In any business endeavor, success depends on the right process as well as the right people. In new product development (NPD), we follow processes (like WAGILE) to minimize investment risk and maximize value delivery (to both customer and company). NPD projects are executed by cross-functional, multi-disciplinary teams.
NPD teams are the sum of a core working team, ad hoc functional support, and administrative disciplines. Overall, this project team includes all the necessary representatives to design, develop, and market the new product as well as related functions required for ordinary business operations. No single team member is more important than the others; however, the time commitments and roles of each team member vary throughout the life of a project.
The Project Life Cycle
All product development projects follow a similar life cycle. First, an idea or an opportunity is identified. These concepts span from new technologies, new applications of existing technology, and new products introduced into existing markets. Next, the ideas are evaluated by testing consumer fit and by generating a high-level business case. If potential customers are not interested in the concept or if the projected revenue fails to outweigh expected costs, the project is halted.
Yet, when consumers show interest in the new product concept and the business opportunity is favorable, the project advances to technical development. In this stage of the project life cycle, products are designed and tested for form and functionality. In the final stage of an NPD project, manufacturing is ramped and the product commercialized. Commercialization involves marketing and sales to deliver the product at the right price point to satisfied customers. (Read here about pricing strategies.)
NPD Team Evolution
of course, the working NPD team stays intact throughout the project. These working team members generally include, at a minimum,:
- Project / product management,
- Marketing / sales,
- Technical / engineering, and
- Finance / accounting.
These four core rules represent a minimum of functions to design and develop a product within a given timeframe and budget. A key point in assigning working team members is to ensure they hold decision-making authority for the NPD project.
Extended team members often include roles represented by R&D, brand management, legal, supply chain, communications, and/or HR. While working team members attend all core project meetings and activities, extended team members are present on an ad hoc basis. Alternatively, each working team member is assigned reporting responsibility for a set of functions within the extended team. For example, marketing / sales may bring data and information regarding branding to a project meeting while technical engineering also represents the R&D view during a working team activity.
As an NPD project evolves from idea to commercialization, the working team lead may shift. For instance, marketing plays a lead role in the opportunity identification stage of a project to validate consumer interest in the product idea. During concept evaluation, finance may lead decision-making regarding profitability of the new product. In a fully empowered team, responsibilities adjust to the project stage and conditions naturally.
Finally, as we discuss “Who is the NPD Team,” we must assess the team size. Innumerable times, I have encountered managers who want to attend working team activities. The reason often amounts to a lack of trust. However, a fully empowered team should make new product decisions within the guardrails and boundaries provided during project initiation. Managers are usually too far removed from technical inner workings and customer interactions to contribute in a positive way for the rapid decisions necessary to keep a project on track. Furthermore, keeping the working team small (less than 10 people) enables rapid decision making.
On the other hand, when a project is pushing an agreed-upon boundary condition (like scope, schedule, or cost), management must be informed through an exception process. Senior managers then evaluate the NPD team recommendations and stretch the boundaries or cancel the project.
Team management in new product development (NPD) is complex due to the inherent risks of innovation. Here are some opportunities for you to learn more about building effective and collaborative NPD teams.
- PDMA Minnesota Chapter, Cross-Functional Team Collaboration (21 September)
- PMI-Kansas City Chapter, Effective Team Communications (28 September)
- Read Chapter 4 in The Innovation ANSWER Book
- Study Chapter 8 in The Innovation QUESTION Book
- Read a blog on NPD team management here
- Contact me at info at globalnpsolutions.com
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