New product development is expensive. However, if you want your company to thrive in the future, you need to invest in new product development now, because your competition is investing now.
Research by Accenture indicates that many companies in the US and UK have, in fact, increased innovation funding during the economic downturn, and Booze reported that most companies maintained their innovation programs and many are boosting spending to “compete more effectively in the upturn.”
It is not a good strategy to allow your competitors to gain a lead in their product and service offerings. However, the tough economy makes justifying the risk and expense of new product development more challenging than in the past. The answer is not to simply cut your new product development budget. Instead, you should lower your costs by increasing the probability of investing in ideas that lead to the big winners – cut costs without inhibiting the creative thinking and risk taking that leads to the big winners.
Cut costs to improve the chance of success; It is an easy thing to suggest, but can it actually be done?
Yes; absolutely…. “How?” you ask…..
Most new product ideas fail somewhere in the development process and therefore never make it to market. These failures cost money. In addition, many of the ideas that survive the product development process fail within their first year on the market. A rule of thumb is that for every ten ideas that enter a company’s new product development process only one product will make it to market, and 70%-80% of those new products fail within their first year. There are books and even museum exhibits dedicated to these failures.
New Product failures cost lots of money.
There is no doubt that failures can be excellent learning experiences but most of us prefer not to learn those lessons. Lessons from failure are painful.
As a result, we have developed tools to decrease the risk of costly and painful failures. For example, Agile software development improves time to market and better meets customer needs. Advances in market research, statistical analysis, product testing, and customer feedback, provide better information for designing the entire customer experience.
Now is the time to employ a revolutionary approach to developing better, more valuable, more realistic new product ideas to submit to your new product development process. Better ideas up front lead to fewer failures in the development process and in the market. That means the people developing the ideas need higher quality thinking skills. They need to dig deeper into their areas of expertise, develop their knowledge and experience beyond their areas of expertise, and even beyond their industry, and they need to know how to assemble their knowledge into the quality ideas that will spur innovation at the front end.
To learn more about driving shareholder value by increasing the value of innovation, I invite you to begin here: Need creativity? Ideative is better creativity .
Ready to explore ways to help your company develop innovative, realistic, and Valuable Ideas in this tough economic environment? Contact me at: firstname.lastname@example.org.