Product Development

To Lessons Learned Section

In February 1996, Alex Trotman, chairman and CEO of Ford, spoke to the National Automobile Dealers Association and laid out his vision of the future. He talked about the movement toward a shrinking, "borderless" world with the opening of lots of new markets. At the same time, he said, the information revolution is creating customers who are more knowledgeable and more sophisticated than ever before and less loyal to a specific brand. "... the bottom line of the revolution will be intense competition for the customer," Trotman said. "Customers don't want fewer features, they want more."

Product development has always been critical to meet market demands. What you want is the best possible product to fill the customers' needs. To be effective, you have to know what's wanted and then develop it. That's never been easy and, in the last few years, it's gotten harder.

In addition to just meeting market demands, there's a greater requirement to develop more complex products in an increasingly regulated environment. The competition's moving too. And speed to market has become a critical way to add value.

If that isn't enough, the product that we develop often turns out to be more than one product. We're finding it necessary to develop different products for different markets in different parts of the world. The challenge of product development today also involves building good, effective teamwork across geographical boundaries.

CRITICAL CHALLENGES OF PRODUCT DEVELOPMENT

Although Trotman was talking about the automotive business, his remarks really could relate to any company that has to develop products for today's hypercompetitive global markets. What are the key challenges?

There are four primary challenges you can solve with Internet technology. They are:

The first critical challenge is to build better, more sophisticated products. The technology is certainly there to provide them, but it raises both the stakes and the level of difficulty for those who have to design the new products. An important aspect of this challenge is to get timely feedback from customers that enables you consistently to stay ahead of your customers' expectations with new and different products and services.

The second critical challenge is to do it faster. Engineers responding to the Design News Career Survey, for example, overwhelmingly (79%) said that they had less time to design products than they did five years ago. And 17% of the engineers responding said that design cycles were only about half as long as they used to be. Indeed, bringing products to market quickly has become one of the key competitive challenges of the '9Os, and it doesn't promise to get any easier. Basically, the idea is to be able to hit the market window of opportunity with all your functional departments aligned for a productive and timely product launch. You can hear the importance of timing in the language of product development, in terms like rapid prototyping and improved speed to market. In fact, speed to market has become one of the key differentiators. All the customization in the world won't do you any good if your product comes out later than your competition's.

The third critical challenge is to do things less expensively. That's the basic challenge of competitive business. Build a better mousetrap, but build it for less than your competition.

The fourth critical challenge is to build a productive project team of cross-functional experts (both internal‹from various departments of your company‹and external‹business partners, suppliers, and customers) that often have to work across geographical boundaries. When you're trying to produce the right product as rapidly as possible for less cost, two things that get in your way are geography and time. The synergy of a well-built team brings to the product development process two powerful ingredients that, when combined and properly focused, will find solutions to achieving any goal. Those ingredients are a variety of expertise and creative brain power.

In manufacturing, the buzzword is often lean, but lean manufacturing has to start way back before the factory floor. It has to start in product development, by, for instance, finding ways to integrate the entire product design process with other operations. When we can get more efficient all along the chain, we can drive costs down and make more money.

The professional responses to all the modern strategic thinking in manufacturing have some familiar names. Terms such as concurrent engineering and reduced cycle time refer to approaches and objectives. And other terms such as rapid prototyping relate to the idea of specific techniques for doing things faster, more efficiently, and in a more integrated way.

Underlying all this is attitude. If you start with the idea that there is a way to do things faster, more effectively, and less expensively, you're likely to find it. That leads you to simple ways to get the job done by using computer solutions and Net technology.

Product Development Lessons Learned:

1. Effective, efficient, rapid product development starts with attitude. If you go into the process believing that you can develop rapidly and effectively, you're very likely to do so. The companies that do well at this seem to be asking "how" questions instead of "can we" questions about product development.

2. Use all the tools. Use an intranet/extranet system combined with e-mail, newsgroups, discussion forums, whiteboards, and videoconferencing, working with design teams to develop different products for different markets in different parts of the world. The people we saw succeeding here didn't use just one tool; they used lots of them.

3. Build on the technologies already available. Product development on the Net would be much less effective if it were not for the CAD, CAM, and CAE systems already in place. And it would be much less effective, efficient, and profitable without the efforts of key vendors of those technologies to make their systems Net-capable and available. Expect that those technologies, techniques, and programs that aren't Web-capable or Web-compatible now will be made that way in short order.

4. Geography is not a boundary or a bar. Look for ways to bring together the people, processes, and information you need from a variety of sources using the Net instead of trains, planes, and automobiles. Look for ways to gather expertise and concentrate it where it's needed. Virtual space is in people's heads. The Net and Web technologies deliver data, information, and knowledge to that space.

5. The key words in making this process happen seem to be information and collaboration. The sheer engineering advantage of being able to deliver mounds of relevant information to the desktop in seconds and then to deploy it effectively is one of the keys to effective product development using the Net. Keep seeking new information sources inside and outside your organization. For product development efforts, pay special attention to the information contributions of vendors and professional associations.

6. Continue seeking collaboration at all stages. That includes links and connections with customers and clients. It includes feedback and analysis from front-line people within the company and from those outside the company who are partners in the business and product development process. Use the intranet to link information from sales and customer service to the product development process.

7. In the companies we reviewed, we saw constant struggles to balance open sharing and security, an especially thorny problem in product development. Clearly each industry and situation will be a bit different, but we found lots of people who had only one answer. Some chose the "share it" answer and used that almost all the time. Others came down consistently on the "keep it confidential" end of the spectrum. The best advice we've heard comes from a computer security expert:

"On security questions, formula answers don't work. Remember that you should always engage your brain before you put your mouth in gear."

8. Use this technology to move quickly to situations where you get feedback on your ideas. This can be product testing in virtual space, gathering data from field tests, or just using e-mail or surveys to get user feedback. Good, timely feedback, properly used, is a key to great product development.

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