I am going to start off with three simple questions.
Q. How do you take your idea to market?
Q. How do you ensure that you have validated that your idea is robust and meets the legal requirements?
Q. How do you know that your idea is what your customer wants or needs and how do you know if it will be accepted in the marketplace?
These seem like simple and obvious questions…Questions which should have straight forward answers... Right?
It is surprising how many people or companies there are who can not answer these simple questions or articulate a logical response.
Even more-so, it is surprising how many organisations are putting themselves at risk or constantly wasting resource on fixing production or in-the-field issues simply because they don’t have a robust process or they just don’t have a process at all.
In my opinion, every business which offers either a product (ie a physical object) or a service must have some form of New Product Development (NPD) process.
So what is NPD?
If you ask 100 people what is NPD, you will most likely receive 100 different responses, but I have found a definition which provides a good overall view.
The Product Development and Management Association (PDMA) defines NPD or New Product Development as:
“The overall process of strategy, organisation, concept generation, product and marketing plan creation and evaluation, and commercialisation of a new product. Also often referred to as product development .”
(Ref: The PDMA Handbook of New Product Development -Third Edition)
In other words, NPD is a methodology which is used to bring a new product to market and ensures that it is relevant for the market, is commercially viable and is delivered with the minimum risk to all stakeholders.
I like to define NPD as:
“It is a risk management tool which provides an effective and efficient method to bring the right product (or service) to market in a way that:
- clearly understands and defines the market needs
- delivers the best in class performance and quality
- provides a framework that is transparent and engages all functions within the business”
If we refer back to my three opening questions, I believe they can be answered in the following way:
Q1. How do you take your idea to market?
=> Ans. By using an NPD process which provides a framework that is transparent and engages all functions within the business.
Q2. How do you ensure that you have validated your idea is robust and meets all of the legal requirements?
=> Ans. By using an NPD process which delivers the best in class performance and quality.
Q3. How do you know that your idea is what your customer wants or needs and how do you know if it will be accepted in the marketplace?
=> Ans. By using an NPD process which has challenged us to clearly understand and define the market needs.
You might be thinking at this point, that all I have done is just repeated myself. We I have in a way…But if you break it down to the lowest common denominator, these three aspects are the key deliverables of an NPD process.
1. understand the market: needs, gaps and the commercial impact.
2. deliver outcomes or objective: best performance and best quality and the right price.
3. risk management: transparency of project and engagement of stakeholders and resources to deliver seamless project execution in a timely manner.
Why is NPD important then?
Companies which embrace NPD methodologies to deliver their innovation pipeline become top performers and enjoy market success. For these top performing companies, their success rates in the marketplace are approximately 3 times greater than the success rates of poor performers. In other words, top performing companies have a success rate due to the benefits of NPD of 78% compared to poor performers who have a success rate of just 24%. (Ref: Idea‐to‐Launch Model by Scott J. Edgett)
The three key deliverables of NPD ensures that an organisation understands its market, delivers favourable outcomes and objectives, and minimises risks to the business and stakeholders.
The Wrap Up.
NPD provides the organisation with the tools, checks and balances to undertake robust and genuine actions towards business growth and provides transparency and clarity of the impact on the business in terms of:
- Resource needs
- Capital Needs
- Forward Planning
- Growth outlook
If you need help with understanding NPD further or with implementing an effective NPD system into your business to support your innovation opportunities to deliver growth, contact me at ANBA Solutions.
What do you think?
Director - ANBA Pty Ltd
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Andrew Baldacchino, applies his industry experience and world class practises in simple, logical and effective ways to help businesses and their people to develop innovative solutions and implement strategies to grow their business, improve sustainability and brand value in the market place.