Creating Breakthrough Products: Innovation from Product Planning to Program Approval

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Overview

Creating Breakthrough Products identifies key factors associated with successful innovation, and presents an insightful and comprehensive approach to building products and services that redefine markets — or create new ones. Learn to identify Product Opportunity Gaps that can lead to enormous success; control and navigate the "Fuzzy Front End" of the product development process; and leverage contributions from diverse product teams — while staying relentlessly focused on your customer's values and lifestyles.

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Product Details

Meet the Author

JONATHAN CAGAN is a Professor of Mechanical Engineering at Carnegie Mellon University. His work focuses on the early stages of product development with emphasis on engineering design, interdisciplinary collaborations, formal design synthesis, and computational design tools. Dr. Cagan is a Fellow of the American Society of Mechanical Engineers and a registered Professional Engineer.

CRAIG M. VOGEL is a Professor in the School of Design at Carnegie Mellon University. His areas of expertise include product design, product aesthetics, design history, team management, and design patent litigation. Professor Vogel is a Fellow, and former President, of the Industrial Designers Society of America (IDSA).

Professors Cagan and Vogel have collaborated for close to a decade in teaching, research, and consulting in the area of integrated new product development. For more information see www.creatingbreakthroughproducts.com

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Read an Excerpt

Chapter One: What Drives New Product Development

Breakthrough products result from the appropriate combination of style and technology and help to create experiences that people find both rewarding and valuable. In this chapter, we focus on the first step in developing a breakthrough product: learning to interpret the interconnected factors of Social change, Economic trends, and Technological innovation. Interpreting these SET Factors leads to the identification of Product Opportunity Gaps in the marketplace. Converting product opportunities into breakthrough products requires a combination of vision and sound methodology. As highlighted in the case studies in this chapter, the comprehensive approach introduced in this book applies equally to the development of products and services.

Redefining the Bottom Line

This book introduces ideas and methods for companies that want to be market leaders through the development of breakthrough products. Breakthrough products create new or redefine existing markets, support the customer's experience in using the product and create a lifestyle fantasy about who that customer is, and generate higher profit for the company that produces them.

We have found the process of product development to be analogous to rock climbing, a challenging, invigorating, and empowering experience. To succeed at rock climbing, you need to have a set of appropriate tools, a good plan for the climb, and an interdependent team that works together to use the tools when appropriate. The climb is constant and well thought out, but the team has the training to adapt to issues that emerge along the way. Successful product development also requires a well-planned process using tools to help you negotiate difficult terrain. Teams of engineers, designers, and market researchers must work in unison to recognize promising product directions and work through the Fuzzy Front End of the product development process to create a product that meets the needs, wants, and desires of the customer. Managing the Fuzzy Front End is an underlying theme that permeates this book. The Fuzzy Front End is the part of the product development process that starts with the general goals of the program and covers the early stages of new product development. Making the most of the Fuzzy Front End is essential in creating breakthrough products. Companies that see the process as a climb see every part as essential and understand that the preparation and the climb have equal importance. The process requires the skill and patience necessary to use the tools successfully to develop products that you are confident will succeed in the marketplace.

There are many companies that approach product development as if it were parachuting instead of rock climbing. They have a core technology (their plane) and capital (the parachute) and then they free fall through the Fuzzy Front End to quality programs for manufacturing, expecting a smooth landing. These companies think the free fall will take care of itself, or in product terms they quickly jump to a focus on one product concept that they think will become a marketable product if it meets manufacturing quality standards. Product development in this way succeeds only by chance. By failing to maximize the Fuzzy Front End, these well-manufactured products fail in the market because they do not respond to customer's needs, wants, and desires. The result is a loss of brand equity, profit, time, and investor confidence.

New product development is a climb, not a free fall. The more prepared you are for the challenges of the terrain, the better the climb will be. This book will help you climb through the Fuzzy Front End of the product development process and will give you the tools that make your product more likely to succeed in the marketplace.

