Over the past decade and even more so in the last five years, software development and IT organizations have undergone a transformation thanks to the mainstream adoption of many Agile development principles. Quite frankly, this transition occurred because software teams had lost their way. These teams were building inwardly focused infrastructures and architectures that were unnecessary and costly and were not delivering for the business or the end users. All the while, the business suffered delays and heartache over non-user focused technology.
Whether it is Scrum, XP or Kanban, the typical success rate of truly Agile teams has skyrocketed. Agile teams are delivering working software that solves real business needs faster and with more consistency than ever. In fact, according to the 2011 CHAOS report from the Standish Group, Agile teams are three times more successful than Waterfall.
Considering that over half of new product initiatives fail to meet the expectations of the business1, I believe there are some lessons product development teams can learn from the Agile methodology. As I pondered this possibility, the most obvious starting point was focus on the team.
In Agile, the single measure of success for a team is providing business value. We break down the traditional silos of product management, design, development and QA. Then each team member does what it takes to drive value into the end product.
In thinking about today’s product development organizations and processes, most are still very departmentally focused. This means that NPD team members are loaned out to do tasks on many product projects, a business case for example. Unfortunately, their only accountability is to the task, not the end result. Indeed, many contributing team members can only assume a subjective guess as to a product’s final success and their role in that success.
In order to address this challenge, we must build a system to make visible the desired results as well as the realized results from the team’s efforts. We must also change the way we recognize the contributions of the NPD team to focus on the end result and team engagement to drive that result instead of the tasks to get to market. I believe, as a first step, more organizations should change this simple behavioral aspect. As a result, their NPD teams would deliver far more successful launches and potentially, as we have seen with Agile in software, accomplish far shorter time to market.
In my experience, the most obvious reality of the world and implicitly in our work to deliver products to market is the most difficult cultural element to modify. It is a fundamental reality that the time at which we know the least about any project is on the first day of that project. Most of our project management principles and business processes around new product development and launches are risk-focused when trying to address this reality.
We put decision points or gates, between each segment of work and learning associated with that work to make sure we have not uncovered or learned something that deteriorates the value of our offering or makes it impossible to bring to market. This type of process is an absolute “must” to ensure we are not just throwing money and time away. Further, we need to augment this thinking with a systematic design and engineering approach that allows our new learnings to create a better product, not just kill a bad idea.
In my reviews with NPD teams, we often spend time looking at what happened with a product launch. Whether a product was successful or not can be a very small detail that the team discovered. All too often I hear they discovered it “too late to do anything about it.” This is the most critical part of the culture we need to address. In Agile it is never too late to learn something that will make us more successful.
The reason I push this as a cultural issue over process is the belief of the individuals. The team must believe that all insights are not only valued, they are indeed critical for the larger success of the product. It is not important if we have to go back to the drawing board on packaging, design or formulation if it means the product will be better for the customer. Unfortunately, most individuals believe that at some point in the creation and launch of a product, we cross a point of no return where indeed the cost to change is too high. Even worse, many times the engineers, brand managers or scientists even act that way. Instead of embracing the new information as an opportunity to be more successful, they shy away from change.
When coaching these teams, we must emphasize re-working a design post launch is costlier than any re-work before we go to market. More importantly, we must learn from our trend in the software industry’s Agile movement and embrace change, even late in the process.
From the twelve core principles of Agile, we know that our highest priority is to satisfy the customer through early and continuous delivery of valuable software. I believe that traditional new product development organizations suffer from believing they have to build a finished product before they can get customer or end user feedback and reaction. I have seen many software development groups struggle with the same thing. They want to build a whole solution in architectural layers and lock themselves into a solution early that leads to costly rework or failure late. A lesson we can all learn from Apple’s iPhone and iPad successes over competitive offerings that have the same or perhaps more robust “feature set” is that emotional response from the customer is critical to new product success. The challenge that teams building truly new products face is how to predict that response. If these teams were to learn from the Agile mindset of delivering early and often this gap could be closed. The key is for these teams to find ways of delivering early models and prototypes that are low cost instead of waiting until late in the development lifecycle.
New technologies are making this easier and easier. Take 3D printing as an example. 3D printing can be leveraged to deliver lower cost early prototypes for testing in consumer industries or even in more engineering / technology centric organizations. The time and cost to prototype design concepts can be greatly reduced through 3D printing. Ford is one example of a company leading the way in adopting this mindset and approach to new product development.
For more consumables type of companies, early prototypes and test launches can also greatly increase the success of a new product, or worst case at least avoid a costly mistake. Wendy’s is an industry leader in leveraging test markets for both success (Pretzel Burger) and lower cost failures (Breakfast). Wendy’s teams are showing the courage to try things out early but just as importantly, they are making decisions based on their customers’ feedback.
Many product development teams find themselves reacting to poor market feedback after very costly launches. Much of a product’s success is due to the customers’ emotional response to the product. Understanding that this response and feedback is critical for a successful launch, these teams would benefit greatly from leveraging a core Agile principle to deliver early and adapt based on responses. These teams may be hesitant and quick to point out how easy it is to adjust software versus a traditionally manufactured good. Although they are accurate that it is very costly to adjust a finished good, I believe by following the examples of companies above these teams can indeed implement the process and the innovation success will grow because of it.
1 Cooper, R. D. and Edgett, S. J. (2007) Generating Breakthrough New Product Ideas.
Don Sarno has over 18 years of experience in software development and software technologies. He has devoted the last eight years to coaching great agile organizations.