Given just how important new product launches are to the value creation process, I thought it worth sharing seven of the most important lessons learned during my years in the trenches, as a CEO, and as a consultant.
To make things easier, I’ll use a recent success story to help illustrate these lessons – each of which played a significant role in the launch of a new platform.
Some background: the company in question already enjoyed broad-based adoption of its sophisticated electronics. But the rapid evolution of technology being what it is, a market disruption prompted the need for the wholesale reengineering and national field replacement of a complete product range on an extremely ambitious time table – the existing suite of products would be obsolete (non-functional) in 42 months.
Encompassing six products covering multiple end applications, closer inspection revealed a number of issues that had to be addressed, including:
- The existing products were poorly designed and expensive to produce
- The engineering team was overwhelmed with multiple projects and shifting priorities
- The commercial team was increasingly cynical about any promises made by engineering based on historical performance
- The product development process was fragmented with little formality
- Customer requirements were vaguely defined
In the spirit of turning lemons into lemonade, we opted to interpret the market disruption as an invaluable opportunity to fundamentally change the company’s product development process – the urgency of the situation would be the engine that forced such change. To be clear the existing product development process would not be capable of delivering the required outcome
It was no longer enough simply to engineer and release products: new products would be released on time, cost less to produce, deliver the exact functionality customers expected, and include a wide range of new functionality behind that initial market disruption.
And that’s precisely what we did.
How? By leveraging the seven key lessons learned from our exhaustive assessment of the company’s product development practices. Specifically:
- Senior leadership must be intimately involved in formally defining the product requirements at the start of the project; the requirements must be ‘frozen’ and subject to formal agreement to change.
- The cost target is a critical early decision. Production unit cost targets put important boundaries on the development process and form the basis of better-informed new product pricing decisions.
- Launch criteria must be defined by ‘commercial readiness’ rather than ‘engineering complete.’ This drives the timelines, cross-functional involvement and an organizational understanding of how to deliver what the customer wants, when the customer wants it.
- Employ strong Program Management talent to construct and manage the plan. Experienced talent will deliver the process steps in the plan and drive it hard.
- Concentrate leadership on the major decision points from start to finish; this is business critical, not an Engineering project
- Put in place Product Management as an Executive function to be accountable for the commercial launch and engaging all business groups continuously.
- Formalise ‘No’ as a legitimate response to projects that divert engineering resources.
In this case, significant changes in the focus of the attention of the senior leadership to the project and re-defining the meaning of ‘launch’ provided the necessary impetus to achieve to success. As a side note, formalizing ‘No’ as a legitimate response to project requests from commercial was probably the hardest of the 7 lessons to implement!
Today, product development is no longer the sole preserve of the engineering function and the business is better for it.
Let me repeat: The importance of senior leadership formally agreeing with the detailed definition of the customer requirements at the initiation of the project cannot be overstated. ‘Cheaper,’ ‘faster,’ ‘lighter,’ ‘thinner’ are not requirements!