Think -> Concept -> Build April 18, 2008

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A model for concept development I put together, as part of a weekly series of info diagrams from different designers, marketers, and other creative types. The series is called “Think Draw Make”, the website is www.thinkdrawmake.com , and is organized by DT of DesignSojourn.com

Here is my official explanation of the diagram, as left by my comment at ThinkDrawMake:

My inspiration is from product development phases, with the understanding of ‘product’ as being wide open to include objects (physical and intangible) for commercial, nonprofit, personal, and communal use.

The word ‘Market’ may imply designing an object for commercial use only. However, it could be stretched so that we simply mean looking at non-competitive objects elsewhere in the world. This may be done for noting best practices, styling, and other inputs into concept development.

In the diagram, multiple ideas are thought out then each is examined against:

- Our Objective or Scope
- Quality (as a function of time, cost, and absolute value)
- Strategic Fit (organizational or personal values, culture, intended future direction)

If the idea passes that preliminary intuitive test, then it’s a good ‘Concept’. These will then be further explored and refined through detailed descriptions, models (drawings, 3d forms, etc.), research, and viability analysis.

The second screen simply asks which concepts are worth making, given our scope, their viability, attractiveness, and whatever constraints we may have (time, money, etc.).

Then we build prototypes and lastly, finished objects. In the diagram, we began with 5 ideas and ended up building 2. I don’t want to make the whole process seem too disciplined or difficult - but hey that’s life - to make great objects we have to be a little critical, you know? Money and time doesn’t grow on trees

The Change Function March 16, 2008

I came across this interesting qualitative assessment model for predicting whether change is possible, and to what degree it will arise, from my reading of Pip Coburn’s “The Change Function“. Pip’s context was finding how out people’s inclination to adopt new technologies, based on a user-centered model that functions like a cost/benefit analysis. While the large reliance on qualitative data can make this change propensity difficult to assess, it serves as an excellent guide for developing and testing new product concepts in design research, and evaluating their implementation value and market potential.

Degree of Actual Crisis or Need
How bad is the dilemma we’re facing? Is it causing difficulties for us to function in our work or personal lives? Is it costing us time, money, health, growth rate? This analysis asks us to be critical, because marketing and bright, shiny, objects/processes can fascinate us into believing our current situation may be lacking somehow; that if it could be improved, we’d be that much better off. Remember, desires can be turned into needs (rational or not), by changes in perspectives (through influence and/or analysis). This goes for things small like new running shoes to massive ERP software packages. The incentive to change (purchase, sell, adapt behavior) is a result of performing this preliminary assessment.

Total Perceived Pain of Adoption
If I/we decide to change or act upon an opportunity, what is it going to cost us? Common factors include:

• Relative Affordability
• Learning Curve (difficulty, time)
• Time to Benefits Realization
• Readiness/Will for Change (based on Myers-Briggs)
• Risk of Failure

Change
While solving this formula may seem difficult or confusing because of the division involved, a simpler way to look at the problem is as follows: To what degree is the actual crisis or need, larger than the total perceived pain of adoption.

• If Positive, change will be increasingly beneficial.
• If Equal, the decision to change is practically indifferent since neither benefits nor pain will be incurred.
• If Negative, change will be increasingly detrimental.

Time is the all pervasive dynamic factor that affects prices, product & technology life cycles, and other socio-economic and political forces. Benefits may slowly accrue, hit a peak, then gradually decline. The initial pain of adoption may be high or low, then gradually adjust along its own path over time. A simple positive net result in a proposal for change may be quite obvious; what isn’t known is the best time to take the first step to maximize future benefits (or minimize losses). Hence, the need for building and comparing different scenarios using forecasts and multivariate data.

While using qualitative data in a mathematical context may be quite difficult through the summation of assigned numeric values and their weighted coefficients, this model can be very helpful in performing critical opportunity assessments.

Special thanks to my pal Luis Carlos Pelaez, for contributing his thoughts and insight into this subject.

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Have you seen or applied unique models for evaluating the potential for positive change? How about alternate ways of doing cost/benefit analyses? Your feedback would be greatly appreciated.

The Stage-Gate Model of Product Development February 25, 2008

Ladies and Gentlemen, this is the model that Robert G. Cooper established in the early 80s to describe a systematic approach toward developing new products. It was the result of three companies who approached him and asked to research their processes and establish a common best-practices framework; they were DuPont, Nortel Networks, and Pratt & Whitney. While the basic underlying principles of a development process have long been around, Cooper established a framework that also included project review sessions known as “Gates” and/or “Decision Diamonds”. The entire model is also known as a Phased Review model (among other names), and is commonly referred to as such in academic and commercial settings due to the trademarking of the name.

The following links are posts I’ve written that cover these phases:

• Discovery
• Idea Screening
• Scoping
• Business Case & Plan
• Development
• Testing & Validation

Because the Launch phase involves many differing factors and activities that are different for each product category, I will not be covering it. However, I do have a diagram that outlines how a marketing plan is developed. This is a ‘living document’ that is created within the Business Case & Plan phase, and updated throughout the NPD process. A related topic that is formed between the Business Case and Development phases, is a new product design strategy.

