ENTERPRISE THINKING MetaMatrix Consulting Group 1 NEW PRODUCT & SERVICES DEVELOPMENT Adjunct...

1ENTERPRISETHINKING

MetaMatrix

Consulting Group

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: [email protected]

website: www.metamatrixconsulting.com

2ENTERPRISETHINKING

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Questions that need answering…

• Where are we?• Where do we want to go?• How do we get there?• When do we want to arrive? • Who will get us there? • What will it cost?• What are the expected results?• How do we measure results?• Why are we doing it?

3ENTERPRISETHINKING

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Terminology of the trade

• Vision: Mode of seeing or conceiving, unusual discernment or foresight.

• Mission : The act or instance of sending a body or persons to perform a service or carry out an activity.

• Goal: Long range aim• Objective: Short range aim• Tactic: A device for immediate accomplishment• Strategy: How to get to the end aim

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Work Towards a Perfect Model

Traditional Planning

GoalYou are here

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VISIONINGPeter Block, The Empowered

Manager, 1987

"The initial step toward autonomy for those of us in organizations is to put into words the future we wish to create for our own unit. This is called a vision of greatness. We describe a preferred future that we are committing ourselves to and committing our unit to. The belief is that this vision will be good for the individual, good for the unit, and good for the organization. Creating this vision is our essential act of leadership."

6ENTERPRISETHINKING

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CLASS WORK ON:

• What Visions Do You Have For A New Product Development Group NPDG?

• Who Do You Share Your Vision With?

• What is your mission?

• List your goals.

7ENTERPRISETHINKING

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SHARED VISION

SHARE VISION WITH

EMPLOYEES

THE MARKET PLACE

STOCK HOLDERS

POLITICAL & GOVERNMENT

SUPPLIERS

MEDIA

CUSTOMERS

THE COMMUNITY

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NPSD must be…

• Tied to the vision statement• Tied to the mission statement

Question: Does your vision or mission statement include your product or service direction?

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GUIDE TO MISSION STATEMENT

• Purpose or reason the organization exists.

• Type of products/services offered.

• Its markets and customers.

• How they will treat customers.

• Their values and philosophy.

• The broad direction it will take.

• The major targets it is trying to reach.

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GUIDE TO MISSION STATEMENT• How capital & people resources are employed.

• The culture under which it will operate.

• A view of itself.

• A broad indication of production techniques and technology.

• The public impression they will set forth.

• A clear indication of how they will relate to various stakeholders: customers, employees, stockholders, vendors, community, government, etc.


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NEVER ENDING PLANNING CYCLE


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KEY QUESTIONS IN NEW PRODUCT INTRODUCTION

Bill Klumb’s questions - PDMA 1998 International Conference

Answer True or false 1. A good idea with an average product is more likely to succeed than an

average idea with a good product. False

2. Uniqueness is a strong driver in new product success. False

3. Advertising is far more important for new products than for established brands.

True

4. Most new products experience growth in their second year. False

5. Trial sizes are usually an effective form of promotion for new products False


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NEW PRODUCT FAILURE

• “25 to 45 % of new products launched, fail. Percentage will vary by industry.” Dr. Robert G. Cooper in his book, “Winning at New Products”

• “19,000 new products were introduced to supermarkets and half disappeared from the shelves within two years.” David A. Light, Harvard Business Review, November-December 1996, Briefings from the Editor, based on 1995 study.


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WHY NEW PRODUCTS FAIL

?


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MAJOR CAUSES OF FAILURE

1. Lack Of Strategic Direction

2. Lack Of A Process

3. Lack Of Resources

4. Lack of Core Competencies

5. Lack Of Knowledge Of Customer Needs

6. Lack of supporting organizational culture


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RESULTS OF BENCHMARKING

• Most successful companies are new product machines.

• Companies have clear strategic direction. • The corporate culture has been aligned behind

new products. • Resources of people and money have been

allocated.


