Balancing Fast Time-to-Market with Project Risk

Every business is interested in managing development projects with a goal to get new products on the market as fast as possible. There are many good reasons for emphasizing speed as the major project driver:

• Competitive pressure—matching or leapfrogging competitive products
• Customer demand—keeping that major account
• Market window—launching new products at the annual trade show
• Revenue growth—maintaining the health of the company
• Many projects, few resources—taking advantage of opportunities

• Start development before specifying the product—the old joke about one programmer telling the other to "start coding while I find out what they want" happens more often than you imagine.
• Launch and fix—another common approach where final product development, quality control and performance validation are done after the product reaches the market—a perfect way to lose both reputation and customers.
• Launch and stop—many products are launched, generate demand and then can't be supplied because of poor inventory build, bad forecasting or incomplete manufacturing and supplier preparation. This approach teaches your competition what you are doing and allows them to catch up quickly.
• Launch and see what sticks to the wall—a substitute for marketing and listening to the voice of the customer—make several variations, put them on the market and withdraw the ones that don't sell; a sure-fire method of confusing the market and losing a lot of money.

Avoid Project Restarts

Recommended first steps include:

1. Writing a brief project definition, including:

• A description of the product to be developed with all functional performance characteristics;
• Pertinent market and customer information to guide development;
• Validation or regulatory testing that must be satisfied;
• Drivers and constraints of the project (time, quality, cost).

3. Charge the team with developing a plan for the project, including discussion of the major issues/risks and suggested steps for mitigation of the risks.

These steps are important for any project. However for expedited projects, these three items constitute the critical path to success.

Discuss Project Risks and Their Mitigation

1. Technical risk—Sometimes the technology required to achieve the specified product performance is uncertain and several approaches could be considered. The normal development path is for the technical staff to begin development with the most likely approach, evaluate it and, if unsuccessful, try the next. This consecutive development path can lead to long project times.

For time-critical developments, to mitigate risk and keep on schedule, it may be appropriate to execute two or three concurrent developments and make an early decision on which technology to take commercial. While the early development cost is higher, if decisions are made before the more expensive testing and validation and commercial preparation stages are pursued, then the gain in time usually more than compensates for the added cost.

This risk-management technique requires planning, staffing and a thorough discussion with management. This approach has yielded a subsequent halving of the expected development time.

2. Market risk—This can be considerable if your customers do not see your new product as a direct replacement for something they already use. To convince them to change their techniques, processes or user techniques requires you to convince them that the effort will bring value. Basically the risk is that they may not agree with you that the new product brings sufficient value to make changes, or that the new product did not solve one of their problems or meet their needs.

Many projects lose time because customers are involved too late in the process. Too frequently, marketing waits until the technical development is nearly complete and they are certain that the product can be made; the general concern is that they do not want to excite customers about something new and then find it can't be delivered. If a customer's first exposure is to your working prototypes, there is a risk that one or more critical performance features are missing or not to their satisfaction. This causes recycle of the development effort, with significant lost time and money.

It is never too early to start testing the product properties via testing of concepts or prototypes. Project definitions should be based on market research and customer feedback. Even when you ask customers to evaluate products that are not commercialized, you gain in reputation for leading development in the field and do not pay a penalty for generating expectations.

If your particular industry requires long product testing and validation cycles, begin them as soon as you can, using working prototypes if possible. For these issues, communication with other functions can be critically important. The comment from quality and testing groups "if only they had told me what they were doing and come to me earlier" is frequently heard.

A similar story can be told about manufacturer and supplier communication. Expedited projects imply that all functions are prepared early. Frequent updates to functional management and a good communication scheme to all functions is essential to succeed in time-critical situations.

3. Financial risk—The key elements of financial risk can be simply stated:

• The product cost is too high.
• Sales do not develop to forecast.
• Product price targets are not achieved.

Marketing and sales must validate the market premises after the prototype is developed, and before committing to manufacture and inventory build. Once development is complete, every effort must be taken to begin securing contracted sales at projected pricing. This market validation phase should take place concurrent with any product performance testing and regulatory compliance testing.

Summary