The next post on this topic will cover what the ‘Gates’ are all about.

A Brief Note on Development December 12, 2007

Was emptying my paper tray and came across a page of notes I’d taken for a client’s web copy, regarding what the Development phase in NPD is all about. I have to laugh when I think about it though, because the very nature of creativity is such that we like to think of it best expressed as boundless force. And yet the law of restraints, considerations, and best practices come into place based on the unique aspects of the objective, the application, the artwork, the craft being performed.

The influencers to this stage are the marketing plan, business case, and design strategy.

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The substantive deliverable of this phase is a prototype that has been at least partially validated with customers, and through extensive in-house, alpha, and lab tests.

Aspects:

• Sourcing, Building, Testing.
• Multifunctional team with empowerment to cut silo-ing.
• Specially-managed plan of action with milestones.
• Timeline formed through input of development team members.
• Timeline is realistic and objective, with buffering on activities whose expected completion time is variable.
• Milestones are quantifiable and have attached timeframes.
• Great milestones are SMART - Specific, Measurable, Actionable, Realistic and Time-Bound.
• Frequent reviews of activities and timeline with revisions as necessary.
• Concurrent activities; parallel processing by different members of the development team; Un-bundle big tasks.
• Project management tools and software
• Team-Leadership established; Defined member roles alongside creative teamwork.

If you think of anything else for me to add to this list of aspects of what Development might mean to you, please leave a comment. - Mille Grazie…

The next phase in this process is: Testing & Development

For more information on the various phases in NPD, visit the master page on The Stage-Gate Model of New Product Development

Book Review: Wikinomics November 6, 2007

After hearing so much about Innovation these days, it’s nice to be able to gain some fresh perspective on how it’s influenced in this day and age with the Internet and open-collaboration models we’ve come to know and see grow over the last 10 years. Besides the obvious reference to Wikipedia and our knowledge of social media, it feels now that innovation-ability has increased because greater opportunities for collaboration have never existed like today, and companies/orgs have realized that being more open can have significant advantages in product & process innovation.

In the authors’ own words, p.18:

The new promise of collaboration is that with peer production we will harness human skill, ingenuity, and intelligence more efficiently and effectively than anything we have witnessed previously…the collective knowledge, capability, and resources embodied within broad horizontal networks can be mobilized to accomplish much more than one firm acting alone. Whether designing an airplane, assembling a motorcycle, or analyzing the human genome, the ability to integrate the talents of dispersed individuals and organizations is becoming the defining competency for managers and firms.

The authors describe the principles of Wikinomics as: Being Open, Peering, Sharing, and Acting Globally.

While these principles speak for themselves in our imagination and real-life examples, the authors share with us seven new models of mass collaboration:

Peer Production - Think of all the individuals contributing to open source software, Wikipedia, the Age of Conversation, and volunteers in grass roots orgs who collectively show that together they can create and execute quality projects faster than large and well-financed enterprises can.

“Ideagoras” - These are eBay-like marketplaces for innovation. Organizations can solicit proposals for unique solutions they’re seeking OR offer their intellectual property for license/sale. Bright individuals can review proposals and submit their ideas if they believe the reward (monetary, recognition) worth it. Examples include: InnoCentive, Yet2.com, NineSigma, InnovationXchange Network, Eureka Medical, YourEncore, Innovation Relay Centers, TopCoder, and Fellowforce. Additional examples with a nonprofit social-design aspect include Design21, and Open Architecture Network.

“Prosumers” - Product customization has existed for a long time, whether pursued by individuals’ own creative efforts, or offered as an option by manufacturers/providers. But lead users are a force to be reckoned with. They can take matters into their own hands by hacking iPods and PSPs; or creating mashups of creative works, dispersed data, and web applications. Alternatively, organizations can allow such open-innovation by offering up software APIs, design kits, and other tools; in doing so they can vastly extend their user base and grow their brand goodwill. Examples include: Lego Mindstorms, Facebook applications, Creative Commons, and embeddable media.

Science 2.0 - Dubbed “The New Alexandrians” by the authors because it represents distributed and shared R&D among scientists for specific fields and purposes across geographic boundaries and organizational types. The best example was that of the SNP Consortium which in 1999 began tracking gene sequences for addition to the Human Genome Project. The nice twist was that this movement originally began with Merck in 1995 as a counterstrategy to entrepreneurial biotech companies looking to find and patent gene information; Merck created immediate commons of all its findings in its ‘Gene Index’. Examples of this in action include: arXiv, Earth System Grid, OpenWetWare, and various digital library projects whether by governments, universities, or the private sector.

Participation Platforms - Here we’re talking about taking your product/service platform, and opening it up for others to play/mix/re-purpose aspects of it, for their own personal and creative use. The benefits for both originator and participants can be vast. The primary environment is software and digital data/media. Mashups from open web APIs, XML, RSS and embeddable media, are great examples. Specific applications from a variety of uses include: PeopleFinder, for displaced families of hurricane Katrina; HousingMaps (Google Maps and Craigslist housing info), BBC’s Creative Archive License Group, Amazon Web Services (Commerce, Search [Alexa], computing, storage, work outsourcing), Scorecard (environmental data on US communities), Neighborhood Knowledge California (Los Angeles community data tool for identifying areas of urban decay & in need of improvement), and Force.com (open application platform for use within the Salesforce.com environment).

