Developing the product concept is the first stage in the process. The product concept contains the basic outline of what the product or service is going to be and how it is going to be delivered.
New products and services concepts arise in many different ways and from a number of sources, including:
Customers – many organizations have found it invaluable to harness the power of customer suggestions, customers being the people who are best placed to suggest what they want from the products and services that they use. Most usually, this is through the intervention of the marketing function within an organization.
Internal Research and Development (R&D) departments – these used to be a feature of most large firms, but increasingly this function is being outsourced to specialist development firms
Staff – a great source for ideas from the people who often know the products and processes better than anyone
Figure 3.3 A generic model of the NPD process.
Suppliers – through a close relationship with suppliers, who may have new technologies that need a product or product range to go into
Competitors – either through analysis of their current offerings or the need to follow new products.
Other sources of ideas include the Patent Office (see section on Intellectual Property) and old products, which may have contained a feature that has since gone out of common usage but would provide a differentiator today. Many new product ideas emerge from off-the-wall people or groups, or at least what might be considered ‘non-conventional’ sources. Indeed, breaking with convention lets people create the necessary differentiation between existing and new prod-ucts. Firms such as Disney Corp. and Orange (the mobile communica-tions company) hire people to blue-sky new project ideas – so called because they spend time gazing into the sky, waiting for a blinding flash of inspiration about what the next Lion King or communications device will be! These are not marginal roles in either firm. In Orange, the blue-sky department is located next to the main board offices.
The type of process for idea creation should depend on what the organization is trying to achieve. Many firms, particularly those that operate in niche markets, are happy to evolve their products and services continuously. Indeed, many larger firms prefer this gentle evolution to a more radical approach – often referred to as discontinuous, because it is not based on any previous experience of the firm. However, at the outset of the process the objective is to create as many new ideas as possible, both for radical and evolutionary innovation. Traditional work environments rarely provide the degree of inspiration for such creativity. Many organizations, including Disney and Orange, have seen it necessary to create apparent chaos by stripping away many of the constraints to creative work, and have targeted the working environment as one of these constraints.
Creativity has become a key attribute for many modern businesses.
In addition to the outcome of apparent chaos, new products may be developed as a result of basic research – fundamental research into the nature of science (such as bio-tech companies striving to provide a complete mapping of the human genome). Basic research is expen-sive, highly risky (there is no guarantee of a successful outcome) and pre-competitive – i.e. there will be several stages and a considerable time-lag between this work and a commercial product. Such work is often funded by governments, as it would not be immediately attractive to commercial organizations.
Staff Competitors
Customers Suppliers
R&D
Number of ideas increasing
Licence use Sell idea
New business NEW PRODUCT Number of ideas decreasing
Concept
development Product
delivery Time Recycle ideas
Many books on NPD show the process as a funnel where ideas are filtered. This is rarely a good model of the concept development stage.
Far from narrowing down the possibilities, the whole objective is to create as many strong ideas as possible. The most innovative firms only filter these once serious levels of investment in time or money are required. But what happens to those ideas that are filtered out and therefore will not be developed by the firm? Some should, quite rightly, be discarded. Others may have considerable potential, but just not at this time or by this firm. The sale of such ideas for others to develop is a major source of revenue for companies such as 3M Corporation. Other ideas may be recycled for further development or combination with other new ideas. If the idea looks promising, some firms will now provide the start-up capital for the employees responsible for the idea to go and start a business with that idea. In this way, the impact of the idea on the existing business is limited, but it might just result in a great new business that the organization can benefit from. This new model of the process is shown in Figure 3.4.
This process often appears very mechanistic, as though the creativity will just happen within organizations. More often that not, this creativity is the result of an individual and the product of what is often termed creative frustration. In the UK, James Dyson created an innovation in vacuum cleaners applying dual-cyclone technology to the vacuum cleaners. This technology eliminates the need for the more traditional bag, which rapidly becomes clogged and loses efficiency.
Figure 3.4 Concept input and output.
Dyson’s insights were based on the systems being used in paint spray booths to remove any solid particles of paint before the air was vented to the environment. Spinning air containing particles in a container at high speed causes the particles to get thrown to the outside of the container, where they fall out of the air stream and into a collection vessel. Dyson’s frustration with the inefficiencies of his normal vacuum cleaner led him to apply the technique to removing dust particles. In trying to perfect the method for domestic use, he constructed and tested over 600 prototypes before he launched his DC01 in 1992. (The story of this innovation and others with which he had been involved is told in his autobiography, Against the Odds.) This illustrates very clearly the role of such frustrations in starting the process.
However, the process of generating new ideas is futile if the people who generate them have no stake in the outcome, or if they are not supported in developing their ideas. 3M’s original product range involved applying thin films of adhesive to paper to make products such as abrasive papers and adhesive tapes. You probably know 3M better through their most famous development in recent times, the Post-It note – a small piece of paper with a thin film of adhesive at one edge, which will attach to most surfaces and can be easily removed afterwards. Corporate folklore has it that the adhesive had been developed for another purpose and rejected for its lack of permanent adhesion. An employee who sang in a church choir used the glue to attach a piece of paper to mark the pages in his hymnbook. Since these pages were thin and easily damaged, a non-permanent glue was perfect. Those who saw his idea liked it, and asked him to make some for them. The rest, as they say, is history. The glue that failed generated 3M Corporation $1.2 billion in annual revenues in the late 1990s, and this revenue came about because the organization was prepared to give the person the time to develop the product to a point where it could be taken on into full-scale commercialization.