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RESULTS OF BENCHMARKING

• New product effort is cross-functional. • There is a central place where the process

resides. • Each has developed the process best suited for

them. • Clear measures of success or failure are

established.


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BEST PROCESS

• Has clear strategic direction.

• The corporate culture has been aligned behind new products.

• Resources of people and money have been allocated.

• Clear measures of success or failure are established.


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BEST PROCESS

• The new product effort is cross-functional.

• There is a central place where the process resides.

• Each has developed the process best suited for them.

• The most successful companies are new product machines.


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BALANCING THE NEW PRODUCT PROCESS


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WHAT MOST COMPANY’S WANT

• Clear Vision and How to Achieve It. • New Products, but Are Often at a Loss How to

Achieve Them.• Basic Core Competencies in Place.• Optimal Investment to Achieve Results.

In Almost All Issues There Is Always a Divergence of Approaches and Opinions.


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WHAT MOST COMPANY’S WANT

• A Process Developed to Fit Customer’s and the Organization’s Needs.

• Productive Process That Provides Fast Results.

• A Flexible Process that Becomes the Basis for Future Achievements at Management’s Targeted Levels.

Remember -------- the Process Is Only As Important As the Results Produced.


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ASSIGNMENT DUE:

• Read at least the first 4 chapters, if not the complete book.

• Hand in your: vision, mission, goals, and strategies for your NPDG. (Group not Product)

Think about how all of the above relates

to your final project.


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Discovery consists in seeing what everybody has seen and thinking

what nobody has thought.

- Albert von Szent-Gyorgyi 1893-1986


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MMCG 100% Guarantee

Created new product with 100% Guarantee on speaking.

Results:YEO loved itNAPEO did notLOMA did not

No money… referral and project


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Final Project & Website Review

• Review Homework/Book• Samples on website• Extra information to download• Stage Gate sheet• Objectives working backwards


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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


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Essentials to New Product Success

Strategic Direction

Dedication of Resources - People & Dollars

A Supportive Culture

A Tailor Made Process

Multi-Functional Involvement

Solid Planning

Backing and Leadership From Champions


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Philip H. Knight CEO, Pres & Chairman

Current Nike role: My job is to listen to ideas, maybe cook up a

few of my own, and make decisions based on what's good for the shareholders and for the

company


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23 Years of Research – One Idea

Bose Corporation was founded in 1964 by Dr. Amar G. Bose, professor of electrical engineering at the Massachusetts Institute of Technology.

While doing graduate work at MIT in the 1950s, Dr. Bose decided to purchase a new stereo system. He was disappointed to find that speakers with impressive technical specifications failed to reproduce the realism of a live performance.


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Ear to the pavement…

“When you dance with your customers, let them lead.”

-Sam Walton


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Love To Be Hated

Someone will always

hate your decisions.

- David A. Goldsmith


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You can’t start without ideas…

Discovery Stage

How would you

listen to the customer?


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Ways to listen…

Baseline study

Research

Advanced computer tools Monitoring for measuring customer input

Quality Function Deployment (QFD)

Advanced data base modeling

Customer service input

Sales force input

Suppliers input


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Room Service Made Popular•Distinguish yourself from the competition•Since1893 - 1425 guest rooms

http://www.hilton.com


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Thinking About It for YearsThe can was test-marketed in Syracuse, N.Y., and the response was "fantastic," according to Sherwin-Williams Chairman and Chief Executive Chris Connor, who said he had pondered the idea of a better paint can for many years.

Pushing the project was one of the first things he attended to after rising to the top of Sherwin-Williams. The day after becoming chairman in 2000, he met with Nottingham-Spirk Design Assoc. in Cleveland, who already had been working on a design

"We thought the time was right," Nottingham said, "There was new leadership in the company."