Globally Distributed Product Development & Manufacturing - Yes, this is a common trend many of us know and understand. But this isn’t just about outsourcing, it’s about collaboration. The Boeing’s 787 was built faster and more efficiently by opening up technical/architectural info to its many suppliers. Chonqing in western China is home to a vibrant collaborative community of motorcycles parts and unit manufacturers, of which Lifan is the largest brand (all vehicle types). It’s approximated that around 60-70% of ALL vehicle parts are manufactured by third parties; Magna International is one example. BMW now spends R&D only on designing engines, interiors, and software (btw, their DesignWorksUSA division outsources industrial design). From these examples, the authors give us 7 lessons for manufacturers to learn from:

1. Identify and focus your efforts on critical value drivers. The authors give a new golden rule: “Always strive to be the best at what your customers value most and partner for everything else.”
   
2. Use orchestration to add value. Think excellent execution through project management and open collaboration.
3. Foster collaborative design processes that are rapid and iterative.
4. Employ modular architectures. The authors describe this as “Rather than mandating how to produce products, firms can work to create standards and modular architectures that specify product interfaces and leave it up to suppliers to the the job done.”
5. Build a supply chain ecosystem that’s transparent and egalitarian.
6. “Share the Costs and Risks” of product development among all parties. This includes shared decision making, where the implications of certain programs/efforts will affect the operations of various partners.
7. Observe market and industry developments and use predictive scenario planning techniques to identify strategic arenas of opportunity.

The “Wiki Workplace” - Spontaneous and collaborative workspaces resembling networks, increase innovation and boost employee participation & morale. The visibility of the traditional hierarchy and its function, begins to fade. The authors point out 5 typical workplace functions that will be affected: teams, time allocation, decision making, resource allocation, and communication.

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So those are the 7 models of mass collaboration. Before I bore you (and burn myself out) any more on this subject, I would like to close with the authors’ final design principles that are common to all these models:

• Follow, listen, and take cues for action from Lead Users.
• Build a critical mass of participants that’ll attract more people to the ecosystem.
• Provide an infrastructure for collaboration.
• “Take your time to get the structures and governance right”.
• Ensure benefits can be gained from the participation of all parties.
• “Abide by community norms” regarding issues like communication, appropriation, and contribution processes.
• Allow for the entire ecosystem to grow and evolve without strict adherence to a personally intended “best-case-for-us” blueprint.
• Develop and utilize a mind toward collaboration.

For more information on Wikinomics, check out the book itself and a special section of BusinessWeek devoted to the subject.

Collaborative Social Design October 21, 2007

While reading through my latest I.D. magazine, I came across two very interesting organizations that act as communities for social design projects. Very cool and similar to the open innovation networks out there.

Design21

Founded by Japanese design retailer Felissimo in partnership with UNESCO (United Nations Educational, Scientific and Cultural Organization), this community site offers design competitions, news, and member discussions.

Open Architecture Network

A forum for architects to review and rate projects by others, participate in 3 open challenges, find and connect with other members, and contribute and share resources.

Radio Program: Eureka Democracy October 13, 2007

Just listened to a BBC radio program on open innovation models, titled Eureka Democracy (15 min).

Well worth the listen. They speak with people from Lego, P&G, and some scholars on this emerging field (which I’ve been following through Wikinomics, Mavericks at Work, and elsewhere).

New Product Design Strategy September 12, 2007

Continuing on the subject of new product development, today I’ll discuss “Design Strategy”.
This follows the previous phase: “Building the Business Case & Plan”. However, applying these principles can be done anytime during concept development. Ultimately, these design strategies help you build a solid product definition and guide you to focus on what’s important during the development phase.

The Design and Development phase is more than just a different set of likely actions that each product category does differently. At its core lies strategy influencing tactics.

Five primary design strategies include:

1. Cost Advantage - Minimize your component, assembly and production costs.
2. Design Prominence - Focus on aesthetics, ergonomics, packaging, presentation, and innovative materials and concepts to deliver consumer value. This will come in the form of enhancements to product usability and sensory perception that will stir up emotional reactions in shoppers related to their needs and desires.
3. Feature Leadership - Deliver cutting-edge and highly innovative solutions, then highlight how the features of your product deliver these benefits.
4. Concentrated Application - Design the product to be tailored to the needs and wants of a particular type of customer. Make it the most appropriate option available to them in terms of fit and performance.
5. Desirable Alternative - Design the product’s features and benefits within the scope of an existing product category or an established leader therein. This strategy will often work well within sales channels with room for category growth, but will need accompanying strategies to differentiate the product when competition heats up.

