New product development (NPD) is not just important for organizational success – it is essential for long-term organizational survival. Some of the key factors that drive NPD include:
- Changing consumer tastes and behaviors
- Increased competition
- Technological advancements
- New opportunities for growth and development
- Diversifying risk
- Exploiting excess capacity
In addition, NDP can help organizations foster goodwill, enhance their reputation, and demonstrate social responsibility. In fact, 90% of customers feel that brand innovation should impact society in a positive way.
However, while NPD can be highly profitable, it can also be significantly risky. Consider the following:
- Only 40% of developed products ever make it to market.
- 45% of product launches are delayed by at least one month.
- Of the products that make it to market, only 60% will generate any revenue.
Complexities and Challenges
What makes so many NPD efforts and investments regrettable instead of rewarding? Product managers, C-level executives and other key stakeholders across the enterprise face numerous complexities and challenges, including:
- Lack of Cross-functional Collaboration
Effective collaboration is at the heart of successful product development. However, achieving this goal can be extremely challenging given that collaboration – which includes a vast amount of document and data sharing – must connect product managers and team members (including those working remotely), cross-functional business units, partner organizations, and complex supply chains. When collaboration breaks down, internal teams work in silos, external stakeholders are left out of the loop, and it is only a matter of time before forward progress is thwarted by one unexpected setback after another. This lack of engagement is a key reason 28% of product managers worry that product launches will not meet management expectations.
- Lack of Cross-functional Collaboration
- Difficulty Adapting and Changing Course
All product development projects must be rooted in robust and realistic plans. Yet, it is not a question of “if” these plans will need to be adjusted, but a matter of “when” – and to what extent. Indeed, as pointed out by management consultants Stefan Thomke and Donald Reinertsen in an article for Harvard Business Review: “In all our consulting work and research, we have never come across a single product development project whose requirements remained stable throughout the design process.”The root problem, however, is not this (very common) lack of stability. Rather, it is that organizations lack the systems and tools they need to rapidly adapt. As a result, they cannot take advantage of new information or opportunities, or change course to avoid looming risks and threats. The disconnect between the plan and reality creates an ever-widening gap that the product development project falls into, and must climb out of. And in some cases, the costs are so enormous that the only option is to cancel the project entirely.
- Difficulty Adapting and Changing Course
- Under- and Over-Allocating Resources
Resource allocation is extraordinarily challenging on product development projects, and for a reason that many outsiders struggle to grasp: work is so iterative, that it is virtually impossible to know with precision how long certain tasks will take. And this challenge is amplified by the fact that, quite often, the workers who are responsible for completing tasks have never done them before – not because they are incompetent (they certainly aren’t), but because product development projects are inherently unpredictable; even more so than manufacturing projects, which can at least leverage repetitive processes and transaction processing. New product development projects do not have this luxury.As a result of this intrinsic variability, product development projects can – and often do – get mired in one of two unwelcome scenarios. The first is that resources are under-utilized, which means they’re “sitting on the bench” instead of making a contribution. The second is that resources are over-utilized, which means they cannot work in a controlled, focused and efficient manner. This is a key reason 52% of product managers say they are forced to spend an excessive amount of time on unplanned “fire-fighting” activities.
- Under- and Over-Allocating Resources
- Lack of Visibility into Different Work Streams
The basic lack of visibility into different work streams limits the ability of leadership and PMOs to identify and prioritize risks and opportunities. It also blocks the capacity for teams to focus on work that matters most – which leads to bottlenecks, double (and sometimes triple) work, missed deadlines and milestones, and cost overruns. Clarity is replaced with confusion, and decisions are rooted in best guesses instead of reliable, actionable business intelligence.
- Lack of Visibility into Different Work Streams
- Disengaged, Exhausted and Burned Out Team Members
It has been rightly pointed out that people – and not technology – are at the heart of product development. And naturally, these people want to be part of successful initiatives. They are like athletes who want to be on winning teams, so they can reach their full potential and reap the rewards of their vocation. However, when 6 out of every 10 developed products never even make it to market, they are more likely to be frustrated than exhilarated. When this happens over and over again, disengagement, exhaustion and burnout are inevitable.
- Disengaged, Exhausted and Burned Out Team Members
How an Adaptive Project and Portfolio Management Solution Helps
An adaptive project and portfolio management (PPM) solution enables organizations to quickly adapt to changing market demands, competitive pressures, new innovations, growth, and new strategies to deliver maximum impact and value across their businesses – anywhere in the world.
Here are the key ways that an adaptive project management solution makes a pivotal difference between accelerating and enhancing new product development vs. facing ongoing struggles and setbacks:
- Enhancing Cross-Functional Collaboration
New product development requires the expertise of a broad range of stakeholders who need to be kept up-to-date. An adaptive PPM solution can be configured to match each team’s specific needs and empower them to work collaboratively – even in cases where two or more product managers or PMOs need to cooperate on a single project to deliver on an objective.All project-specific data, files, documents, conversations and approvals are readily accessible to authorized users, so that teams can engage in internal discussions, as well as connect with external partners and other stakeholders in the context of the project at hand. This level of transparency and personalized experience not only helps individuals and teams stay focused and engaged, but it also saves time by reducing the need for meetings and offline emails and chats.
- Enhancing Cross-Functional Collaboration
- Driving Adaptability and Change
Every phase in the new product development process involves multiple decisions, and each has significant financial and organizational consequences. An adaptive PPM solution enables product managers to access real-time project status via live dashboards and interactive views and reports, so they can anticipate changes and strategically respond vs. get blindsided by changes and haphazardly react.Furthermore, product managers can monitor and manage all inbound work and change requests, and track time spent on each work item in order to make informed decisions about priorities, resource allocation and timelines.
- Driving Adaptability and Change
- Optimizing Resources Across Projects and Portfolios
An adaptive PPM solution enables product managers and other decision-makers to define the resource assignments over the duration of the project, as well as adjust the assignment load by period – which helps ensure that resources are neither over-committed or under-committed.In addition, resource utilization reports can be used to evaluate performance trends and identify training requirements, as well as highlight the need to hire contract workers and/or employees with specific skill sets to support future initiatives.
- Optimizing Resources Across Projects and Portfolios
- Establishing Clear Visibility into Work Streams
Many enterprise-level new product development engagements involve a multi-disciplinary team located in various time zones. An adaptive PPM solution provides enterprise-wide visibility across portfolios and projects, to help ensure that teams are focused on and accountable for the tasks and objectives that really matter. Strong portfolio management combined with robust reporting and analytics helps drive operational excellence by ensuring that teams and projects are aligned with key strategies and organizational objectives.
- Establishing Clear Visibility into Work Streams
- Engaging Team Members
One of the key reasons that new product development team members become disengaged, frustrated and exhausted is that their tools force them to use a methodology that does not align with their needs, strengths and preferences. An adaptive PPM solution eliminates this obstacle by enabling teams to adopt the methodology that works best for them (e.g., waterfall, Agile, hybrid waterfall + Agile, Scrum, and Kanban).
- Engaging Team Members
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The Bottom Line
In today’s extremely competitive and fast-changing business landscape, enterprises are under relentless pressure to drive continuous improvement, optimize their operating model, and seek new ways to strategically and efficiently manage their portfolios that are packed with projects that carry extreme risk and huge investments. Given what is at stake, an adaptive PPM solution that solves all of the challenges described above is not just important – it is essential!
Ready to learn more? We’ve helped many global enterprises improve the outcomes of their new product development initiatives. Please contact us to learn more.
