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NEW PRODUCT & SERVICES DEVELOPMENT

Adjunct Associate Professor

David A. Goldsmith MetaMatrix Consulting Group, LLC.

8248 Barksdale Lane Manlius, NY 13104

Phone: (315) 682-3157 Fax: (315) 682-0509

Email: david@davidgoldsmith.com

website: www.metamatrixconsulting.com

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TEXT BOOKMain Text

Winning At New Product Development:

Accelerating the Process from Idea to Launch

by Robert Cooper (3rd edition)

Published by Perseus Publishing

Suggested Reading

Revolutionizing Product Development

By Wheelwright and Clark

Published by Free Press

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COURSE REQUIREMENTS & ATTENDANCE

To earn CEU attendance is required at all sessions. Course requires full class participation & assignments. There will be no exams. There are assignments for each

session which includes a final project. Grading is based on how much each individual learns

during the course. • 25% of the grade will be for class participation• 25% will be for the first assignment• 50% will be for the final project.

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Today 09:00 AM –

Introduction; overview; your expectations; what new product and service development means to you; the final project; grading; and defining new products.

10:00 AM – Organizational and new product visions, goals, and strategic directions.

Teams will work on establishing vision, mission, goals, and strategies for your real or hypothetical New Product Development Group(NPDG) and for new products.

11:00 AM – Why new products fail & critical factors for success.

12:00 PM - Lunch 1:00 PM – Continued 04:00 PM - Adjourn

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FINAL PROJECT

“The Process You Would Use To Develop A New Product Or Service And The New Product Or Service That you Have Developed From The Process.”

1. The vision, mission, goals, and strategies of the NPDG.

2. The general criteria for the NPDG.

3. Description and diagram of the NPP.

5. The specific criteria for the new product or service.

6. Your business evaluation of the new product.

7. The next actions you will take.

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What are your expectations?• Name…country• If employed…where?• Position you currently hold…if any?• What would you like to learn?• If you learned it, what would it do to your

business or you?• One unique thing about yourself that

others may be surprised to know.

Russian Roulette

$10 Million Dollars

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Goals for you

• Create a mind shift • Increase your awareness and knowledge• Develop a system for your firm to use.

• Part educational• Part group activities• Part interactive• Use of examples

Educating Your Mind

“A man’s mind, once stretched, never goes

back to it’s original dimensions.”

Oliver Wendell Homes

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WHAT ARE NP&S?

?

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They can be…

• Concepts• Solutions to problems• New technology• New to the company• Line extension• Service extension

Product of the Highway Industry

E-Z Pass changes

The need for toll personnel

The need to count cash

The need to generate reciepts

The need for accounting personnel

The need for “people” safety

Benefits to driverSpeed of processing

One simple bill

No cash as a driver

Consolidate invoices

Waiting in line diminished

New Products from Coca-ColaVanilla Coke May 8, 2002

Diet Coke with Lemon in October 2001

Cherry Coke in 1986New Coke 1985

Diet Coke in 1982

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“The Can” Sherwin-Williams Inc

“The new plastic can is largely a response to the growing number of women who not only make most decorating decisions at home but also are taking brush in hand,” said Adam Chafe, director of marketing for Dutch Boy.

Test marketed in Syracuse NYNottingham Spirk Design Associates

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New to consumer – End user

• Continuous Innovation

Car, Television, chair, Windows 2000• Dynamically Continuous Innovation

Digital watch, Laptop• Discontinuous innovation

MP3

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New to a company

• Technology introduction• Inventions within firm• Innovations • Addition to existing products• New to market • New to market segment

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New to a company or trade

• New to a country – Mexican Food in US• New to a category – DVD• New Brand – Victoria Secret• Repackaging – Financial Services• Repositioning – Apple• Line Extension – size, color, shape

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NP&S define business

• Sales• Hiring• Manufacturing process• Vendor selection• Technology• Planning• Channel• Customers

• Banking • Media• Advertising• Location• Alliances• Competition• Education• Legal

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NP&S are all over your firm…• Accounting

– Invoice, Software• IT

– Software, Server, Computers

• HR – Training, Handbook,

Leasing• Maintenance

– Chemicals, Tools• Logistics

– Shippers, Online tracking• Engineering

– New process, Forms

• Design

– On-line service, ASP

• Finance

– Proposals, Credit Cards

• Sales – New video, Products

• Manufacturing – Equip., Staging Systems

• Operations

– 24 tech Support, Site Select

• Marketing – Ad Campaign, Survey

Role of management is to create the systems and supply the tools for

employees to produce predictable reliable results….continuously.

