Your NPD process is stuck in the 80s when…
- Your organization still calls it ‘gated process'.
- Your portfolio of projects consists of an Excel™ spreadsheet.
- Projects get into the process and never get killed.
- Concepts are generated from random brainstorming or are management pet projects.
- Your product line roadmap is a PowerPoint™ that someone from marketing created.
So, why are you stuck?
The gated process is considered by many practitioners to be mature in its lifecycle. Because of its mature lifecycle, many companies have come to understand that gated process alone is inadequate to achieve strategic new product development and innovation goals. If your company is stuck at the capability level you have some catching up to do.
So, you likely do not have a gated process problem. What you probably have is a product line strategy and roadmapping problem – or, rather, the problem is the lack of product line strategy and roadmapping. As a result, you don't have alignment on product line strategy or a working product line roadmap to guide new products into the pipeline. Therefore, decisions can't be made on product projects, or about how/when to kill projects that don't meet strategic and risk criteria. Without that alignment, gatekeepers and portfolio managers have no framework in which to make decisions.
Stepping into the 21st century: embracing the full NPD process
Let's go back and look at some of the components of the new product development (NPD) process. Phase-gated and gated processed new product development processes are only sub processes of a full architecture of NPD and innovation. If any of these sub processes are suboptimal, then your results will not be as strong as they could be, you are not gaining the benefits, and the competition may be winning the game. The full architecture of NPD and innovation links the following processes together:
- Business strategy
- Product line strategy
- Product line roadmapping
- Concept generation
- Gated process project management
- Lifecycle management
- Portfolio management
While the gated process type process helps streamline work flow, information flow, and decision flow of single projects, it is portfolio management that allows organizations to manage sets of many projects effectively, especially given the usual constraints of time and money. When trade-offs need to be made and resources need to be allocated, it is portfolio management that optimizes the allocation of human resources, expense dollars, and capital expense, to achieve the product line and business strategy. However, if your portfolio management still consists of rolling up a list of projects into a view and report-out of all projects, and stops there, your company may need to take portfolio management, portfolio analysis, scenario building, and portfolio recommendations for management decision, to the next level.
Success today: NPD best practices
Could your company be behind in utilizing these best practices? If so, you may be missing the point of portfolio management, and not capturing the maximum value of an optimized portfolio. In order to make portfolio recommendations, portfolio managers, analysts, and review teams need to have a framework from which to reference the gaps in the product line and business strategy. This is what product line roadmapping provides.
But, please keep in mind that a product line roadmap is not simply a PowerPoint created by someone from marketing. If your roadmap does not have cross-organizational input and alignment, then it is a house of cards that has not been embedded into the organization and is not understood by the senior leadership team and will, eventually, simply fall apart when external pressures exert themselves. A powerful product line roadmap is aligned across the organization and links the front end, gated process, and the portfolio to product line strategy to carry out the execution of business strategy for the purpose of converting products to cash flow. That is something management can agree upon!
So now what? Adjusting your time machine settings
Updating your NPD practices does not mean you have to shut everything down to fix the process. Companies build skills in these areas in parallel and one level of capability at a time. If a company conducted the implementation of each of these sub processes sequentially it would take decades to gain the benefits. Here's an outline of areas to help move your organization to the next level:
- Everyone needs to be involved. Form a cross-functional and cross-organizational team to assess capabilities.
- Conduct work in parallel. Build capabilities in each sub process of the full architecture of NPD one level at a time.
- Keep it simple. Don't burden the organization with unnecessary steps.