the niche customers using an MVP and develops a second version of the product, purchased by a growing customer base.

Again, technical requirements are developed based on customer insights and feedback rom using the real product.  Another, more sophisticated version is released based on this new market information, and the cycle repeats itself again and again.

Incremental wagile is an especially useful project management approach for a new product category.  Fitbit™, like Kleenex™ and Xerox™, identifies the product category for fitness tracker today, yet functionality is radically more complex than the original step counters released as MVPs just a few years ago.

Wagile for NPD

Each NPD project is unique in some way.  Thus, applying the “right” NPD and project management process approach requires evaluating several variables for the project.  Some of these factors include the following.

  • Technical uncertainty
  • Market uncertainty
  • Customer availability
  • Company culture
  • Team structure
  • Competitive threats

However, most NPD projects can be successfully implement using a waterfall (staged and gated), agile (Scrum), or hybrid (wagile) approach.

We invite you to learn more about “wagile” new product development in an upcoming Agile NPD or New Product Development Professional (NPDP) certification workshop.  Check out our full class schedule at Simple-PDH.com.  Please contact me if you’d like a free pdf copy of the Scrum Body of Knowledge (SBOK) and check out our current course list for Agile NPD and Scrum here.  Feel free to contact me at [email protected] 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

Some great references on agile and Scrum are:

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

Scrum in New Product Development

One of the hottest topics in project management and product development today is Agile.  Agile is a set of values that generate several different project management frameworks to increase productivity, customer satisfaction, and team morale.  While agile methodologies are widespread in software and IT, they are only recently being adapted to the development of physical products.

The Agile Manifesto

The core values of the agile philosophy are reflected in The Agile Manifesto.  This proclamation was produced by a group of software developers in 2001 in an attempt to improve speed-to-market and accuracy of product delivery.

The Agile Manifesto compares a preferred way of doing things in a project to the traditional way.  So, while conventional project management tools, techniques, and procedures are not rejected outright, the agile philosophy recognizes a better and more efficient way to accomplish project tasks.  These are shown on the left-hand side of the comparison statements, while conventional policies are shown the right-hand side.

  • Individuals and interactions over processes and tools
  • Working products over comprehensive documentation
  • Customer collaboration over contract negotiation
  • Responding to change instead of following a plan

Scrum

While there are literally dozens of implementations of the agile philosophy, the most commonly adopted framework for physical product development is Scrum.  Scrum is an adaptative, flexible approach to projects that allows for iterative development and improves communication across a team and with the customer.  Elements of Scrum fall into three categories:  artifacts, tools, and roles.

Artifacts

A key artifact or process in Scrum is the idea of time-boxing.  This produces a rhythm and cadence in the work and, for product development, helps to minimize risk.  Several events are time-boxed or limited.  The first is the sprint.

A sprint typically lasts two to four weeks and is a period of intense work for the product development team.  Only a few, priority tasks are completed in each sprint so that the team maintains focus.  For example, a sprint may be designed to gain customer insights through market research by conducting customer focus groups or testing a particular concept in a real environment.  Sprint tasks re prioritized to bring the highest value to the project as early as possible.  Thus, by keying in on a few, critical items early in the project, a new product can be designed with appropriate features that customers want and need.

A disadvantage of the sprint in physical product design is in the definition of “done”.  Whereas a software project can deliver completed lines of code at the end of a sprint, physical product development sprints may deliver test results or qualitative market research.  It may be useful to view the sprint as a learning period.

Other artifacts in Scrum include the daily stand-up meeting and retrospectives.  I’d like to refer you to other posts and papers for more information on these artifacts.

Tools

As indicated, the new product development (NPD) team works on gaining customer feedback or delivering a working feature during each sprint.  A crucial decision-making tool for Scrum is the product backlog.  This is loosely like a list of project requirements in a traditional phased and gated product development process.

The product backlog is developed at the beginning of a project and is constantly reviewed and updated (“groomed”) during the project life cycle.  Product features and attributes, along with the most critical customer experiments are listed in rank order.  Items from the product backlog are worked during any given sprint.  The NPD team commits to only work on a product backlog item during a sprint which can be completed in the timeframe (e.g. 2 to 4 weeks).  In this way, the highest business value items are worked first.

In physical product development, it is of high value to determine the business case for a new product as well as to test a minimally viable product (MVP).  Market studies and technical experiments are often conducted int eh early sprints to determine customer need and product feasibility.  Such knowledge-building activities are designed to eliminate uncertainty in the product development effort.

Scrum Roles

Three important roles in a Scrum project are the team, the Scrum Master, and the product owner.  A cross-functional, co-located team does the work of the project during the time-boxed sprints.  Close collaboration among team members is often cited as a reason for improved productivity in an agile project versus traditional staged and gated processes.

