No question about it, it’s been tight going for many organizations. By the looks of things, better performance has seemingly become synonymous with cutting costs and staying lean. But long-term growth requires equal attention to the flip side of the performance coin, and many companies should take a healthy look at what’s been a mostly overlooked initiative: cultivating innovation and product development as part of an ongoing growth strategy.
Surveys bear out that a good product development strategy can have a measurable impact on revenue growth. Statistics also reveal, however, that the failure rate of new products or services introduced into the marketplace is appallingly high--as much as 90 percent within some industries.
To improve the quality, timing, and information exchange of your product development efforts, it may be time to implement some fundamental changes.
Sourcing good ideas for processes, products, services
If it’s been awhile since you’ve allocated resources and energies to product or service development, or even if it’s a strategy you try hard to sustain, you can begin to cultivate improvements by comparing your current capabilities to the best organizations within your industry. Examining the product-development practices of better performers lets you both recognize gaps in your processes and validate the things that are working well.
While industry competitors or even best-in-class performers elsewhere can provide valuable insights for enhancing your product-development process, the information that counts most can only come from one source--your customers. Meeting their needs is the primary driver of a good strategy, better than a development effort that strives to lower a product’s cost or the goal to be first to market with a new idea.
In order to build a good strategy, customers’ needs must be clearly defined. Companies have begun to use outcome-based customer interviews as a better tool for crystallizing the needs of their customers. Instead of focusing on possible product features, the research targets the results customers want to achieve. The data is then used to create a new product strategy that addresses unsatisfied needs in a marketplace. Generally, when you’re involved with a customer who’s attempting to solve a problem, you’re on the brink of discovering a new product or service.
The best strategies, and ultimately, the most successful product introductions, involve the customer throughout the development process, from beginning to end. Collaborating with customers and even suppliers can have the most significant impact on a successful product or service launch. Try to create a formal process to catalogue ideas no matter what the sources are, whether internal or from outside the company. An ongoing partnership helps to ensure new product success before any significant investments are made.
Speed to market
Getting good ideas in products and services out to the market in a timely fashion is always a challenge. Too fast, and you risk mistakes; too slow, and you might miss the opportunity. The competitive edge goes to organizations that can act both quickly and well. Again, a healthy collaboration between your company and your customers and suppliers is often the contributing factor of speed to market.
Information exchange is similarly the lifeblood of strong product development and execution. Creating a cross-functional, decision-making process, then facilitating a good flow of information throughout the development cycle allows for both innovation and on-target product introductions.
Remember, the product-development process is a dynamic one. By shunning rigid formulas and instead, letting it evolve, you’ll allow for quick changes, which can lead to faster, better introductions. Put good guidelines into place, but leave room to customize steps and tasks. Involve all company functions in the effort, and always include marketing resources throughout the process. Its connectedness to the marketplace and to the market’s changing landscape is crucial to your new product or service success.