the "Committee Effect"
in New Product Development
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
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
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
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.
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."
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.