An incremental approach to new product development.

"An incremental approach to new product development, and the associated sales and marketing tasks, is the most logical way to build the competitive position of an organisation." Everyone knows, "The longest journey begins with a single step!"

A short discussion of the above eastern proverb, the thinking behind project management, a definition of new product development and the application of the principle of the learning or experience curve to these three are used to justify the argument that "An incremental approach to new product development, and the associated sales and marketing tasks, is the most logical approach to build the competitive position of an organisation."

The longest journey | project management | new product development | experience learning | can you maximise experience benefits in new product development? | incremental product development | summary | links | feedback

The longest journey begins with a single step!

One of the many simple insight you can gain from this proverb is that there many perspectives and your choice of view may significantly affect your perceptions.

Depending on your own outlook, you could view "the longest journey", as exciting, motivating and thrilling, or you could view it as daunting, disabling or frighteningly big. Equally you could view a succession of single steps as organised essentials or good habitual routine, if you take a different view, as dull, repetitive boredom. The task itself can be described in a macro or micro way and our own outlook on life may colour our perception of either description.

The task of new product development for an organisation can certainly be daunting but it must be solved to create a new product pipeline to secure your future. Further challenging is that your pipeline of new products must be responsive to changing needs and must react to and or anticipate market trends if you are to build a future of organic growth.

Project Management

This eastern proverb is also much loved by project managers who break down complex tasks into small bite sized steps or chunks so that they can clarify the management of a complex project and ensure that despite complexity it keeps on track.

For project management, tasks are described in a number of ways, the most important being their level of inter dependence. Dependent tasks must be done sequentially while independent tasks can be started whenever resources and timescales allow.

Breaking projects into small tasks assists their management and brings a smaller micro perspective as does considering the longest journey as many single steps.

To use project management terminology, one step after another is a series of dependent sequential events. To become well suited to the tasks involved in the longest journey you need to become practised at taking one step after another, something we know as "walking".

Assuming we become skilled at walking for sustained periods, we will be able to undertake the longest journey and complete our project.

New Product Development

For this article it is important to distinguish "new product development" from process development, rationalisation, team or supplier development.

Products are things real or virtual which are supplied to customers. My definition of New product development is that it involves the creation and or modification of products supplied to customers, always making changes that are meaningful to the customers concerned. The item is not a product until it is being supplied as such. Therefore the process of new product development may involve the technical department, testing, marketing, production, sales, promotion advertising and channels of distribution.

Assuming you agree with my definition of new product development, it can be seen to be a complex task or process, perhaps like the longest journey, benefits can certainly be gained by segmenting it into small steps.

Just as in the longest journey, if the organisation becomes adept at walking through the individual steps of their new product development cycle then much product development is possible. If however every step is troublesome then not much new product development will be achieved with resulting effect on the health and market position of the company.

I make the distinction that new product development affects customer perception of the products and therefore their marketability. Cumulatively, new product development affects the relative competitive position of the company.

Experience Learning

The concept of an experience curve applies to people and organisations, practice makes perfect.

The more practised we are at doing a task, the better, faster or more effectively we are able to do that task. It is important organisations ensure they capture all available experience curve benefits even if their customers do not demand that they do so.

Formula One Car racing teams practice pit stops many times to improve their technique for raceday. The Automotive supply industry use formulas to calculate that for every doubling in cumulative output a saving on value added costs should be available through application of experience to the process itself. They often demand this saving in price reductions.

When you are producing a new product, the possibilities to improve the processes involved increase in line with your production experience. This can be a virtuous circle in which repetitively doing the task builds your experience which allows you to improve the process.

The arguments of experience curve benefits are most often applied to production environments where tasks are repetitive by nature. It may be difficult to conceive of experience benefiting new product development but I argue here that this aspect differentiates companies who are able to create sustained organic growth from those that fail.

The process of new product development is a process just like a production environment. There are variables just as there can be in production and not every new product will follow the same path from conception through innovation to creation, production and its market. There will however be many steps along in the process which will be repeated time and time again in other new product development projects.

Concentrating on these steps allows you to apply project management skills and gain experience curve benefits which can be applied to the process of new product development.

Can you maximise experience benefits in new product development?

The more product development tasks you complete the more practised you become at the required processes.

It can be, and often is, statistically suggested that most new products fail to meet their commercial expectations. It makes good sense therefore to try to produce and launch many new products because you are more likely to have success and will become more proficient at the tasks involved.

The "experience curve effect" applies just as much to the sales and marketing tasks involved in NPD. The more practised your sales and marketing staff are at conceiving and researching new products, producing marketing support information, packaging and merchandising materials, launching and promoting new products into your sales channels and to your target markets and customers, evaluating results etc etc, the better they will carry out these essential tasks.

Successful new product development can be treated just like a production process or steps in a project. If your organisation becomes adept and practised at completing the tasks, you will better be able to create and bring new products to the market.

Incremental Product Development.

Incremental product development means taking lots of little steps forward with your products as opposed to trying to take large strides.

New product development, viewed in the abstract over a time period of years, is a long journey into the technically unknown.

For example: was the route from the electric valve to the silicon microprocessor, or from the horse drawn cart to the latest automobile, from the first Kites to the stealth bomber, from the first "pre industrial revolution" machines to miniaturised nano bots designed to work inside our own blood vessels, known at the start? and how many companies failed when they backed the wrong horse or were unable to change their direction in response to events.

Comparing product development to the "long journey" from the proverb offers insights:

- you do not know over the longer term where your product development journey will take you but you should have a clear direction based on customer driven benefits you are trying to achieve.

- In the short term, your next steps are in sharp focus where you will usually be applying technology that has been well researched and proven to a particular performance problem.

- as with the single step and the comparison to project management, if you focus on the long journey as whole you are likely to end up with many possible scenarios, many unknowns, and many potential failure points. By focusing on the single step (one incremental development) you reduce the number of unknowns, the number of possible scenarios and the number of potential failure modes.

You are simply more likely to succeed taking little steps forward than giant strides. Little steps can be made faster than giant strides, little steps cost less energy than giant strides, you get more chances to change direction (respond to changing conditions and events) between lots of little steps than when taking giant strides.

Summary

I argue in this article that "An incremental approach to new product development, and the associated sales and marketing tasks, is the most logical way to build the competitive position of an organisation." I used the eastern proverb "The longest journey begins with a single step!" and project management terminology to suggest that focus be made on making many small new product development steps, I suggested that experience and practice, "makes perfect". I propose that most new products fail to meet their commercial expectations and so your new product development process should be designed to produce lots of new products with small incremental modifications allowing you to change direction fast and to react and respond to changing events and conditions with the minimum lost time and money.

I do not offer any evidence to support this, it remains just an argument, I have however competed with a company who in retrospect practised the new product development philosophy proposed in this article and can advise that they were and remain a formidable adversary. Further in updating this website monthly with new articles and updating its format and code I am practising what I argue in this article, "oft repeated practice makes perfect". Check back in a few months and tell me if it is working!! :-)

Author: Mark Abraham mark@sticky-marketing.net 30 May 2001

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