New Product Development(NPD): Develop or die!

I read an interesting article where David Pogue who in his State of the art column ( International Herald Tribune, Aug 25,2011) wrote a scathing report on the Blackberry Bold 9900 especially stating that when it came out…Will anybody care?

This guy killed the product and Blackberry. He also reminded us that Nokia once a leader in the mobile handset business has “given away their business” to Apple with the Iphone.

I remember a few years back I missed out on an opportunity to meet Jorma Ollila, then CEO of Nokia. This guy was God! He was invited to all the high level, prominent world conferences as a speaker and meeting him was akin to meeting the Pope if you were in telecoms (well OK… not like meeting the Pope but close). Nokia was on top of the world in the early 2000’s where they commanded at least 60% world market share. Then a little company from Canada called RIM was building steam on the market with the Blackberry and it was hailed as the next best thing and you were missing out if ” you did not have a Blackberry “. Today the table has changed once again: I mean do you know anybody that does not have an IPhone?

Product development and a philosophy of being customer obsessed are key in the smart phone business as you can see. Apple commands now 26% of the app phone market (i.e. IPhone applications) which is the result of 75 million slaving fans and a bottomless app store.

In my MBA classes we talk about “Gaining momentum – the Larreche prescription”. Larreche maintains that momentum is something that can be created by companies and once achieved can be maintained by pursuing a creative marketing approach. Apple, Toyota, Nintendo and Skype have all entered the virtuous circle of continuous growth – “the momentum effect”. A company that “systematically place customers at the center of its thinking and thrives to attain ambitious goals will be able to harness the power of the momentum and deliver exceptional growth.”( J.-C. Larreche, 2008 the momentum effect: How to Ignite Exceptional Growth).

I could not agree more.

Where are you sitting right now with product development for your firm and more specifically is the customer the main focus for what you are trying to create, build and sell?

I want to cover the importance of being competitive and aggressive about product development. In my next article I will talk about the actual phases of NPD (New Product Development) but I can’t do that until I raise (read, remind you of the) importance of:

1) Why you always have to be in the right zone of developing enough products,

2) Making sure the customer is at the focus of what you develop and,

3) Kill a product when it has reached the end of its life cycle.

I don’t care what industry you are in. Customers have become used to “new and improved” and unfortunately for you they expect it. Are customers rational when it comes to buying new products and knowing which product is best? Answer: No. Larreche also tells us that they are not always strictly rational: Their perception is their reality.

Perception is what drives them.

If your products have not had a “face lift” or change and your competition offers something better or perceived better, the customer “will walk” in other words he/she will change products.

Lifestyles have changed and are getting faster .People are more are more time constrained and want immediate results. Does your product offer this better than the competition?

As well, your competitors are probably persuading even loyal customers to come over based on better prices. NPD is another reason to help you get away from the “price trap”.

Have I got your attention now and are you motivated to do something about NPD?

Here are 10 ways to find great new product ideas:

1) Run informal sessions with customers

2) Make customer brainstorming a part of company/plant tours

3) Survey your customers

4) Allow time off for technical people to putter on pet projects

5) Undertake ‘fly on the wall’ research from customers

6) Use iterative rounds with customers

7) Set up a keyword search to scan trade publications

8) Treat trade shows as intelligence missions

9) Have employees visit supplier labs

10) Set up an idea workshop

Notice how often I mention often the word customer here?

As a benchmark Toyota employees generate 2 million ideas per year or 35 suggestions per employee (er…that is 3 idea per month!). Are you encouraging the same in your firm?

On a closing note, Bob Bowles one the best NPD gurus I know in telecoms came to help me with my former employer, essentially a company that could not compete.

We wanted to get NPD off the ground and to become a credible player in the telecoms business, but ironically we found that the team had all the right ingredients. We just needed a structure, a process and the need to ignite the obsession of being customer focused.

The rest is history since my former employer is now competing and generating new products with the same intensity as established industry players. It worked!

NPD starts by having the right mindset regardless if you are a 1 person organization or 5000 people organization. Customers want products that satisfy their needs – all the time.

Use the ideas above to optimize or kick start your NPD approach. In my next article I’ll go over NPD structure and process.

In the meantime get the Idea generating machine going!

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