Today, organizations are under severe restrictions imposed by economic conditions, a tight labor force, and market turbulence. It’s challenging for a business to focus on current operations, let alone the future and strategic planning. Limited resources are committed to day-to-day activities yet there is a sense of “something missing”.
New product development (NPD) is often more severely impacted by a downturn in the economy than any other function in a business. Executives tend to cut R&D investment to try and preserve profit margins. However, it is exactly the research and development of new products that create a foundation of long-term growth for companies. So, focused investing in NPD during a recession is a smart move.
The next argument sometimes made against product development during economic hard times is the lack of resources. Maintaining core capabilities – especially in R&D – is critical to success over the long run. You need these resources to develop new technologies and to address anticipated market needs post – recession. Many of your human resources retain tacit knowledge that is hard to replace if they walk out the door.
During a recession, it is also a good time to assess your NPD processes. In my experience, many organizations become risk-averse, bureaucratic, and document-heavy during good times. Companies can afford the luxury of employees to check and double-check the work of other employees. Systems become bloated with reviews, meetings, and checklists. Meetings, in particular, are huge time-wasters when more efficient forms of information sharing are available, and perhaps are more effective.
Entry Point NPD Processes
Because you will have fewer people working on different types of new product development projects during a recession, you will need to be very efficient with decision-making. Lean NPD is a process that moves new product development decisions downward to the active project team. The NPD working team is empowered to make necessary market, technical, and design decisions within a given set of boundary conditions. Typically, these boundary conditions include scope, schedule, and cost as well as product features and target markets as high-level restrictions. As long as the project advances within these guardrails, the NPD team is free to work autonomously.
Many companies select an NPD process to follow a waterfall or staged-and-gated methodology. Bob Cooper’s approach to developing and commercializing new products correctly assumes new product investment correlates to market risk. Many companies that are new to NPD systems effectively adopt staged-and-gated systems/approaches for product and process development. It is a very good foundation for product management and builds discipline for R&D into the organizational culture.
However, as indicated, companies mature and become less risk-tolerant, and waterfall systems become overloaded with unnecessary documentation and bureaucracy. One of my NPD consulting clients often used 64-page PowerPoint presentations and weekly three-hour gate review meetings to communicate project status. No one in the organization has time to actually work when they attended that many meetings and pre meetings! Substituting core working teams and streamlined decision-making allows project teams to focus on the most important components of the NPD project to get to market quicker.
Revamping Your NPD Process to Beat a Recession
As the US and much of the world appears to be entering a recession, it’s a great time to consider revamping your NPD processes. A key metric is the growth in stage completion time as NPD processes become more bureaucratic and less flexible, project schedules increase with tasks to eliminate (versus manage) risk.
Next, examine any pre-determined project schedules for waste. One of my client companies allotted 120 days for proof of concept for new formulations, but 75% of that time was assigned to tasks associated with gate review preparation and meetings. By retrofitting and adapting to using gate reviews as decision-making points, PowerPoint presentations shrunk by 90% and meeting times became more focused and efficient.
Adopting a Lean Attitude for NPD
Lean NPD has its roots in quality management and Six Sigma. Just as you want to eliminate waste in manufacturing by producing the right part the first time, Lean NPD seeks to eliminate waste. In product development and product management, the biggest “waste” is our time and knowledge. Take advantage of external conditions (a pending recession) to thoroughly root out waste in your project management process and adopt a lean methodology.
Not sure where to start? Join me every Tuesday for six weeks, starting 24 January 2023 for a deep dive on Designing a Hybrid Product Development Process. We will cover basic NPD processes and give you tools to implement the best of WAGILE Product Development and Lean NPD. Save $50 if you register by 30 November 2022. Register here.
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