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Less glamour, more profit

“ Big firms are better at less eye-catching forms of innovation—adding the twist to the snack food, for example, and generally improving the ways in which products invented elsewhere are manufactured, marketed and continually enhanced. Henry Ford... did not invent the automobile. He invented a far superior way to manufacture it, the mass-production assembly line.”

The EconomistApr 22nd 2004

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The Results – 1, 2 or 3 items

100%

47%

32%

64%Anticipated

Results

Actual Results

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Jump right in…

Draw a picture

of how you do it now.

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Review of your process….

• Where did you enter the process?• Where did your employees add input?• Where did you make the decision to go

ahead?• Where did accounting, manufacturing or

human resources enter the picture?

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The Management Toolbox

• We use meetings to increase productivity• We use time management to create time• We use statistical analysis for guidance.• We create teams to gain synergy• We design buildings to increase efficiency

Our tools are our decisions and the better we make the process the more predictable is the result.

Rule of 80/20

A firms ability to compete and employees ability to succeed is

driven primarily by the structure the firm has to offer. The role of

management is to think…design the structure, processes and goals to insure the probability of success.

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Create systems and tools

Define and refine process

Teach the firm to use it

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2 Main Tools

Funnel Development Process

Stage Gate

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NEW PRODUCT IDEA ATTRITION

100

90

80

70

60

50

40

30

20

10

0

0 10 20 30 40 50 60 70 80 90 100

IDEA GENERATION

SCREENING

EVALUATION

DEVELOPMENTTESTING

COMMERCIALIZATION

SURVIVAL RATE(%)

CUMULATIVE TIME IN PROCESS (%)

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Funnel Development Tool

Internal ForcesManagementTimeFunds

External ForcesVendorsCustomersMarket Conditions

Wheelright and Clark

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Process limits the success

• Not enough ideas• Research misdirected• Management late entry• Resources not reviewed or wasted• Not tied to strategy (poor strategy)• Cannot be taught• Missed opportunities• Risk assessment overlooked – 9/11 Shift

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Increase the probability of success

Generation and collection of ideas for programs, facilitators, and sponsors

Objective is quantity

Goal is to continually expand the ideas so the final product is the best possible choice

Narrow choices for more in depth discussion.

Selection should be greater than needed.

Final selection has an increased probability of success and higher quality.

Change in approach and narrowed based on pre-determined characteristics.

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Increase Mouth

• Customers• Vendors • Focus Groups• Industry• Customer Service• Consultants• Trade Journals• Existing Products• Magazines/Books

• Surveys• Sales Force• Competition• Mailings• Web • Employees• Associations• Friends• Trade Shows

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Narrow Scope

• Research• Stats• Costs• Market Needs• Capacity• Equipment• Finances

• Facilities• Time to market• ROI

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How can this be powerful

• Duplicatible• Expectations met• Formula determines success• Easy to teach• Increases Creativity• Proactive

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DAVI

D A

GO

LDSM

ITH

DAVI

D A

GO

LDSM

ITH

DAVI

D A

GO

LDSM

ITH

03-0

2-1

0 Re

cru

iting

Pro

ce

ss F

unne

l

1. Evaluate Needs80/20 RuleActive M anagem ent

2. A lliances In S tateHigh School CoachesAlum niRecruiting F irm sDB D eveloped

4. Identify P rospectsProcess FunnelTop 10 in Country on List2 on 4 E lim ination Academ ic Child D iscip line Transfer

5. Com plete H om ew orkStudent N eedsAcadem icsLong Range GoalG uidance CouncilorsO ther CoachesFam ily B ackground

6. W atch Them PlayRanking Form ula Built Academ ics Interests G oals Ta lent Skill S ets Define (Jum p a phone book)

7. Relationship Build ing

Throw Cata logsHTM NM om , Dad, S tudent NeedsEarly Rela tionshipsPresenta tion D ifferentia tion

