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product innovation

Hydrate Your Creativity

Water.  We all need water to stay alive.  When we become dehydrated, our minds get fuzzy and our bodies collapse.  Water is a fundamental component of life and we must continually take it to survive. 

Creativity is like the water of innovation.  A company cannot survive if it does not explore new ideas and without creativity, products become stale and collapsed.  Creativity is fundamental to new product development (NPD) and we must continually supply it for a firm to stay in business. 

But just as we take water in different forms to stay hydrated, we can use creativity in different ways to maintain and sustain innovation.  First, we must understand the goals.  Then, we must invest in the right tools.  Next, we must make creativity and its companion – failure – acceptable within the culture.  Finally, we can take the small steps to encourage creativity across organizational boundaries. 

Goals for Creativity

Most firms clearly articulate the need for innovation to stay competitive and to meet a variety of strategic objectives.  Business goals and objectives are typically identified in the strategic mission statement and visualized on the product roadmap.  Yet, creativity is not a clearly identified goal in itself.  However, without creativity, innovation and product development cannot thrive. 

Management can inspire creativity by linking business goals with innovation objectives.  This is easier than it sounds.  Often our R&D and NPD teams gather for “brainstorming.”  Brainstorming is one of several techniques that is useful for generating new ideas and concepts, but brainstorming can be largely ineffective if not applied in the right situation(s). 

It is more important to choose the right problem to solve than the right technique.  A lot of firms will automatically turn to brainstorming when other creativity tools can be used to find potential solutions to customer problems.  The objective of the company is to sustain business growth which may require marketing for sales solutions in addition to product development.  Brainstorming tends to focus on generating ideas around a single concept and many of these ideas never have any follow-up. 

Instead, task your product development and engineering staff with a set of business goals.  Striving to meet a specific goal can generate more creative solutions that are realistic and actionable. 

For example, consider a product that has lately experienced lagging sales.  Instead of jumping to a brainstorming session to generate ideas for added features, use the experience and expertise of your product management teams to better understand the sales data from the perspective of business goals. 

  • Are there new competitors in the market?
  • What is your market share?
  • Our customers once-through or repeat buyers?
  • What fashion or geographical trends are impacting the sales?

Invest in Creativity Tools

Brainstorming is a great technique under certain circumstances, but it is not a cure-all for creativity.  Companies must invest in a wide range of efforts to induce creativity.  This includes a financial commitment, year-after-year, to basic R&D.  Skills development in research cannot be advanced with annual budget fluctuations due to the interruptions in project progress.  Creativity grows from a long-term investment in R&D and in building skills for NPD within staff and personnel dedicated to bringing new ideas to fruition. 

Brainwriting is a structured group method to generate new ideas but is more focused on specific problems and goals than are general brainstorming sessions.  This technique eliminates the wild and often chaotic atmosphere of a brainstorming event to bring forth more actionable ideas.  Each individual will quietly inscribe three to five ideas on a sheet of paper.  Because the problem statement has been circulated in advance, the ideas are immediately forthcoming.  The paper is passed to the next person who builds on these ideas.  Or they may record a new idea.  After a few rounds, the paper returns to the originator who reviews and selects the best idea.  The team then notes the “best” concepts from this compilation of ideas.  These “best” ideas are recorded as in a traditional brainstorming session.

Another technique that works well to generate creative product concepts is built on the customer’s problem, or “job-to-be-done”.  The NPD team should actually use the product as it was designed in the same situations that a customer might use it.  Product use (and role-playing if that’s not possible) helps to identify real pain points from the customer’s viewpoint – areas that are ripe for innovative solutions. 

Accept Failure

We’ve all heard Thomas Edison’s famous quote of not having found the right invention but instead having found 10,000 ways not to do it.  Failure is a part of the creative process and companies must learn to accept some failures on the pathway to success.  This is precisely why athletes practice and practice.  When they encounter the real-life conflict in a game, they know what worked and what did not. 

While failure is a part of the creative process, there are limits to acceptable failures.  Companies should not tolerate new product development without corresponding customer research.  Product designs should not be created in a vacuum without consumer input.  Marketing campaigns should be tested with a subset of the target audience.  The NPD process is devised to engender fast and smart failures, leading to knowledge that increases the success rates of new products. 