The Scrum Master is a bit like a project leader yet works in a service role more than a directional one.  The team largely decides how to accomplish tasks during any given sprint while the Scrum Master interfaces with the customer, and removes roadblocks and obstacles facing the team in their daily work.

The product owner is a unique role in Scrum and a role that is frequently overlooked in practice of traditional NPD and project management processes.  Product owners create the prioritized product backlog, making the decisions of which features are most important – and valuable – to the business and to the customer.  It is the product owner who approves features and applications at the end of each sprint.  NPD projects benefit from creating personas for the product owner to assume in this role.

Agile for NPD

While initially designed for software development, agile methodologies are gaining traction in NPD for physical, tangible product development.  Often, the agile processes, like those in Scrum, are overlaid on a traditional NPD process.  Learning cycles are especially important in the market and technology development of a new product.

Please contact me if you’d like a free pdf copy of the Scrum Body of Knowledge (SBOK).  To learn more about applying agile to new product development management, check out self-study and other NPDP Workshops.  Feel free to contact me at [email protected] 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

Stories of entrepreneurial success, like Airbnb, using agile techniques for new business are artfully included in The Creator’s Code and Barking Up the Wrong Tree (affiliate links).  I also dedicate an entire chapter to traditional NPD processes in NPDP Certification Prep:  A 24-Hour Study Guide, and you can find additional references at https://globalnpsolutions.com/services/npd-resources/.   Some more great references on agile and Scrum are:

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

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 [email protected] 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  

Disruptive Innovation: Customer vs. Market Orientation

Ever since Clayton Christensen first published “The Innovator’s Dilemma” over 20 years ago, companies have struggled to identify and develop products that are “disruptive”.  Likewise, academics have argued about the definition of “disruption” along with the constraints and application of the theory.  Because of the sheer volume of papers and the animation of those debating the topic, we can assuredly know that disruptive innovation is important!

In short, Christensen noted that large, incumbent firms tend to develop new products that serve existing customers with higher and higher levels of performance.  These are called sustaining innovations.  At the opposite end of the spectrum, entrepreneurial firms with no profit margin or expectations tend to design new products that meet the needs of niche customers.  As the product performance characteristics of these new designs improve, mainstream market adoption occurs which “disrupts” the incumbent’s position.

Certainly, not all innovations or new products should be disruptive, yet if a company ignores new technologies and business models, it stands to lose to the up and coming competitors.  One element of disruptive innovation that is often overlooked is the strategic orientation of the firm which informs the innovation culture.  Understanding this linkage – and any deficiencies – can help a company better balance a new product portfolio between sustaining and disruptive innovations.

Two Strategies

A company can follow one of two broad strategic approaches, the choice of which will lead to a cultural tendency toward sustaining or disruptive innovations.

Customer-Led Strategic Orientation

First, many organizations maintain intimate contact with their best customers.  These consumers and end-users regularly participate in lead user forums and focus groups.  The firm relies on these customers to test new product prototypes and to provide feedback on new product concepts.  Such customers may be more innovative than the average consumer and can offer insights into product usage, features, and characteristics.

Companies that utilize a customer-led strategy often are focused on improving existing product performance and gaining market share.  As a result, these firms resort to sustaining innovations more than disruptive technology introductions.  The company’s culture is driven by quality improvements, cost reduction, and customer satisfaction.

Market-Led Orientation

On the other hand, many firms follow a market orientation in their strategic approach.  Companies with this focus will follow trends and readily adopt new technologies and platforms.  Such firms will seek to understand and empathize with customers to identify unmet needs.  They will visit and observe customers in the consumer’s own environment to identify challenges and pain points with product usage.

Companies that follow a market-led orientation support an internal culture of curiosity and creativity.  Failure is accepted – on an appropriate scale – and is valued as a learning tool.  Being first to market with a new technology for a new market is highly valued.  Performance is measured by market penetration, sales volume growth, and new customer acquisition.  Such firms will create many new products and a few of these will become disruptive innovations with a mainstream customer base.

Disruptive Innovation and Strategic Orientation

Strategic orientation, whether a company is customer-led or follows market trends, influences the degree of innovation sought and generated in new products.  Companies that seek deep understanding of existing customers tend to support sustaining innovations while firms that seek to understand new market insights tend to yield more disruptive innovations.  The firm’s strategic orientation creates internal cultures and practices that confirm customer satisfaction or design processes for learning by experimentation.

