We recently held the first meeting of a newly formed group called the RIT New Product Development Forum in Rochester, New York. In our applied research on new product development (NPD), we have found that there is widespread dissatisfaction with the current state-of-the-art of bringing new products and services to market. Companies have spent billions trying to improve this process, and have found that simultaneous engineering teams are just not enough to sustain a better way to do this. Something new is needed.
Six companies in the region are members of this forum, including Bausch & Lomb, The Gleason Works, Goulds Pumps/ITT, CVC, ExxonMobil and Kodak Polychrome. After presentations from each Forum member on its critical challenges of today, the remarkable realization is that nearly everyone shares the same problems, whether the company is high tech, low tech, local, global, new, or old. In the management of NPD, five issues emerged as common between all six companies:
Let’s take a look at each one of these issues briefly.
First, Fuzzy Front End. I don’t know of one exception to the practice of starting a simultaneous engineering team with general requirements. That is, the broad marching orders for the new product development process come from outside one of the critical components of the development groups’ activities. Where do they come from? How are ideas filtered? Can customers alone really be trusted to guide the new product development process? Can customers even tell you what they really want if you ask them? What about really new ideas, where do they come from?
Every company wants to know what will be successful before a project is funded. The second issue to emerge in our forum was Predictive Metrics of NPD success. Sure, when we finally launch a new product we get feedback on how we did—our sales go up or don’t, our profit margins go up or they don’t—but by then it‘s really too late to do anything about it. What metrics can be used to predict ultimate outcomes? In our research we have found that only about a third of new product developing companies even think seriously about this question. Just making stages and gates is not enough. Just minimizing design change requests is not enough. And just distracting senior managers is not a sufficient indicator of ultimate success. We have found only one so far that has any hope of being valuable and that is the level of employee satisfaction among professional development groups responsible for new product work in process. How many companies track this?
The third issue to emerge from our meeting is Multiple Locations—usually international affiliates of the companies launching new products. Several members of the forum have design partners and co-workers in German-speaking countries, and this has proved to present a coordination challenge.
The fourth issue is Leadership, although this really applies to all of the issues mentioned. All Forum members are interested in becoming better leaders of the new product development process in their companies.
The fifth issue (so far) is Specification Changes. It seems inevitable that companies will never get a new design right the first time, partly because customers change their minds. How should one best manage this process?