Selecting a particular strategy, or a combination thereof, involves looking at how you want to position the product in the marketplace and in the shopper’s mind. Refer to your product’s definition and its marketing strategy. This is important because each strategy involves a different set of actions and mindsets. Pursuing multiple strategies isn’t necessarily bad, but know that to be excellent in each position will require a considerable amount of time and effort. Just be aware of the following risks:

• Excessive development time increases the likelihood that the market opportunity will be diminished because of competitive offerings, shorter purchasing windows, and changes in consumer tastes and preferences.
• Distributing limited time, financial and human resources to multiple product positions will diminish the overall performance on those characteristics, resulting in mediocrity.
• A product that attempts multiple positions in the mind, will not effectively stand out for anything in particular and will not draw strong emotional appeal.

What tactics you should employ to meet the unique design strategy chosen, will depend on a second variable: the Design Situation. This indicates the degree of change that the product definition entails.

The four main design situations are:

1. Renovative - Existing products receive minor changes and updates.
2. Adaptive - Existing products are modified in response to technological improvements or changes in the marketplace affecting consumer demand or supply considerations.
3. Evolutionary - New products designed based on existing technology, that deliver similar capabilities and benefits as previous or other competitive offerings.
4. Discontinuous - Breakthrough products that differentiate themselves by either applying new technology to existing commercial applications, applying existing technology to new commercial applications, or both.

To form an effective design strategy, think first about how you want your product to be positioned, then look at the degree of change your product is going to exhibit. Each intersection of strategy and situation calls for a different approach and a variable amount of effort expended. Determine what’s best for your needs, solidify the strategy, then communicate it to your development team members and management, so they understand the priorities during the development phase and can make the most appropriate decisions based on rational intuition. This will reduce your development time and minimize any micro-management.

For more information on the various phases in NPD, visit the master page on The Stage-Gate Model of New Product Development

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Have you seen alternative principles or approaches to design strategy for product development? Please share!

Fellowforce - Ideation Community September 10, 2007

Fellowforce is a community platform / idea exchange for organizations and creative thinkers. The basic process works like this:

1. Organizations can post challenges they’re facing in an effort to solicit innovative ideas and solutions, in exchange for a specified reward/prize.
2. Community members can review available challenges and pitch their creative solutions to the problem.
3. Organizations review the bidding ideas and select the best solution.
4. Winning member receives the specified reward.

This all sounds very neat, but how are ideas protected? I guess there’s a certain degree of trust and perhaps the winner reveals more info after they’ve been selected.

Outsourced-innovation is a very hot-growing industry. Did you know BMW has its own outsourced design company? They’re called Designworks and have been around for at least 8 years.

More on this subject for another day…

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Have you seen any similar applications of idea-generation outsourcing? Social media and user communities have been used for product development and testing before. What are your thoughts on this? Do you see any pitfalls or concerns?

Building the Business Case & Plan September 7, 2007

Continuing on the subject of new product development, today I’ll discuss “Building the Business Case & Plan”.
This follows the Concept Review and the previous phase: “Scoping”. This is the last phase of Concept Development.

A new product is a venture. It may represent the initial reason for a company’s existence, or it may be part of its plans to grow. Whether we’re building a breakthrough, platform, or incremental product…developers and companies still need to perform a solid analysis before they start developing. This phase is difficult, complex, and resource-intensive. I will admit that some scenarios will not warrant expending much time in this phase. After all, being flexible and highly responsive to the needs of the market and customers should be commended. However, the amount of effort a firm places into this phase, at least into the breadth of its activities, is directly relational to the success of the product. Both commercially and in terms of development time.

This phase is made up of 4 steps:

1. Product Definition and Analysis
2. Building the Business Case
3. Building the Project Plan
4. Feasibility Review

Product Definition and Analysis
The first step is composed of a series of activities that will give you the inputs to effectively define your product and justify your reasoning to develop and commercialize it. Some activities are run concurrently to others. I’ll try to explain it as follows:

• User Needs & Wants Study - Here we try to understand what creates value for the customer. What benefits does the product give? What features and attributes should it have? You should try and conduct interviews and surveys with existing and potential customers, in addition to sales channel partners. Don’t forget your staff’s opinion.
• Market Analysis - How large is the market and how is it segmented? What is its rate of growth? What trends are affecting the competitive offerings and buyer behavior? Who are the buyers and through what channels can they be reached?
• Competitive Analysis - Knowing how your competitors operate and their relative strengths and weaknesses is key to not only building a great product, but also in how and where you will launch it.

The results of the preceding activities will help build your product definition and provide the foundation for your marketing strategy. Next, we’ll have to do three things:

• Build a Technically Feasible Product Concept - This includes the substance (materials, form, packaging) and the various methods and activities needed to produce the product.
• Production & Operations Costs Analysis
• Marketing and Expected Launch Costs Analysis
  

Next we’ll want to:

• Test the Concept - Develop drawings, models and early prototypes which you can gauge reactions to through presentations to your staff, existing and potential customers, and channel partners. This should give you feedback on what changes may need to be made, in addition to an idea of what sales potential the product may have, which you’ll need for your financial analysis.
• Build a Solid Product Definition based on the cumulative activities performed and additional feedback received.

