Over my 30 year career in the consumer technology and hardware business, the transition from analog to digital technology provided the biggest challenges and opportunities. The onset of digital created the capability to create, gather, and evaluate information at incredible speeds. Analog was slow motion compared to digital, which is explosively fast, overflowing with information, massively communicated, and instantly analyzed. Bottom line: digital technology has created a business culture of speed.
- Uncover your companies innovation processes.
- Move faster from ideation to product launch
- Analyze Instantly
This new culture affected decision making
Although the decision components are still the same today:
- Identify and understand the options
- Evaluate the appropriate data
Moving at digital speed has also dramatically accelerated the process of making decisions.
How much? Inventory replenishment is a good example. From my experience in the TV Industry, purchase decisions were made monthly. Sales Data was only available monthly. Today, replenishment systems can potentially purchase daily – a 30 fold improvement. Digital technology has slashed hardware development cycles. Multi-purpose silicon has converged product categories which are continuously challenged for differentiation. As camcorders became digital cameras and cameras became smart phones, rapidly changing customer requirements have become the norm.
Product Development speed must also accelerate
Good development still requires answers to questions like:
- What are the most attractive concepts?
- What are the proper features?
- How much should be charged?
But, the market is different now. It’s fast. A good idea is only useful if it can be brought to market quickly enough.
Winning “time to market” is critical to market share and profitability. Fast followers lose. Product life cycles are shorter and, therefore, the window for profit is also shorter.
First to market with the right product is a key to the sustainable differentiation. And, finally, just to be competitive, you must do everything in half the time or you will lose the market entirely
Product Development is Sequential and Not Always Fast Enough
The decision making process for new products and services has struggled to be competitive. My personal experience in large multinational company gave me a perspective on the difficulties of staying competitive. The computer manufacturing model and low cost of off-shore manufacturers have commoditized cash cows and have put pressure on finding sustainable new features that could quickly be used for brand differentiation. Discovering those differentiating nuggets was always a challenge.
Product Development is still, essentially, a sequential process. But now it’s just too slow. Big Company resources are often bogged down in big company business silos, committees and bureaucracies, which is a cancer for time to market.
The typical path to innovation is too slow
- Large matrixed organization are often too siloed to effectively bring innovation to market
- Time to market is often a cancer to innovation
Typical development steps may need passage through a series of stage gate approvals and sign offs, rigorous concept tests with focus groups, on-line surveys which can take weeks to prepare, more focus groups with prototypes, and market testing to verify the sales approach and pricing. Although these steps are designed to mitigate risk, they often destroy the product as the market flies relentlessly ahead. And your competition is always trying to beat you to market.
How fast is the market moving now? The classic shortening lifecycle example is the packaged media migration of platforms. Depending on your data source, VHS lasted 20 years. DVD: 15 years, Blu-ray: about 8 years (and is being over taken by online media). The profit opportunity is squeezed.
This whole process can be streamlined
IPSOS Vantis has developed a succinct process and product called Crescendo, which uses a few concurrent steps and a strong management commitment to create effective results in a short time period. The Vantis methodology is to execute many steps simultaneously and avoid sequential repetition, down time, and interim reporting.
Critically important is the management commitment to create a cross functional operating team. This group is not a standing committee but is rather a Tiger Team singularly focused on one project. The short term personnel commitment is high, but the efficiency saves money and time. It has the potential of a 50-75% time reduction.
Vantis acts as the “credible outside agent” and guides the team. This helps to manage intra-company issues. Vantis also brings specific process and technical expertise and does evaluation and revision ON THE FLY. Even though the execution period is short, the results are both qualitative and quantitative tests.
Finally, the results are benchmarked against existing products from an extensive database. This benchmarking is predictive of potential product success in the market and is critical for getting top management buy in for a go /no/go decision in a very compressed process.
Product development can be extremely challenging. It’s exciting to see new tools being developed which can help to insure success.
If you are interested in learning more about the methodology described in this blog post, please go to the “Crescendo” link to hear a webinar describing a real life case study on the utility of the tool.
– Jeff Cove, Business Creation Professional
J.Cove and Associates, LLC
Jeff Cove – LinkedIn