Neither culture or strategic orientation is “right” and, of course, neither is “wrong”.  Instead, what senior management must ask is if the balance between customer and market orientations will allow the firm to meet its strategic objectives.  Some companies will lean too heavily in supporting performance improvements for existing customers while others will sacrifice product support to chase the next shiny object.

To better understand your firm’s new product strategic balance, you can do a simple exercise.  Take a sheet of paper and draw a dividing line down the vertical middle.  Label the left half “Customer Orientation” and the right half “Market Orientation”.  Now, simply list your current new product development (NPD) products in one of the two columns.  Don’t elaborate too much and don’t spend too long on this exercise – no more than five minutes.  Your “gut feel” will suffice for an early strategic assessment.

When you are finished, you will see if the projects listed are evenly distributed or if there is a distinctive imbalance.  For example, a conservative, risk-averse firm may find no projects that are market-led disruptive technologies.  This signals a long-term threat if competitors introduce new technologies or business models that change how customers interact with the product.  The simple strategic analysis leads the company to take steps to create fundamental research opportunities within their accepted cultural norms (e.g. a low-risk partnership with a university to conduct R&D).

It is important in a fast-changing, globally competitive environment to understand how strategic orientation and the resulting cultural practices impact your innovation characteristics.  Is your firm customer-led or market-oriented?  Is your NPD portfolio balanced between sustaining and disruptive innovations?  Will the innovation portfolio deliver both short-term and long-term strategic objectives?

To learn more about disruptive innovation, check out our on-line class and you will earn one hour of professional development credit.  We also discuss how to implement a disruptive innovation strategy in our self-study and other NPDP Workshops.  Feel free to contact me at [email protected] 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 the debate between sustaining and disruptive innovation is The Power of Little Ideas.  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  

 

Organizational Culture vs. Team Climate

Brian is a smart guy.  He works in a product development group as a technical expert.  With over 20 years of experience, Brian also has worked in operations and in customer-facing roles, such as sales and marketing.  He is passionate about the product and wants to make is successful both to satisfy customer needs and to help the company make money.  He takes pride in his contributions to the product.

Samantha is Brian’s direct supervisor. She believes in team empowerment.  She trusts her team members to make the right decisions based on appropriate data and she gives them the responsibility to plan and execute project work.  Samantha has created a good working culture, right?

Wrong!  Samantha’s team is working within a climate that is conducive to innovation.  Culture is reflected less by behaviors and more by unspoken norms.  Let’s take a look at the differences between organizational culture and team climate.

Organizational Culture

Culture is defined as a “set of shared beliefs, values, assumptions, and expectations.”  An organization’s culture reflects its values and can be observed in the customs, norms, and rites of the group.  The fact that Brian wears a tie to work every day and never questions the unwritten dress code is an element of organizational culture.  A tie is an indication of a more formal environment, ad the policies and procedures at the company are also quite formal and detailed.

Newcomers to an organization are quick to sense both the culture ad the climate.  The culture, however, is underlying the surface and is often difficult for employees to articulate.  Culture can be inferred in how work gets accomplished.  Brian, for instance, must complete several forms to submit an idea for prototype investigation, and then the forms must be approved by both Samantha and Samantha’s boss, Bill.  He also must track a specific budget for the project and report project status weekly on a prescribed template.

Ricardo used to work with Brian and Samantha.  But, he liked to wear jeans to work and preferred trying things out to see if there was a potential in a solution before delving deeper into the problem.  Ricardo hated bureaucracy and felt like filling out forms was a waste of time that he could otherwise dedicate to testing features and functions for the new product.  He like to talk to customers to understand their real need for the product.  Ricardo’s personality did not match the company culture and he eventually found a job at another company with a different set of values and norms, and where he could maximize his talents in technical product development.

Team Climate

Samantha works hard to ensure her team members all get a chance to contribute.  She was sorry to see Ricardo go but understood his personal and professional growth needs.  Samantha communicates with her team regularly, either in person or by phone for the team members that are in different geographical locations.  She is quick to publicly name someone who has made a significant contribution to the project and she uses the word “Thanks” a lot.

Because many of her teammates are part of dual-career families, Samantha is understanding about time off for school events.  Honestly, she doesn’t care if someone works 8 to 5 or 5 to 8 as long as they get their work done and they are actively involved in accomplishing the team goals to deliver the best new product possible.

Samantha has created a certain climate for her team.  Climate is defined as “a set of properties of a work environment, perceived directly or indirectly by employees, that has a significant impact on employee behavior.”  Team climate includes elements of leadership, communication, trust, responsibility, recognition, and employee participation.