Lastly we’ll perform three analyses based on the information gathered so far:

• Business Analysis - Here we undertake a full examination of why this product makes business sense. We’ll want to look at the competitive and strategic rationale, the competencies of the firm, and determine the capabilities and roles of partners and suppliers. Letters of intent will be required from any 3rd parties.
• Risk Analysis - What are the variables that will affect the development and commercial success of this project? How might they be mitigated? Which will seriously affect the viability of this product venture?
• Financial Analysis - This involves taking combining data from your market and operational analyses to determine what kind of return on investment is possible. Methods include Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period, Expected Commercial Value (ECV), Earnings before interest and taxes (EBIT), and Shareholder Value Added (SVA).

These are the activities that make up the first step. Information gathered in the Discovery and Scoping phases are used as a foundation for further exploration here. Even if your product is just a line extension or an incremental change, it’s advised that you participate in as many activities that are reasonable for your unique strategy and business reasoning for developing the product.

Building the Business Case
The Business Case is a living document that defines the product and provides the rationale for developing it. It will be referred to throughout the development process and channel readiness phase, and will be revised as necessary. Although the exact format of this document will vary by company, these are its primary components:

• Results of the activities of Product Definition and Analysis
• Legal and regulatory requirements
• Safety, health, and environmental considerations
• Assumptions made to draw the conclusions you have, and why you believe they are valid and reasonable.
• Out-of-bounds criteria that indicate certain changes/events which will mandate an emergency business case review

Building the Project Plan
This includes:

• A scheduled list of events, tasks, and actions for the development phase. Timelines are included in the form of Gantt charts or critical-path plans.
• The human, time, and financial resources that will be required for the development phase.
• Defined and measurable milestones to be completed within the development phase.
• Tentative action and resource plans for the marketing, sales, production, and related channel readiness activities.
• An expected product launch date

Feasibility Review
This is the final review session where management, marketing, and technical staff meet to discuss and review the rationale for pursuing the project, the risks involved, a financial analysis, the resources required, and the project plan. If everything looks good, give yourself a round of applause! Now go ahead and proceed to Product Development.

For more information on the various phases in NPD, visit the master page on The Stage-Gate Model of New Product Development

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I would absolutely love any feedback on this phase or any elements thereof. Please share any thoughts you may have!

Scoping August 30, 2007

Today we’ll be covering the second phase in new product development: Scoping

This follows our first review: The Idea Screen

The purpose of this stage is to do a little homework on the great ideas you have. Not too much time is spent here though; it could take 10 days, but should not be longer than one month. Besides being an initial investigation on the merits of your project, this stage really acts as a reality-check before you commit any serious effort. In it, we perform three activities:

Preliminary Market Assessment
The purpose of this market study is to investigate the commercial prospects of your product idea. Your objectives should be to quickly:

• Assess the market attractiveness and its potential by looking at its size, distribution channels, patterns of growth or decline, and identifying fads versus trends.
• Estimate the product’s possible acceptance and level of appeal based on customer needs and interests.
• Survey the competitive landscape by identifying the major players, their relative size and product offerings

Again, do not attempt to gather in-depth information. It can be easy to become distracted by the variety of details you may uncover and want to further pursue. It is vastly more important to build a holistic view of what the market is like. Here are some recommended sources you can use:

• Employees - Speak with your own sales and marketing personnel to get their first-hand knowledge of customer habits, preferences, order-winning criteria including assortment and pricing, and what the competitive landscape is like.
• Internet Research - A lot of information can be found using the internet. However, it is highly recommended that you employ someone who is skilled at scouring the net using various search methodologies, news alerts, engines, and portals. Doing this will save your firm a lot of time and the results will likely be much better organized.
• Internal Data - Has your firm performed any research or purchased any reports related to your efforts? Do you have a reference library of books and publications? Sometimes these sources won’t give you any specific insights, but they will provide direction on where to look next.
• Lead Users and Customers - Have an informal conversation with a few customers or people in your target audience. Remember, this meeting is about them and their likes, needs, and opinions on this product category. An in-person discussion would be preferable, but telephone and email correspondence also works.
• Partners - Do you have external sales agents or other parties with whom you have a business relationship, that might be able to provide you some unique insights on this market? Strike up a conversation with them.
• Consulting and Research Firms - Certain firms publish standard reports or white papers that may cover aspects of your product category or industry at large. Look at their abstracts and publication dates to see if they might be right for you. Don’t buy anything that’ll take a lot of time to read and analyze; there are better secondary resources available right now.
• Competitors’ Advertisements and Trade Literature - Look at how your competitors talk about their product features, performance claims, and how they’re positioning their products.
• Industry Experts - Hire a specialist in your product category/industry for a day or two. Their knowledge can save you a LOT of time in your research efforts.
• Trade Associations - There are a variety of associations related to your industry or a unique aspect of your product concept. Seek them out. Sometimes they will publish reports or maintain directories of members and organizations that may be of interest.

As you can see, there are a variety of sources at your disposal. The important point is that you try to cover all your bases.

Preliminary Technical Assessment
Here, your firm’s R&D, development, engineering, and operations staff will examine the product concept and appraise it for viability. They will need to draft early technical and performance objectives, conduct preliminary studies for technical feasibility, and identify critical issues that may pose as risks or hurdles. Your in-house staff may be able to perform these duties, but it is advised that you seek professional advice for areas you may be weak in.

