“Innovate or Die”New Product Development Process

Prepared for Product Camp St. Louis 2012Selected SlidesTom HorlacherApril 21, 2012

Today’s Presentation

New Product Development Process

•Value of Innovation

•Critical Success Factors

•Selecting the Right Project

Innovate or Die

• Dow Jones Index & Fortune 500 Constantly Changing

• Product Life Cycles Are Shorter– PDAs now Smartphones– SUVs now Hybrids– DSL now Wi-Fi

• 60% of Apple’s sales are from products that did not exist 3 years ago

• According to Gartner by 2015 – 50% of web sales will be via social presence and mobile applications

Various Types of New Products

• New to the World – iPad, Sega, Segway, Walkman, TiVo

• New Product Lines – Hybrid Cars, Scroll Compressor, Xbox

• Additions to Product Lines – Mich Ultra, Roundup Ready®

• Improvements/Enhancements – Tide, PS2, Bud Select

• Repositioning – Arm & Hammer Uses for Baking Soda

• Cost Reductions

Where Do New Product Ideas Come From - Everywhere

Internal• Research & Development• Sales & Marketing• Production Workers

External• CUSTOMERS – Most Important Spot• Competitors• Inventors, Universities• Suppliers

Critical Success Factors Do the Project Right

1. Seek Differentiated, Superior Products2. Market Research Pays Off3. Build In The Voice Of The Customer4. Sharp, Stable, And Early Product Definition5. Plan And Resource The Market Launch6. Build Go/Kill Decision Points Into The Process7. Organize Around Cross-functional Teams8. Leverage From Your Core Competencies9. Build An International Orientation Into The

Process10. Top Management Is Critical To Success

Source : Bob Cooper, Product Development Institute

Seeking New Product Ideas

• Look Everywhere – Broaden Your Exposure

• Generate As Many Ideas As Possible• Let Go Of Assumptions • Be Willing to Fail – Test Concepts Early

in Process

Creativity Is A Game Changer

What’s in a Product Spec

Be sure to include• A target market

definition• A product concept

– Benefits of product– Written in the language

of the customer

• Positioning strategy• Product specification

– Features– Performance

requirements

Don’t allow or include

• Unstable specs• Project scope creep

Stage Gate Process

Project Selection Tool to Focus on Winning Projects

Screen Criteria – Stage 2

Market Attractiveness• Approximate Size And Growth Rate• Competitors – How Many And Relative Strength• Price Sensitivity/Probable ProfitabilityCapability • Manufacturing Capability• Engineering CompatibilityStrategic Issues• Fit With Corporate Strategy• Potential Leverage With Other Products• Defend/Strengthen A Leadership Position

Doing the Right Projects

Portfolio Management• Maximizing The Value Of The Portfolio• Achieving The Right Balance Of

Products• Strategic Alignment• Resource Balancing

Value Selection

Combine financial models with scoring models

• Topics to score– Strategic Fit– Product Advantages– Market Attractiveness– Leverage Capability– Technical Feasibility– Financial Return

Project Balance

• High/low risk• Long/short term• Product Platforms• Type of Program

Risk

Low High

Long

Short

DevTime

Providing Intelligence for Growth

Tom M. HorlacherManaging Principal

314.721.4501tom.horlacher@wolverineadvisors.com

• Thank You For Attending Today• Selected Slides Only Included Here

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