The document provides guidance on developing a new products pipeline. It emphasizes generating a large number of ideas, focusing on customer insights and problems, and conducting early homework including market assessment and business analysis. The key phases of development are idea generation, customer homework, development, testing and launch. Resources, commitment from leadership, and a product development strategy are among the important company requirements.

1. Developing Your New Products
Pipeline
August 22, 2014

2. My Background
• Passionate about New Products since 1993
• Range of New Product categories
– training pants, feminine protection, meat, dairy,
processed food and educational products
Business development is THE most
exciting, creative and important aspect of
business
2

3. Outline
• Key Success Factors
• Product Development Phases
• New Product Pipeline Components
• Product Development Strategy
• Sources of Ideas
• Company Requirements
• Summary
3

4. Innovate or Die
Radio Shack’s looking to develop a new products pipeline, to
save their dying business.
4

5. When’s the Best Time to Plant a Tree?
• 20 Years Ago
• Today!
5

6. Key Success Factors
• Generate A LOT of Ideas
• Focus on Customer Insight/Problems
• “Early Homework” is Key to Success
– Front Load Ideas, Customer Insight &
Business Analysis
– Back Load Expenses, Risk & Inventory
– Write “Strategic Framework” – Compass
• Iterative Process
6

7. Product Development Phases

8. Idea
Generation
Customer
Homework
Development Testing Launch
8

9. New Product Phases
1) Idea Generation
2) Customer Homework
3) Development
4) Testing
5) Launch
9

10. Early Phases
1) Idea Generation
• New Product Development Strategy
• Product Concepts/Ideas
• Customer Insight/Marketing Research
• Problem Identification
• Positioning & Communication
• “Quick” Business Assessment
2) Customer Homework
Business Case & Product Verification
– Pricing
– Product Costing
– Financial Analysis/Pro Formas
– Product Testing
– Project Management/Timelines
10

11. New Product Phases
Phase 1 - Idea Generation
• Strategic Direction
• Lots of Product Ideas
• Quick Market Assessment
• List of Technical Hurdles
11

12. Idea
Generation
Customer
Homework
Development Testing Launch
12

13. New Product Phases
Phase 2 – Customer Homework
• Product Definition
• Concept Testing
• Product Testing
• Technical Analysis
• Business Case
13

14. New Product Pipeline Components
1. Product Development Strategy
2. Lots of Ideas, Select Strongest
• Focus, Alternative Thinking, Hunger for Innovation
3. Customer Input/Feedback
4. Top-Level Commitment and Support
5. Resources
– People
– $s
– Time
14

15. “Ideal” New Products Pipeline
• Ideas Can Come from Anywhere to Solve a Customer
Problem
• Create a List of Your New Product Ideas
– Generate Alternatives, to Get More Ideas
• Get Customer Feedback
– Focus Groups and/or Concept Testing
– Evaluate and Prioritize
• Select Best Ideas for Refinement & Development
15

16. VISION =
PRODUCT DEVELOPMENT STRATEGY
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17. Product Development Strategy
1. Clear Innovation Objectives
2. Link/Tie Product Innovation of Business Goals
• Must fit overall business development plan
3. Leadership Commitment & Vision
4. Focus on Key Areas of Development
• Adjacencies
• Core Competencies
• Boundaries – what’s in and what’s out
17

18. Product Development Strategy
1. Clear Objectives
Examples
a) 30% of sales from new products in past 3 years
b) # of New Ideas
i. 20 Concepts in Initial Screening per year
ii. 12 concepts in Business Evaluation Phase per year
iii. 6 new product concepts to Development; 2 year development cycle
iv. 2 new product concepts to Market Launch; per year
c) Identify 2 new-to-the world customer platforms in our core
markets
– spend 2,000 “person” hours on foundational research to identify new
technologies tied to those platforms
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19. Product Development Strategy
2. Tie Product Innovation to Business Goals
Examples
• “Increase our market share in the Crime & Terrorism Prevention
Market”
• “Utilize our proprietary expertise in filtration technologies to create
solutions to the Global need for drinkable water”
• “Generate $50 million in revenue by developing HAZMAT suits that
enable doctors and EMTs to safely treat Ebola victims”
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20. Product Development Strategy
3. Senior Management Commitment & Vision
• Vision = Strategy
• Sustained effort and resources
• Decisiveness
– Go/Kill Weak Ideas
• Allocation of Resources To Best Ideas
– $s
– Time/People/Effort
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21. Product Development Strategy
4. Focus on Key Areas of Development
Sensor Technology - Product & Market Matrix
Markets Image Recognition Motion Detection Radar Applications Video Surveillance Climate Monitoring
Products
Factory Automation
Government
Medicine
Robotics
Shipping
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22. Product Development Strategy
4. Focus & Market Evaluation
A. Technology & Core Competencies
• Fit with our core competencies and expertise
• Can we create a competitive advantage? Do we have one?
• Are changes in technology creating new market opportunities?
B. Market Size and Attractiveness
• Rate of Growth
• Strength/Weakness of Competitors
• Value-to-Customers/Margins
C. Sales/Marketing Leverage
• Our customer relationships
• Sales force/Distribution channels
22

