New Web Product Development�Quick Reference Card

New Web Product Development—Quick Reference Card A Successful Web Product Boils Down to Two Key Success Factors 1. Do the right projects! 2. Then do the projects right! “Even a blind man can get results in a gold mine by swinging a pick-axe. It’s not how you mine as much as the ability to pick the right gold mine.” Stanford Innovation best practices study: • Winning products have performanceto-cost ratio & yield high contribution margin • Winning products are technically superior • Winning products are unique • Winning products provide significant value to constituent • Winning products are first in a large and growing market – Product introduced ahead of competition • • Proficient market launch with strong resources Well-planned and executed R&D process – Strong R&D understanding of constituent needs and the development solution • • ―Create-Make-Sell‖ functions well coordinated Marketing and technological synergy. Good fit between project needs and company capabilities. Leverages core competencies. HP best practices study: • Understanding user needs • Strategic alignment • Competitive analysis & product superiority • Regulation compliance • Priority decision criteria list • Risk assessment • Product positioning • Product channel support • Project endorsement by Sr. Mgt • Total organizational support Critical success factors in product innovation: • A unique superior product: a differentiated product that delivers unique benefits and superior value to the constituent. Good value for the money. • Market-driven and customer-focused new product process. Voice of the constituent built-in throughout process. • An international orientation in product design, development, and target marketing provides the edge in product innovation. • Do your homework and do it well before you start development. • Sharp and early fact-based product and project definition. • A well-conceived, properly executed launch with a solid marketing plan at the heart. • The right organizational structure, design, and climate. • The resources must be in place. • True cross-functional teams: empowered, resourced, accountable, with dedicated leader. • Market attractiveness – size, growth, margins. • Top management support. • Leveraging core competencies. • Technological competencies & quality of execution of technical activities. • Products aimed at attractive markets. • Build tough Go/Kill decision points where projects really do get killed = better focus. • Emphasis on completeness, consistency, and quality of execution from beginning to end. Quality of launch effort: well-planned and properly resourced • Speed is important, but not at the expense of quality. • Follow a multi-stage new product process. Challenges/Pitfalls to avoid: • Lack of market orientation –Do understand constituent needs/wants –Do detailed business analysis & market study –Assess market acceptance –Test launch plan • Not enough up-front homework –Don’t be fuzzy on the target –Need sharp market and product definition –Commit resources to winning products • Lack of value for the constituent –Vague understanding of constituent requirements = illdefined products with little benefit/value to constituent –Differentiated products are central to winning • Pipeline gridlock –Too many projects and not enough resources to get the job done right. –Failure to make tough choices = lack of focus and resources spread too thin. –Cycle time increases and quality suffers. –Get rid of some projects! Build tough criteria into your process, and stop low value projects –Use agreed-to criteria to prioritize projects • Poor quality of execution –Poor preliminary technical assessment. –Poor product research & development. –Poor prototype testing in-house. –Poor pilot. • Move too quickly & cut corners –Some things done in the interest of saving time have the exact opposite effect. –Comes back to haunt you –Project moves off target. –Tasks have to be repeated with lost time and money –Doing it right the first time actually saves time. Compiled by: Cheryl Mathews, Web Presence, May 2006 Product Development Quick Reference Card Stanford Innovation best practices study (53): • Winning products have performanceto-cost ratio & yield high contribution margin • Winning products are technically superior • Winning products are unique • Winning products provide significant value to constituent • Winning products are first in a large and growing market – Product introduced ahead of competition Lessons Learned (25): a • More and better market information, research, and analysis – Vital: voice of constituent before development! • Careful product positioning. Get the positioning right: price, features, quality. Don’t go above or below customer’s expectations: – – – – • • Proficient market launch with strong resources Well-planned and executed R&D process – Strong R&D understanding of constituent needs and the development solution Concept testing before development Test marketing Sharp evaluation of products – go with the winners Good planning & execution of sales and promotion efforts • • • ―Create-Make-Sell‖ functions well coordinated Marketing and technological synergy. Good fit between project needs and company capabilities. Leverages core competencies. • • • • Keep Sr Mgt informed about progress as appropriate, and limit their personal involvement Ensure ample selling effort and promotional resources to achieve stated goals Don’t stray too far from your company’s