The following list of questions will help guide your team in this process:

• What requirements and specifications should the product have? This is part of further defining the core elements of your product concept.
• Is your firm technically capable of producing this product? What raw materials or components would need to be sourced? What aspects of the product could be designed, developed, and manufactured in-house? Which aspects would have to be outsourced?
• What are the largest technical risks and how might we mitigate them? Are there important quality, handling, health or usage concerns that we need to be aware of and/or advise affiliated parties of?
• Are there any Intellectual Property issues (ex: patents, copyrights, licensing) or product regulatory issues involved? If the product or components thereof are being imported, what implications does that impose on us regarding quality, certification, and duties among others?
• Given our limited knowledge, how likely is it that this product can be reliably produced?
• How much will it cost to product this product? How much time would it take to develop it? Again, rough estimates is all we can expect.

Every product category has a wide variety of issues to consider for design, manufacturing, logistics, and quality control among others. This basic assessment across these various factors will help your firm evaluate each product concept in an objective manner for consideration at the next review meeting.

Preliminary Business & Financial Assessment
After having evaluated the product’s market and its technical considerations, you’ll want to lay out the facts of this project regarding the business implications. Key elements of this assessment include:

• The strategic and competitive rationale for this product. How does this fit within your product portfolio? How is it aligned with your product innovation strategy?
• A core competencies assessment that addresses your capability to effectively execute this project. If partnering or outsourcing is necessary, you’ll need to explain in basic terms how these additional relationships would affect your business.
• A rough financial analysis that identifies expected sales, cash flow windows, investments required, costs, and the payback period. Note that this data will be highly speculative and based on early conjectures, but nonetheless important to know because you don’t want to spend further resources on a project that just may not make business sense.

Concept Review
Your development team should now prepare a concept brief for the second review. In it, they should include the following:

• The findings from the preliminary market, technical, business & financial assessments.
• A recommendation to either continue the project into the next stage, or to halt further investigation.
• Action plans, time lines, resources (personnel and time-requirements), and the deliverables to be expected for the final review before development begins.

Management will now hear the presentations from the development team and discuss the project details, recommendations, plans, and resources requested. Based on the information presented and the criteria by which concepts are evaluated against, Management will decide on the future of the project (go, recycle, terminate), appropriate human and financial resources, and decide when the feasibility review will be held (end of phase 3).

When you’re ready, continue to the 3rd phase in concept development: Building the Business Case & Plan

For more information on the various phases in NPD, visit the master page on The Stage-Gate Model of New Product Development

Note: The term ‘Scoping’ in NPD terminology, was coined by Robert G. Cooper as the first stage in his trademarked Stage-Gate process. A more universal term for this phase would be ‘concept development’, with the semantic implications also carrying over into the business case & plan phase.

Merchandising Innovation: Soup August 27, 2007

A little over a year ago while shopping at Target, I noticed some standard Campbell’s chicken noodle cans in a dispensing container. Then I recently saw the same devices used at my local Albertsons supermarket.

Allowing the product’s features to be prominently displayed with bigger text and imagery, helps shoppers easier see the variety of choices they have and make a quicker purchasing decision. This readability is particularly helpful to older shoppers, whose eyes aren’t as light receptive as their younger counterparts.

In a category like soup, visuals are important in arousing emotional appeal, thereby increasing the propensity to buy. Traditional soup lovers are greater convenienced, other shoppers take greater notice, and total category sales will grow.

What else I like is that the product always appears orderly. Re-facing products can be a chore. In fast-moving consumer goods, it’s just a necessity. Items need to be moved to the front and the shelf should look in order. More facings in the visual shelf-estate leads to greater notice. But this process costs employees time, which they could be using for service in the daytime. With this system, everything’s taken care of.

Kind of geeky topic, I know…and it isn’t exactly a new invention. But this does represent a unique way of merchandising products that affects both retail sales and operations.

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Have you seen some interesting examples of innovation in store environments?

Idea Screening August 20, 2007

In a previous post, I explained a little bit about the first phase in developing new products: Discovery

Today, we’ll briefly visit the first review session in the product development process: The Idea Screen

Once you’ve generated plenty of ideas, you’ll need to evaluate them for viability, score them, and decide which ones you’ll want to further investigate.

Winning Criteria

First, you’ll want to establish criteria to judge each idea against. The criteria will often involve the following:

• Alignment with your Product Innovation Strategy
• Degree of compatibility with the company’s values & principles (ex: moral, health, environmental)
• Market attractiveness / opportunity
• Project feasibility
• Degree of product advantage over other options
• Ability to leverage existing company resources

From the book “Launch It!“, the authors give in the first chapters some great questions to ask when evaluating your own ideas. A number of “No”s should indicate the idea needs some work or should be scrapped. Here are the questions (in my own words):

