New Product Development For Dummies®
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Library of Congress Control Number: 2007924231
ISBN: 978-0-470-11770-5
Manufactured in the United States of America
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Robin Karol is CEO of the Product Development and Management Associa- tion (PDMA), a professional society that creates and nurtures a global community in which people and businesses learn to grow and prosper through innovation and the introduction of new products. Robin is an adjunct full professor at the University of Delaware Lerner School of Business Administration, where she teaches courses on the Management of Creativity and Innovation. Robin worked at DuPont for 23 years in various aspects of innovation and new product development, achieving the role of Director of Innovation Processes. A certified new product development professional (NPDP), she received her PhD in Biochemistry from the State University of New York at Buffalo. She has numerous publications and has presented at many conferences and workshops. The Industrial Research Institute (IRI) presented Robin with its Maurice Holland Award for the best paper in its journal Research-Technology Management in 2003.
Beebe Nelson is Co-Director of the International Association for Product Development (IAPD), a consortium of leading product developers who come together to improve their ability to execute new product development. She has organized, chaired, presented at, and facilitated conferences and workshops in product development, and has contributed chapters and articles in a number of venues. From 1998 to 2003, she was Book Review Editor of the Journal of Product Innovation Management, a publication of the PDMA. Beebe is a certified new product development professional (NPDP) and holds a doctorate in philosophy from the Harvard Graduate School of Education. Beebe has taught Philosophy at the University of Massachusetts at Boston and most recently in the College of Management at UMass-Lowell. She chairs the Advisory Council of Partners in Ending Hunger, a not-for-profit organization located in Maine.
We dedicate this book to the members of the PDMA and the IAPD with whom we have worked and learned, and to George Castellion and his Frontier Dialogues. He was willing not to have the answers so that we could all learn together.
Our number one acknowledgement goes to the hundreds of new product development professionals who have made the practice into a field that we could write this book about. Thank you George Castellion for PDMA’s Frontier Dialogues, where we asked each other dumb questions until the answers began to emerge.
Thank you Kemp Dwenger and Dan Dimancescu (yes, those really are their names!) for researching Japanese product development practices and bringing them to the IAPD for us to learn from.
Thank you Merle Crawford, Robert Cooper, Abbie Griffin, and countless other academics for doing the research that enabled us to regularize the practices of new product development. Thank you Clayton Christiansen, Stefan Thomke, Henry Chesbrough, and many others for continually pushing the limits of NPD from your professorial offices.
Thank you Peter Senge for bringing home the systemic nature of new product development, both in your writings and in your association with the IAPD and the PDMA. And thank you Tom Bigda-Peyton, with whom Beebe applied the lessons of “the learning organization” at a number of client companies, including UTC, Corning, Fairchild, and Becton-Dickinson.
Thank you to the product developers and the leadership at DuPont, where Robin learned almost everything she knows about product development with the DuPont Consulting Solutions team. Thank you to the New Product Delivery Support Center at Polaroid, where Beebe worked with one of the most inspiring teams she has ever known.
Robin gives a special thank you to the original PACE(r) team members who struggled with her to understand how all this worked: Eric Schuler, Ken Pausell, Bob Gentlzer, Richard Tait, Greg Ajamian, Edmund Ziegler, and Ed Artz. I would also like to thank Michael McGrath of PRTM (Pittiglio, Rabin, Todd, and McGrath) for the creation of the PACE(r) process, for writing his books, and for being a mentor as I was learning new product development. I also thank Amram Shapiro and Mark Deck for working with the original team at DuPont and training us all.
Beebe’s special thanks go to Polaroid colleagues Julie Manga, Karen Anne Zien, Dick Collette, Christina Hepner Brodie, the late Pat McGurty, Carolyn Walker, Catherine Seo, Jim Fesler, and Mark Durrenberger. We were all beginners — none more than I — and working with you was a distinct pleasure. My clients at Polaroid, including Walter Byron and Wendy Watson, provided lots of OJT, and I hope they learned as much from me as I did from them.
I also have some very particular thank you’s. Thank you to Bob Gill for our first glimpse of an NPD territory — one that went far beyond the “river of development” — and to the late Bill Ausura for extending that view into the product lifecycle. Thank you to Christina Hepner Brodie, who taught me almost everything I know about customer visits when we worked together at Polaroid and later at the Center for Quality of Management.
Beebe and Robin reached out to many colleagues as they wrote the chapters of this book. The following people talked over content and structure, read drafts, and generally improved what we had to say: Thank you Don Ross of Innovare who helped us with Chapter 5 and with whom Beebe has done many exciting early stage NPD projects, and Rich Albright of Albright Technology Group, with whom Beebe co-wrote the chapter on technology mapping for the PDMA ToolBook2. Thanks to Mike Compeau of Compeau-Faulkes for his help with the chapter on new product launch. Thanks to Scott Elliott of TechZecs for help with Chapter 14 and to Don Hardenbrook of Intel for help with Chapter 11. Thanks to Mike Ransom and Dave Vondle of Eli Lilly for their input into Chapter 16.