Creativity Across Organizational Boundaries

Creativity for new products and services is not limited to named R&D staff or those personnel assigned to the product development organization.   Seek creativity across organizational boundaries to increase idea generation, manufacturability, and sales and marketing of products that meet customer needs and wants.   Workers on the factory floor should be empowered to add value by saving costs or increasing productivity.   Sales teams often have the most contact with customers and know their needs best.   Every NPD effort must be staffed by a cross-functional team that can look across organizational boundaries to build better, smarter, faster products and services to solve customer problems.

YOF_083

The traditional “suggestion box” might be accompanied by incentives and rewards, linking exceptional ideas to the corporate business goals.   Every suggestion, however, must be acknowledged with a heartfelt “thank you” and how the suggestion will (or will not) be implemented.   Suggestions that aren’t timely or do not have enough cost impact must be acknowledged, rewarded, and encouraged.   Small steps can eventually cover great distances, especially when taken together.

Supporting Creativity

We have to support our bodies and minds by staying hydrated as water supports all the life-giving mechanisms.   Similarly, creativity supports all the business-sustaining systems for growth and productivity.   We set goals for daily water consumption – my fitness app recommends 64 ounces of water per day.   I have invested in tools to help me achieve that objective – refillable water bottles for my bicycle, for instance, and an insulated thermos for the car.   Sometimes I fail to meet my hydration goal – sometimes by a few ounces and other times by a lot.   But I can accept that failure and try again tomorrow.   Finally, I have enlisted help across my institutions – each evening, my husband brings me a fresh bottle of water while I watch television or read.   Staying hydrated helps me achieve so many other goals.

Likewise, senior executives today recognize more than ever that that innovation is key to long-term success.   Inspiring creativity is not easy, yet most employees feel empowered and more engaged in their work when they seek creative solutions to address real-world problems.   Just as I’ve taken simple steps to increase hydration in my daily life, firms can take some simple steps to enhance creativity in their organizations.

  1. Link innovation to specific business goals.
  2. Invest in effective innovation tools.
  3. Accept failures on the pathway to creativity.
  4. Take small steps to generate big results.

Creativity is part of being a successful new product development professional (NPDP).   Learn more about NPDP certifications here. 

Read about more creativity tools in my recent article in Chemical Engineering Progress (published by the American Institute of Chemical Engineers) here.

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Can Nerds Serve the Customer?

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

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

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

So, can nerds learn to serve the customer?

The Customer

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

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

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

Design Thinking

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

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

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

Image from Creative Commons

Engineers and Design Thinking

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

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

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Innovation in the Product Life Cycle

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

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

The Product Life Cycle

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

image from creative commons

Introduction

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

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

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

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

Growth

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

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

Maturity

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

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

Decline

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

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

Innovating in the PLC

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

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

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

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Innovation Project Scheduling

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

image from creative commons with free to use and share designation

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

Innovation Project activities

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

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

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

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

Roadmapping

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

Example of a Simple Product Roadmap

Backward Pass Scheduling

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

Detailed Scheduling

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

Innovation Project Scheduling

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

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

Learn how to make your innovation process flexible!

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Who Is Your Competition?

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

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

Elements of Competition

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

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

Strategy

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

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

Presence

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

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

Do you have presence in your industry?

Willingness

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

licensed by Creative Commons

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

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

Capacity

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

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

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Understand your Competition

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

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

Learn More

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

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About Me

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

Forecasting for Product Management

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

Snow covered palm tree
Image from Flickr (The_Doodler)

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

What is Forecasting?

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

Time Frames for Forecasting

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

Role of the Product Manager

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

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

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

Types of Forecasts

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

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

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

Forecasting for Product Managers

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

image from 123rf.com license, author kebox.

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

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Customers and Product Development

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

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

Types of Customers

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

Internal Customers

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

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

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

External Customers

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

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

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

End-Users

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

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

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

Decision-Maker

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

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

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

Who is Your Customer? 

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

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

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

Learn More

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

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What is WAGILE?

WAGILE is an emerging approach to product innovation.  You might ask, “Why do we need yet another, new approach to managing product development?”  The answer is that every system has advantages and that over time, we can recognize process improvements.  A secondary answer is more data-based.  Studies indicate that revamping and revitalizing your new product development (NPD) process can not only enhance participation but yield improved results, such as creative solutions, time-to-market, and profitability.

