Product Management & Strategy

for technology companies

VOC / Customer needs – Influence of Paradigms

Posted by Narendra Rao on January 9, 2008

 

                        Paradigm is the mental model of how we see the world & form opinions. We tend to see world as we want to see it rather than as they are. Paradigms tell us what are rules & regulations to be successful in this world.

                        Paradigms constantly filter incoming information. They influence the way we do things & the way we make decisions. Past experiences influence the way we see the future. Product managers must be aware of their own paradigms, particularly when understanding user requirements, so they can consciousl reduce their effect. Company executives often say “We know what the customer wants better than the customer.” Often companies get into trouble because of this.

                       While collecting user requirements or while doing ethnographic observations, be conscious about paradigms – Yours, theirs & companies. For every observation, ask question “Why” multiple times until underlying needs surface. From customer’s language of his needs, understand the consequences of all needs. For example, For a camera, customers might say “I need 3X zoom, auto focus, large screen etc.” The consequences could be “camera should be simple & easy to use, I should relax/enjoy using this” etc. Consequences represent what customer wants to have happen & there is more feeling & emotion. Designing products at consequence level lead to creativity & shall be much different than that at basic function level. 

                      Asking question “Why” multiple times lead to understanding customer’s purposes & goals, overcoming all paradigms. They are stable & long run. Designing products at this level can be radically different & hugely successful.

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Assessing an Opportunity – Market Readiness

Posted by Narendra Rao on August 28, 2007

Market Not Ready!!

1. Neural network software is available since 1980s. This algorithm mimics the structure of the brain. It improves itself by feedback from various experiences, just the way humans learn by various life events. This was conceived to be exciting technology as computers can teach themselves & develop solutions which no human can develop from scratch. However, neural networks have shown little commercial success!!

2. Desktop Video Conferencing has been there since 1990s with various companies like xerox, Intel, IBM, Picturetel investing in it. Inventors swear by this technology & companies keep on making billion dollar business projections. It is not bandwidth or technology problem. However, companies see little commercial success.

Industry is agog with various such stories every year. What makes some products/technologies  fail commercially whereas few becomes successful? One of important measures of opportunities is testing market readiness. Answering the question “Why Now”? As technologies evolve & costomer preferances’ change, it is important to assess if market is ready for. Testing market readiness involves answering following two questions.

  1. Is there a critical mass in early stages? As product is introduced to market, there is certain market segment that either has compelling value proposition or has enough emotional need to buy. Later segment is essentially enthusiasts who want to be first in their group to use any new product. They have enough free cash to invest. They are not unduly concerned about return on investment. But, what is important here is to identify these customers & assess their market size. There should be a critical mass of these customers which should make project viable. This segment should provide enough cash flow & ROI to satisfy investor demands. Majority of companies fail to sustain themselves during this phase & gets shelved for non-viability. Apple’s iPhone is classic example. This product has created enough interest in early users to sustain itself.
  2. Can product satisfy needs of mainstream customers? Ultimately products have to satisfy underlying needs of mainstream customers to sustain in market place. It becomes compelling for some companies to invest in products looking at early users. However, emotional needs won’t make products successful in the long run. Companies should ask if opportunity is real? Ability to create real value proposition & ability to serve profitably along with ability to sustain it in long run is essential. Will iPhone be commercial success in the mainstream market in longer run? Answer to that question depends on ability of it to satisfy various real customer problems. Value conscious mainstream customers shall look for utilities rather than fancy features.

Ultimately the companies that succeed are the ones which continuously monitor critical mass of early adopters and ability to transition it to mainstream in the longer run.

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Keys to New Product Success(Part-4)- Transformation with strategic partnerships

Posted by Narendra Rao on August 21, 2007

SWOT analysis has been an important tool, managers & business executives are using to assess new product opportunities. Proponents of this theory argue that parameters internal to organization & external to organization (viz market & competitive scenarios etc) overall help determine the attractiveness of an opportunity. Strengths & weakness are analyzed based on organizational competencies, understanding of customer needs & insights, resources, systems & processes, technology IPs, channels etc in the context of opportunity. The opportunities are evaluated based on market context, macro trends, built in inefficiencies, emergence of critical mass for certain solutions etc.