Many, many thanks to our Technical Editor, Steve Somermeyer, a PDMA Board Member, a long time member of the IAPD’s Steering Committee, and the president of Somermeyer and Associates. Because of Steve’s hard work, we don’t have to say “the errors that remain are ours.” Now they belong to Steve as well.
Beebe particularly wants to acknowledge the IAPD and the IAPD members for an ongoing, high-level course in new product development. This group of companies has, for the past 15 years, been willing to set aside what they know to explore what they don’t yet understand, and it has been a fascinating and rewarding experience to work with and for them. I also know that without my clients — David Deems of Becton-Dickinson, Shriti Halberg of Cerner, all the folks at Praxair, Dick Tyler of Bose, Jacques LeMoine of Corning, Jennifer Lee of Globe Union, and, well, I wish I could mention every single one by name — I wouldn’t have understood what actually makes NPD work. Thank you all.
The success of the PDMA’s effort to codify the knowledge of thought leaders in the field of new product development was crucial to writing this book. Robin wants to thank the PDMA for supporting her with the time to work on this book and for being a resource of information. I want to specifically thank the Board Chair, Hamsa Thota, for his encouragement; Ken Kahn, VP of Publications, for getting me started on this; Gerry Katz, who heads up the PDMA’s Body of Knowledge; and all the directors, VPs, and members for being there to talk to throughout this project.
Mike Lewis, Acquisitions Editor at Wiley, held our hands through the contracting process, and Chrissy Guthrie, Senior Project Editor at Wiley, has been unfailingly supportive as we’ve worked toward the final product. We thank them both.
Steven Haines of Sequent Learning Networks held our hands as we worked through a number of thorny issues. His contribution to our understanding of product lifecycles enlivens many parts of the book. Phillip Clark jumped in to rescue us when we were overwhelmed by Wiley’s editing process. Thanks to you both.
We’re indebted to April Klimley, Editor of the PDMA’s Visions, who was always there to lend her mind and heart, as well as a hand, an eye, or an ear. If we couldn’t figure out how to do something, or to whom we could delegate it, April always sprang to our sides and pressed through. The book, our readers, and we owe her a great deal.
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New Product Development For Dummies. I would guess that some of my colleagues might be offended at these words. But the fact is that a certain amount of naiveté is an essential ingredient in the process of getting a new product to market. After all, if we know it all, where is the room for discovery? It has been my experience that successful innovators have the characteristic of trying something first to see if it works, and explaining it later. Indeed, even better still, they get someone else to explain it.
This book teaches us the various hurdles to be overcome and the activities required if this endeavour of developing new products is to be successful. Indeed, it is a survival issue for many companies and for countries, including the U.S. A recent study by the National Academy of Science shows that the United States has moved from having a positive balance of payments of $33 billion for high–tech products in 1990, to having a negative balance of payments of $24 billion in 2004.
There are incremental new products, and there are revolutionary new products, those products that change the basis of competition. Developing new products requires creativity — coming up with ideas for new products — and innovation — the process of turning those ideas into something of value.
I use the following definitions:
“Research and Development is the transformation of money into knowledge. Innovation is the transformation of knowledge into money.”
Clearly we need both. This book focuses on the transformation of an idea into something of value — in other words, the transformation of knowledge into money. We cannot be happy with satisfying the customer; we have to reach the next level of delighting the customer. That often comes from products that satisfy a need that the customer did not even know he or she had.
To be successful with new products, an organization must provide an environment that allows innovation to thrive, the resources to get it done, and a measurable expectation of success. If you want to activate innovation in an organization, you need to:
Know where you want to go — Vision
Know where the rest of the world is going —Foresight
Have ambition — Stretch goals
Have freedom to achieve your goals — Empowerment
Draw from and work with others — Communication, Networking
Be rewarded for your efforts — Recognition
Passion and courage, however difficult they are to measure, are also essential in new product development. I can tell you from my experience in championing Post-It Notes that we had to have passion and courage. We were told several times by management to kill the program. I know that if we had had some of the processes like the ones described in this book, we could have had that product in the market two years earlier than we did.
Companies of any size must hire innovative people to join their team. These people should be creative, have broad interests, be capable problem solvers, be self motivated, have a strong work ethic, and be resourceful.
And so in your passionate and courageous effort to get new products successfully into the market by using the tools in this book, always keep in mind the six phases a program is likely to go through:
1. Enthusiasm
2. Disillusionment
3. Panic
4. Search for the guilty
5. Punishment of the innocent
6. Praise and honors for the non-participant
A final message: Enjoy the book, innovate for the customer, network with your colleagues, and have fun. But most of all, I wish you success with your new products.
— Dr. Geoffrey C. Nicholson, Retired 3M Vice President
Visit http://www.dummies.com/cheatsheet/newproductdevelopment to view this book's cheat sheet.
Title
Introduction
About This Book
Conventions Used in This Book
What You’re Not to Read
Foolish Assumptions
How This Book Is Organized
Icons Used in This Book
Where to Go from Here
Part I : The Basics of New Product Development
Chapter 1: It Takes a Company . . .