There are a number of challenges that make it difficult for companies to maintain a leading position in a particular product category. These challenges are forcing companies to redefine the bottom line and the path to get there. The goal is to increase profits while simultaneously maintaining a healthy internal structure that balances innovation and continuity. So, while companies are trying to realize their stated goals in sales and profit projections, they are also trying to resolve the following issues:

  • Finding the right opportunities for new products and appropriate innovation to improve existing products;
  • Designing products and services that customers perceive as truly valuable by appropriate integration of style and technology;
  • Maximizing front-end decisions to minimize downstream corrections;
  • Reducing cycle times without reducing innovation and quality;
  • Building and maintaining brand equity through a strong product;
  • Integrating design, marketing, and engineering by reducing "perceptual gaps" and producing products that are considered useful, usable, and desirable by the customer;
  • Appropriately positioning the role of technology in product development;
  • Recognizing the significance of industrial and interaction design in the product development process;
  • Attracting, preparing, and retaining the best people.
To be successful in meeting these challenges, a shared vision must flow from top management through middle and lower management down to individual members of product development teams. While an opportunity for new products can be identified at any level, the vision of the product potential must be shared and championed at all levels. Not only do successful products help customers create maximum experiences in their everyday lives, but the process of developing the products themselves must be an equally powerful and rewarding experience for the product team. Developing products should be a form of serious fun. If everyone on the team is enjoying the process, it usually means that everyone in the company profits from the experience.

Positioning Breakthrough Products

Consumer demand for better products has been continually increasing during the last three decades. During the 1980s and early '90s, quality development programs, reengineering, and concurrent design were the initiatives that drove companies worldwide to constantly improve their products. At the beginning of a new century, the emphasis has shifted from the back end to the front of the product development process. It is increasingly harder to find the right product concept and the time and processes needed to bring that concept to market. Technological innovation and maintenance of manufacturing standards are still intrinsic parts of developing successful products. But if, however, a product does not connect with the values of consumers, it will fail.

People use products to improve their experience while doing tasks. They relate these experiences to their fantasies and dreams. Successful products fulfill a higher emotional value state, whether it is the excitement and security of driving in an SUV, the comfort and effectiveness of cooking in the kitchen, the relaxation and escapism of sipping coffee in a coffeehouse, or the independence and adventure of using a two-way communication device. The mantra that form follows function is no longer relevant; we are now in a period where form and function must fulfill fantasy.

What is it that makes some product programs fail and others succeed? How did Black & Decker corner the flashlight market from 1994 to 1997 with a product called the SnakeLight? How could OXO evolve from a single product, GoodGrips, to a full line of products, a significant market penetration, the most prominently displayed product line in stores that carry the OXO line, and reinvent the profit margins in the industry?

How could Motorola develop a major presence in the consumer product category with the hit of one new product, the Talkabout? How could Starbucks, initially a small coffee house in Seattle, reinvent how Americans drink coffee and turn a 50 cent cup o' Joe into a $3.00 Café Latte Grande (make that skim milk)? How could car companies look to the past for ideas that would sell so effectively in the present, as they did starting with the Mazda Miata, following with the Volkswagen Beetle, and continuing with the Chrysler PT Cruiser?

In evaluating the value impact of all these products, we found that they were all highly successful in communicating value in the key categories that connected them to their customers and moved them ahead of their competition. If you look at most positioning maps, the optimum quadrant is usually the upper right, where each positioning attribute is maximized. In this book we introduce a Positioning Map (Figure 1.1) that charts style against technology through added value. The Upper Right, with integrated style and technology and the only place with significant value, is the place to which a company must move and be positioned in order to best differentiate itself from the competition and to succeed. All of the breakthrough products mentioned above are positioned in that quadrant. Getting there is not easy because of the third dimension, which acts as a cliff that needs to be climbed. As mentioned previously, product development is akin to rock climbing. This "Sheer Cliff of Value" is the rock that the product development team must climb to succeed. Every progressive company sets its strategy to move there, but it often fails to find the methods to achieve the goal. This book will help you get there. We call this approach Moving to the Upper Right.

