For most executives this Halloween the only thing scarier than the USA presidential election campaign is the development and launch of a new product. Heroes have created successes like the MAC computer, the Zip drive, Fiber Optic cable and more recently the iPod. Equally spectacular, however, are those, somewhat less than heroic, who lost $300 million at Federal Express on Zapmail and $200 million in inventory alone on Polarvision, Polaroid’s instant movies .
New product development is the life blood of any company and yet ironically it is one of the least developed management skills. In general, the success rate of new product launches is extremely low. So are there conditions that can help a company develop a blockbuster product or service? And if so, are there some observed principles on developing and launching successful products that we can apply to our businesses?
In their book “Blockbusters: The Five Keys to Developing Great New Products”, authors Gary Lynn and Richard Reilly researched new product development teams, including those that developed blockbuster products. They discovered five principles they call the five golden rules of New Product Development. Their study concluded that companies that excelled at executing all five of these principles succeeded in launching a blockbuster product 71% of the time and 98% of the time the product was at the very least a moderate success. At the other end of the scale, companies that executed the five principles poorly or not at all (which is by far the majority of companies) were almost guaranteed failure. Here’s a summary of their five golden rules of New Product Development (and the keys to your future success):
- Senior Management Commitment: Teams that developed blockbuster products had senior management’s full commitment and in some cases their full involvement in the project.!
- Clear and Stable Vision: Blockbuster product teams all had specific defined goals.!
- Improvisation: Successful teams were flexible in trying different ideas in rapid succession until a prototype was developed that inspired their customers. (Fail often and fail fast could describe the mantra of high performing new product development teams).!
- Formal and Informal Information Exchange: Information exchange amongst teams that developed blockbusters was rapid and varied using any media type available to the group members. They didn’t wait for formal meetings – information was shared at every opportunity.!
- Collaboration under Pressure: Interpersonal differences of blockbuster teams were quickly shoved aside as the goals and objectives became the focus. Great teams aren’t concerned with building friendships or insisting everyone like each other – they are concerned with reaching their goal – interpersonal differences be damned!
As the authors so bluntly point out, successful teams excel at all five principles. They don’t excel at some of the five principles and don’t excel at them some of the time – they excel at all of them all of the time. And the payoff is huge – almost a 100% guarantee of New Product Launch success. Unfortunately, there are no shortcuts. Ignore one of the principles or don’t apply it rigorously and the New Product Launch success rate plummets. Maybe that’s why this is such scary stuff!
1. “Blockbusters: The Five Keys to Developing Great New Products” by Gary Lynn and Richard Reilly, Harper Business 2002