The Requirements of NPD Success
Moving from Product Possibility to Market Reality
Identifying the Roles of the Functions
Playing Your Part in Product Development
Chapter 2: What Are You Developing, and Why?
Growing Your Business: Market Expansion, Acquisition, or Innovation?
Assessing the Importance of New Products in Your Growth Plans
Identifying the Role of NPD for Your Company
Defining the Types of New Products
Making the Most of Products, Services, Solutions, and Experiences
Chapter 3: Defining Your Product Strategy
Understanding the Market
Opportunities in Existing Product Lines
Constructing Your Profit Model
Fitting Your New Product Lines with Your Brand
Part II : Charting the Ocean of Opportunity for New Products
Chapter 4: What Do Your Customers Really Want?
Dissecting the Customer Visit Process
Building the Foundation for the Customer Visit Program
Dipping Your Toes into the Visiting Process
The Final Push
Distilling the Results: Images and Requirements
Quantifying the Results of the Customer Visit Program
Chapter 5: Turning Your Company into an Idea Factory
Drafting Your Creative Teams
Setting Up and Opening the Creative Session
Getting Creative by Thinking Outside the Box
Using Your Knowledge of the Customer to Inspire Solutions
Dipping into Your Bag of Tricks to Make Creative Sessions Even More Creative
Chapter 6: Picking Winners and Losing Losers
Screening Your Ideas and Developing New Concepts
Improving Your Concepts with Quality Function Deployment
Turning Losing Concepts into Assets
Chapter 7: Making the Most of Technology
Recognizing the Importance of Inventorying Your Technology
Surveying Ways to Inventory Your Technology
Connecting Technology Capabilities to Products and Markets
Developing or Finding the Necessary Technology
Chapter 8: Focusing Your NPD Efforts
Setting NPD Targets
Including Partners in New Product Development
Managing Your Business to Achieve Your NPD Goals
Uniting Your NPD Efforts with an Internal Communication Plan
Part III : Navigating the River of Product Development
Chapter 9: One Foot in Front of the Other: The Product Development Process
Connecting Research to Development: The Fuzzy Front End
Phase 1: Navigating from the Ocean to the River
Phase 2: The Business Case Phase
Phase 3: The Development Phase
Phase 4: Launch and Commercialization
Making the Product Development Process Work for You
Involving the Functions in the NPD Process
Relating to Management during the NPD Process
Understanding and Managing NPD Risk
Chapter 10: Organizing the NPD Troops
What Makes Teams Fly?
Understanding Why Cross-Functional Teams Are Special
Leading Cross-Functional Teams
Taking the “Cross” Out of Cross-Functional Teams
Preparing for Engagement: Assembling and Equipping Your NPD Team
Defining the Troops’ Roles and Responsibilities
Organizing Your NPD Teams
Chapter 11: Managing Your Corporation’s NPD Resources
Is Your Company a Well-Oiled Machine or a Herd of Cats?
Filling and Balancing Your NPD Portfolio
Resourcing New Product Projects in the Development Pipeline
Shortening Cycle Time
Practicing the Discipline of No Waste
Chapter 12: Using Reviews to Keep Projects on Track
Understanding the Purpose of Reviews
Abiding by the Rules for a Successful Review
For Reviewers: Knowing When and How to Say No
Making Review Meetings Work
The Prose of Finance and Strategy: Writing a Project’s Business Case
Chapter 13: Launching Products for Market Success
Preparing for a Successful Launch — You Gotta Start Early
Forming the Launch Plan
Double-Checking the Details
Factoring In Post-Launch Evaluations
Part IV : New Challenges in Product Development
Chapter 14: Developing Products in the Digital Age
Using Digital Technology to Test and Experiment
Using Digital Technologies for Team Collaboration
Booting Up IT to Organize Your Corporation’s Innovations
Chapter 15: Product Development Goes Global
Mapping the Landscape in the Global Development Game
Surveying the Benefits of Globalization and Defining Your Strategy
Recognizing (And Avoiding) the Risks of Globalization
Beefing Up Your Social Skills in the Global Economy
Chapter 16: Choose Your Partner! Partners in Product Development
Understanding the “Open Innovation Paradigm”
Deciding Whom to Partner With
Structuring the Business Partner Relationship
A Line in the Sandbox: Deciding What Assets to Keep and What to Share
Unveiling the How-To’s and Secrets of Collaboration
Part V : The Part of Tens
Chapter 17: Ten Ideas on Ways to Test Your New Products
Conducting New Product Concept Testing
Checking Your Progress with Prototypes
Testing Products in Customers’ Hands
Chapter 18: Ten (Or More) Ways to Track Your Innovation Efforts
Ten (Minus Two) Ways to Keep Track of Your Teams’ Progress
Ten Ways to Measure the Health of Your Product Development Processes
Ten (Divided by Two) Metrics to Make Sure Your NPD Efforts Are Paying Off
Seeing Ten (Or Fewer) Measures at a Glance with Dashboard Metrics
Business Case Outline
: Further Reading