Every company wants to get the right products to market quickly and retain loyal customers. Why is this so difficult for most companies?

Technical factors are usually not the major problems for the development and launch of successful new products. Reasons for product failure include:

• Lack of a compelling need for the product in the marketplace
• Poor understanding of user needs
• Lack of up-front planning
• Lack of competitive analysis
• Lack of corporate strategic alignment
• Poor communication between cross-functional organizations
• Errors discovered late in the development cycle
• Senior management interference
• Project overload for team members
• Lack of understanding of regulatory or channel issues

Launching products that meet customer requirements and are competitive in the marketplace requires:

• A keen understanding of customer needs and competition
• A robust product development process
• Effective collaboration between internal resources and external customers, partners and suppliers
• Criticality of product validation and testing
• Effective internal preparations for a successful external launch

Yet optimization of such dynamic variables is difficult, complicated by the hard reality that not every product is destined to be a financial success in the market. Successful companies learn as much as possible from each product development and launch activity, enabling them to eventually build a portfolio of offerings, with a high ratio of very successful products.

In a marketplace where 75 percent of new products fail and less than 5 percent of new products have complete customer requirements, the good news is that such dismal success rates can be measurably improved by focusing on the customer's needs. Success in the marketplace increases as products enjoy higher-than-average market acceptance. Many companies, in fact, have started to focus more on time-to-market acceptance rather than merely time-to-market introduction. They have found that this provides higher ROI by accelerating and increasing revenue and reducing costs.

Launching competitive products that meet customer requirements requires systematic attention to the following areas.

Understanding the Marketplace

How can companies define the right products? Product developers often get caught in the trap of only soliciting customer feedback, with the intention of improving the functionality of the existing products. It is important to step back and fully understand the customer's needs, in order to become customer-centric rather than product-centric. Customer needs are often not what customers or potential customers say they want in terms of specific product functionality. It is important to use a keen understanding of customers and their workflows to discern these needs.

Some examples of customer-centric issues to assess include:

• What are the current challenges facing customers?
• How are customers currently addressing such problems?
• Have these approaches been working; if not, then why?
• How are the customers' business processes changing?
• What about other markets, customers, or applications?
• How are the needs of these potential customers different?
• What are the buying processes and drivers?
• What are the customer constraints-technology, resources, money?

Customer information of this sort can be obtained both directly and indirectly. If directly, marketers assess customer processes and needs, and fit these with existing or proposed products. There also are other ways of capturing customer knowledge. Customers often phone into a company's call center to express their opinions about its products. Warranty claims also provide input into the product planning process. Salespeople also often hear from customers about product functionality.

Another useful consideration is assessing the needs of various types of customers based on how quickly they adopt new products and new technologies (i.e., lead users, early adopters, early majority, late majority, laggards-ref. Professor Eric Von Hippel, MIT). Although the early users will often have different product requirements, they provide valuable information for developing breakthrough products. It is useful to talk to opinion leaders or create a company idea bank-an inner think tank that often evolves into a repository, not only of simply internally generated ideas, but also of internally generated ideas in response to customer feedback.

It is most important to learn about unarticulated or prospective customer needs in order to evaluate if a request from a single customer can be extrapolated to the larger universe of customers, and if new product functionality is justifiable in terms of company resources and priorities.

Additional information on external factors (e.g., government legislation affecting customer needs) also should be taken into account. Competitive analysis addressing current and future product features/ benefits, price, quality, market acceptance and technology by the vendor further hone a company's product requirements.

A Robust Product Development Process

As organizations grow leaner, the pressure to get products out faster increases. As employees get flooded with different types of information, it is critical for organizations to be capable of responding with agility and discipline in order to be successful.

Agility is derived from efficient organizational processes and prudent use of information technology. Discipline, from management and employees, also emanates from efficient organizational processes.

As with most organizational imperatives, it also is important to recognize all of the dimensions of successful product development-culture, process and technology. The culture of an organization will determine how employees interact with each other and respond to pressure. Leaders of organizations also must cultivate and maintain the right cultural environment in their companies to ensure timely collaboration to support product-planning, development and launch efforts. Well-defined and well-applied processes for communication, product development and launch allow for timely integration of input from all of the key stakeholders across the organization, and enable timely decisions at the different stages of the product lifecycle.

Good processes include sharing lessons learned and best practices. Technology refers to development of the appropriate expertise in each of the cross-functional areas through effective use of information technology. Applied wisely, it will result in smooth collaboration across the product development team both within a company and with customers and partners. Timely cross-enterprise collaboration is therefore a critical factor for getting the right products to market on time.

Over the years companies have started to apply structured processes for product development and to use cross-functional teams. In these processes for product development, each phase contains a set of prescribed and concurrent activities, incorporating industry best practices. Phases are cross-functional and preceded by a decision gate. Gates are the key points where a decision must be made. Gatekeepers can choose to allow, stop, hold or mothball the project.

Phases can include:

• Generation and selection of ideas
• Business case development
• Product feasibility determination
• Design and development
• Validation
• Manufacturing ramp-up and release
• External launch

Research shows that companies using a gate approach reduce time-to-market by as much as 50 percent compared to companies without a structured new product development process in place.