Though SWOT framework was sufficient for the industry of 20th century, they are not sufficient to fast moving, technology driven industries of 21st century.

Let us ask this question to all organizations ” Will you be satisfied with where your internal strengths can take you to or what articulated opportunities can fetch you?” Little introspection here tells that answer is “No”. Now, the winner is the one who exerts greater control over his destiny, far more than his internal strengths and what current opportunity can offer. They create opportunities & solve in a way that is far superior than their internal capabilities.

Transformation with strategic partnerships: The way to go about is to transform organizational capabilities and effectiveness to much higher level than their strengths & opportunities by forging strategic partnerships. I can’t imagine  a better industry than semiconductor, where companies are transformed their market effectiveness to much higher level than their offerings. These companies compete with each other & at the same time, partner for creating value added products.

For example, ARM has been promoting their microchip as standard & is licensing their core to number of semiconductor companies. Other companies, particularly fabless design houses, build their own differentiated technology on top of ARM core, to offer more successful products. This effective collaboration has helped many smaller design houses to offer much effective products. It helps companies to innovate along their core competencies & at the same time collaborate for more compelling value proposition to customers.

These partnerships are extended to all aspects of value chain. The challenge is to see the synergy in value creation. This can be

  • to offer superior product or solution.
  • increase measurable customer benefits.
  • Reduce costs by ex. supply chain optimization, channel optimization etc.
  • Decrease total cost of ownership.
  • Increase customer reach or acceptability

Overall, strategic partnerships have potential to transform organizations by creating opportunities that is normally not there and solving them in a way that is normally not possible by conventional organizational limits.

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Video on ‘Stanford Design Thinking Process’

Posted by Narendra Rao on August 5, 2007

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Incremental Innovation: Unsung Heroes of Product Development.

Posted by Narendra Rao on August 4, 2007

Mission Impossible: We hear Superman(ager!) stories ” A product manager conceptualizes a great product idea (when an apple falls on his head!!). There is clear gap in available offerings & segment of customers are waiting for it since years! Big market size, large value creation with sustainable competitive advantage! Engineering team takes up seemingly impossible task & puts in superhuman efforts. Product is developed, tested & later released to site in record time. Revenue bells starts ringing etc.etc….!!”

Such heroic projects make good news stories, often heard in start-ups. Neither such success stories repeatable (if at all!) nor do they mostly make money. They can fail very expensively.

Traditionally products have been developed by this mega project approach – Like talking to all possible users, evaluating all possible competitors, making complete business cases, estimate market size, value proposition, use cases & scenarios, profiling etc. The process is extraordinarily long with various stage gate reviews & go no-go decisions. The financial & management stakes are very high. Companies have to wait 3-5 years before they actually see a dollar of earned profit. Product managers should get specifications 100% right & predict what customers want when product gets launched. Getting insight into what customer would need rather than what they asked for is important. Changing requirements put undue pressure on project schedule, as mega projects lack inherent flexibility to adapt to changing needs.

Mega projects with big budgets & large number of stage-gate-reviews fail to respond to changing technology & market conditions, user preferences or demanding venture capitalists. Companies need to be agile in responding to changing needs, manage risks & be able to show intermediate results.

Incremental Innovation: There is a saying ” easiest way to shorten development cycles is to minimize the work required to develop the product!!”  In incremental innovation approach, a development cycle goes through several, small & end to end cycles. And each cycle is executed at rapid phase with minimum budgets & managed with minimum risks. The teams are empowered to run through cycle without much intervention. There is almost no management stage gate reviews within each cycle.