Traditional NPD Processes

Organizations implement NPD processes to manage risk.  Risk in innovation is more loosely defined than in traditional project management.  Innovation professionals encounter risk from two perspectives:  understanding the product or project requirements and developing the required technology.  These are identified as “requirements uncertainty” and “technical uncertainty” in the figure.

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A traditional NPD process, such as the staged-and-gated process, is designed primarily to manage investment risk.  Each stage of work involves more resources but as the project advances through the various stages, technical risks are addressed.  Each subsequent stage of work encounters less uncertainty.  In this way, financial risk is minimized because there is little investment for small-scale experiments during initial stages and as more knowledge is gained, the investments will grow but with reduced uncertainty in the outcomes.  Sometimes these processes are called “waterfall” since each step flows to the next; however, there is no easy way to go “backward” in the system.

To counter the bureaucracy that many large companies incorporate alongside traditional NPD processes, the Agile methodology intentionally leaves the overall requirements uncertain.  Theoretically, the customer provides feedback after each incremental development step (called a “sprint”) so that the requirements uncertainty is reduced.  A drawback of Agile is that real customers are often not included in the process.  Further, it is difficult to determine when a project is “done” in terms of meeting market requirements.

What is WAGILE?

WAGILE is a hybrid process that blends the best of the traditional waterfall systems with Agile philosophy (“W” + “Agile”).  The rigor of a staged-and-gated project management approach is coupled with required customer feedback in each phase.  Incremental and iterative work within a stage allows innovation teams to adequately address design and development needs.  Yet repeating a phase of work is done only when necessary.  The WAGILE philosophy incorporates key ideas from these innovation approaches.

  • Move fast
  • Practice discipline
  • Understand risks
  • Engage customers
  • Provide autonomy

You can read more about the WAGILE Philosophy here.

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WAGILE Roles

Roles and responsibilities are defined clearly for Agile processes, such as Scrum, as well as in traditional project management.  Many of these roles are similar to those utilized in WAGILE.  Some key roles and responsibilities for WAGILE are described below.  You can read more about the WAGILE Roles here.

  • Project Leader:  Somewhat like a traditional brand manager, the Project Leader in WAGILE is responsible for the overall product life cycle and drives product innovation.
  • Customer Representative:  In Scrum, the product owner represents the voice of the customer.  In WAGILE, the Customer Representative carries out this responsibility and helps to translate or articulate customer needs for the innovation team.
  • Team Leader:  In many ways, the team leader in WAGILE is similar to a traditional project manager with tactical and operational responsibility for the execution of the project.  Team leaders are servant leaders yet maintain autonomy for project decisions within the scope of the project.
  • Cross-Functional Team:  Like all new product development teams, successful innovation under a WAGILE approach requires participation from all relevant departments and functions.  Team members are generalist-specialists, as in an Agile approach and the core team maintains continuity throughout the project effort.

Some WAGILE Tools

WAGILE tools are based primarily on Design Thinking to incorporate customer feedback at each stage of development.  Each individual WAGILE project will use several complementary tools to complete the work of a given phase.  Depending on the scale, scope, and breadth of the innovation work, several tools are used at multiple points during development.  A fundamental decision point in selecting feedback techniques is to use the data gathering, testing, and experimentation tools that provide the highest density of customer information.  Read more about WAGILE Tools here – a list of some of my favorite tools follows.

  • Customer empathy map
  • Customer journey map
  • Affinity diagrams
  • Product Portfolio Management
  • Scrum board
  • Business model canvas
  • Paper prototypes

Benefits of WAGILE

Again, you might be asking, “Why do I need a new system to manage product development?”  Often the NPD process becomes stale and the links to customer feedback become broken.  You need WAGILE if you find your innovation teams bogged down in idea generation stages or if recent product launches are met with “ho-hum” market responses.  The biggest benefit of WAGILE is that it is a flexible, risk-based process to get new products into competitive markets.  We measure success of product innovation in WAGILE via market success:  customer satisfaction, market share, and profitability.

What’s Next? 

If you’d like to learn more about WAGILE, please join our WAGILE class on 18 and 19 February.  We will dig deeper into each of these concepts.  Your homework during the course allows you to begin transitioning to a more flexible and adaptable approach to innovation within the governance of a risk-adjusted process.  For personalized problem-solving or customized training, contact me at info@globalnpsolutions.com for innovation consulting.   

