Immersion & iteration: Leading edge approaches for early stage product planning

Rochester Institute of Technology

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1-1-2007

Immersion & iteration: Leading edge approaches

for early stage product planning

Christopher Bondy

Jack Rahill

Michael L. Povio

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Recommended Citation

Immersion

&

Iteration:

Leading

Edge Approaches for

Early

Stage

Product

Planning

"Delivering

Breakthrough

Products"

Christopher

Bondy

Jack Rahill Michael L. Povio

Academic Advisor:

Robert Boehner

-Rochester Institute of Technology, College of Business

Industry

Advisors:

Tony

Federico - Xerox

Corporation, Corporate Officer Business

Group

Fred DeBolt

-Xerox Corporation, VP Color Line of Business

Rochester

Institute

of

Technology

Master of Science in Product Development

Capstone Research Project

November 14, 2007

Illllllersion

& Iteration: Leading

Edge Approaches for Early Stage

Product Planning

Delivering Breakthrough Products

Signatures

Aca

d

e

mi

c A

dvi

so

r

:

Robert Boehner

Robert Boehner

Rochester Institute of Technology, College of Business

In

d

u

s

try

A

dvi

so

r

s:

Tony Federico

Tony Federico

Xerox Corporation, Corporate Officer, Business Group

Fred DeBolt

Fred DeBolt

Xerox Corporation, VP, Color Line of Business

MPD Dir

e

ct

o

r:

Mark Smith

Mark Smith

Immersion & Iteration: _LeadingEdgeApproachesfor_EarlyStageProduct_Planning (DeliveringBreakthrough Products)

Acknowledgments

Theresearchpaperbeforeyouisthefinalprojectforatwoyear endeavorinthe

pursuit of a MasterofScienceforProduct Developmentat Rochester Instituteof

Technology. Ithas been a six monthinvestmentthathas requiredthehardwork

of

balancing

family,

work and academics. Theexistenceofthis paperisdueto the

support of_manypeople which we wouldlike to_sincerelythank.

OurFamilies: Whohave endearedthe 2years with us and wethank them for

their_{understanding} and support. Jackwouldliketo_especiallythankhiswife Gail

andtwo

daughters,

MeghanandEmma_{for enduring}the

long

nights andtime

awayfrom one another. Mikethankshiswife

Tracey

andkids_Jacob, Ryanand

Lindsey

fortheirmoral support. Chriswouldliketoexpresshisthanks to hiswife

Glenda and_{4teenagers; Kaelyn, Jacob,} MariahandLucasfor_{understanding}the

sacrifice and_{acknowledging}thevalue ofthis program.

Our Advisors: Dr. Robert Boehnerfor_guidingusthrough this _seemingly

endless research paper. Theencouragement and motivation you gave us makes

thiseffort worthwhile. "Fromcloudsofideasto_{granite, pretty}impressive."

Our Companies: Xerox andDMHfor_givingusthis _opportunitytobetter

ourselvesineffortstogrow withthecompany.

Our Colleagues: the camaraderie oftheclass madethiscourse most enjoyable.

The

friendship

andbondsmadeherewill

definitely

last alifetime.

MPD

Faculty

andStaff: Mark_Smith, Chris Fisherand all theprofessors.You

have donean excellentjobin providingthe students ofthis course withthebest

opportunityfor learning.

Theroots _ofeducation are

bitter,

butthefruitissweet. -Aristotle

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Program:

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I understand that I must submit a print copy of my thesis or dissertation to the RIT Archives, per current RIT guidelines for the completion of my degree. I hereby grant to the Rochester institute of Technology and its agents the non-exclusive license to archive and make accessible my thesis or dissertation in whole or in part in all forms of media in perpetuity. I retain all other ownership rights to the copyright of the thesis or dissertation. I also retain the right to use in future works (such as anicles or books) all or part of this thesis or dissertation.

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/l

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hereby grant permission to the Rochester institute Technology to reproduce my print thesis or dissertation in whole or in pan. Any reproduction will not be for commercial use or profit.

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b3,~p'&-Immersion 8 Iteration l eadii

Executive

Summary

Developing

and

delivering

products that

truly

delight customers is_surprisingly

more of a unique occurrencethan most wouldbelieve. Amongst the vast_array of

mediocre products reside afew eliteproductsthat customers

truly

seek outto

acquire beyond _anythingelse offered in the marketplace_{these productsare}

truly

"breakthrough"

products. Breakthrough inthat _theyprovide customer

benefitsthat addressthe unmet and unspokenwants and needs ofthe customer.

Breakthroughproductsdelivervalue inamannerthatexcites the customer

by

the

almost intuitive_waythese products resonate withtheirreal world requirements.