Financial Advantages:

  • Relative investments in each phase is lower.
  • Revenue & profits show up much faster. Cash flows are better as there is no need to wait for say 5 years to see a dollar of profit.
  • Much less financial risks as strong feedback from market help in adapting or changing investment needs. Surprises appear much earlier in life cycle.

Marketing Advantages:

  • It is much easier to forecast customer needs over shorter time horizons, thereby helps to create more accurate products.
  • Even if there is a mistake in assessing user needs, it is far easier to correct it.
  • In fast moving markets, it gives crucial flexibility & mistakes are not costly.
  • Each product introductions has the potential to lock in the customer with switching costs & network externality effects.
  • Product gets refined with each introduction as it helps in getting crucial insight into customer needs than what customers explicitly asked for.

Engineering Advantages:

  • As requirements are added during execution phase, complexity increases exponentially, putting lot of stress on development.
  • Cost of adding new feature is significant as most complexity is due to interfaces & interactions with rest of the system.
  • Field problems can not easily be modeled. Hence systems are best tested in actual working conditions.
  • As technology changes, it is easier to incorporate at each cycle, rather than making technology commitments for longer time horizon.
  • They are very effective in motivating people as they can see results faster.

In summery, incremental innovation enables rapid organizational learning & makes them effective in responding to changing needs & keeping risks manageable.

Posted in Project Management | 4 Comments »

Perennial Productivity Problem : Increase Effectiveness from Effeciency

Posted by Narendra Rao on July 31, 2007

Productivity, a misnomer : The motivation for productivity improvement is different for different companies. The term is broadly defined as “to produce same output (whatever is desired)” with increasingly lesser & lesser input (resources). It is the definition of so called “output” & “input” that creates different motivations for different people. For some, lesser development cost is productivity improvement whereas for others, it is lesser development time. Companies are investing in millions of dollars in various systems & tools, in order to gain an order higher productivity, but often overall benefits remain only incremental.

Align Productivity with Business goals: Assuming the goal of productivity improvement is to generate maximum possible value to customers & share holders, it is important to align productivity with overall business goals of organization. There is lot of cue to take from old manufacturing technologies who have benefited immensely.

Operational managers in these industries continuously monitor & identify potential bottlenecks – Places where system is subjected to greater demand than it can handle & alleviate them by balancing people & equipments. There is only marginal benefit in improving individual throughputs, without considering how their actions are going to affect the performances of upstream & downstream stages.

Organizations focus on improving productivity at every level, from department level to project, team & ultimately at individual level. It is natural to think that the more productive the employee is, is any day better than less productive ones. However, larger organizational business goals are over sighted by this. Individual productivity improvements shall only increase local efficiency, without increasing business effectiveness. Reducing development cost need not be universal mantra, nor reducing development times. What is important is to know if these individual improvements ultimately help in winning in market place profitably.

Base productivity decisions on business effectiveness.

  1. Increased Revenue:   What is the impact of  faster development time on revenue? Does it increase useful sales life of the product? It might be surprise in the market & creates a time lag for competition to catch up. The benefits are much larger if there is a switching cost for a customer. For example, it is much difficult to gain a telephone customer from competition than retaining one. Companies can be first in the market & thereby retain customer loyalty due to switching costs. It helps create network externality effect, which companies like Microsoft has so effectively used. White space products shall of 100% market share for some times, with peak sales & profitability. Trade-off cost & time productivity decisions based on hard economic numbers & sound business logic.
  2. Increased Profit: Similarly, what is the impact of development cost reduction? It reduces the fixed cost component from total costs, thereby reducing the risk of investment. As lesser fixed cost is amortized over lifecycle, total cost would be less (for same variable cost) & makes product more competitive. However, which lever to operate (cost lever or revenue lever) depends on market competitive conditions.
  3. Adapt & Sustain the competitive advantage: Ability to move quickly provides greater flexibility. Most technologies mature over time by being used in field. Early companies shall have data from field conditions & user preferences. It helps in coming with superior solutions than competition & also provide flexibility to changing market needs.

