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 Avoiding the "Committee Effect"
in New Product Development

by Dave Biggs

The fundamentals of product development are common sense. Understand the marketplace, do good product definitions, design the products and business processes at the same time, and effectively introduce products to customers. But the process always seems to bog down and then we take shortcuts. As a result, according to an MIT study, only one new product out of 11 is successful. It's an appalling record considering failures aren't just neutral. Products like the Newton Pad actually stunt a company's growth. Suppose a company spends 10% of sales on the development of new products. With only one success out of 11 products, roughly 9% of sales is spent to actually hurt the company. But there is a positive way to look at the situation. If the track record improves to 2 out of 11, product development productivity just doubled!

It's not easy. Anticipating which product customers will buy is the most difficult product development activity. The challenges to understanding the marketplace are:

Challenge No. 1: Many different hands hold pieces of the marketplace puzzle. Sales people gather volumes of information in their routine contact with customers. Engineering and Product Service people get different pieces of information as they brush against the marketplace. Innovative customers have a perspective that we ignore only at our own peril. And the list goes on and on.

Solution: A method is required to exchange information between all the people that have the bits and pieces to the puzzle. What won't work is a committee. Even if we could get all these people around a conference table, the "committee effect" would paralyze progress.

Challenge No. 2: Often, marketplace discussions get mired down in semantic and terminology disconnects.

Solution: When terminology problems arise, they should be solved just once. A method is required to develop a common vocabulary for discussion the marketplace.

Challenge No. 3: Marketplace discussions get deflected into product or business process discussions. Once the product discussions begin, unbiased exploration of the marketplace stops. Consider the classic bookstore. The products are books sold in a retail store. When discussions of marketplace turn into review of store enhancements such as a coffee shop, understanding the customer's needs goes to the back seat. The customers need fast, convenient and cost-effective access to books. The may want to socialize also, and that should also be discussed. But, discussions focused on the decor of the coffee shop don't really improve market place understanding. Product discussions are very important, but should have a separate forum to prevent distraction during time allocated to understanding the marketplace.

Solution: Time should be dedicated to understanding the marketplace. Actually, it requires surprisingly little if the process is facilitated to stay focused on the marketplace and not get distracted on other facets of business.

Challenge No. 4: Many marketplace reviews start off re-discussing topics previously discussed.

Solution: A map of the marketplace needs to be created during the exploration process. Just like the great explorers, we need to map where we have been and how we got there. We must be able to quickly forge into new territory without relearning old lessons.

Challenge No. 5: What is true today is passe tomorrow. The customer's sophistication and expectations advance daily and competition is constantly trying to mold and change the marketplace.

Solution: The process must be dynamic and frequently updated. Exploration of customer's expectations should be event driven - the BFO (Big Fantastic Order) - and happen periodically at regularly scheduled meetings.

Challenge No. 6: Customer's beliefs and practices may be foreign to us. Today's marketplace is global and the customers have different family structures, religions, and methods of communicating concepts.

Solution: An open-minded learning approach is the best way to understand the marketplace. Since different personalities are involved, exploring the marketplace must be facilitated to provide a brainstorming environment. Sometimes the "gold nugget" comes from the introverted person who will not speak out in the presence of dominant individuals unless shelter and encouragement are provided.

But wait! There's good news. There are techniques that work and don't bog the process down. Reviewing one of the MAP (Market Aimed Products) techniques makes the point. "Needs tree analysis" incorporates the solutions to the challenges into a process that is an integral part of the MAP process.

R. D. Garwood, Inc. provides a good example of the needs tree process. We (as in solution 1) started the process by defining the "bumper sticker" description of our customer's needs. "Helping companies improve their business process" is a good description, in our case. We then broke the statement down into finer pieces by function. There are manufacturing processes, product development processes, financial processes, human resources processes, etc. The graphic below shows the beginning of the needs tree.

Garwood Needs Tree

We discussed the situation and exchanged ideas as we broke the needs into finer and finer pieces. The value was in the discussion and the exchange of information that occurred in the process. Terms were defined (solution 2) and various views were presented. Like solution 6 suggests, keeping the discussion in a brainstorming mode helped us "break out" of existing ruts and encouraged everyone to participate. It wasn't as important to determine who was right and who was wrong as it was to discuss the pieces of the puzzle. When we disagreed on the ISO 9000 area, we just put a question mark, like in figure 1. The question mark helped us remember the issues still in debate. With a clear consensus that we didn't intend to pursue accounting processes, it was documented with a line through that process. It's as important to document what is not a business target as it is to clearly identify what is being pursued. Good maps help you remember where not to go!

So why this technique? What are it's strengths? The first strength is that everyone didn't have to participate in every meeting to effectively participate in the process. After we had discussed the needs tree, some of us discussed it with key customers. In your company after executive staff discusses the needs tree, your sales executive could then take the needs tree diagram to the next sales meeting and discuss the situation. Information gathered could then be taken back to the next executive staff meeting.

The needs tree diagram is the map referred to in solution 4. We know where we have already been and glancing at the diagram helps recall previous discussions. We now avoid unnecessary review of old topics.

As the marketplace or company direction changes, the diagram has become a very effective new information presentation tool. In the R. D. Garwood example, maybe someone has some new information (things change � solution 5) concerning management of automated machinery. They could cite the diagram and say, "Remember when we decided that we were not in business of helping people with management of automated machinery? Well here is some new information."

There are a lot of techniques that make the needs tree tool effective. For example, a needs tree meeting should not go more than an hour-and-a-half. After that amount of time, everyone is saturated and contribution to process is minimal. It takes a little orientation on these techniques to become proficient at the process. Product development magic is in the techniques that allow us to accomplish necessary tasks without them becoming onerous and time-consuming. The time taken to learn these techniques is one of the best investments that can be made in new product development.

All Contents Copyright � 2002 R. D. Garwood, Inc. All Rights Reserved.