23. SEEMS DAUNTING, BUT…..
ONCE YOU GET STARTED, YOU HAVE LOTS OF
SOURCES OF IDEAS
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24. SOURCES OF IDEAS
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25. Sources of Ideas
1. Customer Insight/Unmet Needs
2. Industry Trends
3. Competitive Analysis
4. Core Competencies
5. Changing Technologies
6. Changes (Just) Outside Market
7. Open Innovation
8. Your Employees
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26. Sources of Ideas
Customer Insight/Unmet Needs
• Spend Time with Customers
– Observing
– Asking Questions
– Listening
– Watching for Changes
– Identifying Problems
Ideas usually come from inside an industry,
based on things anyone “inside” could see.
26

27. You can observe a lot
just by watching.
- Yogi Berra

28. Cataract Surgery
• Late 1950s, William Connor was looking for a common
“problem” in the medical industry
– One part of surgery was difficult
– Cut a ligament, tie blood vessels/risk bleeding
– Surgeons hated cutting, made them nervous
• An enzyme that eliminated the need for cutting the
ligament, isolated in 1890
– Refrigeration was not available in 1890
• Enzyme not commercialized
– By the 1950s, refrigeration was readily available
• Use of enzyme adopted quickly by all eye surgeons
• Sold Alcon Laboratories 20 years later to Nestle in 1977
Source – Innovation and Entrepreneurship, Peter F. Drucker, 1985
28

29. Customer Insight/Unmet Needs
Pink to White
Ceiling Paint
29

30. Customer Insight/Unmet Needs
DeWalt Worksite Radio
30

31. 31

32. Industry Trends

33. Sources of Ideas
Industry Trends - Big Shifts in Your Market
• List the Biggest Shifts in Your Market
– What opportunities do these create?
– Who is capitalizing on them?
– How did they do it?
33

34. Food Industry Trends
1) Simple Meal Preparation & Assembly
2) “Breakfast is the Most Important Meal of the
Day!!”
3) More Snacking
4) Consumer Tastes Getting More Global
5) Single Portions/One-Person Households
6) Baby Boomers Want Healthy Food Choices
34

35. Food Industry Trends
Baby Boomers Looking for Healthy Meal
Options
Mayo Clinic’s Top 5 Foods to Lower Cholesterol
• Oatmeal, Oat Bran and High-Fiber Foods
• Fish and Omega-3 Fatty Acids
• Walnuts, Almonds & Other Nuts
• Olive Oil
• Foods with Added Plant Sterols and Stanols
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36. More Snacking
36

37. Food Industry Trends –
Simple Meal Preparation & Assembly
Current “Convenient Preparation” Products
• Frozen pizza crusts
• Fresh, pre-cut fruits and vegetables
• Pre-Assembled/Pre-Packaged raw ingredients
• “Sauce-Starters”
37

38. Top Trends in Building Materials
• “Design Build” will continue to grow.
– Design and construction services under one
contract with a single point of responsibility.
• Green Building will continue to grow and get
more technical.
• Single-family housing will grow and continue
to segment.
38

39. Top Trends in Building Materials
• “Design Build” will continue to grow.
– Brainstorm products specifically to appeal to “Design Build”
segment
• Understand their problems, brainstorm and research new product
ideas for this segment
• Go to Convention, Talk to Customers
• Green Building will continue to grow and get more
technical.
• Learn what “green architects” are looking for, and create product
ideas to solve their problems.
• Single-family housing will grow and continue to segment.
• Study the different segments of single-family homes, and brainstorm
new product ideas for each individual segment.
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40. Your Employees
• Host an Innovation Fair
• Devote 10% of Time to Own Ideas
• System to Capture Internal Ideas
• Off-Site Ideation Event
40