In summery, business goals drive productivity strategies. Traditional bottom up productivity improvement efforts (i.e. from individual contributor to teams to projects to businesses) fail to satisfy the needs of businesses. Improve productivity effectiveness by basing & driving strategies from business to further down.

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Software Based Electronic Devices – Trend towards usability & commoditization

Posted by Narendra Rao on July 24, 2007

Electronic devices conjure up the images of boxes with displays, keyboards & connectors. The spectrum of such devices are large, like industrial automation systems (field measurement devices, controllers, display consoles, hand held devices, computers etc) consumer electronics devices (laptops, PCs, televisions, gaming consoles, mobile handsets, security devices etc). Traditionally, they stay at the center of value chain between high technology semiconductor chips & device/application software.

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Semiconductor Industry: Semiconductor chips power electronic devices. Almost every device has some processors & other signal handling chips. Automobiles have upwards of fifty processors, controlling everything from engines to glass wipers. Consumer devices like cellular phones, TVs, DVD players, security systems & all industrial instrumentation systems rely on semiconductor chips.

                Industry has moved a long way from first transistors from Bell Labs in 1947. Combining these transistors in millions on a single chip constitute a semiconductor device like processors, memory or bus drivers. Initial chips lacked performance & reliability. Early music systems had poor sound quality & bulky, Industrial measurement equipments drifted from its set points that required frequent recalibration, most of control instrumentation were manual, security devices were at best alert systems (with lot of redundancy) to manned systems. Initial electronics circuit designs involved deep understanding of semiconductor devices as well as system performances. Larger number of components was required to realize most function, with additional components for various compensations like drift, temperature, offset etc.

                Industry has seen considerable sustained innovation since last 50 years. Industry consists of basically three types namely, integrated devices manufacturers (both design & manufacture), Fabless design houses & Foundries, which do contract manufacturing (Like Taiwan Semiconductor Manufacturing Company). Fabless design houses are flooding market with various custom chips with cost per function at significantly lower than earlier generation. The entry barriers for most of low/medium speed chips are further reduced. As Intel has moved towards more of high end, high speed, R&D intensive, upscale processors, and other manufacturers are concentrating on operation (efficiency) driven custom & usability aspects. For most of applications in industrial instrumentation, security & consumer products, the demand for chip performance is significantly reduced. Niche applications like multimedia, 3D gaming, voice processing etc that demand huge processing power constitute a small market. Net effect of all this is that most of semi-conductor chips are getting commoditized with only differentiation in usability & operations (price).

Software Industry: If we simplify the software industry to mostly contents & applications, the technology play is significantly reduced. Leaving apart some special algorithms & data processing, most of performance & reliability issues are satisfied. However, major driver for the industry is the ability to satisfy the underlying user need & enhance the user experience. Next generation could be the ability of the product to customize to user’s personal preferences & needs. There is more & more demand for companies to come up with applications that could satisfy various problems, improve efficiency, cut costs or enable various business functions etc. More importantly, this industry is most nearest to customers/end users in value chain & hence “owns the customer”.

Electronics’ Device Manufacturers: That leaves electronics device manufacturers in the middle of value chain. Traditionally, they have been designing products using semiconductor chips & enabling the platform for software application developers. During semiconductor technology evolution stages, they had to design products with deep understanding of semiconductor devices, ambient & operating conditions. Circuit design would involve various compensations for performance & reliability, ambient effects, operating environmental effects (like noises) etc.

                As semiconductor technology is evolved & matured with sustained innovation, most functions’ performance & reliability requirements are met. For example, now electronics amplifier designers just don’t have to think much about offset or bias current drifts or play with limited bandwidth or common mode effects. If they could follow judicious process in selecting right device referring to manufacturer data sheets & application notes, most of design functions can be realized. The effect of this is that companies with limited competency in design or manufacture are now able to produce equal to or better devices than before. The design philosophy has shifted from in depth science & technology analysis to much simpler engineering & system integration of functions.  Semiconductor manufacturers are pushing through the value chain by producing custom chips, hardware modules or reusable/reprogrammable components.

