Title: MPO Markt- en productontwikkeling
1MPOMarkt- en productontwikkeling
2 februari 2001
2Contents
Part 1
- Product planning
- Idea generation
- Case 1 De Friesland Zorgverzekeraar
Part 2
- Success factors
- Idea evaluation and selection
- Tool NewProd
- Case 2 PTT Post BU Brieven
3Product management managing the entire life cycle
Product life cycle
Withdrawal
Introduction
Operation
Development
Phase out
Execution Project organisation
Execution Standing organisation
4Development 3 sub-fases
Operation
Development
Phase Out
- Development break through products
- Development platform products
- Development derivative products
Pizza-box interface
Product planning
- Development product technology
- Development process technology
5Example HP - Filling the pizza bins
6Product planning Portfolio planning
Account 1 Account 2 Account 3 . . . Account
n Account n1 Account n2
Product planning
- Which products need to be. . .
- Phased out?
- Added to the portfolio?
Product 1 Product 2 Product 3 . . . Product
n Product n1 Product n2
gt
P
7Product development continuous renewal
Introduction
Withdrawal
Operation
Development
Phase out
Development
Development
8Example Motorola - Life cycle planning
9Product family concept
10Program management
What has the portfolio to look like in 1 year, 3
years and 10 years?
Program 1
Program 2
1 year
3 years
10 years
11From vision to new ideas
12The idea funnel
From vision to new ideas
Assessment of future technological developments
Assessment of future market developments
13The idea funnel
Each selected idea constitutes the input of a new
project
Project definition
- Brief description of product idea
- Corporate mission
- Primary target group
- Secundary target group
- Assumptions
- Stakeholders
14The idea funnel
A 3-step process
Generate and select alternative strategies
Generate and select search fields
Generate and select product ideas
15Generating and selecting ideas a three-step
process
Strategy
Selected search fields
Selected ideas
16The selection process
Market potential
Technical complexity
- Categorise ideas
- Create balanced portfolio
- Qualify ideas per category
- Use category-specific criteria
- Test high-potential high-risk ideas that require
substantial investment
17Summary product planning
- Research and commercial projects
- Product families
- Mix of projects
- Product and process development
- Projects and programs
18Contents
Part 1
- Product planning
- Idea generation
- Case 1 De Friesland Zorgverzekeraar
Part 2
- Success factors
- Idea evaluation and selection
- Tool NewProd
- Case 2 PTT Post BU Brieven
19Idea generation
Product planning
Idea generation
Idea selection
20Example 3M - How to keep the innovative spirit
alive
- If management is intolerant and destructively
critical when mistakes are made, I think it kills
initiative. - William McKnight, the spiritual father of 3M
21Example 3M - Two ground rules
- 25 Sales need to come from products introduced
in the last five years - 15 Time may be spend on bootlegging
22Example 3M - Two ground rules
- 25 Sales need to come from products introduced
in the last five years - 15 Time may be spend on bootlegging
Post-it Notes The Invention of 3M's Post-it Notes
began when Art Fry dug out an old idea for an
adhesive, because the bookmarks for his choir
hymnal wouldn't stay in place. The idea, applying
a strip of repositionable adhesive to each sheet
in a note pad became a practical innovation now
used in homes and offices worldwide.
23Creativity as a means of creating new knowledge
Creative problem solving techniques
Modelling techniques
- Creativity is seen as the cause and successful
innovation as the effect - Nyström (1979)
24Need for knowledge creation
25Creative thinking
- I like to think of creative thinking as the sex
of our mental lives - Roger von Oech
26How the printing press and movable type was
invented
27The creative cycle
28Different ways of thinking
- Right part of the brain à creative-intuitive
thinking - Left part of the bain à logical-rational thinking
29Mental locks
- The right answer
- Thats not logical
- Follow the rules
- Be practical
- Play is frivolous
- That is not my area
- Dont be foolish
- Avoid ambiguity
- To err is wrong
- Im not creative
30Stepping stone
31The idea funnel
- Two classes of techniques
- Divergent
- Convergent
The idea funnel
32Categories of divergent techniques
- Associative techniques
- Creative confrontation techniques
- Systematic techniques
33Associative techniques
- Based on the following ways of thinking
- Association
- Provocation
34Association
- Stimulate creativity by thinking along
association patterns like - Opposites (e.g. high and low, thick and thin)
- Part and whole (e.g. finger and hand, shoelace
and shoe) - Proximity in time and space (e.g.station and
train, pen and ink) - Cause and effect (e.g. wound and pain)
- Form (e.g. swan and duck)
- Sound (life and wife)
35Provocation
- Stimulate creativity by asking provoking
questions - What happens if you turn the problem around?
