Successful new product development (NPD) starts with identifying good product ideas and using reliable criteria to decide which ideas to pursue. Show
You should take the following steps before you allocate funds to new product development. Idea generationWrite a customer needs list based on the information you gather from the sources identified below. You should try to identify existing weaknesses in your products, gaps in your product range and areas for product improvement. Brainstorm product issuesWork with your existing team members to brainstorm product issues. Your sales and service staff speak to your customers daily, hearing feedback about your products and the customers' needs. Capture the feedback, product observations and ideas from your team. Make sure you recognise their ideas and promote a shared culture of innovation. Use your research and development (R&D) processesUse your business's existing R&D processes. Identify modifications you could make to existing products, or adaptations for new products, consistent with feedback from your market and customers. Review your quality assurance (QA) processesNote any issues in your products and identify potential ideas for addressing gaps in quality. Review your customer complaint recordsIdentify common weaknesses in your existing product range, and look for areas where improvement is most needed. Learn about managing customer complaints. Review your researchReview your customer research and market research, and plan further market and customer surveys if you identify research gaps. What are your customers telling you they're looking for? What do they find frustrating or limiting about your products? How do they use your products most? Talk to your suppliers and other business partnersTalk to manufacturers, retailers and sales reps to capture their knowledge of your products and thoughts for improving them. Research and understand your competitionTry to understand your competition. Review your competitors' product range and consider how the market is responding to them. Do any of their products seem to be meeting needs that yours aren't? Study catalogues and product informationMake sure you have a comprehensive understanding of existing products available in your market. Idea screeningWith your list of potential new product ideas, you now need to decide which ideas to pursue and which to discard. Consider your competition, your existing products, their shortcomings, and the needs of your market. Draw on the customer needs list you have developed, and the areas for product improvement you have identified. Develop a set of criteria to evaluate your ideas against. Your criteria might include:
SWOT analysisA SWOT analysis can help you to identify the strengths and weaknesses of each idea. Innovation supportYour innovative approach and your steps to foster innovation in your team will help you realise your new product goals. Find out about innovation advice, grants and support. Read more about becoming an innovative business. Also consider...
Diversify your product line. Stick to your knitting. Hire a professional manager. Watch fixed costs. Those are some of the suggestions that entrepreneurs sort through as they try to get their ventures off the ground. Why all the conflicting advice? Because in a young company, all decisions are up for grabs. Based on his observations of several hundred start-up ventures over eight years, Amar Bhidé has developed a three-step sequence of questions that all entrepreneurs must ask themselves in order to establish priorities among the vast array of opportunities and problems they face: What are my goals? Do I have the right strategy? Can I execute the strategy? Before entrepreneurs can set goals for a business, they must articulate their personal goals. They may want, for instance, to attain a certain lifestyle, experiment with technology, or build an institution that can outlive them. Only when entrepreneurs decide what they want from their businesses can they determine what kind of company they must build, what they are willing to risk, and whether they have a well-defined strategy. Great strategies, however, don’t guarantee great execution. A venture may fail if its founders do not hire the best people, attract capital, invest in organizational infrastructure, and shape a culture to suit the venture’s strategy. Founders must also consider the evolution of their personal roles. Entrepreneurs cannot build self-sustaining companies simply by “letting go.” While they sketch out the future, entrepreneurs must manage as if the company were about to go under. They must continually acquire new skills—and continually ask themselves where they want to go and how they will get there.
Of the hundreds of thousands of business ventures launched each year, many never get off the ground. Others fizzle after spectacular rocket starts. Why such dismal odds? Entrepreneurs—with their bias for action—often ignore ingredients essential to business success. These include a clear strategy, the right workforce talent, and organizational controls that spur performance without stifling employees’ initiative. Moreover, no two ventures take the same path. Thus entrepreneurs can’t look to formulas to navigate the myriad choices arising as their enterprise evolves. A decision that’s right for one venture may prove disastrous for another. How to chart a successful course for your venture? Bhide recommends asking yourself these questions:
Improvisation takes a venture only so far. Successful entrepreneurs keep asking tough questions about where they want to go—and whether the track they’re on will take them there. The Idea in Practice A closer look at Bhide’s three questions: Where Do I Want to Go?To articulate your goals for the enterprise, clarify:
How Will I Get There?Successful strategies:
Can I Do It?A great strategy is worthless unless you can execute it. To do so, you’ll need the right:
Of the hundreds of thousands of business ventures that entrepreneurs launch every year, many never get off the ground. Others fizzle after spectacular rocket starts. A version of this article appeared in the November–December 1996 issue of Harvard Business Review.
|