Innovation and the new product development process L 7 Ing. Jiří Šnajdar 2016

Lessons Leadership Cross functional teams Portfolio management Communication Old product development vs. new product development Organisation Project management Communication

The BOK (Body of Knowledge) covers: Co-Development & Alliances Customer & Market Research Intellectual Property Metrics New Product Process & Execution People, Teams and Culture Portfolio Management Strategy Technology

Information Inputs Corporate objectives Market analysis Techno-environmental scanning Competitor analysis Customer needs Technological opportunities in targeted markets. Market & technical assessment Initial financial assessment Corporate fit. Customer needs analysis; Market analysis; Technical analysis.

Model Stage New Product Strategy Idea Generation Screening Concept Development

Model Stage New Product Strategy Idea Generation Screening Concept Development

Decision/Outputs Market opportunities for new products, which meet corporate objectives. Body of acceptable ideas. Acceptable ideas for further development work. Identification of: Key product dimensions Key technical costs Target markets and potential

Information Inputs Explicit market analysis including potential Explicit technical feasibility analysis, including costs Production implications Check with corporate objectives Market research Production requirements Market research Finalised product Marketing plan Promotion Price Distribution. Results of test marketing

Model Stage Business Analysis Product Development Market Testing Launch commercialisation Decision/Outputs GO/NO GO decision Initial marketing plan and budget Product development plan Finalised product Production plan Marketing plan Product take up; Final adjustments to the marketing plan.

Cooper’s Stage Gate Model Today

The financial impact of shorter time to market

Costs and risk High Low Costs Risks No. of stages/time

Funnel not tunnel

Key themes from the product development literature Management authority support technical aspects communication Process timing pre-development activities development activities marketing activities launch activities Organisational structure mechanism style Information general marketing external communication Successful new products People multifunctional co-ordination product champion communication Strategy orientation objectives synergy product characteristics Source: Hart (1995) in Bruce & Biemans, Wiley; Trott (2005), Prentice Hall

Technology push vs. market pull Source: Adapted from B. Rothwell and W. Zegveld (1985) Reindustrialisation and Technology, Longman, London.

Revamps vs NPD The requirements are different Revamps are more defined and amenable to project management techniques NPD has a much fuzzier front end, is riskier, eats money, is complex to manage

Portfolio Management Portfolio management is a dynamic decision process whereby a business’s list of active new product (and R&D) projects is constantly up-dated and revised. In this process, new projects are evaluated, selected and prioritised: existing projects may be: accelerated, killed or de-prioritised; and resources are allocated and re-allocated to the active attractive projects.

Dynamic process Strategic objectives Internal resource allocation Portfolio management tools External transactions and partnerships

Evaluation criteria for projects Technical – do we have experience? Research direction and balance – compatability? Competitive rationale – is it superior/necessary? Patentability Stability of the market – time enough for ROI? Integration and synergy – a good fit?

Evaluation criteria for projects (cont.) Market - what is the size, is it growing, is there an existing customer base, is the potential big enough? Channel fit – do we have existing customers? Manufacturing – can we use existing resources? Financial - what investment is expected/needed? Strategic fit – does it support short/long term plans?

Importance of Portfolio Management Financial To maximise return; to maximise R&D productivity; to achieve financial goals To maintain the competitive position of the business To increase sales and market share To allocate scarce resources properly and efficiently To forge the link between project selection and business strategy: The portfolio is the expression of strategy: it must support the strategy

Importance of Portfolio Management To achieve focus: Not doing too many projects, focusing limited resources on the ‘great’ projects. To achieve balance: The right balance between long and short term/high risk and low risk projects, consistent with the business’s goals To communicate priorities better within the organisation, both vertically and horizontally To provide better objectivity in project selection – to weed out bad projects