41. Sources of Ideas
Competitive Analysis
• What are competitors having success with?
– Why?
– Where are they failing?
• SWOT Analysis
– Major Competitors
– What would YOU do in their shoes?
• Industry Trends
41

42. Exercise:
Competitive Analysis
• List Your Top 3 Competitors
• What Are Strengths and Weaknesses of Each?
• How is each succeeding now?
• What is each failing at, now?
Does this give you any thoughts for new
product ideas?
42

43. Sources of Ideas
Core Competencies
• What do you do better than anyone else?
• What are your strengths in product, process,
industry knowledge or customer insight?
43

44. Your Core Competencies
Reservation System
for Travel Agents
Travelocity®
44

45. Exercise:
Core Competencies
• List Your Top Core Competencies
– How could you use these competencies to solve a
customer problem?
– How can you improve or develop these core
competencies, into new technologies, capabilities
or applications to solve problems?
What product ideas come from your
core competencies?
45

46. External Sources of Ideas
• Partners and Vendors
• Small Businesses and Start-Ups
• Outside Idea Contests
46

47. Changing Technologies
How are changing technologies affecting your
industry?
– Wireless Solutions
– Nanotechnologies
– Automation
– Packaging Technologies
– Software
– New Materials
47

48. Exercise:
Changing Technologies
List the Technologies that Are Changing Your
Business Environment
What Problems Are These Technologies
Creating?
What Problems Could they Help Solve?
48

49. ZEO Sleep Management System
49

50. COMPANY REQUIREMENTS
50

51. Company Requirements
• Resources
• Focused Attention, Time & People
• Disciplined Collection Process
• Customer Insight
• Problem-Focused Brainstorming/Alternatives
• Vision = Strategy
• Courage & Long-Term Commitment
51

52. Company Requirements
Resources
• $s, Budget, % of Sales
– Scale of Your Business
52

53. Company Requirements
Focused Attention, Time & People
• Accountability
• Internal Innovation “Champions”
• Performance Objectives
• Senior Management
– Players and/or Support
• Regular Monthly Progress
53

54. Company Requirements
Disciplined Collection Process
• Good Ideas Captured
• Systematic Evaluation
• Customer Feedback
• Testing, Winnowing and Approving Ideas
54

55. Company Requirements
Customer Insight
• Create Feedback Loops
• Understand Your Customers’ Problems
• Define Their Role in the Process
55

56. Company Requirements
Problem Focused Brainstorming
• Best Ideas Solve Real Problems
• Identifying Problems Often 1st Step
• Focused Problem-Solving Sessions
• Exercise
– List Top 5 Problems Your Customers Have with
Your Products Now
56

57. Exercise:
Top 5 Problems
• What Your Customers’ Problems Are?
• Organize a Monthly Brainstorming Session to
“Attack”, Find Solutions for Each Problem
• Problem Solving Exercise
– List Your Customers Top 5 Problems
– Brainstorm Long List of Possible Solutions to Each
Customer Problem
57

58. Company Requirements
Vision
• “28% of Revenue and Profits from New
Products”
• Instill Hunger for New Products in Your
Company
– People
– Culture
– Curiosity
58

59. Exercise:
Vision
Question: Who is Hungry for Innovation Now?
• How can you encourage and motivate your teams to be
curious?
• Do you set aside time for your people to innovative, think
and investigate new product opportunities?
• Who are the best people in your company to lead the
innovation process?
• What outside help do you need?
59

60. Company Requirements
Courage & Commitment
• Decisiveness
– Commit to Good Ideas
– Kill Bad Ideas
– Prioritize/Rank
• Allocate Resources
• Patience, Persistence & Perseverance
60

61. Exercise:
Courage & Commitment
What Courageous Decisions Need to Be Made?
• Who Makes the Decision to Start and Terminate New
Product Projects?
• How are Decisions about Resource Allocation Made?
– By Whom?
– When?
• Does Your Company Recommit, in the Face of New
Products Setbacks?
61

62. Company Requirements
Courage & Long-Term Commitment
• Need for Innovation Never Goes Away
• Can’t be Half-Hearted
62

63. Summary
• New Products Pipeline is a “List” of Customer Focused
Ideas
• Ratio of Concepts to Market Launch is about 10 to 1
– So Generate a Lot of Ideas
• Build Customer Insight into Process, Early & Often
• Just as Important to “Kill” Bad Ideas, as Selecting the
Best
Good, Solid, Ideas that Solve Problems Win
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