BS4163 Business Creativity

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BS4163 Business Creativity

• Innovation and the new product development
  process
• Andrew Turnbull

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Outline
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PDMA Product Development and Management
Association
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Study of New Product Development (NPD)
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Booz Allen Hamilton (1968)
Decision/Outputs
Model Stage
Information Inputs
Market opportunities for new products, which
meet corporate objectives.
New Product Strategy
Corporate objectives Market analysis Techno-envir
onmental scanning Competitor analysis.
Body of acceptable ideas.
Idea Generation
Customer needs Technological opportunities in
targeted markets.
Acceptable ideas for further development work.
Screening
Market technical assessment Initial financial
assessment Corporate fit.
Identification of Key product dimensions Key
technical costs Target markets and potential.
Concept Development
Customer needs analysis Market
analysis Technical analysis.
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Decision/Outputs
Model Stage
Information Inputs
GO/NO GO decision Initial marketing plan and
budget Product development plan.
Business Analysis
Explicit market analysis including
potential Explicit technical feasibility
analysis, including costs Production
implications Check with corporate objectives.
Finalised product Production plan Marketing plan
Product Development
Market research Production requirements
Product take up Final adjustments to the
marketing plan.
Market Testing

• Market research
• Finalised product
• Marketing plan
• Promotion
• Price
• Distribution.

Adjustments as a result of take up Long term
commitment.
Launch (commercialisation)
Results of test marketing.
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Next Milestone
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The State-Gate New Product Process, with Six
Stages and Gates
Stage Gate Articles, Research, Knowledge and
Working Papers
Stage Gate Articles, Research, Knowledge and
Working Papers
Stage Gate Articles, Research, Knowledge and
Working Papers
Technical concept definition production possibili
ty
Production technical activities
In-house product tests
Preliminary technical appraisal
Trial/test production
Full production
Product development
Gate 3 Project definition pre-development busine
ss analysis
Gate 6 Pre- commercialisation business analysis
Gate 2 Preliminary assessment
Gate 1 Initial screen
Review adjust
Gate 4 Pre-test review
Gate 5 Pre-trial review
Idea
Marketing activities
Concept identification concept testing
Customer tests of product
Development of marketing plan
Preliminary market appraisal
Test market
Market launch
Stage l Assessment ll Definition lll
Development lV Testing V Trial Vl
Commercialisation
Source Cooper R.G., The New Product Process A
decision Guide for Management, Journal of
Marketing Management, 1988,3, 238-255
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Coopers Stage Gate Model Today

• Rugby scrum approach as opposed to the relay race
  approach of the Booz Allen and Hamilton model.
• Stage Gate - official site - Product Development
  Institute