© Simple-PDH.com

A Division of Global NP Solutions, LLC  

Study.       Learn.       Earn.       Simple.

About Me

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

Unless otherwise indicated, images used under Creative Commons.

Defining Innovation Leadership

Innovation is inherently risky.  Yet, the old adage “innovate or die” requires leaders to continually invest in new product development (NPD).  Success depends on rigorous processes, committed resources, and confident leadership.  Transformative innovation programs include a clear vision for today and for the future.  Innovation leaders guide and govern an ecosystem for NPD success. 

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The Innovation Framework

At the heart of innovation is strategy.  An organization needs to clearly and succinctly describe its vision, mission, and values.  The strategy of a firm drives its decision-making processes based on risk tolerance and a chosen business model. 

Executing an innovation strategy with efficiency builds short-term and long-term success.  Product portfolio management (PPM) comprises a set of executive decisions to select the highest value-added innovation projects for the organization to implement.  (Please join our hands-on implementation of 100 Days to PPM in 2021 here – you will transform your innovation program!  Use discount code goodbye 2020 before 20 December 2020 to save 20%.) 

Hand-in-hand with project selection is the NPD process by which an individual project moves from idea to commercialization.  A great number of project management tools are available today to streamline project execution in parallel with the innovation strategy.  If your firm is not already using PPM software, you should resolve to find an appropriate system in the new year!

Of course, all products and services have a limited lifetime.  Customer tasks and market forces change the demand curves for new products overtime.  Product life cycle management matches innovation and marketing strategies with the maturity of a product.  Innovation leaders are successful when their life cycle decisions align with the organization’s strategic direction. 

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Next, these critical elements of innovation are supported by both internal and external organizational functions.  Teams and leadership are the people that do the work of innovation.  The best leaders understand different working styles while engaging and motivating teams with autonomous project work.  Check out a case study of success from the Team Dimensions profile in the podcast here.

NPD tools and metrics provide supporting frameworks to ensure implementation of best practices and continuous improvement.  Successful innovation leaders adopt and adapt NPD tools from a variety of industries to enhance idea generation, customer interactions, and process improvement.  The emerging WAGILE product development process is a way to integrate a hybrid NPD process with Design Thinking tools for active customer engagement.  Register here for the February 2021 WAGILE short course.

Finally, market research directly links customer satisfaction in a feedback loop to the business strategy.  Market research teaches an organization about customer needs, emotional drivers, and transient competitors.  You must have both primary and secondary market research tools in place to gather customer insights for existing and new products.

Why You Need to Define Innovation Leadership

First, 60 to 80% of CEOs believe that innovation is crucial to the long-term growth of their business.  Yet, key stakeholders have marginal opinions of the new products and services offered in the marketplace.  About one-quarter of customers do not believe new products are innovative.  Executives and senior leaders struggle with repeatable innovation that drives top line growth. 

Defining innovation leadership is based on our Flagship Innovation Leader program that transforms individuals and organizations from struggling individual contributors to a high-performance innovation machine.  Understanding and acting upon your organization’s innovation health will breathe new life into your NPD programs.  Take the Innovation Health Assessment™ here and benchmark your performance with industry. 

For anyone wanting to learn more about innovation best practices, please check out our full list of courses including NPDP Certification and Innovation Best Practices starting on 14 January.  Please use discount code goodbye 2020 for a 20% discount on any single course at Simple-PDH. 

Another important resource for you as you define innovation leadership is The Innovation ANSWER Book.  This book has simplified the content from the PDMA Body of Knowledge so that you can use The Innovation ANSWER Book both as a study guide for NPDP certification and to guide practical industry implementation of innovation best practices.  Get your copy at Amazon (paperback or Kindle). 

What Are Your Plans for 2021?

To define yourself as a transformative innovation leader, you need to sustain continuing education.  Innovation is learning!  For more information on open courses and customized learning for innovation best practices, please contact me at info@simple-pdh.com or area code 281, phone 787-3979. 

About Me

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

© Simple-PDH.com

A Division of Global NP Solutions, LLC  

Study.       Learn.       Earn.       Simple.

Wagile Tools

For several weeks, we have been posting about the Wagile innovation process. 

Wagile is a hybrid new product development (NPD) process that brings together the best of waterfall (“w‑”)project management systems with Agile systems used for software development (“‑agile”).  The outcome is an innovation process that has a deep focus on customer needs while managing risk (investment) through a disciplined approach. 

