Approach to New-Product Development - Coursework Example

Section/# Article Review: A More Rational Approach to New-Product Development The article argues that some sense can be made out of the overall product development process. Although many firms languish in this stage and waste valuable time and resources, the authors argue that the process can be defined and regulated to yield the highest number of profitable returns while minimizing risky developments that will likely not yield a high degree of profitability. Bonabeau et al define these two stages as 1) a truth seeking stage and 2) a success-seeking stage (2007 p. 97). Intuitively, this requires the that new product development teams focus on strengths, known facts/needs/and market needs when seeking to develop a new product line. In this way, much of the waste in time and money that is often associated with new product development is ameliorated. The article goes on to detail how Eli Lilly created a special team which was named “Chorus” whose sole purpose was to guide and direct research and development of new product lines based up on the metrics that have been previously related. Due to a strict adherence to the previous rubric, Eli Lilly was able to nearly double the amount of drug compounds that they developed between both 12 and 24 month periods. The article continues to describe the pitfalls that not employing such logic can provide to the overall process. Furthermore, the authors detail the situation that often arises where key leaders and shareholders ignore the obvious signs that a product line displays during development regarding its ability to succeed in the marketplace and yield a profit. Oftentimes, this is the result of the fact that management and/or key leaders have strong beliefs with respect to the overall viability of a given product and are therefore reticent to accept any proof that the line may result in eventual failure. Specific examples of such blind faith are given by the authors with relation to Ely Lilly’s drug tests that continued to send red flags to the development team; however, management continued to pour money down the rabbit hole with respect to continuing to fund the research. The authors discuss a secondary pitfall that many would-be product development teams suffer from. This secondary pitfall centers upon the fact that many product development teams terminate projects/products prematurely due to lack of evidence that the project/product has an overall likelihood to succeed. Although this can result from a number of factors, the authors note that the main reason results from an unclear and undifferentiated research process. For purposes of the analysis, the authors define one of the key components of success to relate to the concept of POC (Proof of Concept). This relates the process that a firm can employ that provides a highly focused fast track path of research to determine whether or not the product has likelihood of overall success. In this way, targeted experiments can be rapidly employed to prove whether or not a product has an overall likelihood of success. Likewise, the authors note that determining overall project/product profitability is also a likely determinate that should be used in order to determine what level of time and funding should be provided to ensure that the project maintains the highest ability to produce a net profit. Similarly, the authors argue that product success can further be maximized by dividing the stages of product testing and development into early and late stages. By further defining the metrics with respect to what goals and tasks should be accomplished in the early and late stages, it is abundantly clear for product development where the product lies in terms of overall viability at any particular juncture of the process. In this way, the guess work is taken out of the process and long-term product developments that can turn into a multimillion dollar mistake are effectively weeded out. This novel approach is simplistic; however, it nonetheless works. Many firms have followed in the footsteps of Ely Lilly in attempting to harness the positive and constructive energy that such a project engenders. First among these is the Ford Motor Company. Due to the fact that research and product development eat up a sizable portion of any automakers total net earnings, it only makes sense that an auto maker will carefully work to create a development process that is full of metrics and milestones whereby the development team can work closely with the other diverse interests that guide the development process while ensuring they do not spend an inordinate amount of time on any one idea or any one low-yield concept. Naturally, the process can be altered if the firm believes that a particular breakthrough is key to expanding the firm into a new market or gaining a rapid increase in market share. However, by and large, this process of metric guided product development is one of the key steps that keeps Ford Motor Company profitable and relevant in an increasingly difficult economic time for car manufacturers. Another highly successful and well known company employs the same rubric that this particular article has employed. Apple bases all of their ongoing research and product development on the very same subset of analysis that the authors of this article have painstakingly lain out. Rather than selecting a host of ideas to test, Apple selectively targets what designs it would like to see tested and analyzed for a future product offering. As one might imagine, the basic component of any and all of Apple’s new product offerings starts with the design of the given product. Once this is complete, the development team is sequestered to begin the process of product creation. However, rather than allowing this to run for an unspecified amount of time and at an unspecified cost, Apple requires that Executive Teams review the product development process every Monday. These ETs consist of key shareholder within upper management as well as individual design artists, programmers, and engineers at the very lowest levels of production/testing. In this way, the entire team is tapped to help management determine the overall feasibility of the ongoing project on a continual basis. Reference Bonabeau, E, Bodick, N, & Armstrong, R 2008, 'A More Rational Approach to New-Product Development', Harvard Business Review, 86, 3, pp. 96-102, Business Source Premier, EBSCOhost, viewed 22 October 2012. Read More