area of technical and marketing expertise Expect ―copy cat‖ competitors: launch of rival products, heavy promotion, price cuts. Anticipate a long & hard process educating customers of the value of the product. Inadequate market analysis Product problems or defects Lack of effective marketing effort Higher costs than anticipated Competitive strength or reaction Poor timing of introduction Technical or production problems Main causes of new product failure (25): • • • • • • • Product Development Quick Reference Card 6 causes of poor quality execution (104) • Ignorance of process/steps/KSFs • Lack of skill: – – – Define standards of performance Define what constitutes best practices Education & training in the process steps/tasks and project mgt Build 15 CSFs and good execution of those into your process. Get rid of time wasters, speed bumps, uneeded bureaucracy, and work that adds no value. Short-cuts. Missing CSFs. Challenges/Pitfalls to avoid (46) • Lack of market orientation – Failure to understand constituent needs/wants Assess market acceptance Test launch plan Key actions critical to success are arbitrarily omited Comes back to haunt you Mistakes made Project moves off target Tasks have to be repeated with lost time and money Homework is KSF Can’t be fuzzy on the target Need sharp market and product definition Obvious losers weeded out Commit resources to winners Poor execution or omission of these activities = failure (27): • Market – – – • Poor quality of execution – • – – – – Preliminary assessment of the market Detailed market study Prototype testing with constituent Test marketing Product launch Preliminary technical assessment Product Development (research & development) Prototype testing in-house Pilot production Production start-up Initial screening Detailed business analysis Faulty new product process. – – • Technical – – – – – • Moving too quickly – – – – • • Overconfidence – – – – • Evaluative – – Cut corners Some things done in the interest of saving time have the exactly opposite effect. Doing it right the first time actually saves time. Too many projects and not enough resources to get the job done right. Failure to make tough choices = lack of focus and resources spread too thin. Cycle time increases and quality suffers. Get rid of some projects! Build tough go/kill gates into your process. Use checklists to prioritize projects. • Not enough up-front homework – – – • Pipeline gridlock – – – – – – – • Lack of value for the constituent – Vague understanding of constituent requirements = ill-defined products with little benefit/value to constituent Differentiated products are central to winning – • No focus: too many projects and lack of resources – Lack of time, $, and people = errors of omission & poor quality Key tasks don’t happen when they should or as well as they should Ensure the process is not too cumbersome or too bureaucratic • Lack of systemic new project process – – Product Development Quick Reference Card My deliverables: • Fig 1.4 % portfolio: newness to company and newness to market. • Fig 8.4 prioritization matrix (240) • Fig 8.6 prioritization criteria (242) Gates are quality checkpoints. Checklist of questions to ask (list 117): • Quality of execution • Business rationale • The path forward Project Plan Milestones: • Initial screening • Prel market assessment – Voice of the constituent • Prel technical assessment – Voice of the engineer • Detailed market study • Bus/fin analysis • Prod development • In-house product tests • constituent product tests • Test market/trial sell • Trial/pilot production • Pre-launch business analysis • Production start-up • Market launch (roll-out) 7 goals of new product process: 1. Quality execution – – – Focus on completeness Focus on quality Focus on the important 2. Sharper focus, better prioritization 3. Fast-paced parallel processing. Compress cycle time. 4. A true cross-functional team approach 1. Defined leader with formal authority 2. Resources are ―ring fenced‖ and committed 5. Strong market orientation with voice of the constituent built-in 6. Better homework up front 7. Products with competitive advantage Product Development Quick Reference Card Winning products have: • High performance-to-cost ratio (the result of in-depth understanding of constituent needs and the market) • Market launch proficient with strong resources • Product yields high contribution margin • R&D process is well planned & executed • The create, make, and sell functions are well interfaced & coordinated • The product is introduced ahead of competition • There exists marketing and technological synergy (a good fit between project needs and company capabilities • Top mgt support from development through launch Categories of new products: • New-to-the-world products • New product lines – Products not new to market; new to firm Fit with the firm’s existing product line (already produces) • Drivers of innovation (8): • Technology advances • Changing constituent needs • Shortening product lifecycles • Increased world competition Additions to existing product lines – • Improvements & revisions to existing products – Replacement of existing products Repurposing existing products by targeting a new market segment or for a different application Replace existing products with similar benefits/performance at a lower cost • Repositionings – • Cost reductions – Action: inventory your company’s products & services over the last 5 years and categorize by the above. Questions p. 15.