                In summery, as electronics design is getting commoditized in terms of functional performance & reliability, the focus has shifted towards scalability & usability. It is more of an engineering art. In future, the trend shall shift towards ability to quickly configure & customize. For remaining applications, it shall drift towards commoditization.

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Keys to New Product Success (Part – 3) – Need identification in early product lifecycle

Posted by Narendra Rao on July 8, 2007

  “You are a product manager in company ABC, involved in electronic displays, sensing etc. One day, research team comes up with a novel product i.e. a display that can not only show images/movies in 3D, but also gives you 3D touch-feeling when you place your hand on display. The project is code named “3DSense”.  The research team has spent considerable amount of resources & time on this project. There are still many issues to be resolved. Due to increased pressure for meeting revenue targets & to streamline the research direction, they have approached you to make strategic product road-map that is driven by customer needs & also help to self sustain the budgets for further development.”

Now, you decide to talk directly to number of customers to understand their perspective. You are not convinced about the maturity of technology to serve few obvious applications. Without further customer interest/feedback, a place for pilot, a compelling application & a willing customer as technology stands today, the project would be shelved. How would you go about it & which customer segments & applications do you target?

•1.       First, understand possibilities: Technology is obviously in stage 1 of its lifecycle. There are underlying performance & reliability issues. Brainstorm with research teams, developers, engineering teams & understand various functions, technology can satisfy under different operating & ambient conditions. Also, list down external constraints (like platform related) for other adjacent applications.

For example 3DSense, functions that are readily satisfied could be touch-feeling for small surface unevenness, detection of sharp edges, differentiate hard & soft surfaces, feeling of objects greater than say 5mm, straight-line detection etc. There could be some constraints like temperature effects, performance issues for smaller objects, curved surfaces etc. There could be platform constraints like limitation of camera to sense effective 3D, large size data management, communication speed, compatibility issues etc. Some applications might require other companies in value chain to develop other complementing technologies/products for creating compelling applications. Make a complete dashboard of ready applications, adjacent applications with platform issues/supporting complementary technology issues etc.

•2.      Identify Compelling Applications: Prioritization is utmost important step. For applications, that technology could readily satisfy; selection shall be based on number of factors & is highly contextual. Some of factors could be; ability of product to become mainstream some day (& hence, market size & macro trends), ability to create value & its sustenance in a profitable manner, threat of alternates & substitutes, ability to reach out to customers with existing sales/channel force etc.

For 3DSense, the main stream application can be multi-media gaming industry, entertainment etc. Then there is no point in selecting say “reading-support for blind” as stage 1 user. The current VOC needs & trajectory in which technology develops from this application may not assist mainstream product. Also, stage 1 user may not be good reference for main stream segment. Instead applications such as remote operational or quality control might be good starting point. This application may have similar architecture, but demands for performance must be limited.

•3.      Identify user context: For the application identified, identify all user stake holders. Know who shall use it, how, where & under what constraints is he going to use it. What are important to him for doing his job better & how product is going to help him in that direction? User & thereby industry attitude or resistance towards adoption shall depend upon products that require user to change current mode of working, behavior, significant learning or require changing other current products or services. Hence, adoption shall depend upon their characteristic response to these changes. The acceptance is easier if product can just compliment the existing system with additional benefits.

•4.      Identify technology enthusiasts & industry innovative leaders: There will always be certain company which leads the industry with latest technologies & benchmark, which others follow. They understand initial short comings of new products; & are willing to use it & give necessary feedback. They like to work closely with development teams. These customers like to adopt new product, just to be ahead of industry or the solution offered to them should give a performance which is an order better.

