Apple’s New Product Development Process Case Study
Many companies face internal problems because they can’t see the bigger picture.
I came face to face with this reality while working with Apple.
What Apple had was the right ideas. They lacked a concise way to take those ideas and make them into tangible products; they needed product management tools to scale their new product development to the next level.
There were two significant issues in their new product development process:
The first problem was reinventing the wheel every time a new product was launched. The second problem was that each team was interdependent on the other. One product team’s quick decision could impact the work of the parallel team. This created a possible cycle of one team destroying the progress of another.
In short, the product development process was tribal. To scale, they needed to change.
Further, teams were inefficient, and the weight of this inefficiency landed on the manager’s shoulders. The managers were weighed down with attempting to reinvent the wheel and putting out the day-to-day fires the other product teams (and product managers) were causing in the design process. Apple struggled to achieve its most significant goal, scaling up.
After their fourth attempt at identifying the product development best practices, my colleague Jeanne Bradford, who worked in the Cupertino HQ (working for the manufacturing and global supply manager), and I brought on to find the golden intersection between idea and creation.
We took a four-step approach to transform Apple’s new product process, the TCGen consulting approach we use regularly with our clients. Steve Jobs is not against the process; he is just against too much process. He liked to combine innovation with very rapid iteration to create one of America’s most admired companies.
Step 1: New Product-Focused Assessment
Bradford and I took a general assessment, including idea generation, market research, and brainstorming. We used its findings to pinpoint several improvement levers, including improvements for the design teams. These levers addressed issues like the product teams crashing each other’s latest innovations and fostering a more collaborative and efficient environment. By incorporating idea generation and market research into the assessment process, we aimed to capture various innovative concepts, potential product ideas, and insights about the target market and customer needs.
Each lever we identified had the potential to bring about improvements to a certain degree. To ensure maximum impact, we prioritized the levers that would have the most significant effect on the overall product development process. By sequencing and addressing these levers in order of priority, we aimed to create a structured approach that would lead to tangible improvements in idea generation, design, market research, and overall product development outcomes. This approach would be crucial in developing a solid business plan based on the new product ideas and aligned with the needs and preferences of the target market.
Predictive Metrics and Business Analysis
For each of these key improvement levers, we created a target metric. We wouldn’t move on to the next level until the one prior was established. We would move on to the next priority only when we achieved our target metric. The product concept and development strategy aligned with the market need and target audience, ensuring our efforts focused on delivering a competitive advantage and capturing market share.
It’s this general assessment and product development metrics that separated our efforts to improve the product development process from the earlier attempts. By implementing a structured approach and aligning our actions with the business plan, we could strategically navigate the product life cycle, identify and address the market need, and effectively position our product to gain a competitive advantage and increase market share.
Step 2: Set Boundary Conditions
The most crucial part of transforming the product process was establishing product management tools like boundary conditions and out-of-bounds procedures. This was a vital part of the Apple New Product Process (ANPP).
Boundary conditions are a contract between the teams and management. At the start of each project, the team and management negotiate a contract around approximately five dimensions of a project:
- Product Cost
Each boundary condition identifies the big, bold aspiration the team has for its project. The team and management then agree on quantitative thresholds for each boundary condition. For example, a target cost for the product at retail or a “no later than” date for delivery of a product being shown at a trade show.
The success of the boundary conditions process lies in defining a quantitative metric for each dimension.
As long as each team expects to remain within its pre-defined boundary conditions, upper management leaves the team alone. If the team predicts they will cross a boundary, called a boundary break, they have an escalation process. This process is the out-of-bounds process.
There are two solutions for an out-of-bounds process.
Solution #1: The team emails management proposing the solution to the boundary break. If management agrees to the team’s solution, a new quantitative metric is decided upon, and the team proceeds as it was.
Solution #2: If management doesn’t agree to the team’s solution, then a meeting is held where the management and the team agree and create a new quantitative metric as their target.
After the out-of-bounds review is complete, the team and management continue as they were. This approach ensures teams don’t get micromanaged and provides a clear escalation path if projects don’t go according to plan. This measure ensured that we did not run afoul of manufacturing practicalities, and we followed the rules of the road and supported the design team, the development team, Engineering Project Management (EPM), and Global Supply Management (GSM) to the final product.
Step 3: Overcoming the Cultural Hurdle
Convincing management to empower the teams was a significant challenge. For example, when we asked managers to remove weekly status meetings, they refused. Despite knowing a team was working within boundary conditions, they still wanted weekly updates. This created a repetitive, time-wasting system.
If a team was within their boundary conditions, set to meet their quantitative metrics for each dimension, there was no need to hold an hour-long meeting to explain their progress to management. Management knew their progress already because they were within their boundary conditions.