Truth be told, Brian doesn’t like wearing a tie, but he loves his work and he finds great opportunities to pursue his technical passions working for someone like Samantha.  Daisy is co-worker of Brian’s.  She has just transferred to the new product development (NPD) group from operations.  She understands that forms and procedures are often required for audit tracking and to file patents on new inventions.  While she’d prefer to be building a new prototype, Daisy acknowledges that the corporate culture and government regulations require forms and templates.  She is really excited about working for Samantha in an open climate with a chance to have greater responsibility in product design.  She wants to be recognized for her direct contributions to the team.

Culture vs. Climate

Most of us mistake team climate for organizational culture.  As leaders, we strive to make changes in our style and in the work environment to positively influence employee behaviors.  Leadership, responsibility, and trust are visible at the surface.  Employees can quickly point out the positive and negative elements of their working environment – elements of the team climate.

Culture is not as readily identified because it is a set of organizational values, often rooted in long corporate histories, that lie under the surface of the working environment.  Organizational culture defines how work gets done and is passed on informally through legends and stories.  Corporate “heroes” are emulated as new employees adopt customs, patterns, and values of the organization.  The culture drives the underlying work processes, relationships, and leadership styles of executive management.

Our confusion between culture and climate arises because, as leaders, we have the levers at our control to quickly change team climate.  A new leader can bring fresh perspectives to a team.  Yet, a new leader cannot fundamentally or rapidly change the intrinsic values and norms of a company.  Even when the senior leadership undergoes a full-scale transformation (such as in an acquisition or buy-out), the corporate culture is slow to change – maybe even taking years to do so.  Habits and customs of employees are the deeply ingrained fundamentals that determine the culture.

Brian, Samantha, Ricardo, and Daisy are all fictional characters.  Yet, each of us can recognize a bit of ourselves and a bit of our fellow team members in their stories and behaviors.  Our job as product development and engineering leaders is to manage the team climate for productivity and efficiency within the bounds and values of the greater organizational culture.

To learn more about teams and organizational structures to successfully launch new products, please join us in a self-study or other NPDP Workshop.  Feel free to contact me at [email protected] 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

A classic book on organizational structure is Structure in Fives:  Designing Effective Organizations by Henry Mintzberg (affiliate link).  I have a chapter on NPD teams 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  

Defining the CRM

CRM – we hear about this term a lot lately, but what is it and how can we use CRM to influence successful new product development/

CRM is the acronym for customer relationship management.  Very often it is implements as a technology to collect data about customers and is used primarily by the sales force.  In practice, we can identify at least two other implementations of CRM at a function level and at a strategic level.  Let’s take a look at each of these.

Technology-Driven CRM

Big data and the opportunity to gather vast amounts of data, such as web page viewing, click-through behavior, and purchase histories, have led to the creation of many functional CRM systems.  These CRM systems are driven by technology and have a limited use.  Often, the CRM is used only to automate sales force functions or to manage promotions and campaigns.

Analysis of CRM data to inform new product development is lacking in a technology-driven system.  Companies may invest significant capital and IT resources to install CRM systems.  Yet, the stored data is often neglected so that the return on investment is far less than expected.  This leads to severe disappointment in the CRM and executives continue to search for ways to collect consumer insights.  The CRM thus becomes a wasted resource.

Level 1 CRM

A Level 1 CRM utilizes the data collected through the IT application and shares the information to build a consistent customer view across several functions.  Companies deploying a Level 1 CRM recognize the importance of coordinating customer and segment knowledge to deliver a unified customer experience.

Functions involved in a Level 1 CRM might include sales, marketing, customer service, technical service, warranty, and maintenance.  Each department will have access to the CRM database showing a customer’s purchase and claim history.

The idea behind a Level 1 CRM is to focus on the total customer experience.  A firm will recognize the customer throughout the purchase process from decision-making, buying, and after-sales support.  In some industries, a Level 1 CRM can be differentiating.

Strategic CRM

A strategic CRM system goes beyond Level 1 by integrating the customer experience throughout the new product development process.  We might prefer to call a strategic CRM “CVM” – or customer value management.

At the strategic level, customer viewpoints, reactions, and interactions are integrated into all business processes.  CRM is not simply a data collection tool but a warehouse of information and knowledge to inform business decisions of a customer-centric organization.  All the functions involved in a Level 1 customer experience analysis are included in a strategic CRM, but also involved are R&D, engineering, operations, and supply chain.

These cross-functional teams study and observe customer behaviors to validate stated and unstated customer needs.  Customers are queried throughout the NPD process to verify new concepts and new product features and functionalities.  Strategic CRM focuses on processes that span department boundaries in order to select customers and products that will deliver the most value to the frim.