                In summery, this stage throws up unique set challenges & technical performance issues. Early life cycle is the stage where early users/uses of product are defined. This will ultimately define how mainstream product shall look like & which are the segments, users & applications ultimately targeted. Create reference customers who will help in accelerating to main stream. They are unique in their needs & demands for functions, performance, price, customer support etc. They don’t represent the needs of mainstream customers, but act as stepping stone or gate keepers. The issues shall also be unique in terms of broader cultural & behavioral adaptability & acceptability, industry regulation issues & help evolving value proposition. Make & prioritize VOC targeted at these early adopters & early issues. Evolve the needs as product progresses to next stage of life cycle.

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Keys to New Product Success (Part – 2) – Customer Need Hypothesis.

Posted by Narendra Rao on June 25, 2007

                                 While making any product or solution strategy, product managers should think along two dimensions to understand the premises of customer need, that is, Product evolution stage & degree of separation.  Windermere Associates (San Francisco), Clayton Christensen (‘SEEING WHAT’S NEXT) and Geoffrey Moore (Crossing the Chasm) have brought this out with similar underlying logic. The contextual nature of customer need, based on underlying basic need & product lifecycle should be looked at, in an integrated fashion. This is like telling that you should take advantage of your day in the sun before next day renders you obsolete. The customer needs should be looked as “Windows of Opportunity” & rather shifting windows along life cycle stages.

Product Evolution Stages: Most products go through a life cycle that is quite similar. Briefly, new products go through following stages before getting commoditized & later obsolete.

  1. Stage 1; Functional: Initial customer response would be “Is the product has all functions necessary to satisfy the basic need for which I have paid for?” For example, is mobile phone has necessary functions for user to speak & take calls, when he is mobile. During this stage, performance can be inferior, but the basic drivers for product success can be innovation, status/life style, niche application etc. This stage is largely driven by “technology push” & with almost no competition.
  2. Stage 2; Performance Optimization & Reliability: As technology matures to satisfy basic functions & as both customers, competitors get some awareness about product, performance optimization, reliability & non-core functions would be major driving factor. For example, in mobile industry, how large is the coverage? Are highways/rail lines covered? Can I use it as a pager? Can I save address & phone nos.? How much battery life? How much reliable? etc.
  3. Stage 3; Safety, Convenience & User experience: Windermere Associates (Christensen, 1997) find that when vendors have improved their product to the point that they satisfy functionality and reliability, the basis of competition shifts to convenience & user experience. Like how sleek is the cell phone? How large the buttons & display? Colors, user interface, friendliness etc. Customers become more demanding & competition intense. The product improvement becomes incremental & most new features added either to retain existing customer base & or make product viable for new users.
  4. Stage 4; Customization, Personalization & further market segmentation: This is the phase where competition is maximum, technology is mature & all basic needs as above are satisfied. Now products & solutions shall start targeting asymmetries in the market based on over served & under served market segments (explained below) & new users. Well tuned products are offered for all homogeneous segments with specific needs. There are lots of small & medium players, along with leaders, each addressing various niche segments.
  5. Stage 5; Commoditization: If further product differentiation is not possible, then product becomes commoditized & vendors compete on price. Firms stay competitive either by cost cutting or migrating to next generation of products with completely different value proposition.

Degree of Separation: Both Clayton Christensen and Geoffrey Moore argue that every customer cares about certain feature & performance irrespective of an early adopter or mainstream customer, utility or status buyer, customized or cost sensitive buyer. This particular function or set of functions are satisfying fundamental problem financially, productivity wise, convenience or emotionally & is the reason for which customer is buying. That is normally the basis of competition for that particular customer.

For example, for a naïve user of computers, friendly UI is critical whereas for a designer of a real time control system, speed is most critical & for a multimedia programmer, new & creative functions are important & so on. Some buyers may buy for status & then success of the product depends on the ability to satisfy the ego. No matter what customers’ value, based on the degree of separation between critical functions & ability of products to satisfy those set of critical functions, customers can be classified as

  • Underserved Customers: These customers demand more than vendor’s current offerings & this segment is the target for sustainable/incremental improvements. Vendors will be able to decide how next generation products should look like if they could correctly understand underlying demand dimension. This trajectory helps in moving the product features along its life cycle.