We continued to find resistance in many culturally everyday Apple practices, finding ourselves having to convince employees this process would make their jobs easier. Some of the most significant elements that we had to work with were their product design process (including industrial design and user experience design), as it was essential to preserve or even enhance it.
Apple’s design process and leading with great products are fundamental to who they are. Jony Ive was an authentic second voice that married great design with functionality. It sets Apple apart from other great companies like Amazon and Microsoft.
Step 4: Implement Apple’s Product Development Process
After we convinced employees they would be happy with these changes, we implemented a test trial. We tested our product process with several teams and key executives. This was mainly a learning exercise to understand the specifics of implementation. With a complete understanding of how our process worked in real-time, we held a workshop to train all relevant stakeholders, including several sessions with the executive team.
Teams working within boundary conditions consumed less of management’s time. When projects strayed from their initial goals, the out-of-bounds process kept the project’s momentum while we moved toward achieving our quantitative metrics. One of the most successful parts of our process was the improved relationship between management and teams. Apple was no startup when we worked with them, so the team and management needed to work together – and they did.
Bradford and I successfully transformed Apple’s new product development environment by incorporating validation and customer feedback at every stage of the product development process. We recognized the importance of gathering insights directly from customers to ensure the development of a successful product. This iterative approach enabled us to gather valuable feedback and make necessary adjustments before progressing to the next stage, ensuring that the final product would meet customer needs and expectations.
Driving Effective Product Management and Concept Development for Scalable Success
The ability for companies to scale depends on achieving product development maturity. If your process is built on quantitative results with sideline processes established to fix unforeseen problems, you can achieve Apple’s largest mission. Along with a robust pricing strategy and an empowered product development team, consistent validation and integration of customer feedback are essential for driving success in bringing new business ideas to market.
Apple has continued to scale for years. ANPP is now the guiding principle with iPhone, iPad, iPod iMac, and Mac (Macintosh) business units.
Apple’s Effective Processes: A Closer Look at Additional Key Factors
In the dynamic product development landscape, Apple has established itself as a global leader and consistently introduced innovative and groundbreaking products. Central to their success was a meticulous and well-executed marketing strategy that drove the commercialization of their new offerings. By leveraging a comprehensive understanding of pricing, existing products, feasibility, and new product ideas, Apple became synonymous with cutting-edge technology and exceptional user experiences.
Apple’s Marketing Strategy and Commercialization in the Product Development Journey
At the forefront of Apple’s product development process was the ideation stage, where new ideas were generated and evaluated for their market viability. This crucial step involved considering market share potential customers and exploring new markets to identify untapped opportunities. Through careful analysis of consumer needs and preferences, Apple’s marketing plan was designed to resonate with target audiences and carve out a distinct market position.
To validate their concepts and ensure a successful product launch, Apple employed various strategies, such as concept testing, and conducted focus groups. This allowed them to gather valuable feedback and refine their ideas, resulting in a product that met the demands of their potential customers. This iterative development cycle ensured that the final product aligned with Apple’s commitment to product innovation and exceeded customer expectations.
Throughout the development process, Apple collaborated with distributors, partners, and their sales team to optimize market reach and maximize sales potential. By carefully segmenting their target audience, Apple tailored their marketing efforts to specific customer groups, creating tailored messaging and campaigns that resonated with their intended market segments. This approach enabled Apple to maintain a competitive advantage and capture the attention of potential customers.
Furthermore, Apple recognized the power of social media in amplifying its marketing efforts. By harnessing the reach and influence of various social media platforms, Apple effectively engaged with its target audience, generating buzz and anticipation for its new products. This strategic use of social media was integrated into their overall marketing plan, enabling Apple to create a strong brand presence and enhance customer loyalty.
Technical feasibility played a crucial role in Apple’s product development process. With a strong focus on software development, Apple ensured that its products were seamlessly integrated into its ecosystem, providing a cohesive user experience. By prioritizing technical feasibility, Apple created a finished product that not only met their high standards but also exceeded customer expectations.
As entrepreneurs and businesses navigated the product development landscape, Apple’s product roadmap was a valuable guide. It outlined vital milestones, timelines, and dependencies, ensuring a structured and efficient development process. This roadmap enabled Apple to maintain a strategic focus, aligning its marketing efforts with its overall business objectives.
Apple’s success in the commercialization of its products stemmed from a well-executed marketing strategy encompassing pricing, feasibility, market segmentation, and technical innovation. By leveraging its competitive advantage, engaging potential customers through social media, and adopting a customer-centric approach, Apple established itself as a pioneer in the tech industry. Through a relentless commitment to product innovation and a comprehensive understanding of its target market, Apple continued to captivate consumers and shape the future of technology.