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Managing the new product development
process
There are many and varied reasons why innovation might fail. For example, a lack of top management support leading to under resourcing a lack of cross functional interaction leading to expensive designs are delays and commercialization for the development and launching of innovations with minimal or unclear advantage over existing offerings leading to poor market performance and slow diffusion. TERM 2
Managing the new product development
process
DEFINITION 2 many of the causes of failure can be reduced dramatically by a more robust understanding and management of the innovation process, such as through the systematic and iterated use of idea screening techniques to kill off week ideas as early on as possible, the use of cross functional teams, the employment of sophisticated techniques for idea generation and problem solving, and the structured involvement of users in the testing of concepts and prototypes to identify problems that can be corrected prior to market launch. TERM 3
The new product development process
DEFINITION 3
the innovation of new product development process is often
conceptualize and represented as a linear series of activity
stages with feedback links between stages. Each stage is
typically connected to the next by a decision point or stage
gate through which the process must pass before moving
forward.
TERM 4
The new product development process
DEFINITION 4 The overall NPD process may also be visualized as a development funnel in which the original pool of ideas is repeatedly screen and filtered at each stage in a gradual process of uncertainty reduction until one or a small number of innovations emerge to be launched into the marketplace. It is difficult to be certain early on in the NPD process which of the pool of ideas is likely to be the most successful. TERM 5
The new product development process
DEFINITION 5 A customized new service is by definition never really out of the development stage. It is always being modified. The entire product development process is geared towards being able to mass produce economical orders of nearly identical goods, in assembly- line mentality. As services move away from that logic perhaps the entire service development process becomes more entrepreneurial.
The new product development process
Similarities in the development of successful new products
and services are firstly the fit of the new offering with the
existing businesses of the organization and secondly the
involvement of users and customers in the innovation
process.
TERM 7
The new product development process
DEFINITION 7 Each stage of the NPD process should typically be concluded by a yes continue or go, or no drop or no go, decision point these are commonly referred to as the stage gates. The stage gate approach allows for the systematic screening, monitoring and progression of the NPD process and, as such improves the management of risk through the life of the project. Each of the stage gates requires the collection of specific information that allows a project to be evaluated against a set of criteria that are specific and appropriate to that stage gate. TERM 8
Project evaluation criteria
DEFINITION 8 technical feasibility and product uniqueness criteria were important in the idea generation and concept testing stage gate market acceptance criteria were important throughout the NPD process but particularly at the commercialization stage gate product performance criteria were especially important at the product development and market testing stage gates financial criteria were important at the business analysis and commercialization stage gate TERM 9
Project evaluation criteria
DEFINITION 9
Selecting the right criteria or metric to measure performance
at each stage gate is an important precursor to project
managers making the right decisions.
TERM 10
Idea generation
DEFINITION 10
Is that of individual development decisions being taken on
and opportunistic ad hoc basis a system is required in which
ideas are generated through an organized network with a
central collection point. This network should cover both
inside and outside the company utilize a variety of idea
collection methods and techniques.
Idea screening techniques
scoring and checklist models such models often incorporate a wide range of criteria against which the idea is assessed for example in relation to its synergy with current corporate strategy and resources, the range of possible applications, the nature of the competition within the marketplace and the potential for return on investment, market share and profit TERM 17
Concept development
DEFINITION 17 concept development involves the translation and elaboration of an idea into a concept that is expressed in terms that are meaningful to the end- user. Consumers do not buy product ideas they buy product concepts at this stage the idea may be translated into a number of different possible concepts through assessing who will use a product or service, what its primary benefits will be, and the location and context in which it will be used or consumed. The translation of the idea into a concept aims the identification of the market segment, and hence the evaluation and positioning on the concept against current market offerings. TERM 18
Concept development
DEFINITION 18 Conjoint analysis is a method of assessing the utility that users attached to different combinations of the attributes of a hypothetical product or service, by asking users to rank different hypothetical offers. The results of this analysis can allow product developers to identify the most appealing combination of attributes for a concept. This tool was developed for identifying and evaluating variations of existing innovations and is therefore of much more limited use for identifying or developing high novelty innovations or applications. o TERM 19
Concept development
DEFINITION 19 the objectives of concept testing is to present these new concepts to users or potential users from the appropriate target market. For incremental innovations a representative sample is likely to be the most appropriate, whilst for major or discontinuous innovations, it is probably more appropriate for the sample to focus on lead users those that recognize new needs or adopt new offerings earlier than the majority in the marketplace. The more the tested concept resemble the final product or experience the more dependable concept testing is. TERM 20
Preliminary marketing strategy
DEFINITION 20 a description of the size structure and consumption behavior of the target market the planed positioning of the concept relative to existing offerings in the market the initial marketing budget and distribution strategy the medium-term goals in relation to sales market share in profit the marketing mix strategy over time the longer-term goals in relation to sales market share profit
Business analysis
The business analysis phase involves the preparation of cost revenue and profit projections for each of the concepts that have survived earlier filtering process. Costs need to be estimated from development launch and ongoing marketing of a concept as well as the production or delivery costs of the final product or service. Annual or quarterly sales revenues easily estimated. with these figures it is possible to estimate profit levels the payback. And the rate of return on investment. TERM 22
Business analysis
DEFINITION 22 for incremental innovations with the relatively low development costs for example a new type of chocolate bar, projections may only be required for a two to three-year period. For radical innovation with high development costs such as a hydrogen powered automobile engine, projections may be required for a much longer. In order to absorb the high development costs and account for the possibility of a slow diffusion of the innovation. TERM 23
Business analysis
DEFINITION 23
the purpose of the business analysis stage is to evaluate the
attractiveness of one or more ideas and hence inform the
decision-making process. They can help an organization
prioritize allocation of its limited resources. At this stage
more ideas will be screened out.