9. Offic ia l VisitsSchedule Entire TourChoreograph ProcessCoach tim e w ith S tudentPrepare O ffer in AdvanceO ffer is a G IFTCreate A Career Ladder

8. Finacia l ReviewSet L im its on O ffersF inancia l AssistanceUse Scoring M ethod

10. A fter the O fferCreate a Conversation L istO rganize Calls S tra tegica llyAccept O ffer - M ake it a G IFT

11. Accepts Another O fferDisney - W elcom e Hom eStock Thank You CallKeep in Touch Process

3. A lliances In O ut-o f-S tateHigh School CoachesAlum niRecruiting F irm sDB D eveloped

1 2 3 4 5 6 7 8 9 10 11

© 2003 MetaM atrix Consulting Group LLCP: (315) 476-0510 ww w.metam atrixconsulting.comUse only by C larion Univ. W ithout Written Perm ission

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Let’s try a simple one…

1. Take one person in the group.

2. Show their current process

3. Convert it to a more structured funnel

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Gun Example

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Defining Stages

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Stage Gate Process - Robert Cooper

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STAGE GATE PROCESS ™

STAGE 1

IDEA GATE 1

INITIAL

SCREEN

IDEATION

PRELIMINARY

INVESTIGATION (SCOPING)

GATE 2 STAGE 2

GATE 3 STAGE 3

GATE 4 STAGE 4

GATE 5 STAGE 5

PIR

2NDSCREEN

DETAILED INVESTIGATION (BUSINESS CASE ORBUSINESS EVALUATION)

DECISION ON B.E.

DEVELOPMENT

POST -DEVELOPMENT REVIEW

TESTING & VALIDATION

PRE-COMMERCIALIZATION BUSINESS ANALYSIS

FULL PRODUCTION & MARKET LAUNCH

POST-IMPLEMENTATION REVIEW

60% of all firms in the world use it!!

Advantages:

Insures consistency

Parallel processing

Blocks ideas that do not fit company

Can be managed consistently

Structured process

Easily taught

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Pontiac Solstice in Record Time

126 vs. 253 Days

'Oh my gosh, you guysare making this thing arunner, aren't you!'“

says Reuss.

NBC5.comhttp://www.popsci.com/popsci/auto/article/0,12543,233259-6,00.html

Photograph by John B. Carnett

RubbermaidContinual Stream of New Products using New

Product Development Teams

Founded 1933

98.9% Brand Awareness

$7 Billion in 2000

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Technology Firms Use It

• Israel-based company VKB has developed a virtual QWERTY keyboard that can be projected onto any flat surface.

• Because the keyboard is projected, it’s ideal for use in sterile environments such as cleanrooms and hospital operating theatres.

• keyboard is full size and the letters are in a standard format (Clicks when you type)

www.vkb.co.il

Product & Service Firms Use it

Häagen-Dazs® ice cream was first sold in 1961 exclusively in New York gourmet shops. As the popularity of this exotic-sounding brand name

grew and the demand for further distribution increased, Häagen-Dazs began franchising ice

cream shops/cafés in the mid-1970s

Creating The Right Products

The Burj

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A Story About Franks. Snappys …

…children and

decisions that cost

them the farm

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Heid’s of Liverpool

• Founded in 1883 by Mr. Valentine Hied• One of the oldest and best-known “Hot Dog

Stand” in the country.• Present restaurant built in 1937 and design

bought from the 1935 World Fair of a Bavarian sausage house.

• Family owned and operated for 3 generations until 1995

• Bought by John and Randall Parker (brothers) in 1995

• Plans to re-open Sweet Treats facility serving ice cream

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Starting Over … Planning

‘If you don’t know where you’re going, you might end up somewhere else.”

Casey Stengel

“Plans are nothing, planning is everything.”Dwight D. Eisenhower