The Process for Creating Market-Winning Products
Lesson #6 of Turning Ideas into Market-Winning Products.
Many people regard innovation as a chaotic activity. The word itself implies a mix of art and science. However, research by PDMA into actual organizations reveals that correctly adding order improves product innovation success. This order is the New Product Development process.
Why This Lesson is Important and What You Will Learn
After reading this lesson you will be able to describe the structure of a new product development process and its primary components.
This lesson has a lot of depth. Stick with it and you have more elements of the scaffolding you need for success.
Applying Structure to Create Market-Winning Products: The Big Picture
Remember the 3-part innovation model shared in lesson three? It consists of:
1. “Eureka” moments are guided through the Managed Front End, which results in viable product concepts. The right structure reduces fuzziness, adds order and improves results.
2. In New Product Development, product concepts take shape through a structured process and are transformed into products that may be launched to a market.
3. Once the product is launched, the Product Lifecycle becomes the product manager’s focus – maximizing the product’s performance, continuing to learn what customers value, and improving the product.
New Product Development
Market-winning products evolve from concept to actual product, through the New Product Development (NPD) process. This is a structured approach for developing products customers value. Remember the reason all this matters, and why you need to care about developing products…
They are the lifeblood of organizations – tangible or intangible products that generate revenue and create profit.
The most substantial way an organization grows revenue and profits is through new product development.
PDMA refers to NPD as:
AIPMM offers a similar definition:
Since a picture is worth a thousand words, see below a typical diagram of an NPD process. This is not the only one, but you will encounter it frequently as you progress in product development studies. You’ll need this base of understanding before investigating more sophisticated approaches.
The NPD process consists of both phases of work and decision gates. Phases involve tasks that produce deliverables, while decision gates evaluate the results of the work completed during the phase.
Phase: Work – learning what customers value, and refining the product
Gate: Decision – whether to proceed with the project or take another course of action
To get you well-grounded in the concepts used in an NPD process, let’s examine the following model:
I chose this model for discussion because it is publicly available from a product management professional group. AIPMM describes this in detail in the book they sponsored, ” The Guide to the Product Management and Marketing Body of Knowledge: ProdBOK Guide.”
The first four phases (Conceive, Plan, Develop, and Qualify) are the activities of the New Product Development process. The remaining phases (Launch, Deliver, and Retire) are the activities performed in the Product Lifecycle-portion of the 3-part innovation model, which will be described in the next lesson.
As a product concept moves from one phase to the next, incremental knowledge is gained regarding what the customer values and how the product delivers this value. After each work phase, the learning is assessed and a decision made (the gate) to:
- Proceed with the product concept in its current form.
- Kill the project and move the resources to more viable concepts.
- Return to a previous phase to learn more.
- Put the product concept on hold until a necessary condition is met.
The phases in the New Product Development-portion of the 3-part innovation model are described next. I am not suggesting that this list is a rigid set of mandates. Rather, these are the activities frequently used when developing a product. How to apply them varies depending on the use of other frameworks, such as a lean approach to product development using the Minimal Viable Product, an indispensable tool described in detail in the companion book.
Conceive: Identify and investigate product concepts. Conceive core activities include…
1. Create a ProductCharter. Define the purpose of the product, its success parameters, and the expected outcomes.
2. Investigate the Market. Gain a greater level of understanding of the target market, the customer, the market problem, and competitors.
3. Investigate the Solution. Identify alternative product solutions.
4. Analyze Market Feedback. Obtain market feedback to ensure the requirements are captured correctly.
5. Create the Product and Marketing Strategy. Develop the high-level product, go-to-market vision, and strategy for capturing the market.
6. Update the Business Case. Refine the return-on-investment (ROI) forecast.
Plan: Craft the plan to develop the product. Plan activities include…
1. Product Definition. Define the product requirements so the product can be created.
2. Project Plan. Create the project plan, consisting of the tasks, schedule, and cost estimates.
3. Marketing Plan. Refine the market strategy and go-to-market plan.
4. Business Case. Refine the overall justification for the product.
Develop: Build, verify, and release the product internally. Develop activities include…
1. Product Development. Build, verify, and ready the product for release.
2. Market Validation Planning. Obtain market feedback on the product.
3. Launch Planning. Prepare the initial product launch plans.
4. Program Review. Ensure the project plan is meeting expectations.
Qualify: Validate the product before the full-scale launch. Qualify activities include…
1. Market Validation. Test the product with real customers; also called beta or field testing.
2. Launch Preparation. Prepare for what comes next – launching the product to the market.
3. Launch Readiness Assessment. Evaluate if all is ready for a successful product launch.
Details of each activity are beyond the scope of this lesson, but you are starting to see how the 3-part innovation model (Managed Front End, New Product Development, Product Lifecycle) provides scaffolding to relate the tools and concepts and sense of them.
As product developers move through the gate portions of the NPD process, they evaluate products and processes by how they align with the strategy, goals, and objectives of the organization. Therein lies the problem. If all the product concepts that move through the NPD process are exactly aligned with what the organization has done before, then very little meaningful innovation may actually occur. Habitual innovation is an oxymoron. This is one of the biggest challenges organizations face in their quest for innovation. Ineffective management of this conundrum has brought down many companies, including the once admired Kodak, a discussion for another time.
The next lesson shines the light on managing the product lifecycle.
Chad McAllister, PhD
Chief Product Master at Product Mastery Now