Using CRM

Companies most successful with Strategic CRM use their intimate knowledge of customers and segments to design and develop future products as well as to understand current needs.  Strategic customer value analysis includes evaluation of societal trends influencing customer behaviors as well as segment and industry activities.  This is the difference between transactional sales management and customer relationship management.  Having a direct dialog with customers provides a qualitatively differentiated product and service solution for customers, giving the firm a competitive advantage.

How do you use CRM in your company?  If it is currently a technology-driven sales tool, dig into the existing data to mine it for new customer insights.  The sales force often has the highest level of interaction and communication with your customers and will document reactions to new product concepts in the CRM.  Understanding thoughts, opinions, and desires of your existing and potential customers can lead to valuable insights for NPD.

You can learn more about building lasting relationships with customers in an NPDP workshop where we discuss specific marketing tools and techniques for new product development.  Contact me at [email protected] or 281-280-8717 to enroll in a free NPDP overview course or any of our newly scheduled PMP, Scrum, or NPDP workshops in Houston as well as our online PDH courses.  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

Three Elements of Service Design

Product, project, and engineering development today are more than just designing features and functions.  Customers across the global spectrum expect fantastic service to be fully satisfied with a product purchase.  Moreover, in many instances, in product, project, and engineering management, our only product is a service.

Superior service doesn’t happen by accident.  Organizations need to consider a service design strategy and train employees on acceptable behaviors to deliver consistent customer service experiences.  WE can borrow the ideas from “Woo, Wow, and Win” by Thomas Stewart and Patricia O’Connell to name three important elements of exceptional service design:

  1. Every customer is not right,
  2. Customer service should be consistent, and
  3. You’re never done.

Every Customer is Not Right

We’ve all heard the old adage that “the customer is always right.”  Innovation for service must recognize the fallacy of this statement.  First, we know that we do not design products and services for all customers.  We develop new products and undertake engineering projects for a specific target audience.  Not all customers are right for every organization and certainly customers are not always right.

The latter point is especially relevant as a firm scales its product and service offering from niche, early adopters to a majority market.  Features and functionalities desired by an early user can be more complex and less refined than those necessary to be successful in a mass market.  Firms need to utilize feedback from early adopters to initially develop a new product, yet the design must be streamlined for cost-effective manufacturing as the product transitions to the mainstream.  The initial customers might be “right” to want you to add advanced technology to their product, but they may no longer be the “right” customers.

Customer Service Should Be Consistent

Consider the last time you stayed at a really nice, luxury hotel.  The lobby shines and the staff are formally dressed, offering polite comments as you check in and transfer your luggage to your suite.  The room itself may be quite plush with thick carpet and fluffy pillows. Bath products include aromatherapy scents to relax and calm you after a long day.

Yet, you’d also like to get an ice-cold soda so you consult the (faux?) leather-bound guide book on the desk.  Ugh!  The ice machine is on another floor, all the way down the hall.  The soda and candy machines are on another, different floor and the room is barren, noisy, and dirty.  Your shoes stick to the floor where someone has obviously spilled something and the trash can is overflowing.  The ambiance is ruined.

Organizations need to provide a reliable, consistent customer service experience.  One way to ensure that service delivery is predictable is to use the service yourself.  Managers should go shopping at their retail outlets to understand and empathize with an ordinary customer.  The service experience should be consistent through all levels of the company.

Employees across the board should be trained to understand the service experience and the overall standards expected in the business.  Nothing should be outside of anyone’s job.  Front desk clerks should tour the hotel to check for consistent “messaging”.  If trash left in the hotel lobby is unacceptable, a dirty snack and ice room or guest laundry room is also unacceptable.  Each employee must also be empowered to make decisions (within the bounds of a set of standards and guidelines) that ensure a consistent, reliable, and satisfying customer experience for all.

You’re Never Done

One of my favorite philosophies of quality management is “kaizen,” or the idea that you must continuously strive to improve.  This is more than true in customer service design!  Especially in a world of social media, customer service matters.

A company that can provide consistent and reliable customer service will excel ahead of its competitors.  But the race never ends.  Consumers expect more and your competitors will add features and services to try to gain market share.

Companies must continually benchmark against their top industry competitors to maintain exceptional service standards.  The best firms will also benchmark and study top firms in other industries to learn what works best.  For years, REI (a sporting goods cooperative) has taken returns with no questions asked.  Zappos, a relatively new online shoe retailer, learned from this policy and offers shoe returns with no questions asked.

You’re never done and translating a customer experience success from one industry to another can keep your firm ahead of the competition.