1. Does the product represent something completely new and different from anything out there in the marketplace? Would it likely appeal to a specialty/niche segment of people?
2. Does the idea have a unique design to it, that’ll make it appeal to more people than a comparable product does now?
3. Will this idea offer a noticeably superior quality in comparison to competitive offerings? If so, can it remain in the same price range as those competitive products?
4. If it’s a popular item (in terms of category volume), would you be able to noticeably lower its price without affecting its quality?
5. Is the idea able to offer enough new features to differentiate it from the competition? If so, to what degree would these additional features be of value or seen as advantageous?
6. For popular products, will your idea enable you to produce and distribute it faster than the competition? Importantly, will this matter? Popular competitive products may carry a strong brand appeal which may be too high a hurdle. However, if the product category is a bit more commoditized, then speed to market will definitely be a strong advantage.
7. How much longevity does your product idea have? Is it part of an established category of products, a trend, or a fad? Having a grip on this is crucial. I’m not saying some product categories are no-growth, sometimes it depends on the sales channel. But obviously you don’t want to base a lot of business on a me-too product whose lifespan may only last a few years.
8. Similar to #7, how new is this idea compared to existing products in your portfolio or pipeline? Buyers are likely to be approached next season by similar products with the additional features and attributes you’ll be pitching. If you’re redesigning a SKU to extend its lifespan, that may be fine. But ultimately, you should try and have additional, newer concepts in your development pipeline.

The Review Session

The format for the review session and how it’s conducted is up to each firm. Here are some tips:

• Allow transparency into the presentations and foster open discussion. The more people that feel they are a part of the process, the larger the buy in will be. Personnel from Sales, Marketing, R&D, and PDD (Product Design and Development) are the key attendees to these sessions. Communicate to them the decision-making criteria and the primary aspects of the Product Innovation Strategy.
• Create standardized idea forms for presenters to fill-out and distribute. Fields include: product definition, target market, explanation of user benefits, and criteria against which the ideas are judged, and a sketch (if applicable).
• With a large number of ideas and participants, create voting schemes. This could involve having idea cards/boards set up around the presentation room, and giving every participant a number of votes. Voting by raised hands can work, but perhaps it might be best to give people post-its to place on the ideas they like, then tally the votes. Techniques may vary - the idea is that participation is important.

Once you’ve selected your winning ideas, place them into an idea portfolio. Any ideas leftover that had some terrific potential, but for some reason couldn’t make the cut, should be stored in an idea bank for future review. There might be a new sales channel opening at a future date, through which these older ideas may be of value.

When you’re ready, continue to the next phase in concept development: Scoping

For more information on the various phases in NPD, visit the master page on The Stage-Gate Model of New Product Development

Cleverly Marketing a Clean Behind August 8, 2007

When you have to explain a product REALLY well so as to stir in people the slightest tinge of curiosity,
and you do it very creatively with great acting, compelling copy, and interactivity that is playful and amusing,
that is the ultimate high in marketing. Good design can make almost anything more appealing.

I sense there was a lot of time and passion devoted to the product concept and definition phase, a critical area in development. A solid product concept accompanied by its business case, establishes a unifying vision and organizational support for it. But still, we must try and use sticky elements in our communicating that vision. Otherwise, the message and concept will be interpreted by everyone differently, who then explain it to third parties in their own way, who then….yeah…I think you get the idea.

Chip and Dan Heath advise using stories whenever possible. When introducing new products to others, it sure can help a lot…especially if that product/service category is full of “me-toos”. I’ll write about this again at a future date. In the meantime, I’d like you to check out the following website and share what you like about it.

http://www.cleanishappy.com/

I particularly like the xylophone effect when you roll over the people’s faces on the main navigation.
What about you?

Discovery - The Pursuit of Breakthrough Ideas July 30, 2007

How do individuals and businesses develop new products and services?
It all begins with a trip into the Ocean of Opportunity and charting the waters.

Before we set sail, we need to know where we’re going. Shall it be the Indian Ocean, the Mediterranean, or the South Atlantic? The relational concept we need is a Product Innovation Strategy, which defines the territories of strategic focus for our efforts. Although ideation and concept development should be an open-minded process, borders remind us of what ideas are ‘in and out of bounds’ and improve the quality of ideas we produce in the time we allocate to the Discovery process.

I’ve organized this list of techniques according to whether we’re looking outside or from within.

External Environment

• Use Voice of the Customer (VOC) research. This involves conversing with your customers, trying to identify their problems, unmet needs and simply asking for suggestions where you can improve. Additionally, try to understand their business or operation and its workflow. Using and maintaining customer profiles will not only focus your communication beyond the generic and subjective, but it will elicit more candid responses now and in the future. Specific techniques include interviews, brief surveys, customer visits, and running a weblog.
• Work with “Lead Users” - organizations and individuals that are passionate and active users of the function and benefits your product provides, whose needs extend far beyond an average user, and who are generally well ahead of current market trends.
• Analyze your customer’s industry for shifts and disruptions that affect the activities in their value/supply chain. Where there are problems or trends, lie opportunities for emerging markets and products.
• Develop alternate scenarios of the future that reflect best and worst cases, as a tool for creating and revising your product innovation strategy. The future is uncertain. Knowing how to react in advance of unexpected changes is at the heart of all strategy be it commercial, military, or personal.
• Analyze your competition for their strengths and weaknesses, in addition to their keeping an eye on their activities up and down the value/supply chain.
• Look into your suppliers’ activities and ventures. Talk with them. Are they currently engaged in or pursuing other activities and areas from which you may take advantage of, now or in the future?
• Attend trade shows, read trade publications (foreign & domestic), read academic/scientific journals and weblogs, and watch the activities of universities with departments engaged in R&D related to your innovation strategy.
• Acquire professional intelligence services that can provide you with specific industry trend reports or research, analysis, and recommendations customized to your particular needs.