TERM 24
Translation
DEFINITION 24
If the concept passes the business analysis stage, then it
moves to the heart of the new product development process
the translation of the concept into a new product, process or
service. This stage usually involves a huge increase in
investment in the project, over and above earliest stages in
the NPD process.
TERM 25
Translation
DEFINITION 25 Translation of customer requirements into technical specifications.the specification needs to indicate the functionality performance and styling requirements, and work with an agreed cost and production one technique that has been employee by a number of leading companies is quality function deployment. This technique provides a framework for the systematic evaluation of customer requirements allowing for the measurement of trade-offs and costs of different customer is that identification of product improvement or differentiation opportunities.
Market
testing
There are number of key manufacturing, distribution and
marketing decisions that need to be majoring this stage of
the new product development process. With respect to
marketing, decisions are required in relation to when the
timing of launch, where this geographical scope of the
launch, to whom the target market, and how the launch
strategy.
TERM 32
Post project audit
DEFINITION 32 an important though often overlooked stage of the innovation process is the post project audit or review. Such an evaluation of what went well and what went badly is an important learning routine within successful innovative organizations. It is important that the audit involves all team members to promote a multi- perspective evaluation and adopts an objective nonjudgmental blame free forum so that mistakes and problems are revealed rather and concealed. O TERM 33
Accelerating the NPD process
DEFINITION 33 Speed to market can be an important factor in the success of a new product or service. There are a number of drivers behind the need to accelerate the NPD process, such as the emergence of increasingly competitive market and the shortening of product life cycles, as well as the need for organizations to recuperate the escalating costs of innovation. And innovation requires not only a focus on reducing the time to develop product or service, but also a focus on reducing the time to launch an rollout and innovation across the targeted markets. O TERM 34
Accelerating the NPD process Methods
DEFINITION 34 encouraging the role of the product champion where appropriate conducting activities in parallel discouraging the spreading of resources thinly across too many projects decentralizing decision-making to encourage team commitment and ownership whilst reducing excessive external interference integrating suppliers better with the NPD process and innovation team involving potential customers early in the NPD process employing enabling technologies such as computer aided design and stereo lithography to allow early visualization and rapid prototyping of the innovation. TERM 35
Innovation as a journey
DEFINITION 35
innovation is a process that really can be planned and
controlled with the kind of analytical certainty managers
associate with other operations. Instead technology tends to
advance in a bubbling intuitive, tumultuous process more
akin to a fermentation vat than a production line. O
Innovation as a journey
Innovation is a dynamic process or journey, where our ideas proliferate and diverge where success criteria change over time with the innovating unit is restructured through external interference or unexpected events and where cycles of optimism and pessimism highlight the emotional roller coaster that often characterizes the innovation process. The adoption of an interactive or network perspective of the innovation process helps us move away from such a rational model of innovative activity TERM 37
Innovation as a social political and emotional
process
DEFINITION 37 social interaction is at the heart of many of the activities and processes that are fundamental to the innovation process, such as idea generation, problem solving, creativity, learning, information and knowledge sharing, and knowledge creation.Innovative accomplishments require the exercise of power to bring about a disruption of existing activities the redirection of organizational energies and to mobilize people and resources to get something nonroutine done. TERM 38
Innovation as a social political and emotional
process
DEFINITION 38 The activities associated with creativity learning and innovation also inherently emotional that is phase of the challenges of dispensing with the old and embracing the new individuals can be confronted with a mixture of positive emotions such as excitement joy and pleasure and negative emotions such as a society fear and frustration. The process is of learning and idea generation within project teams can cause great anxiety among individuals since it requires to expose gaps in their knowledge expose their ideas to scrutiny and dispense with past knowledge and deeply held assumptions. The process of learning is emotional. O TERM 39
Innovation as a social political and emotional
process
DEFINITION 39 The potential for emotional responses during the learning process is the single loop learning or double loop learning.Single loop model learning occurs to the monitoring of the results of an action and changing that action in a reactive way for the desired result are not being achieved. in such a model learning is likely to be incremental since it does not challenge underlying mental models or assumptions. in contrast double loop learning requires individuals to surface and challenge their underlying mental models and deeply embedded assumptions through openly talking about what may be not normally discussed.