- How would superman do this?
- What is the worst solution you can think of?
36Provocation slay a sacred cow
- Groningen is NO fun as a student!!!
37Creative confrontation techniques
- Stimulate creativity by confronting the problem
with - Words that contain analogies
- Randomly chosen words
38Analogies
- Direct analogies
- Personal analogies
- Symbolic analogies
- Fantasy analogies
39Direct analogies
40Creative problem solving techniques
Creative confrontation How do the communication
needs of a marathon runner, a soldier, a car
service station, an ambulance, an insurance
agent, and so on compare to those of our
customers. . .?
At the Rotterdam marathon every runner had an
electronic communication device tied to one of
her/her shoelaces
McLaren services its cars through a satelite
link-up
41Why is not everybody using these techniques?
- Techniques are often
- Unknown
- Misused
- The reasons for this are
- Insufficient training
- Inexperience
- Resistance to change
42Summary creative problem solving techniques
- Product ideas may have different sources
- Idea generation may be of an ad-hoc or structural
nature - Creativity is used throughout the NBD process,
but most noticeable during the fuzzy front end - Creative problem solving techniques stimulate
creativity by unlocking mental locks - Creative problem solving techniques may be
divergent or convergent in nature - Creative problem solving techniques are often
unknown or misused
43Contents
Part 1
- Product planning
- Idea generation
- Case 1 De Friesland Zorgverzekeraar
Part 2
- Success factors
- Idea evaluation and selection
- Tool NewProd
- Case 2 PTT Post BU Brieven
44Background
- Company
- Health care insurance company
- 80 Market share in Friesland
- Social position towards health care insurance
- Market developments
- Liberalisation of health care insurances
- Cross-regional competition
45Example strategy - search field - idea
Strategy
Selected search fields
Selected ideas
To capture the market for collectivities by
delivering additional services in order to
counter competition
Example Administrative services that make life
easier for companies with collective insurance
Example Automatic mutation process for companies
with a changeable workforce
46Approach
- 6 Sessions
- Board of directors, department heads, employees
customers - Generate and select service elements
- Create packages of service elements
- Evaluate packages in two rounds
47Process
48Summary De Friesland Zorgverzekeraar case
- No real sense of urgency
- Fundamental disagreement concerning social
position - Internal acceptance of future development
projects - Linking market needs to company means
- Getting people out of their work process
- Short divergence and convergence cycles
49MPOMarkt- en productontwikkeling
2 februari 2001
50Contents
Part 1
- Product planning
- Idea generation
- Case 1 De Friesland Zoregverzekeraar
Part 2
- Success factors
- Idea evaluation and selection
- Tool NewProd
- Case 2 PTT Post BU Brieven
51Idea evaluation and selection
Product planning
Idea generation
Idea selection
52A common falancy too many projects
53Innovation is a risky excercise. . .
- Despite more than three decades of empirical
research designed to determine the
characteristics of technically progressive
firms and the factors associated with success
and failure in innovation, there still exists no
precise prescription or recipe for successful
innovation. - Rothwell (1992)
39
Failure rate of fully developed products
24
54Many products also fail before introduction!
The 'mortality curve'
11
Number of ideas, concepts or projects
46 of all the resources allocated to product
innovation
3
1.3
1
Screening and evaluation
Business analysis
Development
Testing
Commercialisation
55Bottom line definition of excellence
The 'mortality curve'
Number of ideas, concepts or projects
Overall success rate
Success rate of best in class companies
Screening and evaluation
Business analysis
Development
Testing
Commer-cialisation
56Luck, science or art?