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The financial impact of shorter time to market
(As cited in Shepherd Ahmed, (2000) pg 170)
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Stages
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Costs and risk
High
Costs
Risks
Low
No. of stages/time
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Funnel not tunnel
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Key themes from the product development literature
Process timing pre-development activities developm
ent activities marketing activities launch
activities
Organisational structure mechanism style
Management authority support technical
aspects communication
People multifunctional co-ordination product
champion communication
Information general marketing external communicati
on
Successful new products
Strategy orientation objectives synergy product
characteristics
Source Hart (1995) in Bruce Biemans, Wiley
Trott (2005), Prentice Hall
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Efficiency and creativity
Managing the tension between the need for
creativity and efficiency
Efficiency gains The efficient day-to-day operations within an organisation require stable routines. This is usually achieved in stable and controlled environments The development of new products and services requires creativity and room to try out new ideas. This is usually achieved in a loose and flexible environment Creativity gains
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Technology push vs. market pull
Source Adapted from B. Rothwell and W. Zegveld
(1985) Reindustrialisation and Technology,
Longman, London.
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Pearsons uncertainty map
High
Uncertainty about output
Low
Low
High
As cited in Trott, P. (2008) Innovation
Management and New Product Development. FT
Prentice Hall, Harlow England
Uncertainty about process
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Revamps vs NPD
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Characteristics of Successful Product Innovators
Old Product Development New Product Development
Strategy Top management determines explicit plans and budgets for development work Top management sets broad objectives for organic growth
Shared values Top management fosters understanding of the need for product evolution Top management fosters understanding of the need for really new products
Style Top management is support -tive but does not meddle in development projects. Progress is checked regularly Top management is intimately involved, often on a day to day basis
Structure Top management uses the existing organisation which acknowledges the need to manage updates within a matrix of responsibilities Top management uses new organisational forms, such as business teams, to nurture important developments outside the mainstream organisation
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Characteristics of Successful Product Innovators
Old Product Development New Product Development
Skills There is efficient product planning using sophisticated market analysis techniques Techno-commercial idea generation, screening and testing in concept. Development work often based on new technology
Staff Existing line managers are used with some staff advice. When product leaders are appointed, they may be quite junior but receive a commission from top management. An intrapreneur is allowed to select his/her own team with whom rewards are shared. Failures are viewed as a learning experience
Systems Loose-tight using simultaneous or rugby scrum approach. More tight than loose. Loose-tight using simultaneous or rugby scrum approach. More loose than tight.
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The Performance Diamond
Businesss new product performance
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Portfolio Management
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Dynamic process
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Its about getting your ducks lined up
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Evaluation criteria for projects
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Evaluation criteria for projects (cont.)
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Budgets allocated according to strategic
priority
Project Score Rank
Alpha Beta Gamma Delta
Projects are scored and ranked within allocated
budgets. The most promising projects are
selected.
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Pharmaceutical RD by type
Source ABPI (1993) Pharma Facts and Figures,
Association of the British Pharmaceutical
Industry, London.
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Importance of Portfolio Management
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Importance of Portfolio Management
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Platform Development
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VAG interfirm product platform development
Single platform Many common parts
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Platform development creates the architecture for
a family of products
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Brand positioning
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Product platforms
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The organisations reputation for innovation
Ability to attract creative people
High morale and retention of creative people
Organisational encouragement of creativity and
innovation
Motivates people within the organisation and
reduces frustration
Development of innovative products
A willingness within the organisation to accept
new ideas
Fig 3.7 Propagating a virtuous circle of
innovation.
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References

• Chao, R. O., Kavadias, S. (2008). A Theoretical
  Framework for Managing the New Product
  Development Portfolio When and How to Use
  Strategic Buckets. Management Science, 54(5),
  907-921. Retrieved from EBSCOhost.
• Cooper, R.G.,(1988)The New Product Process A
  decision Guide for Management, Journal of
  Marketing Management,,3, 238-255
• Cooper, R.G. (2008) Perspective The Stage-Gate
  Idea to launch Process Update, Whats New, and
  NexGen Systems. Journal of Product Innovation
  management 25 213 -232
• Cooper, R, Edgett, S, Kleinschmidt, (2001),
  'Portfolio management for new product
  development results of an industry practices
  study', RD Management, 31, 4, p. 361, Business
  Source Premier, EBSCOhost, viewed 12 September
  2011.
• Cooper, R, Edgett, S, Kleinschmidt, (2007),
  "Winning Businesses in Product Development The
  Critical Success Factors" Revisited. Research
  Technology Management, May/Jun, Vol. 50 Issue 3,
  p60-61, 2p
• Johne A. Snelson P.(1988), Successful Product
  Innovation in UK and US Firms, European Journal
  of Marketing 24,12
• PDMA Product Development and Management
  Association accessed 29.8.11
• Pons, D. (2008) Project management for new
  product development. Project Management Journal,
  Jun, Vol. 39 Issue 2, p82-97
• Shepherd, C. Ahmed P.K (2000). NPD frameworks
  a holistic examination. European Journal of
  Innovation Management V3. No 3. pp160-173.
• Trott, P. (2008) Innovation Management and New
  Product Development. FT Prentice Hall, Harlow
  England. 4th edition.