In a report titled "Best Practices for New Product Development and Introduction" from 19 June 2007 Ralph Rio, Research Director Enterprise Software at ARC Advisory Group states:
"On average, 45% of the products are released on schedule which means over half of new products miss their schedule."
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To improve these results, Rio recommends focusing on company goals and metrics that reflect top line revenue impact. Rio's summary provides insights on solving the problem of missed introduction schedules. His report uses the phrase NPDI leader - new product development and introduction leader. He reported:
"The NPDI leader also needs good skill in persuasion to gain agreement from managers to do something that is not optimal for their department, but is in the best interests of the corporation."
The NPDI leader's goal is to ensure that the appropriate people are engaged in development and launch activities and that their activities are coordinated to maximize efficiency to achieve the desired business results for the company.
Why it is important to fill this leadership role?
When new products are not available for purchase by customers on the promised launch date, top line revenue suffers. When missing information or services cause potential customers to abandon the sales process, top line revenue suffers. When customers that purchased your products are reluctant to recommend it, top line revenue suffers. Fixing these problems should be a new product development and introduction imperative. Some product launch problems are a result of errors of omission and that will be discussed later.
Assigning blame for poor performance
When there are inefficiencies and delays in the new product development process, who is blamed? Frequently, one functional group blames another functional group. For example, a contributor with a strong allegiance to engineering may blame management for delays. This has been a recurring them in the Dilbert comic strip from its inception on 16 April 1989 to the present.
Here is some hyperbole about the cause of delays:
- Marketing and sales don't share the same goals
- Sales may criticize the 'factory' for not understanding the customer's needs.
- The product manager frequently complains about not having enough resources.
- Team members complain that their favorite solution was not selected.
- The project management specialist may rebuke contributors that miss critical milestones that were meticulously documented in the project schedule but were unattainable in practice .
Who fulfills the new product development and introduction leadership role?
"NPDI leader" is not a common job title. Who might fulfill this leadership role?
In some companies, the Product Manager is expected to provide new product development and introduction leadership. As described by David Daniels of Launch Clinic in "The Role of the Product Marketing Manager" the Product Manager and Product Marketing Manager have specific strategic and tactical roles but typically their influence is limited within the company.
In other companies, business development managers have broad responsibilities for several product lines. Usually the role of the business development manager is multi-disciplinary and impacts engineering, marketing, and sales activities. Therefore, business development managers are positioned to provide NPDI leadership.
The product champion or sponsor has broad influence and may be positioned to provide NPDI leadership.
Leadership and risk reduction
My July 2005 Visions article titled "Making Robust Launch Decisions - Part 1," suggested another way to analyze launch delays. The potentials for launch delay can be attributed to three types of risk. These three risks are based on an article titled "Why Good Projects Fail Anyway" by Nadim F. Matta and Ronald N. Ashkenas in the September 2003 issue of Harvard Business Review. The three types of risk are:
- Execution risk—The risk that designated activities won’t be carried out properly
- White space risk—Some activities will not be identified in advance
- Integration risk—Disparate activities won’t come together at the end
An NPDI leader must have a system-level perspective to minimize these three types of risk. Errors of omission increase these risks. To ensure top line revenue success, an NPDI leader must have a broad understanding of development and launch fundamentals and interdisciplinary expertise.
The Impact of Reductionists
In the absence of an NPDI leader, the viewpoints of reductionists prevail. Often, reductionists are masters of one discipline but a reductionist has a biased view that overemphasizes specific activities. Reductionists at your company may have job titles such as lead engineer, manufacturing supervisor, purchasing manager, or market analyst. For example, a reductionist might declare that the "all the engineering drawings for a product have been approved" or that "the brochure is finished." The problem is the failure to appreciate the other contributions necessary for a successful launch.
Reductionists are specialists. Their contributions are required for successful new product development and launch. For maximum success, an NPDI leader guides the activities of these specialists.
Examples of successful new product development and introduction leadership
Here are a few examples of successful companies that have NPDI leadership.
- At Toyota, this new product development and introduction leader is called a shusa [see Results and Rewards of Sustained Innovation in Development and Launch].
- At Apple, an NPDI leader is Steve Jobs. He provides system-level thinking that dramatically coordinates development activities and impacts launch schedules.
- The 37signals team of experienced, enthusiastic, multidisciplinary designers and developers has adopted a unique commercialization philosophy.
Who is best equipped to provide effective and efficient new product and development and introduction leadership at your company?
