Product development examples, strategy, and process
What is product development?
Product Development includes the entire set of activities through which a company conceptualizes, develops and launches a concept to the market. It is the capability that allows a company to realize product concepts and present them to customers – reliably and predictably.
A typical product development cycle includes:
- Ideation in close collaboration with customers. Whether it’s brainstorming new product ideas, a suggestion from a customer, or an edict from a senior manager, product development begins with an idea.
- Market research and commercialization activities to determine a market strategy. A business analysis demonstrates the market feasibility of the product. It validates that the product concept has the right functionality and pricing to win market share.
- A product design activity. This is often iterative and in collaboration with customers. In some industries, the “prototype” might be a set of manufacturing processes, a recipe for the new product. Product designs then go through further validation, for example to improve a user interface.
Finally, there’s the product launch and then the ongoing activity known as product life cycle management. Product life cycle management includes the support of existing products as well as new-to-the-company products.
Product development examples
Apple protects new product concepts by separating the product design team from all other parts of the business. The team is shielded from bureaucracy and the usual hierarchy. They might even be discouraged from communicating with other employees.
The team then follows an articulated Apple New Product Process (ANPP) where the team answers in detail the what, who, why, how and when questions related to the product. Apple’s methodology depends on iteration. They will continue to test and revise new products even after they have moved to the manufacturing phase.
Design teams report to the executive team directly. On Mondays, the executive team meets to review the products currently in development. When products move from design into production, an engineering program manager and a global supply manager take over the manufacturing cycle.
Each product has an elaborate product launch plan which is held in strict secrecy. This action plan is called “Rules of the Road” and contains everything required for the commercialization and launch of the final product.
The tech giant uses a Design Sprint approach for new products. Each brief sprint conducts an experiment that the team then hands over to the next sprint to move the product to the finish line.
This approach uses five development stages led by a Sprint Master.
- Understand: the first phase is to comprehend the challenge. Teams brainstorm and conduct short, fast meetings to generate insights that define the end-user’s problem. Key acronym: HMW (How Might We).
- Sketch: Sketching is one approach to ideation. Each team member is then left alone to sketch their own solution to the user’s problem. The team then meets and members share their ideas. The team votes on the ideas and eliminates some.
- Decide: The team then attempts to reach a decision regarding which idea is the best solution for end-users. If the team does not come to an agreement then they might use a Decision Matrix to rate solutions against a set of requirements. They also rate the risk vs. value proposition of the proposed solutions.
- Prototype: Proposed solutions are built out in order to get real time feedback from testing. This stage is about getting rapid feedback to see what will and won’t constitute a viable product.
- Validate: The team then shows the prototype to real users, its target audience. The team may observe customers using the solution. The team then reviews and absorbs their findings together. The team leaves a trail of learnings for the next sprint, which will further the new product development project.
Nigel Hughes, Kellogg’s senior vice president of global research and development summarized his company’s product development approach in early 2021:
“We’ve revamped our whole end-to-end innovation capability to focus on our core food design skills: investing in culinary to get closer to the real food experience; sensory, to equitably learn with the consumer; a design studio and rapid process lab to speed up our prototyping; a scaled-up pilot, which is now certified to make salable food; and finally, our Menuvation Center at The Hatchery in Chicago to showcase our foods with partners and customers.
“These changes give us a real leg up on the competition because they allow us to hit trends, influence new trends and grow our business. They’ve transformed our ability to innovate.”
Product development process
Most companies follow a product development process, often divided into stages, phases or steps. The most common product development processes have six such phases.
For those starting out, or smaller organizations, we advocate reducing the steps to three:
- Concept Fit
- Product/Market Fit
This three step approach is a Minimum Viable Process: enough process but not too much. This three step process enables executive oversight at the inflection points where they need to make investment decisions. It then guides the product team toward reducing risks.
Product development strategy
Another aspect of product development is product development strategy. Product development strategy connects product development to corporate strategy in every possible way: from the technology hub of your company; to the core, augmented, and transformational products you offer; to distribution channels, geographic segmentation, etc.