From the

developers'

perspective, breakthrough products definemarkets, steal

market share and deliver better profit marginsthan incremental productsthat

only provide_{sustaining business} results.

Uncovering

thespecific requirementsthat drive breakthroughproducts is a

daunting

product _planningtask intoday'sfast moving, competitive, and

high-techglobal marketplace. Both B2C and B2Bproduct development organizations

aretaskedwith_uncoveringcustomer requirementsthatwill catapulttheir firms

ahead ofthepack in a privileged position asthe marketleader.

History

suggests

however that the path tobreakthroughproductsislesstraveled and reservedfor

onlyafew companiesthat havea unique_way of

delivering

repeat successes.

Why

is it that the traditionalproduct _planning processeshave notbeen successful at

Immersion& Iteration: _LeadingEdgeApproaches for_EarlyStage Product_Planning

researchproject; thorough investigationofthe obstaclesinthetraditional

product _planningprocessthat hamperthe conceptualization anddevelopmentof

breakthroughproducts willbediscussed.

Thetraditionalproduct _planning processisa complex process of stages and gates

thatis oftenhandicapped

by

a varieddegree ofcommitment,_{understanding}and

participationfromcross-functional teams thatdon'talways perceive the valueof

allthe hurdlesand processes. Thereare_manycompanies who excelinthe

regimented processes ofthevariousstages and gates involved inthe traditional

product_planningprocess. Thesecompanies have successfully delivered

incrementalproducts thatmeet customer needs. These companieshave a solid

business plan with a_steadycustomerbase that_{delivers sustaining business}

results.

Following

the traditionalproduct _planningand developmentprocess with

precision_{usually delivers steady business}growth at or _slightly above

industry

growth rates.

This researchproject showsthat a solid execution ofthe traditional process can

onlyyieldwhatis referredtoas

"incremental"

product developmentat best. For

manycompanies, product development disconnectsare as fundamentalas their

inability

to_{consistently follow}a process. Yettheproblemwith

delivering

breakthroughproducts goesbeyondthe traditional_planningprocess. Theremust

be something more.

Why

is it that themarket leadersseemto _consistentlydeliver

breakthroughproducts? Arethesemarketleaders

doing

_{something differentthat}

Imm

Theansweris thatbreakthrough products require adifferent product _planning

approachthan the traditionalproduct_planningprocess whichis somewhat serial

in nature. Thetraditional product_planningprocess isstructured tobe more of

one-time-throughtheprocess approach,or

"pipeline"

thathas limited

commitment toiteration _prototyping and_usually muchtoo limited engagement

withthe target customer. Multiplestudies haveshown thatfirms are ineffective

at_capturingand

interpreting

VOC and_reflectingtrue customer needsin their

new products.

The author's conducted_primaryresearch with several north eastern companies

as well asbenchmarked several companiesthrough_secondary researchin efforts

touncover the process keysto

delivering

breakthrough products. Throughthis

research effort and referencesfrom

industry

experts such as _{Cooper, Christensen,}

vonHippelandUlwick, this project validatedthatcompanies who deliver

breakthroughproducts engage in more elaborate activities

during

the_early stages

oftheproduct _planningprocess. These companieshave much moreintimate

immersionwith the targetcustomers, and buildprototypes and iteratemore

frequently

back throughthe_planning processthroughout all stages of

development.

Companiesthat deliver breakthrough productshavean _{uncanny way}of

discovering

whatcustomer_reallywantand need. _{The ability} that these successful

productdevelopment companies haveto uncoverneeds, wants and desired

outcomes isgroundedina passion for understanding,

learning

and

immersing

Immersion & Iteration .1ageProduct

Planning :

comprehensive_immersion, these

leading

edge companies are abletobetter

formulatethe total customer experience andinterpretthat experience into

specifications thatdelightthe targetcustomer.

The direct associationbetweenmore comprehensive _immersion, prototypes, and

iterationprovidedthe author's withinsights to

develop

a unique product

planningprocess thatistailored _{specifically for breakthrough}products. This "new"

product _planningprocessfor breakthroughproductsis presented in this

research project as an alternate process approachthatcan_overlaythe traditional

productdevelopment process for productinitiatives thatarefocusedat

breakthroughvs. incrementalefforts.

Both consumerand commercial customers votewiththeirwallets

by

_acquiring

products thatintercept theirspoken and unspokenrequirements most effectively.

