Most businesses think that product is the most important thing, but without great leadership, mission and a team that delivers results at a high level, even the best product won’t make a company successful.Boone Pickens
Excited about applying Lean thinking in your Product and Process Development organization? HOLD UP! Before you start, take a step back and spend a few moments thinking about WHY your organization wants to develop products faster. Write those reasons down.
Is your organization trying to speed up for the right reasons?
Every company must have a valid reason for wanting to shorten the product development cycle. At a fundamental level, why do we want to get our products or services out quicker?
- We do it because Sales will increase
- For every product we launch early, we are more likely to ambush or surprise the competitors. So their response time in trying to match or improve upon your product is going to be longer.
- For every month you cut from the Product development cycle, you gain a month in sales and sales revenue.
- The momentum gained from early sales revenue is likely to increase the product’s life-cycle span
- Sometimes, you can win over customers who like being early adopters. These early adopters are also more likely to be loyal, and less likely to want to switch to your competitor’s product due to the high cost of switching.
- Sometimes, positioning in the marketplace is the desired strategy versus just profitability
- We do it because we can beat the competition to market
- We can capture peak sales and market share earlier
- We have more pricing freedom earlier, and can earn more margins until the competitor’s come in later with cheaper product that forces us to lower or match costs.
- Being first with a proprietary or unique product or service, could help you lock in customers that can’t change later on.
There are pitfalls associated with rapid product development though! Consider the following risks and advantages –
- If the organization wants to be first to market with a new product and be a trendsetter, the company has to absolutely nail it’s understanding of the customer and his/her needs, as they can’t wait to see what the competitor’s are going to do. If your company has a 50% or lower rate of successful product, then wanting to be a trendsetter should take a back-seat until you have addressed your customer study and front-end research methods.
- Doing the right product vs doing the product right.
- Sometimes, it can be profitable to wait and be second to market. There may be cheaper hardware or tooling costs for manufacturing processes available to you now and you have the advantage of lower cost than the “trendsetters” who went in first.
- Shortening the Product development cycle and building the capability and capacity to be faster makes the company more flexible. BUT, BEWARE THE CURSE OF THE INDECISIVE DESIGNERS! Designers by nature, want to explore options indefinitely and like keeping their options open until the Nth minute. So, the hard-won flexibility that you develop, could be abused by designers or marketers who want to change directions unnecessarily which slows down the project.
- Your focus should not be “MORE NEW PRODUCTS!”
- If all you want to do is double your productivity, and the time-to-market is just a means to an end, it could lead to problems.
- Your engineers might realize it’s just a ploy for them to work longer, and they will resist and the program falls apart.
- Use resources more effectively and intensely, by leveling out the Product Development schedule
- Have a well thought out Product Strategy and Plan that looks into the future by 2-3 yrs or more
- Invest in heavier staffing so you don’t burn out your team
- Make more money available for rapid prototyping and testing
- With the above, you effectively double your spending rate on the project, but you only run the project for half as long. So, total spending and resources per project remains the same.
- Thus, the number of projects completed per year with the same resources will be the same as before, but each one will be delivered in half the time
- I NEED IT NOW! Urgency is a bad reason to develop products quickly. Consider looking into why the need is so urgent, and if there are any shortfalls with the Product Planning process.
- Rapid product development is very mentally exhausting and demanding, and should be used selectively, not as a default on all new product launches.
So, why does your company want to develop products faster? Please share in the comments!
References: Developing Products in Half The Time – Don Reinertson, Preston Smith