Products and Services

This book primarily focuses on physical products. Products succeed when they play a major role in creating optimal experiences for customers. Service companies need to provide support that optimizes experiences as well. We recognize that the development and realization of products and services require similar approaches. In order to be successful, it is necessary that both approaches utilize the integration of a number of areas of expertise, and a solid understanding of the customer and their desired experience.

A product is a device that provides a service that enhances human experience. It is always part of a company that provides a service to its customers. That is why Xerox became "the document company" (now "the digital document company"). The service they provide is the production of documents, which they do by producing printing and copying equipment. A service is an activity that enhances experience; it requires an array of products to deliver its core activity. If your company is a web service provider, you use and produce products to provide that service. If your company produces automobiles, the service you provide is transporting people and things. The auto industry produces automobiles; one of the highest profit areas for GM is, however, financing automobile purchases, which is a service. Where would UPS, a delivery service, be without their brown trucks, jets, and information management products? We will discuss both products and services in this book, for the issues that make a product or service successful are the same. Both products and services are connected to understanding the experience that the end customer wants and then translating that understanding into a product or service that enhances a particular interaction with objects, environments, and/or other people.

It sounds simple but understanding customers and then translating customer understanding into products and services is extremely difficult. The number of people and resources that must be brought together to produce a successful product is enormous. The complexity of this task explains why so many product attempts fail. In larger companies, by the time a customer buys a product, hundreds or thousands of people and thousands of man-hours went into the identification, planning, development, production, distribution, and sales. Understanding of the customer can easily be lost in the product development programs in large companies as secondary factors come to dominate decisions about cost, features, and form. While small companies have a better chance of keeping the customer in the loop throughout the process, they often lack the balance of disciplines necessary to generate the research and development of product characteristics for the market. No matter what the size of the company, all of the people involved are stakeholders in the product process, and the success of the product depends on the coordinated involvement of all of them....

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Table of Contents

Foreword
Preface
Acknowledgments
Glossary of Acronymns and Terms
Pt. 1 The Argument 1
Ch. 1 What Drives New Product Development 2
Ch. 2 Moving to the Upper Right 32
Ch. 3 The Upper Right: The Value Quadrant 54
Ch. 4 The Core of a Successful Brand Strategy: Breakthrough Products and Services 84
Pt. 2 The Process 105
Ch. 5 A Comprehensive Approach to User-Centered, Integrated New Product Development 106
Ch. 6 Integrating Disciplines and Managing Diverse Teams 138
Ch. 7 Understanding the User's Needs, Wants, and Desires 174
Pt. 3 Further Evidence 213
Ch. 8 Case Studies: The Power of the Upper Right 214
Ch. 9 Automotive Design: Product Differentiation through User-Centered iNPD 254
Epilogue 289
Index 295
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Preface

For nearly a decade, we have worked as a team in teaching, research, and consulting. As a result, we have developed a unique understanding of the product development process. We constantly identify and analyze examples of successful products, many illustrated in this book, and look for new techniques for user-centered research and integrated New Product Development (iNPD). We have come to believe that breakthrough products should provide an optimum experience for the people who buy and use them. They should also provide an equally rewarding and gratifying experience for the product development teams who create them.

We have been consultants to and conducted research with small and large companies. We have also conducted professional development seminars in iNPD. During this time we have also co-taught an annual course in integrated New Product Development at Carnegie Mellon University, which has resulted in patented products. Through our consulting, research, and teaching we have identified a number of factors that contribute to successful products. We are not just talking about products that are competitive but products that redefine their markets and often transcend their original program goals to create new markets. This book summarizes our findings in a form that will aid practitioners and managers in the product development process.

