Being First to
Market Isn't

by Philip A. Himmelfarb, Ph.D.

In today's highly competitive marketplace, speed, quality, profit margin, manufacturability, meeting customer needs and charging a fair price are essential ingredients for survival and growth. Of these, speed, in the form of shorter and shorter development cycles, has been singled out by modern managers as being especially important, often with disappointing results.

As many companies have discovered, speed is only important if it helps confer a significant competitive advantage to the company. Otherwise, concentrating on speed for its own sake may only lock the company into feverishly developing more and more products, faster and faster, with less yield and less relevance to the marketplace.

In the last decade, many companies became enamored with the concept of speed to market, speed for its own sake. After a while, they discovered that they were in a disadvantageous competitive position because they had developed more and more new products at a rate that was too fast, introducing products faster than the marketplace could absorb them, often without taking customer needs into account. And they often hurt their core product lines and lost customer confidence by introducing new replacement products too soon.

Speed to market is important, but by itself it will never enable a company to differentiate itself in the marketplace or to achieve significant competitive advantages. Let's take a deeper look at some of these issues.

Fast product development is important, but that's not all there is to it. Fast product development must be tied to the company's strategic plan and to its internal technological, marketing and other company capabilities. It also must be tied to customer needs and wants.

No matter how quickly it has been developed, any new product must meet certain criteria. It must:
n Meet customer wants and needs
n Be readily manufacturable
n Be priced fairly
n Generate good profit margins
n Be of high enough quality
n Be introduced at the right time
n Anticipate the competition

To get the true benefit of fast product development, companies also must have high-quality management and other talent, and good channels of distribution to the marketplace. They also need effective advertising and other promotional activities, good customer-service capabilities, a thorough understanding of the marketplace and enough money to do what needs to be done.

How fast must it be?

There is no easy answer to this question. In reality, development projects only need to be started early enough and completed fast enough to satisfy the company's strategic goals, stake out a position in the marketplace, protect a core business and maintain a competitive edge.

The problem is that development projects often are rushed to completion because of unnecessarily aggressive promises made by people who don't realize how harmful it is to force development teams to meet unrealistic deadlines. Or, all too often, to generate excitement in a current product line, new and improved models are rushed to market too soon, severely cannibalizing the original product's sales.

Development projects shouldn't be done so quickly or be so driven by unrealistic end dates that development teams are forced to take inappropriate risks, such as inadequately defining customer needs or shortcutting prototype testing and preproduction debugging activities.

The fact is that not all projects must be developed at the same pace. Marketplace, technical and financial considerations should dictate whether a project is fast track or otherwise.

The window of opportunity

A new product must be put into customers' hands while there is still a window of opportunity in the marketplace. This window typically is delineated by what appears to be the spontaneous appearance of or the creation of a perceived customer need
or want.

Sometimes, the competition gets there first with a successful new product, and the window of opportunity is right now, not some point in the future. In that case, speed is essential, but it can't exclude consideration of acceptable quality, pricing, manufact-
urability or profit margin. The trick is to identify customer trends and needs early enough so that development teams won't always be under the gun to develop new products.

A strategic approach

World-class product development must only be done within a strategic context. Developers should have a three- to five-year outlook that takes into account emerging market trends, environmental and regulatory rulings and trends, customer and employee needs and wants, and financial considerations. The best product developers do not see fast product development as being an end unto itself; rather, they see it as a task that is tied to their strategic plan and emerging marketplace needs.

The best companies select and prioritize their projects strategically, basing these projects on a detailed analysis of their market niches and the trends within those niches. They know years in advance what kinds of products they must develop and when they must introduce them. They are careful not to hurt their core businesses by introducing new replacement products too soon. They do a few major development projects at a time, do them quickly and well, and get the new products out into the marketplace while they can still do the company some real good.

Within a strategic context, companies can use fast product development to good advantage. They can develop the right new products quickly and get these products out into the marketplace at the right time. They will be at an advantage because they know how to do effective and efficient product development. They will have captured market share early, and they will always be able to stay one step ahead of the competition.

A parallel approach

Once strategically important projects are selected, a parallel approach to the product-development process is the best way to go. Parallel product development can bring products that meet customer needs into the marketplace quickly by integrating design and manufacturing capabilities and marketplace information. It's not based on one element or magical formula; rather, it is a collection of principles that must be practiced together.

It is parallel in two ways: It relies heavily on multifunctional teams who work in parallel, and the teams do as many tasks in parallel as possible. Successfully done, this is the best way for a company to conduct its major new product-development projects.

The key elements of fast parallel product development are:
n Senior management support
n Multifunctional core teams for major projects
n Parallel tasking
n Facilitated project planning
n Empowered teams
n Good product definition
n Freezing product features early (and keeping them frozen)
n Critical path project management
n An executive champion for every major project
n Adequate preproduction piloting and testing

It's worth singling out a few items on this list for a deeper look:

Multifunctional teamwork-Multifunctional core teams make fast parallel product development possible. They consist of people from all the key functional areas who can contribute to and have a stake in the project. For major projects, this may include a total of six to 12 people. The team will have representation from manufacturing, engineering, research and development, marketing, sales, finance, quality assurance, customer support, purchasing and anyone else who adds something significant to the team.

Team members are all involved in the project from the start and select their own leader. Key suppliers and key customers are often members of the development team. Once a team has been formed, it should work with a skilled project facilitator to develop a detailed project plan.

Good product definition-A clear product definition helps assure that more than speed will be taken into account when developing a product. It is an essential aspect of any development project. When defining the product, the following questions should be considered as early as possible:
n Who are the customers?
n Who else has a vested interest in the product?
n What do we know about the customers?
n How will the product be positioned in the marketplace?
n What technology will this new product require?
n What are the product's competitive advantages?
n What customer needs will this product satisfy?
n What unambiguous benefits will the product deliver to customers?
n What product features do customers need or want?
n How much will customers pay for this product?
n When is the product needed?
n How will we reach customers with the product?
n How will we promote the product?
n What reliability level is needed with this product?
n What is the product's use environment?

The product definition ultimately leads to a list of product features, derived from those attributes and benefits of a product that the customer is willing to pay for. For every product, there should be a list of essential features and a list of preferred features.

When defining the product, it's important to focus on needs and benefits before trying to list product features. Focusing on features too early can lead to a disconnect between the customer and the development team. If features are identified before customer needs have been articulated, unnecessary features may be added to a product, adding unnecessary design constraints and extra costs.

Customers buy the benefits of the features. Features are of value only if customers can perceive them directly.

About the author . . .

Philip A. Himmelfarb, Ph.D., is president and founder of Philip Adam & Associates, a Milwaukee-based consulting firm specializing in the evaluation, fine-tuning and strategic planning of new-product development, the presentation of in-house training seminars and the facilitating of start-up and ongoing development projects.

Himmelfarb has had more than 30 years of successful consulting and hands-on managerial experience in the creation and management of new-product develop-ment projects for many corporations. His clients have developed and introduced a wide array of successful new products.

Prior to founding PA&A in 1982, Himmelfarb worked at the Jos. Schlitz Brewing Co., where he was responsible for nonbeer new-product and business development. Earlier, he worked at Monsanto Chemical Co. and was a senior consultant at Arthur D. Little Co., specializing in new-product development and research-and-development management.