A viable product development strategy begins with:
- A vision: a broad statement of where you’d like your company to be (3-5-year horizon)
- A strategic plan for product development: steps you intend to take to achieve that vision (2-3-year horizon)
- Product and technology roadmaps, project priority lists and budgets, connected to specific programs that realize the strategy
New Product Development (NPD)
New product development, properly understood, is the design, development, and launch of new-to-the-world products. It involves three capabilities:
- Having the right governance to protect, fund and nurture novel product concepts
- Sufficient funding to allow these ideas to grow
- A process for vetting and prioritizing them to select and launch only the best ideas
Product management for product development
Product management for product development includes such tools as:
- Product roadmaps that show how new and existing products will evolve in relation to one another
- Tools for tracking milestones and keeping new products on schedule
- Tools for keeping roles and responsibilities straight
- Product development metrics that measure the behaviors that improve your process
Organizing product development
Cross-functional teams often come together to develop a new product and then disband, with their resources assigned to other projects. The leader of the development team is usually a Product Manager or Product Owner, while the senior management in question might include the CEO, CMO, CTO/CIO at a startup, or Directors at a larger company.
The best way to organize projects is to have an empowered development team with broad decision-making authority, within pre-established parameters. This is an exception management approach, which includes a clear and simple escalation process when projects drift away from a set of predefined quantitative targets.
In this approach, at the beginning of a project, the dev team and senior management agree on the key dimensions that will make a successful product. These agreed upon dimensions of the project might include certain must-have features, a target dev cost, measures of quality, a desired velocity, and a timeframe for the project (see figure below).
Companies that succeed with product development also have a strong culture of senior management sponsorship of new ideas. These firms have senior managers who are aware of early stage products and create a protected space to nurture them. They champion the best ideas from the very beginning, enabling them to have the funding and resources they need to be successful.
Tips for improving product development
Have a long-term vision
Product development requires patience. Past the start-up stage, a “quick win” mentality won’t get it done. Creating a stream of new products over a long period of time necessitates a vision, a strategy that defines how your company will get there, and the budgets and governance structure to support and execute the strategy.
Integrate technical and customer perspectives into the executive team leading product development
Tech companies tend to be tech driven. But the right executive team to serve as a board for approving investments in product development that include both technical and customer (Product Management) skill sets. Make sure customer needs and market needs are present when leaders make decisions about product development, especially about product selection.
Support product development with appropriate funding
Sure, it’s basic, but how many companies nurture early stage product development to get the best return from their product portfolio? Teams require seed funding on the front end for idea generation, and for the prototyping and iterations required to envision a final product. Remember to fund the first stages, where new product concepts grow into fully fledged offerings in the marketplace.
Create a product portfolio strategy
Companies that create a stream of new products allocate their investments strategically within a portfolio of offerings. Divided between their core business, products in adjacent markets, and completely innovative new products. Companies determine these investments strategically, often based on the company’s risk profile
Make sure the organization is right-sized for the task
Effective product development depends upon sufficient resources. In larger companies, often too many resources are committed to maintaining existing products and the skills needed for tomorrow’s products are limited. Also, too many key resources, like a coder with specialized skills, are overloaded. The right mix for product development is to have these key contributors on not more than two projects at a time.
Have a method for capturing the Voice of the Customer
Whether it’s Design Thinking or some other methodology for capturing the customer experience, it is essential to have a lifeline to potential customers. It is also important to then have a means of translating the voice of the customer into the design process with the features that are most valued by the target audience.
Click on the links below to learn more about product development.
A Minimum Viable Process: the least amount of process possible, but no less. Product development life cycles can be faster with fewer steps.
Learn how to Invest in truely new products, balancing risk and reward with growth and investment. Find out how to optimize your product portfolio.
How to Build a high-performance Program Management capability in your organization to improve new product delivery.
The linkage between Strategy and Time to Market can pave the way for faster innovation. Did you know you can improve predictability with strategy?
The capability to develop new products is the capability that allows a company to realize nascent product concepts and deliver them reliably and predictably.
Design Thinking is an innovation process inspired by empathy for the user followed by ideation and implementation.
Product Development Expert
John Carter is a widely respected expert on product development. He is an inventor of Bose’s Noise Cancelling Headphones and designer of Apple’s New Product Process. As Founder of TCGen Inc., he has consulted for Abbott, Amazon, Apple, Cisco, HP, IBM, Mozilla, Roche, and 3M.