This book is a proof of our process. We began by identifying the opportunity for a book by recognizing the difficulty that companies have in working through the early stages of product development. We did extensive research, building on our existing base, to understand what managers and practitioners who create new products (our target market) required in their process that they did not already have. The focus on breakthrough products, the integration of disciplines, the merging of style and technology, and the creation of true consumer value, all at the Fuzzy Front End, became the themes that drove the development of this book. We identified expert users who had the vision and insight to help us identify critical issues and weed through many ideas. We created prototypes that these expert users read and used to provide feedback. After several iterations, we moved into the design refinement stage to finally deliver what we hope is a useful, usable, and desirable book to help you create breakthrough products.

What to Expect from This Book

In this book you will find some new ideas in product development. You will also find seasoned best practices used by large or small companies. We have integrated these different approaches into a logical framework that takes you from product planning to program approval. You can expect to gain an understanding of the following six aspects of the new product development process:

  1. methods to obtain insights into emerging trends in consumer and industrial markets;
  2. a means to navigate and control what is often called the "Fuzzy Front End" of the product development process, that portion of the design process when the product and market are not yet defined and qualitative tools are needed to complement quantitative research;
  3. the use of qualitative research to understand who the customer is;
  4. techniques to assist in the integration of diverse team players, especially engineers, industrial and interaction designers, and market researchers and planners;
  5. a complete product development process that brings the product from its opportunity identification stage through to program approval and product patenting;
  6. an approach that connects strategic planning and brand management to product development.

We then provide case studies that demonstrate the successful use of the methods introduced in this book. We show that these methods apply to both products and services.

The book's logical flow is designed to provide a useful guide for anyone involved in the product development process. Readers can also use the book by first scanning and then focusing on the areas initially perceived as most relevant. In either case, we have tried to make sure that the book is interconnected and cross referenced so that issues addressed in one part are referred to again in other parts.

The book is divided into three main sections. The first section (Chapters 1-4) establishes our main argument that the best new products are designed by merging style and technology in a way that connects with the lifestyle and values of intended customers. The second section (Chapters 5-7) presents a process for creating such products by integrating different disciplines with a focus on the needs, wants, and desires of the customers. The final section (Chapters 8 and 9) provides additional case studies as further support of our argument and its application to several product categories.

Chapter 1 explains the forces that generate opportunities for new product development. This chapter introduces the process of scanning Social, Economic, and Technology (SET) Factors that leads to Product Opportunity Gaps (POGs) and new market segments. Four case studies of successful companies and the products or services they deliver are used to illustrate this process: the OXO GoodGrips, the Motorola Talkabout, the Crown Wave, and the services provided by Starbucks coffeehouses.

Chapter 2 outlines our major premise. In order to produce new products, a company needs to commit to "Moving to the Upper Right." This phrase represents an integration of style and technology through added product value based on insight into the SET trends that respond to customers' emerging needs for new products and services. Our Positioning Map is introduced to model and map Upper Right products.

Chapter 3 focuses on consumer-based value and further refines product opportunities into what we call "Value Opportunities" (VOs). We have identified seven Value Opportunity classes—emotion, aesthetics, identity, ergonomics, impact, core technology, and quality—that each contribute to the overall experience of the product. The challenge is to interpret the VOs and their attributes and translate them into the right combination of features and style that match with current trends.

Chapter 4 discusses, through corporate and product branding, how to make Moving to the Upper Right a core part of a company's culture. Products and services are the core of a company's strategic planning and brand strategy and they should be driven by the theme of user-centered interdisciplinary product development. The establishment of a clear brand identity necessitates the integration of customer values with company values in a way that differentiates a company and its products in the marketplace.

Chapter 5 is devoted to the planning of product development programs through the presentation of an integrated New Product Development — iNDP — process for the early stages of product development (i.e., the Fuzzy Front End). Most product programs go through a stage where the product opportunity is researched, prototyped, and evaluated. Many companies, however, do not have clear methodologies for this frequently underdeveloped stage of the product development program costing them significant resources. The process we have developed helps companies navigate and control this process by keeping focus on the user. The process is broken into four phases that brings the development team from the stage of identifying opportunities to the program approval stage where intellectual property is protected.