For example, PC manufacturers targeting high end multimedia market with 3D graphics, require faster & faster systems at an attractive value proposition. Typical PCs & servers, when not offering solution at an appropriate price, is ‘under serving’ the segment & is a case for sustainable innovation.

  • Over served Customers: According to Seeing What’s Next, companies continue to improve the products to a point where they eventually over serve the customers. Normally companies innovate faster than customers’ lives change. What people are looking to get done remains remarkably consistent, but products always improve. Eventually products become too good & customers stop paying further improvements in performance & is the driver behind commoditization. Normally vendors target combination of emotions, price, safety & environment impact, reliability etc in a complex proportion & try to define new value proposition.

For a example, for a normal word processor user, using it to write letters & preparing some presentations, latest Microsoft word shall over serve, with not even using 20% of its full capability.

  • Non-consumers: People who lack the ability, wealth, feasibility ($) or access to solve some of their problems using offered product. Or they fail to associate emotionally with the product. This can be attractive segment to target by next generation of products & solutions. While deciding features for next releases for an ongoing product, this will be an attractive segment to maintain or improve revenue stream.

To be continues in next post…..

Note : Further Reading; ” Seeing What’s Next” & ” Crossing the Chasm”

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The Keys to New Product success (Part – 1) – Collecting unarticulated & invisible customer-needs

Posted by Narendra Rao on June 19, 2007

 New product success rates are rare: The success rates of new products are less than 10% & consume significant portion of financial, management & technical resources of companies. Though definition of success is a relative term, there is no doubt that survival of many companies depends upon the success of their new products. There may be many reasons for failure like discontinuous macro-economic, industrial, technological, customer & competitive changes; there is consistency with few companies who routinely come on top with significantly higher success rates.

          The 80:20 Rule applies here. More than 90% of overall successes comes from few handful of companies & large number of companies together contributes to less than 10% of new product success. The successful companies are approaching new product development differently from others. Strategic & technology choices based on customer’s current needs as well as future evolution of needs is an important factor for new product success. 

Customer Need Identification – Traditional Approach: Traditionally companies depend upon the sales, distribution channels, customer support & current customers for data collection. The data & ratings are then aggregated, mapped & prioritized. During formal & informal interactions with end users, buyers, decision makers & beneficiaries, these teams make efforts to understand problems, see if some thing is inefficiently managed that existing offerings can improve, assess gaps in existing offerings etc. The data typically collected are through reactions from current customers & focused exclusively on current offerings.

Such VOC is inadequate & some times irrelevant: That brings us back the basic question, that is, what is the most important & fundamental driver for collection of VOC?

Let us ask few questions?

  • Does VOC helping the organization in prioritizing the technologies that have solid grounding in customer needs?
  • Does the data give necessary information about future product/technology strategy that requires long term prioritization decisions?
  • Does it help in predicting the customer need evolution over next 3-5 years with reasonable assumptions on technology trajectory?
  • Can we understand customer’s organizational & financial constraints with the data?
  • Have we understood what makes the customer win in his business? What functions & features help?

          Traditional VOC is about current products, today’s problems, about gaps in current offerings. It fails to give insight into customer’s unarticulated needs. The products & solutions that are conceptualized based on problems/opportunities of today fails to address the same 2-3 years later when products actually makes it to market. Existing customers are good at telling what next generation features the current products should have. This will only sustain current offerings better with no significant revenue benefits.

          Ultimately, what separates successful ones is the ability to see the underlying customer needs that competition could not see. Rules & success factors for tomorrow would be different than today.  Challenge is to do VOC in a way to prodict what it would be tomorrow. In next couple of parts, I intend to write about VOC collection for technology companies that can help in making strategic choices for technology prioritization with solid grounding on customer needs …… Regards, Narendra Rao

Posted in New Product Success, Uncategorized | 2 Comments »