Product Innovation Tools

Most innovation processes include checklists of what has to be done and when.  In a traditional staged-and-gated process, the business case must be completed in order to pass a certain gate.  Market testing must be completed before going to market with a new product, etc.  (Read more about product innovation tools here.)

Likewise, Scrum specifies a checklist of features (known as the “product backlog”) to complete during a sprint.  Sprints are short periods of time in which the project team works on the list of tasks provided by the business.  Tasks that are not finished in the prescribed two- to four-week period are added to the “sprint backlog” and rollover to the next sprint – akin to a never ending “To Do” list. 

What’s missing in both the traditional waterfall and Agile processes is the “How To.”  Of course, every project is unique and different.  The fun and beauty of working in innovation is the variety and diversity of tasks, activities, and projects.  Yet, each time we encounter a new situation, we can (and should) follow a given process to understand the situation (such as risk analysis) and to design solutions.  In Wagile, we deploy a set of innovation tools to tackle the “how to” of each stage of work. 

Wagile Stages and Gates

Wagile Stages and Wagile Gates are designed to involve the customer.  After all, no innovation is valuable unless it meets a need in the marketplace and is saleable.  Wagile tools use Design Thinking methods to gather customer insights and couple those inputs with measurable decision and performance standards.  As a reminder the Wagile Stages and Gates are indicated here. 

  • 1:  Opportunity Identification (Idea Gate)
  • 2:  Business Case (Functional Gate)
  • 3:  Technology Development (Technology Gate)
  • 4:  Scale-Up (Constructability Gate)
  • 5:  Production (Launch Gate)

Design Thinking Tools

To learn more about Design Thinking tools, read our previous post Tools for Product Innovation based on the work of Carlos Rodriguez (Delaware State University).  Design Thinking is a customer-focused methodology to creatively and collaboratively solve customer problems.  We involve the customer in defining problems and in creating solutions.  We work collaboratively with cross-functional teams, both internally and externally.  We ask questions and we listen. 

Early in the Wagile product innovation process, we use observation and interviewing to gather customer insights.  The Design Thinking tools of customer empathy map and customer journey map are deployed in Stage 1 (Opportunity Identification) to discover and define the customer problem.  Download information on these tools here.  An important outcome of the tools and activities in this stage is to determine if the gain for the customer is greater than the pain of acquiring and learning a new product. 

An Example

I try to maintain a high level of fitness.  I swim, bike, and lift weights.  Recently, my husband got me a new Fitbit that allows me to track all exercises instead of just counting steps.  It’s very convenient as I only have to select the correct icon, push start, and then press finish for each activity.  And if I forget, the device automatically senses that I am cycling instead of running and tracks the calories burned. 

However, I do not wear my new Fitbit when I go swimming.  The pain is greater than the gain.  Since swimming is still under the arbitrary restrictions of corona-panic, the pool is only open for 45 minutes at a time.  My existing swim tracker records the number of laps, strokes per lap, efficiency, and calories burned.  I would incur a transaction cost (lost time in the water) to calibrate my swim watch with the Fitbit.  Right now, I view that cost as higher than the benefit (one device for all activities).  Your customers will also weigh costs and benefits as they consider purchasing a new or updated upgraded product. 

Design Tools in Wagile

Each stage in Wagile is defined to include specific tools to evaluate cost/benefit of an innovation.  Design Thinking tools take the perspective of the customer.  Later stages in Wagile use financial assessment tools (coupled with customer satisfaction measures) to determine cost/benefit from the company’s perspective.  Remember organizations are in business to make money and deliver value to shareholders.  Join me on 11 November for a Wagile tutorial and learn to apply Design Thinking tools in your innovation process!  Register here. 

Learn More

  • Check out where I’m speaking next (click here) and book me for your next event.
  • Get your copy of The Innovation ANSWER Book available at Amazon (now available on Kindle).
  • Vote on the cover of my next book, The Innovation QUESTION Book here.
  • Reference the new PDMA Body of Knowledge, available at Amazon.
  • Get your NPDP Certification!  Join our October online class (Thursdays) following the brand new, 2nd edition PDMA Body of Knowledge.  REGISTER HERE!

About Me

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

© Simple-PDH.com

A Division of Global NP Solutions, LLC  

Study.       Learn.       Earn.       Simple.