Internal Environment

• Conduct primary research & development that is based on stages separated by critical review sessions. These sessions (aka ‘gates’) will examine progress to date, determine technical and commercial viability, and decide whether to proceed to the next stage, return again after more study, or cancel the project altogether. Such discipline results in research projects that are directed, focused and more productive than those based on sheer curiosity.
• For special organizational conferences and events, organize multiple breakout sessions that foster open discussion of the organization’s industry and trends, their strengths and weaknesses, and lastly suggestions where opportunities may lie. Organize and present the generated ideas to management, openly discuss to weed out unfit concepts, and have attendees vote.
• Develop in-house suggestion schemes and idea repositories. Specific tools may include intranet discussion boards or weblogs.
• Employ in-house Ideation Evangelists whose sole job is the coordination of all activities related to idea generation, collection, and dissemination.
• Use ‘Plussing’ - taking an idea intended for one line, and asking other line managers how they could apply the base concept to their department.
• Give personnel time allowances for scouting and personal creative development projects.
• Use creativity tools and conduct staff exercises such as storyboards and skits. You may consider commissioning outside professionals to come in for special sessions.

Results & Sail Plan

The purpose of all these techniques is to identify opportunities in the form of:
Unmet needs, problems, emerging areas, profit areas, and voids and gaps

With these opportunities in hand, we’ll shape them into:
Major initiatives and ventures, research projects, customer solutions, new line extensions or even platforms, and lastly revised product roadmaps.

When you’re ready, continue on to the first review session in the ‘fuzzy front-end’ of product development: Idea Screening

For more information on the various phases in NPD, visit the master page on The Stage-Gate Model of New Product Development

Note: The term ‘Discovery’ in NPD terminology, was coined by Robert G. Cooper as the preliminary phase in his trademarked Stage-Gate process. A more universal term for this phase would be “Idea Generation”.

In The Pursuit of Cheap June 17, 2007

Big box retailers are turning to do-it-yourself sourcing, when they have historically been purchasing primarily through domestic importers who developed and/or procured the merchandise on their behalf.

They began purchasing goods directly from cross-border suppliers and manufacturers, opening sourcing offices in such remote locales as Indonesia and Vietnam, and flying employees with the mission to haggle with local producers, audit quality and labor practices, and figure out how to ship merchandise to their stores.

Many retailers, ranging from Target and Federated Stores to Tesco and Wal-Mart, are looking to buy more without agents. Even companies that have been sourcing direct for years are pushing the direct approach to new levels. Hewlett-Packard, for one, not only purchases computers and monitors directly from its contract manufacturers, but it also sources parts and materials on behalf of those manufacturers.

What started as fledgling purchasing operations mostly handled by others has matured into true sourcing organizations.

Not surprisingly, cost is driving the switch to direct sourcing. This is particularly true in the retail sector, where cutthroat pricing from the competition is forcing rivals to focus on high-margin, private-label goods and wring new savings out of procurement. By sourcing goods directly, they can shave about 10 to 20 percent off the net average cost of their house-brand products.

The benefits of direct sourcing also includes greater control over the production, quality and transportation logistics of merchandise. While some retailers still use consumer packaged goods importers or agents, they now work more closely and consistently with a smaller number of factories, teaching them best practices, and then give them enough volume so they’re captive to them instead of handling work for 30 other importers.

However, the gains from direct sourcing come at a price. A company must develop products, find qualified factories, solicit bids, place orders, inspect the factories, monitor quality, handle logistics, customs, duties and various compliance issues—no small checklist. Determining the true cost of those activities can also prove tricky. While the purchase price of an item may look great, the true cost may be much higher. But the risks and costs increase when you add in factors like inventory management, branding and product innovation. A failure to deal with these dynamics can erode profitability because: Lead times to correct inventory shortages can be longer, Overseas manufacturers traditionally cannot offer innovation, and House brands generally can’t command a premium retail price. This results in the generation of commodity-based products that lack differentiation thus reducing sales and long-term profitability. Many Category Managers (buyers) agree with this line of reasoning; but in the end, their actions are driven by financial pressures.

In order to survive this movement, CPG suppliers/importers MUST focus their proposition on offering unique value to the end consumer so as to differentiate their retail partner; therefore commanding higher margins. They ought to collaborate with their diverse customer base on collecting better data on the value of their brands, how their customers buy from them, and what their strengths and weaknesses are, which in turn will help retailers understand the economic trade-offs. Data coupled with research can help determine where brands and innovation drive profit and where it will not. Additionally, they can implement testing, inventory management strategies and sales programs that will diminish risks and increase profitability - a degree of collaboration that overseas manufacturers will find difficult to duplicate.