Service Design Principles

Product, project, and engineering managers today are faced with satisfying a more selective and differentiating group of customers than ever.  Features and technology functions will only get you so far.  Service can make the difference to fully satisfy customer expectations and to lead the competition.  Exceptional service is built on choosing the right customers, delivering consistent and reliable service, and recognizing that you’re never done.

You can learn more about service design and strategy in an NPDP workshop where we discuss specific marketing tools and techniques for new product development.  Contact me at [email protected] or 281-280-8717 to enroll in a free NPDP overview course or any of our newly scheduled PMP, Scrum, or NPDP workshops in Houston as well as our online PDH courses.  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

Idea Generation Tools

Project, product, and engineering managers are often faced with new problems – problems that don’t have an already pat answer that will resolve the situation quickly and favorably.  These leaders must facilitate problem-solving sessions with technical experts and others with appropriate business knowledge.  Idea generation tools are useful to stimulate thoughts, ideas, and creativity to find novel solutions to unique problems.

SCAMPER

One idea generation tool uses the acronym “SCAMPER” as a thought starter.  Each letter represents a verb or action that can be applied to an existing product or solution in order to modify or improve it.

  • S – substitute
  • C – combine
  • A – adapt
  • M – modify
  • P – put to another use
  • E – eliminate
  • R – reverse

For example, consider a common coffee mug. A substitute for a coffee mug is a paper cup.  We can combine the coffee mug with a snack plate or can adapt the coffee mug to fit in a vehicle’s cup holder.  We can modify the coffee mug to increase its insulation value and keep the coffee hot longer.  Of course, we can put it to another use and make it a pen and pencil holder on our desk or use it as a vase to hold cut flowers.  We can eliminate coffee mugs altogether by either not drinking coffee (no way!) or by using the paper cup substitute already mentioned.  Finally, we could reverse the coffee mug and by standing several mugs upside down, we can create a work of art.

The purpose of the actions represented by SCAMPER is to encourage the team to think about alternatives.  Some of these ideas may result in new product ideas and others may reveal competitive threats.

SWOT Analysis

Of course, when we consider competitive threats, a problem-solving team should conduct a SWOT analysis.  SWOT stands for strengths, weaknesses, opportunities, and threats.  The former elements are internal evaluations while the latter variables address external influences.  Teams can use SWOT analysis to identify areas in which solutions for problems may exist concentrating on organizational capabilities and environmental factors.

Most organizations are very good at identifying and promoting their strengths.  These are organizational characteristics, assets, or processes that offer a competitive advantage.  Marketing and sales campaigns are built on an organization’s strengths and customers point to these elements as differentiating factors.

On the other hand, most organizations find it very difficult to honestly assess organizational weaknesses. A firm must study its customers, competitors, and markets to truly understand its weaknesses.  Weaknesses can result from supplier dependencies, cash flow, or a shallow “bench” for human resources.  Consider a firm that relies on a single source vendor to supply a critical part for their products.  If the vendor experiences an unexpected disruption (e.g. a fire at the factory), the company faces an immediate challenge in its own production.  Weaknesses like this are often overlooked but creep into a system from the long-term effects of internal decisions and management practices.

External influences on production, technology, and the markets also require studying customers, competitors, and trends to understand opportunities and threats.  Market opportunities may arise as new technologies become available or as consumer tastes change.  For instance, automobile manufacturers track the price of oil as a leading indicator of gasoline prices.  Gasoline prices influence consumer spending toward more fuel-efficient, small cars (increase in gas prices) or sturdy, heavy-haul pickup trucks (decrease in gas prices).  Building on the SCAMPER model, opportunities may also come from substitutes (electric cars) or alternative uses for a product in a new market as well (trucks as military vehicles).

Finally, a firm should assess threats to its existing business model and growth plans.  This requires studying competitors’ actions in detail to anticipate market responses to new product launches and market trends.  If a competitor commercializes a product faster than your firm does, they may win the bulk of the market share and lifetime revenues.  As indicated, threats can also come from outside the core industry.  Consider that cell phones have eliminated the need for a separate GPS device.

Brainstorming

Brainstorming is the most common idea generation tool.  Most people are familiar with brainstorming.  It is a group collaboration tool used to generate lots of idea in a short amount of time.

Generally, the problem statement is provided to the group and people call out ideas for possible solutions.  Often these ideas will trigger other ideas among the participants so that a large number of potential concepts are documented in a short period of time.  One of the basic rules of brainstorming is to reserve judgement of ideas until later in order to keep the creative juices flowing.

However, a drawback of brainstorming is that a lot of ideas are not feasible or practical, yet each needs to be addressed as it was documented by the team.  Another pitfall in brainstorming is that the environment is often better suited to confident extroverts and you may miss valuable ideas from quieter thinkers.  It is a good idea to couple brainstorming with other idea generation techniques to countermand these drawbacks.