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Thinking like a child…


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Crest SpinBrush


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Finding the true VOC

Ask the right people

Ask the right questions

Ask about needs, problems and applications

Listen objectively

Avoid wrong analysis

ADAPTED FROM JOHN J. MORAN, CMC, LETTER TO THE EDITOR, PDMA VISIONS OCTOBER 1997


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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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Meeting Customers Needs


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DefinitionsRaw screening - Evaluating ideas or concepts against broad criteria.

Scoping - information is generally gathered from readily available sources. It is the second tier analysis after screening for broad criteria.

Business Evaluation - the most complex level of screening usually supported by primary research, and detailed market and financial analysis. It is the third tier analysis.

Business Plan - plan for roll-out.


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What others do…

HOW LEADING ORGANIZATIONS DEVELOP SUCCESSFUL NEW PRODUCTS

1. Be sure there is clear Strategic Direction and corporate goals.

2. Have the New Product team develop their own goals for the process and for New Products in general.

3. Establish clear criteria and methods of evaluation against the criteria for the various evaluative stages of the process.


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Broad Criteria?

• When do you establish the broad criteria?• When do you develop product/service specific

criteria?• Who develops them?• Who & how will they be evaluated?


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Criteria Development

1. As soon as you have clear strategic direction establish the broad criteria.

2. Once it passes the broad criteria then develop the product/service specific criteria?

3. Who develops them depends on your situation.

4. They should generally be developed by a cross-functional group.

5. Evaluation should not be done by those who develop criteria.


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Broad Criteria Should…

Follow The Organization’s Strategic Direction.

Support The Organization's Goals.

Support The New Product Group’s Goals & Strategies.

Eliminate Obvious Misfits.


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Broad Criteria CoversTechnology

Design, & Production

Marketing,

Distribution, & Sales

Financial

Return on Investment (ROI)

Net Present Value (NPV)

Economic Value added (EVA)

Risk-return

Management

Core Competencies


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Do you know who says this?

"If We Can't Guarantee It, We Won't Sell It!"®


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Les Schwab Tire Centers• Founded January of 1952, purchased a

small OK Rubber Welders tire store in Prineville, Oregon, with $3,500

• First year sales jumped from $32,000 to $150,000

• January 1, 1954, profit share program with Redmond store manager

• 1955, Les opened his third tire store in Bend, Oregon

• Created the supermarket tire concept.• 1966, the Les Schwab Company

became totally independent and formed the Les Schwab Retirement Trust for his employees, purchased six stores and a retread shop in Idaho

• 1972 had a total of 35 stores

• 2002, 261 company stores and 83 member dealer locations

• Sales of one billion dollars. Stocks over one million tires at all times for our customers.


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Anti-Gravitational Research

“Boeing, the world’s largest aircraft manufacturer, has admitted it is working on experimental anti-gravity projects that could overturn a century of conventional aerospace propulsion technology if the science underpinning them can be engineered into hardware.”

Anti-gravity propulsion comes ‘out of the closet’ By Nick Cook, JDW Aerospace Consultant, London

Boeing’s Phantom Works Advanced R&D facility Seattle


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Beyond the imagination

Anti-gravitational Research


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Specific Criteria

MARKET ATTRACTIVENESS

Barriers to entry

Brand Loyalty

Customer benefits

Improved image

Degree of competition

Low/high risk

Market growth

Market potential

Enhanced service

BUSINESS POSITION

Strategic fit

Core competencies

Investment required

Returns expected

Legal issues

Competitive advantage

Ability to produce

Computability with organization


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Simple questions to ask …

• How much time should you devote to the new product or services?

• How much money will be needed to introduce it to the market?

• How can you obtain the needed money?

• How will you best protect the idea?


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Your firm needs …

BROAD CRITERIA

SPECIFIC CRITERIA

A PROCESS


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Fuzzy Front End – Idea Generation

• Give yourself dream space.• Create an environment to

promote creativity. • Seek out idea-oriented people. • Encourage creativity. • Listen but don't judge.• Deliberately break out of

everyday routines.• Impose creative deadlines on

yourself. • Avoid negative people.