Theobject ofthisresearch projectisto betterunderstandthe approaches

followed

by

successful companies who _{consistently deliver}breakthrough

productsand synthesize thoseapproachesintoa new product _planning process

modelthatcanbe better understood andfollowed

by

companies_wishing toplan,

Table

of

Contents

Executive

Summary

v

Table ofContents ix

Table ofFigures xi

Table ofTables xi

Chapter 1: Project Overview 1

Introduction 1

Problem Statement 2

Research_{Objective, Scope,}

Methodology

2

Value Added toKnowledge Base 3

Chapter 2: Background Research 5

Traditional Product

Planning

Process 5

Phases andGates ofProduct

Planning

7

Industry

Accepted Model 12

HI: Traditional Product

Planning

is

Rarely

Done Well 13 H2: Traditional Product

Planning

Done Well

Only

Generates Incremental

Results 19

H3: EvenifDoneWell, Traditional Product

Planning

Does Not Have the Process

Capability

to Deliver BreakthroughProducts 23 Chapter 3:

Primary

Research

-Assessing

Product

Planning

Processes 30

Introduction 30

Analysis 34

VOC andMarket Input 34

ProductDefinition 36

Product Performance Compared to theCompetition 37

ProofofHI 38

ProofofH2 40

Chapter 4:

Using

Immersion toEnhance theProduct

Planning

Process 43

Introduction to Immersion 43

Secondary

Research 44

Hill-Rom's Riseas _{Bed Supplier for Acute Care Hospitals} 44

Appleandthe iPhone: 47

Pratt & Whitney: 51

Steelcase: 56

3M- _{Lead Users 59}

OnStar 63

Chapter5: Product

Planning

Approaches to Immersion 70

Immersion "Pull" Approaches: 72

EthnographicStudies: 73

Ethnographic Techniques: 74

Interviewsand Surveys: ₇₆

Immei _{adingEdge ApproachesforEarlyStage Product}

Planning

(Deln roducts)

Table

of

Contents

Continued

Lead User Engagements: 85

Immersion "Push" Approaches: 86

Virtual Reality: 87

Using

Avatarsforproduct _planningpurposes: 89

Alpha Labs: 90

Co-evolution: 93

Immersion Approaches Summary: 95

Chapter6: Immersionand Iterationprocess forBreakthrough

Products 97

Tradition Product

Planning

with_Immersion; Phase1 a: High-level

Strategy

99

Tradition Product

Planning

withImmersion

-T3Pi 112

Immersion Delivers Breakthrough Products 112

Barriers in

Adopting

the Immersion Model 115

Values, Processes &Resources 116

Culture 118

Lack ofCorporate Commitment 118

Lackof specific "immersionand

iteration"

skills 119

Financial Barriers 120

Time-to-Market Barriers 121

Summary

122

Chapter 7: Capstone

Summary

123

Chapter 8: Areas for Future Research 125

Appendix 1 : Questionnaire Resultsand Interview Notes 126

Appendix 1.1: Questionnaire 126

Appendix 1.2: InterviewResults 130

Appendix 1.3: Independent

Study

Kodak Results 131 Appendix 1.4: Independent

Study

Xerox Results 132

Appendix 1.5 Interview Notes 133

Appendix 2 Xerox Time to Market

(TTM)

Model 143

Appendix 3: Kodak KECP

(1994)

Model 145

Appendix 4: Kahn - Production

Planning

Essentials 2001 146

Appendix 5: Academia Sources 149

Appendix 5.1: New Product Management

-Crawford & DiBenedetto 149

Appendix 5.2: Effective Innovation

-Don

Clausing

& Victor

Fey

149

References 150

Websites 152

Immersion 8, Iteration I eadin

hrough Pi

Table

of

Figures

Figure 2.1: ModelofProduct

Planning

Pipeline 7

Figure 2.2: Xerox Overviewofthe Time To Market Process 10

Figure 2.3: KodakOverview ofthe KECP Process 11

Figure 2.4: Traditional Product

Planning

Model 12

Figure 2.5: APQC Performance Metrics 15

Figure 2.6:

Quality

ofExecution

-Impact on Performance 16

Figure 2.7: High-Leverage Innovation Performance 18

Figure 2.8: NewProduct

Superiority

-Impacton Performance 22

Figure 2.9: VOC and Market Inputs

-ImpactonPerformance 27

Figure 3.1: VOCand Market Inputs

-Questionnaire Results 35

Figure 3.2: Product Definition- Questionnaire Results

37 Figure 3.3: Product Performance Comparedto the Competition

-Questionnaire

Results 38

Figures 3.4: Pareto ofCompanies Scores 40

Figure 3.5: CAGRvs.

Survey

Score 41

Figure 3.6: CAGR vs.