Three Idea Generation Tools

In this post, we have investigated three simple idea generation tools:  SCAMPER, SWOT, and brainstorming.  When an engineering, project, or product manager faces a new situation, s/he will deploy one or more of these tools with the team.  In addition to stimulating new ideas and creativity in an idea generation session, the team should visit the plant, factory, or retail locations to better understand the customer’s perspective of the problem.  Too often, our viewpoint of a problem is internally focused on increasing sales or revenues and in developing sexy new technologies, when a consumer is facing issues regarding quality, distribution, or reliability.  We also must consider how our competitors will respond in any situation as we tackle problems with unique solutions.

To learn more about idea generation tools, please join us for an NPDP workshop where we discuss SCAMPER, SWOT, brainstorming, and a variety of other tools and techniques.  Contact me at [email protected] or 281-280-8717 to enroll in a free NPDP overview course or any of our newly scheduled PMP, Scrum, or NPDP workshops in Houston as well as our online PDH courses.  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

Integrated Product Development:  The Basics

Both New Product Development Professionals (NPDP) and Professional Engineering Managers (PEM) are tasked with transforming ideas into commercial realities.  In many instances, hope is the main tool deployed to make the transition – we hope to make the technology work and we hope to hit the delivery date.  We hope that customer will buy lots and lots of the product and we hope to reap huge profits as a reward.

I am personally a big believer in hoping for the best but as we’ve been taught, we should also add preparation to out toolkit.  A positive attitude goes a long way but should be accompanied by a systematic approach to convert those great ideas into marketable products and services.  One approach that NPDPs and PEMs can use to transform creative ideas into tangible goods is Integrated Product Development (IPD).

History of IPD

IPD is a waterfall process based on cross-functional, multi-disciplinary approach to product development.  In fact, “integrated” means just that – an integrated team and an integrated life cycle perspective of the development program.

For reference, IPD has its roots in software development from the last century.  In the 1970s, waterfall processes were commonly used to create code that powered PCs and other computers.  A waterfall process is so named because work flows from one level to the next, just as a stream cascades over rocks and ledges to reach its destination.

A typical waterfall process includes the following steps:

  • Requirements development;
  • Design specifications based on requirements;
  • Implementing or writing and structuring of the actual code;
  • Verification that the product (software code) meets customer expectations; and
  • Maintenance to identify bug fixes and improvements.

Concurrent Engineering

Another key concept in IPD comes from the principle of concurrent engineering.  In unenlightened times, R&D folks would develop a new technology and then hand-off that technology to an engineering team.  The engineering team would study the technology and scale it up to production levels.  Then, the engineering team would hand-off the full-scale engineering design to a construction team to build the factory.  Upon completion of the factory, operations would begin start-up of the plant to eventually manufacture the product.

Not surprisingly, hand-offs between the teams were incomplete and both data and knowledge were lost in the transitions.  Sometimes the transitions were so poor that the next internal customer had to rework the technology and design completely.  Naturally, all of these hand-offs and rework cycles created delays and added cost to the final product.

The concept of concurrent engineering grew in the aerospace industry in the 1990s in order to improve quality and time-to-market.  Concurrent engineering describes a systematic approach to new product development (NPD) in which multi-disciplinary teams work together, from start to finish, on the product.  There are no hand-offs between functional departments because the work is integrated.  Manufacturing and support organizations participate in product conceptualization and design specification.  Furthermore, the entire product life cycle is examined during development as a part of concurrent engineering (design, manufacturability, reliability, and disposal).

Example IPD System

An example of an IPD system is Intel’s Product Development Framework which is applied across the corporation (“Making the Product Development Framework” by CR Galluzo and Deanna Bolton, 2011).  Here the IPD system involves four steps, each of which include appropriate milestones and approvals.

  1. Exploration
  2. Planning
  3. Development
  4. Production

Another example of an IPD system, familiar to PEMs, is systems engineering which involves multi-disciplinary teams determining customer requirements upfront and following a structured development process.

The Basics of IPD

Integrated Product Development (IPD) is contrasted with serial development processes in which project hand-offs occur during the project life cycle.  IPD is a water process in that specific stages of work must be completed before the next stage of work is initiated.  While serial development can be successful for lengthy and complex projects, integrated teams and concurrent engineering aid in developing products with shorter life cycles and lower cost of investment.