• Make yourself an expert in your area of innovation:

• read• listen • think .. about connections.

• Find out where other "idea people" get there ideas.

• Don't think of problems as obstacles, but as opportunities.

• Study problems in order to generate ideas.


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Tools for generating ideas

1. Brainstorming - no comments or criticism

2. Reverse brainstorming - start with list weakness

3. Trigger Response - playing off each other

4. Checklisting - put other uses, modify, adapt, magnify, minimize, substitute, rearrange, reverse, combine

5. Attribute listing - list characteristics & focus limits

6. Morphological analysis - list possible combinations

7. Synetic - active listening, role-playing, drawing


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From Hands Free to Water Free

The cartridge acts as a funnel, allowing urine to flow through the sealant liquid, preventing any odors from escaping. Next, the cartridge filters sediment, allowing the remaining urine to pass

freely down the drain


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Falcon Waterfree System Makes a Difference

1. No Water Expenses: Cartridge saves more than 9,000 gallons.2. Reduced Sewer Costs: Reduced water volume lowers sewer expenses.3. Lower Installation Charges: No flush valve or water supply pipe work

required.4. Recyclable Cartridge/Biodegradable Sealant: All components are

recyclable or biodegradable.5. Touch-Free Mechanism: Hands-free operation 6. Reduced Urinal Odors: Sealant liquid forms a barrier which eliminates all

unpleasant odors.7. Reduced Maintenance Costs: The cartridge filters out sediment, reducing

drain blockage. The replacement of the cartridge is quick.8. Less Susceptible to Vandalism: There is no flush valve. Ninety percent of

all vandalism includes the forceful removal of the valve.9. Environmentally Friendly: No water, de-scaling chemicals, detergents,

strong cleaning chemicals or acid treatment materials.10. Reduced Energy Expense: Significant energy is required to transport

water around cities and states.


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Spider Super Thread

Wingspan:195 feet, 8 inches

Length:231 feet, 4 inches

Height:63 feet, 6 inches

Weight:358,000 pounds (empty)

Top Speed:604 mph

Cruising Speed:566 mph

Flight Altitude:45,000 feet

Engines:4 engines 43,000-pound-thrust

Pratt & Whitney

Passenger :33 crew, 374 - 490 passengers


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Valuable Sources of Information

• Official Gazette of United States Patent & Trademark, Office of Commissioner of Patents and Trademarks,Washington, DC 20231

• Institut, National De La Propriete Industrielle, 26 Bis Rue De, Leingrad 75008 Paris.

• New Product New Business Digest, General Electric Co., 120 Erie Boulevard, Schenectady, NY 12305

• New Products and Processes, Newsweek, 444 Madison Avenue, New York, NY 10022

• New From Us, Prestwick International Inc., P.O. Box 205, Burnt Hills, N.Y., NY 12027

• Technical Survey, Predicasts, 1101 Cedar Avenue, Cleveland, OH 44106

• NASA Tech Briefs, National Aeronautics and Space Administration, Director Technology Transfer Division, P.O. Box 8757, Baltimore/Washington International Airport, MD 2124

• International Commerce Magazine, U.S. Department of Commerce


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Idea Bank – What, Where, How?

How will the data be kept?Where will it reside?Who will be permitted to access it?What notifications for ideas submitted?Legal considerations?


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John Marshal - Drinker, Biddle & Reath

Intellectual Property Rights

Patents

Copyrights

Trademarks

Trade Secrets


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A launch can be stopped up to the very last

minute.

In NPSD the same situation

exists.

You can stop the launch.