- There is nothing more difficult to plan, more
doubtful of success, nor more dangerous to manage
than the creation of a new system - Machiavelli, Il Principe
MPO
57Success factors SAPPHO
had a much better understanding of user needs
made more use of outside technology and
scientific advice
payed more attention to marketing and publicity
involved key individuals with more seniority
and authority
performed their development work more efficiently
but not necessarily more quickly
58Success factors Stanford Innovation Project
- Successful products had the following success
factors in common
high market proficiency and significant sales
resources
early introduction
well planned and executed RD process
high performance to cost ration through in-depth
understanding of the customer and the market place
high level of top management support
high synergy with existing strengths
high contribution margin
well interfaced and coordinated functions
59Success factors NewProd
- The most important factors were found to be
product superiority and uniqueness
project/ company fit
market need, size and growth
economic advantage
newness to the firm
technological compatibility
competitive market,
product customness
60Summary success factors
- Success does not depend on mere chance
- No one factor is solely responsible for success
- Lack of understanding of strengths and weaknesses
- Critical activities are often omitted or poorly
executed
61Contents
Part 1
- Product planning
- Idea generation
- Case 1 De Friesland Zorgverzekeraar
Part 2
- Success factors
- Idea evaluation and selection
- Tool NewProd
- Case 2 PTT Post BU Brieven
62Productidea selection tool NewProd
- Model predicts success or failure with an
accuracy of 84 - Model links factors to financial performance
based on experiences with 200 real product
introductions
63NewProd factors 4 aspects of success
64Applying NewProd
Teammembers fill in standard questionnaire
Scores are entered in NewProd model
NewProd predicts chance of success
NewProds prediction of successes and failures is
correct in 84 out of 100 cases
65NewProd process
- Brief the project leader on NewProd and gather
information about the project - Adapt the questionnaire to the specific context
of the project - Select and invite the participants
- Instruct participants and discuss definitions
- Have participants fill in the questionnaire
- Check if all questionnaires have been filled in
completely - Process the data and analyse the results
- Present the results
66NewProd outcomes
- Prediction of success or failure
- Areas that are strengths or weaknesses
- Areas where information is lacking
- Areas where consensus is lacking
- Team building
67Benefits of NewProd
- Enhances objectivity of the judgement
- Systemizes selection and evaluation process
- Focuses discussion
- Focuses information gathering
- Involves different functional areas and
hierarchial levels - Reduces complexity decision making
68Drawbacks of NewProd
- NewProd does
- Not yield a very profound evaluation
- Not advise how to improve the project
- Not take organisational aspects into account
- Probably wrongly predict me-too project
development projects - Not learn from new projects
69Summary product idea evaluation and selection
- Products often fail
- Success may be predicted
- Evaluation and selection as early as possible
- Different tools exist (e.g. NewProd)
- Tools structure evaluation and selection process
70Contents
Part 1
- Product planning
- Idea generation
- Case 1 De Friesland Zorgverzekeraar
Part 2
- Success factors
- Idea evaluation and selection
- Tool NewProd
- Case 2 PTT Post BU Brieven
71PTT Post the problem
- Product ideas from
- Account managers
- Product managers
?
No integral prioritisation of ideas
?
No match with development capacity
Bottleneck
72Consequences
Bottleneck in development of new productideas
Delay in realisation of development
projects Deadlines agreed with sales and
customers can not be met
Priority is given to the loudest mouth
73Different options
Chosen option
Smart development
Structural portfolio planning
Increase capacity PD department
- Reuse by
- modularization
- Knowledge management
- Speed up by
- parallelization
- process reengineering
- etc.
- Predict success chance
- Prioritise projects
- importance
- urgency
- Match with development capacity
- Outsource development
- Increase department
74Structural portfolio planning
Generate ideas (e.g. as part of an product/
account plan)
AM
PM
Input ideas (described according to template)
Integrate and determine required capacity (in
preparation of strategic meeting)
Evaluate and select ideas
Develop
75Match with existing processes
Generate ideas
AM
PM
Input ideas
Categorise ideas
Custom build for one customer
Generic product ideas
RD ideas
Qualification by NewProd
Bid/ no bid review
76Match with existing processes
Custom build for one customer
Generic product ideas
RD ideas
J
N
Capacity requirement larger than X?
N
Mid-term commercial potential?
J
NewProd test
Bid/ no bid review
Strategic management decision
Selection and prioritization by management
77Match with existing processes
Selection and prioritization by MT Commercie
300 of available capacity
Selection and prioritization by Topplatform
150 of available capacity
100 of available capacity
78NewProd pilot Frankeerservice
- Ease of use
- Big envelop to collect all mail
- Business-like presentation
- Deferred payment with cost overview
- Entry product
- New logistic process
79Success chance Frankeerservice
Frankeerservice has a chance of success of 73
80Success factors
81Summary of strengths and weaknesses
Product
Technology
- Average price-performance ratio
- New
- Not complex
- Bad technological fit
- Unclear specifications
Organisation
Market
Right competencies Strong competitive position
Small Stable Existing market need Little
competition
82Impact of price performance ratio
83Impact of organisational fit
84Impact of market potential
85Evaluation of NewProd pilot
- Een team wordt gedwongen om een productidee
aan de hand van een aantal gezichtspunten
kritisch tegen het licht te houden. Daar
ontbreekt het in de huidige praktijk nogal eens
aan.
86Summary PTT Post case
- Lack of prioritization constitutes real problem
for project/program managers - Teamwork is most important benefit of tool like
NewProd - Evaluation of single project give good assessment
product development organisation