Measuring NPD Success

NPD success is often measured by whether the new product meets 1) performance, product cost, and product quality objectives, 2) project cost objectives, and 3) schedule targets (commonly referred to as the “triple constraint”). While those are obviously important, it misses the point of why new products are developed in the first place: to satisfy customer needs better than competitive products and generate revenue and earnings growth for the firm. Just because a new product meets the performance, project cost, and schedule does not guarantee market success over the medium to long term. Maybe the definition for the new product was just not what the market wanted or needed. On the other hand, a new product might be a year late, but when it is introduced, is wildly successful in generating revenue and earnings growth. Continue reading

Another Way to Look at the Product Definition

Defining a new product is an important task and one of the most challenging in the NPD process. The written definition of the product must provide a vision for the project team and describe the important features and benefits, product and project cost targets, and schedule. It is the culmination of the on-going portfolio planning process that allocates scarce resources to projects where the output will be the new products that provide competitive advantage and fuel business growth. Continue reading

Disruption, The Knowledge Funnel, and Learning in New Product Development

I recently read an interesting article in Fast Company magazine on a start-up airline called Surf Air.  Surf Air has a unique business model.  It basically is the first all-you-can-fly airline. For a flat fee per month, you can fly anywhere they fly, which right now is just four regions in California. They plan on expanding from there. They utilize small, regional airports with no waits and no screening since the FAA considers them a charter service. Continue reading

Company Culture and Engagement

Sitting on a runway recently, I happened to read this article in the airline magazine. (http://www.spiritmag.com/click_this/article/cash_in_on_culture/). It related employee happiness to engagement. What company would not want engaged employees, right? No surprise there. Every business at least says they want engaged employees. Engaged employees are willing to go the extra mile for not only their colleagues and the organization, but customers. They help build the foundation for long term financial performance. What I found surprising were some of the statistics cited. For instance less than half of all Americans are happy at work, and 71 percent according to a 2011 Gallup poll said they are actually disengaged. That is truly shocking! Think about your own company, and particularly the R&D organization or anyone involved with the new product development process. The NPD process by its very nature can be chaotic and requires a high level of engagement. If nearly 3/4 of those employees feel disengaged, how is that affecting the companies ability to innovate? Bottom line is that it can drastically reduce a companies ability to innovate over the long term. Continue reading