Defining New Products: The Product Definition Decision Model™ Helps Guide the Process

Is creating a written product definition document before starting development on a new product at odds with the lean methodologies that emphasize “fail fast, fail cheap” as a way to allow a product definition to emerge? A recent article proposed that indeed this is not the case (1). This article will expand on that concept and introduce the Product Definition Decision Model™ as a way to guide product definition. 

Why worry about fully defining a new product? There are at least three good reasons. First, it creates a shared vision across the various functional groups in the business for what the new product will be and will not be. Second, once the project starts, it helps prevent scope creep. And finally, a well thought-out written definition helps reduce time-to-market.

In my experience, companies make one of two mistakes. Either they do not create any written definition, rather they rely on “hallway conversations”, or they believe they know what the customer needs and wants and end up with a flawed definition. Either situation is a waste of resources and time.

The Product Definition Decision Model is shown in the diagram below.

To use the tool, there are some important assumptions. Projects in most organizations are one of three primary types. One is an incremental development, where an existing product based on existing knowledge is being incrementally enhanced. That might constitute 80% of the organization’s projects and there is nothing wrong with that. A second kind of project is “new”, in the sense that the product category exists in the market, but the company is now going to compete in that space. And finally, there are “radical”, or new-to-the-world products and/or business models. You could argue there are other types, but for the purposes of this decision model, that is the assumption.

A second aspect of the model is that it incorporates a specific decision about the competitive strategy. For this, the model embraces the concept of a “maneuver strategy” (2). Many companies compete based on a “war of attrition”. In other words, they try to compete with similar products from other suppliers for market share. Most all industries tend toward a commodity market over time as result, and margins fall for every participant. This might be the right strategy, but only if your company has the most resources and can win in the long run. A better option is to either find a competitive position where no competitors exist (preemption), or if you are entering an existing market, then find a way to capitalize on your competitors weaknesses and take advantage of your strengths (dislocation). As a last resort, you can compete based on disrupting your competitor, though they will likely continue to exist.

Third, the model incorporates a series of tools that you can use to help drive to a product definition. These include the Business Model Canvas (3), Elements of Value (4), and Design Thinking (5). This last tool is the essence of the lean methodologies and the process by which a solution emerges from low-cost prototypes and fast cycles to test concepts. The so called “fail fast, fail cheap” mentality.

Based on the above discussion, and as you follow the various decisions in the model, the end game is to arrive at written definition prior to development.

There are three written documents described in this model. The “Product Business Case Brief” (6) is a very early 1-page definition that will likely be part of an organization’s portfolio management process (7). This will be the input document for driving to a definition for either a “new” or “radical” innovation.

The “NPP” is a New Product Proposal, or a Marketing Requirements document and is typically the first formal definition that kicks off a new project. As the project unfolds, there will likely also be a “PDS” or Product Design Specification document that translates the product definition into engineering terms.

This decision model is a way to help alleviate the two problems discussed at the outset of this article. Namely, that some organizations do not generate any written definition, or if they do, create one that leads to a new product failure.

Notes:

  1. See this article: “Is Fully Defining a New Product at Odds with a “Minimum Viable Product”?”
  2. This is an excellent competitive strategy framework as described in this reference: Phillips & Verjovsky, Outmaneuver. (Bloomington, IN: Xlibris, 2016)
  3. Alexander Osterwalder & Yves Pgneur, Business Model Generation. (Hoboken, NJ: John Wiley & Sons, 2010)
  4. Almquist, Eric et.al. 2016. The Elements of Value. Harvard Business Review, September 2016.
  5. Pauline Tonhauser, Design Thinking Workshop. (Self-published by Pauline Tonhauser, Berlin. 2015)
  6. This document is described on Page 7 of: Ronald Mascitelli, Mastering Lean Product Development. (Northridge, CA: Technology Perspectives, 2011)
  7. See this article: “Critical Aspects of Project Portfolio Management in NPD Success”

About the Author

Jeff Groh is President of New Product Visions located in Flat Rock, NC. New Product Visions helps companies drive revenue and earnings growth by improving their innovation management practices. We focus on processes, organization, management engagement and culture. Services include consulting, Innovation Coach™ Workshops, and MyInnovationCoach online training. Mr. Groh spent 30+ years in industry in a variety of management roles in sales, manufacturing and new product development prior to starting New Product Visions. For additional information or to join our mailing list, contact us. Available for select speaking engagements.

 

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