How to Make Product Ideas Pay Off

More than a dozen years ago, the decline of the Western consumer electronics industry was already the focus of studies on how companies, industries and nations manage rapid development of technology.

Since then, it has become clear that the rate of introduction of new technology into products is accelerating in industry after industry and, in fact, has become a primary means of competition. Examples can be found in computers, appliances, imaging and automobiles.

Two factors are driving the trend. First, there is money to be made by being fast and first. Second, there is an understanding in many companies that since rapid technological development is difficult to achieve, it represents a form of know-how that can yield tremendous competitive advantage.

While the case for developing and managing technology can be made without great difficulty, the idea-generation and problem-solving systems that lead to new technology are often harder to achieve. Top-notch companies often distinguish themselves by the ways they generate good ideas. The ideas then become “problems” requiring solutions, which the companies use to develop new technologies.

Asked where good ideas come from, most people would mention research, engineering, manufacturing, marketing, sales, competitors and top management.

The truth is that the best ideas come from customers.

“Customer watching” is essential if customers are to benefit from technology. This means going well beyond typical market research to having the technology specialists get out and meet, talk to and understand customers. The best features and functions in technological products often come from the meeting of technology know-how and the wants and needs of customers. Typical market research often filters out some of the most valuable information about customers.

Customer watching is not infallible, however, so companies occasionally take a “let’s try it” approach--on the theory that it’s sometimes better to be bold and venturesome than careful and tightfisted. They may put a voice in a car telling drivers that a door is ajar, or put seven doors on a refrigerator. If it turns out that customers don’t like these things, companies can take them off the shelf.

Since there’s a limit to the resources that can be squandered on efforts like these, they are limited to innovations that are relatively cheap to graft onto existing products. Also, many companies are willing to try any decent product that uses a key technology--partly to prepare the market for it, but mainly to smooth out production problems without too much risk. Thus, Kyocera America Inc. of San Diego puts out ceramic-edged knives, not because it expects to make money from them, but because the knowledge gained from making them will be invaluable in producing more important ceramics items in the future.

If customer watching helps create the ideas that lead to problem-solving efforts, the next question is: Where do speedy solutions to the problems come from? Again, the obvious answers--research, engineering, manufacturing, even customers--are incomplete, in and of themselves. Companies first need the technological insight, or know-how, to create the problem-solving products, and they have to be able to bring all the pieces of that know-how together. This can be accomplished through teams that cross several company functions.

So the route to great products, then, really follows two paths. The first combines technological insight and customer orientation to come up with good ideas. The second combines insight with multi-functional teams to find solutions to the problems uncovered on the first path.

Once the two paths meet, the goal is speedy execution leading to new products. Everyone, of course, wants things done fast, and there’s a good deal of merit to this. Getting there, though, can be a problem.

Pushing new products out the door is, of course, helped by good planning, the appropriate use of productivity tools and working in parallel teams.

But a fourth element is time, specifically the way that people who are critical to the project spend their time. Recently, an automotive engineer’s time during the critical states of new car development was broken down into several categories. It was found that 40% of the engineer’s time was spent on solo work, 30% on meetings, 15% on paperwork, 10% on communications, and 5% on miscellaneous activities.

When two of those categories--solo work and meetings--were broken down even further, only about half the time was spent on valuable activities. The rest was taken up with rework or make-work activities and on meetings that lacked agenda or conclusions, or on preparing for meetings, or in reporting results of meetings to management.

Also, a great deal of engineers’ time was wasted because they had to wait for decisions. This indicated that not only did the system for making decisions need improving, but that a significant commitment from top management was required. With this commitment, the development team has clear authority to make and implement decisions.

In short, companies with the fastest lead times in new product development are able to form authoritative teams representing a cross-section of company functions. They listen carefully to their customers, they plan carefully, then they pull out all the stops to develop and deliver the technology as quickly as possible.