New Product Management (4)

Chapter 4: Preparation & Alternatives

In preparing the firm for ideation, the firm needs to get the right people, put them in the correct environment, and get them ready for the ideation process. Then a creative person needs to know what is being searched for (what is a concept & how it is typically found & identified), and then explore a specific system of active concept generation. Product innovation does not begin with a new product idea only. It is better to select a playing field & some rules before starting the game.

Finding the right people, making them productive, and activities to encourage productivity

According to P&G, creativity is “the everyday task of making non-obvious connections”. The firm selects unconventional individuals – diverse experiences, great enthusiasms for innovation, & foreign experience. Most people think reproductively (solve problems in ways that worked in the past), but creative persons think productively (inventing new ways to think) – ex what is half of 13? The key is to keep looking, even after the solution has been found. two types of creativity: artistic & scientific (new product needs both). According to the standard MBIT, there are four personality scales: intuitive-sensory, perceiving-judging, extroverted-introverted, and thinking-feeling (creative persons tend to be more intuitive, perceiving, extroverted, and thinking). The key is getting this kind of persons to be involved in the new product process at the earliest phases (just as important as the process itself).

Creative people can benefit from training (company’s product, its markets, competition, technology used, and etc). Dell’s CEO says that it is important to keep the employees unafraid of failure, as innovation involves learning from failure. Management should allow innovators freedom and permits them to help select projects for development, and job assignments should be challenging. 3M’s chairman says “We do expect mistakes as a normal part of running a business, but we expect our mistakes to have originality”. Firms often use a computerized database (idea bank or refrigerator of ideas) to store & document ideas from earlier, unused new product projects, for reuse later. These ideas are from market research, test market results, project audits, design plans, engineering notes).

There are a lot of killer phrases that can stop creativity (extremely discouraging to fragile ideas), even though they are often well-intentioned. Some firms use a technique called itemized response – when an idea comes up, listeners must 1st cite all its advantages, then they can address the negatives but only in a positive mode.

The Concept

A new product only really comes into being when it is successful – that is when it meets the goals/ objectives assigned to the project in the PIC. When launched, it is still in tentative form, as changes are quite apt to be necessary to make it successful. It is still a concept, an idea that is not fulfilled. There are 3 inputs required by the creation process:

1) Form – the physical thing created or the sequence of steps by which the service will be created.

2) Technology – the source by which the form was attained, the power to do the work (the base of innovation, the one that served as the technical dimension of the focus-arena).

3) Need/ benefit – the product has value only as it provides some benefit to the C that the C sees a need or desire for.

Technology permits us to develop a form that provides the benefit – if any of the 3 is missing, there cannot be product innovation (unless one buys a product ready-made & resells it without change). The innovation process can start with any one dimension: Customer has a need, which a firm finds out about; it calls on its technology to produce a form that is then sold to the customer. Or a firm has technology and then finds out a need a given market groups has, which is then met by a form of product. Or a firm envisions a form of product, which is then created by the use of a technology, and then given to customers to see if it has any benefit. However, putting benefit last is very risky, since it comprises a solution trying to find a problem (ex – DuPont spent years finding applications where Kevlar could yield a profitable benefit). The best is to put benefit 1st (technology-driven scientist put benefit 1st because they have some idea of need that is leading them in their efforts). When all we have is need, then it is regarded as “idea”.

The concept statement

Any two of the three (form, technology, need/ benefit) can come together to make a concept, a potential product. Once a concept appears, we have to screen it before undertaking development, and it requires a product concept statement (to do concept testing, we need the statement which meets these info needs). A concept is a verbal and/ or prototype expression that tells what is going to be changed & how the customer stands to gain (& lose). Anything that does not communicate gain & loss to the intended buyer is still just an idea that needs work. The famous toy inventor said “Notice what things your child play with, and try to spot what’s lacking – and look for holes - a lack of certain item on the market” – benefit, technology, and form are stated in order. The importance of these three dimensions varies by industry. In most, one of the three often needs no attention because of general knowledge within the industry (for pharmaceutical – technology is the only unknown & thus the focus of attention, for food companies- benefit is the prime variable).

To create new product concepts, there are five routes: technology, end-user, team, other insiders, and other outsiders (two involve receiving product ideas created by others and three involve a managed process run by the team).

Important sources of ready-made new product ideas: 40-50% of new product ideas are ready-made, coming at least partially from employees, suppliers, end-users, other stakeholders, and published info. In reality, smaller firms often have the expertise in idea exploration (early stage research), but they lack the resources & skill to carry out extensive development, testing, or commercialization. Large firms turn to these companies as a rich source of new product ideas. End-users who use a product often have ideas for improving it. Most End-users’ concepts are for product improvement rather than new-to-the-world products, and they are less likely to come up with ideas that are easily developed into real products. Product development professionals or more experienced users will have a more realistic view of what is and is not feasible. For industries like engineering or chemical, customers provide little or no help.

Many firms seek new product ideas from their lead users (Customers associated with a significant current trend). They are at the front edge of the trend, have the best understanding of the problems faced, and expect to gain significantly from solutions to those problems. However, they may also be outlanders, or not established members of that trade, or even if they are really leaders, they may think they have already solved their problems. The important principle is to ask customer for outcomes – what it is they would like the product to do for them.

Kawasaki asked JET SKI customers what they wanted and most suggest the improvement on the comfort. But by the time the firm added seats to their products, other firms had done so – reducing one-time leader to “me-too” competitor. The firm could have looked to the motorcycles it produced & got the seat idea. Chrysler got the idea for building a cup holder into their trucks by observing that many drivers had installed the cup holders themselves. An engineer of Chrysler also observed that his wife struggled in putting a child’s car seat into minivan, and came up with the idea of integrating car seats into the van’s seating system, which became very popular. Many firms now get end-user input for new product ideas by involving them effectively, from the earliest stages of the new products process, on their new marketing teams – this bring their needs & problems directly on the table.