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ROBERT G. COOPER, “WINNING AT NEW PRODUCTS” STAGE GATE PROCESS ™

STAGE 1

IDEA GATE 1

INITIALSCREEN

IDEATION PRELIMINARYINVESTIGATION

Ideas Generation to Stage 1


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Me Too Item… Clorox


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Maxim Magazine A #1 Transplant

British transplant men's magazine

Launch United States in April 1997

Felix Dennis, owner of Maxim

parent Dennis Publishing

"Sammy the hamster"

maxim-magazine.co.uk

maximonline.com

maxim.it

maximonline.de

maxim.gr


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Stage Gate Process™

1. Be sure to be eclectic in your approach to idea generation and that no idea is lost for possible future use. (STAGE 0 )

2. Ideas generated must be screened against the broad criteria (initial screen)by people other than those who wrote the criteria. <GATE 1>

3. Determine who should scope (preliminary investigation) those ideas that meet the criteria and obtain help from both internal and external resources. (STAGE 1)

4. Scoping documents are evaluated.<GATE 2>


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Increasing Probabilities

STAGE 1

GATE 2

STAGE 2

SECOND SCREEN

PRELIMINARYINVESTIGATION

DETAILED INVESTIGATION (BUILD BUSINESS CASE)



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5. A detailed investigation, business evaluation (BE), or case must be done in order to determine if the ideas make sense. See that teams are formed, trained, and monitored in the process. (STAGE 2)

6. Teams should come up with specific recommendations from the BE: a pilot program, a test market, building of a prototype, further research, or any combination thereof. <GATE 3>



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Before you spend money…

STAGE 2

GATE 3

STAGE 3

DECISION ONBUSINESS CASE

DETAILED INVESTIGATION(BUILD BUSINESS CASE)

DEVELOPMENT



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All Signs Point To DisasterIn 1913 Investment bankers were

looking to develop 720 units on Chappaquiddick

The area is now

completely submerged


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Insuring it’s money well spent…

STAGE 3

GATE 4

STAGE 4

POST-DEVELOPMENT REVIEW

DEVELOPMENT TESTING &VALIDATION



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7. Make a decision on the business case. <GATE 3>

8. Development. (STAGE 3)

9. Post-development review - update the research. If necessary, redo the business evaluation. Know what will be accepted as success and what will be considered failure. <GATE 4>

10. Testing and evaluation. (STAGE 4)



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To market…

STAGE 4

GATE 5

STAGE 5

PRE=COMMERCIALIZATION BUSINESS ANALYSIS

FULL PRODUCTION &

MARKET LAUNCH

TESTING &VALIDATION



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11. Business evaluation and hand-off to the appropriate group to develop a business plan. Help shepherd the conclusions through an approval process <GATE 5>

12. Roll out the product. (STAGE 5)

13. Monitor and critique failures and successes. [Post-implementation review]



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Chrysler New Product Winner

Name Year DebutedPronto Cruizer 98 Geneva Auto Salon – GenevaAustria GT Cruiser 99 SEMA - Las VegasPanel Cruiser 00 North Amer. Inter. Auto ShowDetroit PT Cruiser Convertible 01 New York Auto Show California Cruiser 02 Paris Auto Show


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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


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Great Marketing - Poor Execution

Prices 1/2 of traditional cartridges

Delivers over 18 days past expectations


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Customers May Not ReturnRR Donnelly Logistics reports that 42% of consumers

that returned an item won’t purchase again from that

merchant

28%

41.4%

16%8.4%

6.2%

Consumer Pain

Low Service

High Service

Significance


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A CLIENT’S NEW PRODUCT PROCESS


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A CLIENT’S NEW PRODUCT, MODIFIED, STAGE GATE ™


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PA

RT 1

- T

HE

P

RO

CE

SS


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DON’T FORGET!

WORK ON YOUR

STAGE GATE PROCESS

Build into the process the ability to constantly change to meet the changing needs of the

customers and company.


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ASSIGNMENT DUE

1. Read the through chapter 8.

2. Hand in a description of the process you will use for your NPDG.

3. Diagram Stage Gate for your firm

ENTERPRISE THINKING MetaMatrix Consulting Group 1 NEW PRODUCT & SERVICES DEVELOPMENT Adjunct...

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