It is important to realize that all products have a lifecycle-adoption, growth, saturation and decline. Smart companies understand the lifecycle of their products and are able to protect their revenues and profitability by managing their portfolio of products. The typical challenge is for marketing, engineering, manufacturing and sales to be in alignment during the lifecycle of different products to improve new product decision-making.

An organization developing a number of products needs to understand its portfolio of development activities in terms of the market dynamics. The right level of structure and workflow must apply for the team to be successful in the marketplace. There needs to be a mechanism for teams to capture their learning from successful as well as unsuccessful products. Failures can be great learning tools and teams can learn to try alternative approaches for future products.

A Team Approach to Product Development

In addition to a robust product development process, the key to accelerating time-to-market is good old execution-which is where the organization comes in. Each function provides valuable perspectives in the new product process. These perspectives combine market experience with the benefits, costs and acceptability of one approach over another. Thus, a good product development team today includes both the internal development team members within a company and its customers and partners.

It is useful to break up the project into steps, some of which can be outsourced. These external resources can be customers and partners, and can include consultants, engineering service companies, research labs and equipment suppliers. The organization needs to have a single person or small team that coordinates work at different locations/organizations and integrates the work of the larger team. To be successful in working with these external resources, it is important to have:

• A reliable network that can be tapped
• Skilled personnel with experience working in such an environment
• Alignment and commitment of external resources with project objectives
• Risk assessment (What happens if they pull out?)
• Clear understanding of roles, responsibilities and timelines
• Good structured communications
• IP management

A company also can have its own employees spread out across remote locations. Collaboration between all of these team members-both internal and external to a company-becomes critical in developing a successful product.

Product development is a complex multifunctional process and should be seen as such. Ineffective communication between various functional groups often becomes a serious roadblock in the product development process. For example, the marketing department will typically provide marketing requirements to the engineering department and obtain a commitment from engineering to make the product available within a certain timeframe. Yet, marketing will have put the product's public launch activities into gear only to find that the product's full functionality still is not available due to unexpected developmental issues.

Similarly, manufacturing may be procuring inventory for volume ramp-up-typically costly resources that need to be carefully managed-only to find out that this inventory now needs to be stockpiled indefinitely, while the product development team takes time to work out unexpected glitches and kinks in the product development process.

To achieve success, constant communication to and from all of these functions is mandatory, so that they may discuss, agree and decide upon all the trade-offs (e.g., lesser functionality by a particular date or complete functionality at a later date). Communication needs to be secure across organizations sharing the necessary information using a common platform. The key is to use collaboration tools across the entire product development team to ensure quick response and participation by the entire team. Implementation of a system providing real-time alerts for these types of problems, coupled with facilitation of this communication process, will go far toward improving the overall efficiency of product development and accelerating the time-to-market.

Criticality of Product Testing and Validation

Product testing includes both internal as well as beta testing and is important for validating the product functionality before external launch. It's a step that when overlooked, often results in a failed product launch. It includes preparation of test plans, testing, and issue tracking during manufacturing ramp-up and release. Key to the success of a beta test is finding good sites-sites that will use the product rigorously in different scenarios in a timely manner, will openly share the information with you and be willing to serve as references for you in the future.

Beta testing should involve testing of the product, product documentation, training and support. Communication is critical and involves providing an easy feedback mechanism for the beta sites to report problems quickly. These problems should be exposed to the entire product development team so there can be collective input regarding the resolution approach, merit and prioritization. Customers should be informed of the resolution status of each problem to provide an incentive for them to provide additional feedback.

Effective Preparation for Successful Launch

Truly successful product launches are based on strong internal preparation. It is critical to carefully design a launch plan. Internal preparation also is critical because it will address issues such as documentation, pricing, warranty, demos, sales tools, training for sales/ channels/service/support, etc. Going back to the original definitions of customer requirements is useful, at this point:

• Who is the customer?
• What are their pain points?
• How is this new product going to help them?
• How will they find this new product out in the market?

These types of questions define the best ways of reaching target customers.

Finally, plans should be set in place for extending a product's useful life and for phasing out products-such as providing post-obsolescence support and guiding customers to other company products in order to keep them from switching to competitive products.

Summary

The keys to successful and rapid market acceptance of new products are:

• A keen understanding of customer needs and competition
• A robust product development process
• Effective collaboration between internal resources and external customers, partners and suppliers
• Criticality of product validation and testing
• Effective internal preparations for a successful external launch

The smartest companies make a distinct effort today to build a knowledge base of all product development efforts-from beginning to end-analyzing what worked and what didn't. This enables product development teams to function at top efficiency by keeping them from re-inventing the wheel. With parameters constantly in flux, this type of coordinated system works better than any model in keeping all team members appraised of the product development process. It maximizes product ROI, accelerates time-to-market introduction and results, ultimately, in market acceptance.

To develop products that are successful in today's marketplace, organizations also have to realize that their products have a finite life, and as a result they must take care to deploy their scarce resources with discipline and agility. Fortunately, software applications that enable companies to address product lifecycle processes are now available in the marketplace. However, to maximize effectiveness of these systems, leaders of organizations also must cultivate and maintain the right cultural environment in their companies to ensure timely collaboration to support product planning, product development and product launch efforts.