New Product Development ,based on the corresponding HBR article .

1. Six myths of Product Development
Group 2
Raghav
Rishav
Shivali
Somya
Suryoday
Ujjwal

2. The conventional approach
New Product Development (NPD) is treated
like a manufacturing process
The Outcome
• Pressure to deliver on predictable schedules
• Minimize cost ,schedule variances and waste
• This impedes the NPD process
Six Fallacies of New Product Development
High Utilization
can improve
performance
Large work
batches can
improve
performance
Sticking to
Original
Development
Plan
Start early,
finish early
Customers like
more features
Need to get
everything right
the first time
Introduction

3. Myth 1-High Utilization of Resources will Improve Performance
Rationale provided
• Projects take longer time to complete when resources are not fully utilized .
• More the time taken, more will be the cost of resources incurred .
• Low utilization is a result of a lack of discipline .
Reasons for Fallacy
• Ignoring intrinsic Variability of Work due to the nature of the process
• Not understanding how queues affect economic performance .
• Low utilization means high WIP inventory ,but WIP cannot be seen in a product
development process
• The role of how performance is measured and rewarded

4. Causes of Fallacy
Ignoring intrinsic Variability in the work
• Many aspects of NPD are by their nature, variable .
• In a transaction processing approach, any increase in work (utilization) leads to a linear
increase in the time required .
• However, in cases of high variability ,an increase in utilization leads to a non-linear increase in
waiting time
Lack of understanding of economic performance
• High utilization leads to queuing of work ,causing delays .
• Queues delay feedback ,which lead to problems getting detected in advanced stages, resulting
in a higher cost of resolving them .
• Managers may not understand and measure the economic costs of queues and trade-off
between underutilization and queuing costs .
Measuring and accounting for WIP is not possible
• Unlike mfg process , in and NPD, the inventory is intangible-information .
• Measuring and accounting for this information is mostly subjective and invisible .

5. Suggestions for Improvement
Change the MIS
• Need to look at redefining the performance measures and reward systems .
Selectively Increase capacity
• Monitor and increase capacity in high utilization and bottleneck processes .
• Easiest to implement in areas where testing is carried out in an automated manner .
Limit the no. of active projects
• This will ensure lesser chances of overshooting the deadlines ,sharper focus, and clearer
priorities .
Make the WIP easier to see
•Use of visual control boards, e.g. Post-it notes
Add a capacity buffer
•Examples of Google, 3M-but may not be easy to implement

6. Myth 2: Processing work in large batches improves the
economics of process
• Another cause of queues in product development is BATCH SIZE
• For a 200 component product either build all 200 parts before
testing or build 20 before testing and therefore decrease batch
size by 90%
• Changes in batch size affect
• Transaction Cost
• Holding Cost

7. Myth 3: Our development plan is great; we just need to
stick to it
• Misconception: Once the plan is
made, sticking to it crucial
• Applicable only when tasks are highly
repetitive, like manufacturing
routine products
• In NPD, requirements change at
every step; this myth results in poor
product innovation
• Regardless of the plan, adaption is
needed to tackle the problems
• Regardless of the perfection of the
plan, flaws would be there; test and
refinement are needed
• Need to keep flexibility in cost
incurred during product
development, to add value to final
product
• Hard to understand customer needs
at the outset f product development;
also competition may increase while
development stage, changes need to
be made accordingly

8. Myth 4: The sooner the project is started, the sooner it
will be finished
• Common Misconception: We have time to kill, lets start a new project.
After all anything accomplished on the new project is work today won’t
have to be done tomorrow
• Wrong: Any preparation done for a newborn project can easily be
rendered obsolete. Newborn projects dilutes the resource pool
• Hard Truth: Idle time is anathema, but we have to stick to unfinished
projects so that we do not spend unnecessary time and money
• Little's Law: Cycle time is proportional to the size of the queue divided
by the proportional rate
• You can shorten the cycle time by raising the processing rate or by
reducing the number of jobs under way

9. Myth 5:The More features we put into a product, the more
customers will like it
• Misconception: Adding features creates value for customers
• Results in extremely complicated offerings
• Examples: Remotes, Car Panels etc
• Outliers : Auto setting Hi-fi systems by Bang & Olufsen
• To really implement the “less can be more” requires effort in:
• Defining the problem
• Determining what to hide or omit

10. Myth 5:The More features we put into a product, the more
customers will like it
a) Define the Problem
• Most important yet underrated part of innovation process
• Essential for developing a clear understanding of what the goals
are and generate the hypothesis that van be tested and refined
through experiments
• Involves deep research constant experimentation and
understanding what delights the customer
• Involves the observation and interview of future users, research on
current competitors products and extensive secondary research

11. Myth 5:The More features we put into a product, the more
customers will like it
a) Determining what to hide or omit
• “Showing –off” technical solutions not preferred by consumers–
often products that solve problems the simplest way by getting to
the underlying principle of the problem are most liked ( Steve
Jobs’ philosophy for Apple’s products)
• In an effort to be innovative, companies throw in unnecessary
features– often omitted functions are not strategically decided but
skipped to cut costs or as time doesn’t permit
• Instead focused approach should be preferred ( “Hidden Potential”
of the product should be unlocked with “ACE matrix”)

12. Myth 6: We will be more successful if we get it right the
first time
• Misconception: “more successful if we
get it right the first time”
• Impact: Biasing the NPD teams towards
the least risky solutions
• Reason: Failure leads to
embarrassment and exposure gaps in
knowledge which can undermine
individual’s self esteem and standing in
the organisation
• Organisations approach: As they
emphasize more on budgets, schedules
etc, little incentive to pursue
innovative solutions to the customers
problems
• What can be done: Tolerate “getting it
wrong the first time” by letting the
teams iterate rapidly and frequently
and learn quickly from their failures
• Experimenting with many diverse ideas
• Deploy advanced IT tools and tap the
full potential of them
• Result: Eliminate poor options quickly
and focus on more promising
alternatives
• Generate new information that
innovator was unable to foresee

13. Practical Guidelines for Overcoming the Fallacies
Make
queues and
Info flow
visible
Quantify
cost of
delays and
factor into
decision
making
Introduce
resource
slack where
utilization
is highest
Shift focus
of control
systems
from
efficiency
to response
time
Reduce
transaction
costs to
enable
smaller
batches and
faster
feedback
Experiment
with
smaller
batches
Focus on
quick
feedback
rather than
first-pass
success
Emphasize
overlapping
and iterative
–not linear-process
design
Experiment
early,
rapidly and
frequently
Aim for
simplicity :
Ask what can
be deleted
Start
projects only
when ready
to make full
commitment
Treat
development
plan as a
hypothesis
(evolve with
info )

14. THANK YOU!