Chapter 6 focuses on team integration and management. Effective interaction of disciplines is integral to the product development process. We describe how team members, and in particular designers and engineers, can work in a context of positive tension where they use their different perspectives to a competitive advantage for the whole team. We also lay out a strategy for breaking down actual parts and components of the product and, by understanding their impact on customer lifestyle and complexity, determining where integration is required to effectively design them. The chapter concludes with insights on how to manage interdisciplinary teams.

Chapter 7 focuses on developing a comprehensive approach to understanding the user's behavior. We discuss the use of existing and emerging methods for understanding how consumers use products and translating that understanding into what we refer to as "actionable insights," which become the basis for developing appropriate product characteristics. These approaches empower the product development team to translate customer preferences into appropriate style, ergonomics, and features.

Chapter 8 highlights nine additional case studies of successful new product development representing a range of product and service categories and types of product development teams.

Chapter 9 highlights the user-centered iNPD process for automobiles, a particularly complex and exciting consumer product market. The Epilogue concludes with a look at future trends for new product development and final thoughts on why companies should commit to use of the iNPD process.

User's Guide

Through our many interactions with industry, people have asked us questions that relate to their product development problems. We have answered many of them in this book. In this section, we list these questions together with pointers to the chapters where they are answered. Readers with a specific issue may want to begin the book here. They are divided into five areas: 1) how to get started; 2) how to become user-driven instead of technology driven; 3) how to balance team, people, and discipline interactions; 4) how to commit the time, money, and people for an integrated New Product Development (iNPD) process; and 5) how to succeed in the marketplace.

I. How to Get Started

How do you learn a successful user-centered iNPD process? The whole book
What is the Upper Right? Chapter 1
What does it mean to design for fantasy? Chapter 1
How do you jumpstart the process? Chapters 1 and 5
What is the Fuzzy Front End? Chapter 5
How do you develop a core competency that separates you
from your competitors? Chapters 5 and 7
Why is quality for manufacture no longer enough? Chapters 1, 2, 3, and 4
How do you balance up-front research and development with
downstream refinement in the product development process? Chapter 5

II. How to Become User-Driven Instead of Technology-Driven

How do you know when you have a true product opportunity? Chapters 1, 2, 3, and 5
How do you get beyond being tech driven? Chapters 5 and 7
What is ethnography and how do you use it? Chapter 7
How do you determine the user value in different parts of a product? Chapter 6
How do you design for a full sensory experience? Chapters 3 and 5
How do you successfully use qualitative research to understand Chapters 5 and 7
the needs of a user?
How do you use psycheconometrics to determine what users want Chapters 3 and 7
and what they will pay for it?

III. How to Balance Team, People, and Discipline Interactions

How do you plan and manage an effective product Chapter 5
development process?
How do you prevent turf battles from having a negative effect Chapters 5 and 6
on the product development process?
How do you maintain an interdisciplinary approach that keeps Chapter 6
different disciplines communicating effectively?
How do you get team members to respect each other's capabilities? Chapter 6
How does team integration affect career development for individuals? Chapter 6
How do you effectively partner with suppliers? Chapters 6 and 9

IV. How to Commit Resources to an iNPD Process

How do you determine how much time, money, and personnel Chapter 5
to commit to the iNPD process?
How do you know how long it will take to address the Fuzzy-Front End? Chapter 5
How do you meet deadlines within the product development process? Chapter 5
How do you integrate industrial, interface, and communication Chapters 1, 5, 6, 8, and 9
design into your company's product development process?

V. How to Succeed in the Marketplace

How do you create a product that reaches the majority of customers Chapter 5
in the marketplace?
How do you gain confidence that the product warrants the capital investment? Chapters 1, 5, 8, and 9
How do you balance being cost-driven and being profit-driven? Chapters 3 and 6
Have there been any successes from this approach? Case studies throughout book, especially Chapters 1, 2, 4, 8, and 9
How does the development of services differ from that of products? Chapter 1
How can you develop a brand strategy that integrates your products and services with your corporate structure? Chapter 4
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