To learn more about IPD, please join us for an NPDP workshop where we discuss several alternative processes for developing new products including serial and integrated teams, waterfall and Agile approaches.  Contact me at [email protected] or 281-280-8717 to enroll in a free NPDP overview course or any of our newly scheduled PMP, Scrum, or NPDP workshops in Houston as well as our online PDH courses.  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

Teaching and Learning

Recently, an acquaintance phoned me at about 9 am on a Wednesday. While I’m not 100% sure why, she asked if she had awoken me out of bed.  I’m assuming that because I work from home, she made a leap of judgement that I don’t really work and I get to sleep in every day.

The truth is that I’m usually working by 6:30 am and I often work past 9:30 pm.  Like others who have home offices, my breaks might include throwing a load of laundry into the washer or going running, but my work is equally intense.  In fact, I plan to continue teaching at the university and college level until I am too old or infirm to continue.

Teaching can be done from home for any online class.  A professor could ostensibly wear pajamas and slippers as office dwellers and offhand acquaintances might assume.  In my case, I shower and dress daily and when I make the short commute from the kitchen to my office, I enter my office with the same dedication to work as anyone else.  In this way, I can maintain a high commitment to education of students, colleagues, and clients.  I am as dedicated to being a good teacher as I am to being a good learner.

Teaching as Lifelong Learning

Teaching is the ultimate zenith in knowledge.  Not only do we have to understand a subject with both breadth and depth, we also have to be able to make the topic engaging enough for heterogeneous groups of students to find interest in the topic even for required, foundational classes.  Being able to restate learnings in a new way or apply knowledge to a new situation is what makes education successful – from both the teacher’s perspective and the student’s viewpoint.

What many students don’t realize is that teachers learn from them as well.  Every term, I find that there are new or unusual interpretations of homework assignments.  What seemed to be a clear cut question to the course designer can elicit a wide range of responses.  In some cases, the responses are so far off that the learning materials and homework assignments need redesigning to meet the course objectives.

Planning Learning

Learning events have to be as carefully planned as any college course.  First, the organization’s objectives need to be considered in full.  For a college or university course, the learning objectives typically align with a certificate or degree program, and are often specified by various accreditation bodies.  In corporate learning, our objectives must match a desired business outcome.  If a company wishes to improve its success with new product launches or increase communications among virtual team members, the learning event must include these results as success measures.

Key to a successful learning event or course includes application of the new knowledge or skill in the workplace.  Simply going to a class and having absorbed information is insufficient to demonstrate transfer of knowledge.  An important measure of success, then, tracks the student beyond the classroom to ensure that s/he is applying the skill in the real world.  Firms can measure the implementation of new skills via professional certifications and management surveys to determine that the learning event met corporate objectives.  Colleges and universities measure success by job placement and feedback from employees.

Education Delivery

While I get up every day, shower, and get dressed in real clothes before going to my office, learners today are cramming skills development into ever smaller parcels of time.  A student very well may be wearing his or her pajamas while watching an online lesson or be listening to a podcast during the daily commute.

Online knowledge delivery has changed how we learn.  Indeed, our attention spans as a whole have dropped precipitously.  Most of us remain engaged for less than 10 minutes.  So, education delivery must meet these parameters and still impart a new skill or behavior within each lesson.  All of our online courses at Simple-PDH.com include short videos or podcasts that can be consumed in brief intervals of time, yet each lesson delivers an important topic necessary to gain and maintain professional certification.

Knowledge Checks

Perhaps more important for professional certification and corporate training is a knowledge check that learning new skills has occurred.  Again, the measurement of knowledge transfer should be part of the organizational planning effort.  In the case of university students and candidates for professional credentials, knowledge checks include practice exams leading to the final, formal exam administered by the appropriate credentialing body (PMI, PDMA, or ASEM, for example).

Practice quizzes offer a risk-free environment to learners to hone their test-taking skills as well as verifying their knowledge base.  CAPM and PMP practice tests help to solidify the sometimes peculiar wording used by PMI that is not as common in an industrial project setting.  New Product Development Professional (NPDP) practice tests help to bring higher order strategic processes into focus with objective, application-oriented questions.

Teaching and Learning

We must all be committed to lifelong learning – whether we are working from a traditional office, a home office, or a student wearing pajamas!  Teaching is the ultimate demonstration of lifelong learning.  Both university and corporate learning event should start with extensive planning to ensure that course objectives, goals, and measures align with the desired business outcomes (e.g. job placement or improved results).

As students today, we demand on-the-go knowledge delivery.  Online courses deliver content that is engaging and brief.  Follow-up practice tests are recommended for those seeking professional certification.  And, yes, you can learn and teach while you are at work or at home!

Contact me at [email protected] or 281-280-8717 to enroll in a free NPDP overview course or any of our newly scheduled PMP, Scrum, or NPDP workshops in Houston as well as our online PDH courses.  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