Industry

Growth Rate 42

Figure 4.1: Hill-Rom COMLinx Communication System 46

Figure 4.2: AppleiPhone 48

Figure 4.3: Steelcase PolyVision Interactive

Display

58

Figure 4.4: 3MSteri-Strips 62

Figure 4.5: OnStar Console 64

Figure 5.1: Immersion Categories 71

Figure6.1: Traditional Product

Planning

Processw/Immersion Front-end 98 Figure 6.2: Strategic

Planning

coupled withImmersion & Iteration 106

Figure 6.3: T3Pi Model 112

Table

of

Tables

Table 2.1: PercentageofProjects in theDevelopment Portfolio 20

Table 4.1: Pratt&

Whitney

Opportunity

Scores 53

Table 4.2: Ideas Generated

by

Pratt &

Whitney

Team 54

Table5.1: Cordis'

Angioplasty

Balloon

Opportunity

Scores 83

eakth

achesfor_EarlyStage Product_Planning

Chapter

1:

Project Overview

Introduction

Newproductdevelopment isconsideredthe

"lifeblood"

of_anycompany,

driving

increased revenues, marketshare, andbrand recognition. Butnew competition, a

global _marketplace, newtechnologiesand_{rapidly changing} customerneedshave

created a marketplacethatmakes itdifficulttosucceed. Yetfirmsthat deliver just

onebreakthroughproduct or service can alter thefuture ofthecompany;

leading

tonewproducts, product familiesor even create a whole newindustry. A

breakthroughproductis definedas a productthatnot_only meets a customer's

unmet wantsand needs butalso delightsthe customerin a_waythatcreates an

emotional connection and loyaladoption versusthe competition.

However, _tryingtoproducea breakthroughproduct or service is_verychallenging.

Benchmarkstudies haveshownthatahigh percentage

(30-40%)

of new product

venturesfail. Themajor reasons citedfor failureare _marketingor customer

related; thepoorexecution ofthe _early stageintheproduct_planning process,

lack ofcustomer-based ideasand the

inability

to understandthejob the customer

needs toget done.These tasks are part of atraditional product_planningprocess

that_manycompanieshave incorporated in theirwork flow. It isthis processthat

presents a numberofproblems forcompaniesthatwishtodeliver breakthrough

[mini Iteration I eadin _ining

Problem

Statement

Companies thatuse the traditional_planning process use a _varietyoftechniques

to capture customer wants and needs.These needs are_commonlyreferred toas

"Voiceofthe Customer" orVOC. The VOC produces product conceptsthatare

mapped to functionalrequirements via the

"Quality

Function Deployment"

method or QFD. The product development communitythen usesthese

requirements to create a product or servicefor the customer.While this

structured process is _clearlyvital forcontinued marketgrowth, it presents three

problems forfirms thatwant to

develop

breakthroughproducts.

1. Thetraditional product _planningprocess is _rarelyexecuted well

2. Thetradition product_planningprocess when executed well oftendelivers

only incremental product improvements at best

3. Even ifdonewell, traditional product_{planning does} not have the process

capability todeliver breakthrough products

Research

Objective,

Scope,

Methodology

Thisresearch paper will assess the strengths and weaknesses ofthe three

traditional product _planning problems stated above comparedto best-practice

industry

examples. Thefocuswill beon the _early stages of process wherethe

VOC's are

being

collected and interpreted. Theexamples will showthat when the

traditional product _planning process isdonecorrectly, the process

typically

yields

tion: I <v geApproaches for_EarlyStage Product_Planning

existingproduct, not_necessarilya productthat isbreakthroughor onethat

ultimately delightsthe customer.

In orderto substantiatethese problems, several companiesaffiliated with the

MPDprogram will beinterviewed tounderstandtheir_earlyphases ofthe

traditional product_planning process.An evaluation willbeperformedto

formulateconclusions aboutthe effectiveness oftheir approaches.

Thisresearch paperwill alsointroduce_secondaryresearch examplesthat provide

evidence and validation of companiesthathave expandedthe traditionalproduct

planningprocess withnewtechniques thatdeliverbreakthrough productsthat

resonate with customers.

Finally, thisreport will analyzethe processes usedtodeliverthesebreakthrough

productsto determinetheuniquemethodologiesthesefirms have inplace. The

resultswillbesynthesized, _providinginsight fortheresearch team to

develop

a

new product_planningmodel. This modelwill be furthersubstantiated

by

comparing "best from

industry

consultants andbreakthroughproduct

examples whose success canbeattributedto a new approachtoproduct _planning

methods.

ValueAdded toKnowledge Base

Thevalue ofthis report will betoprovide additional _capabilityto the traditional

lllllM

obtain and interpretthe unmet wants and needs of acustomer, resultingin

breakthrough products. To accomplish _this, the research paper will...

Provide an independent _studywith companies affiliated with theMPD

program, which will validate that the traditional product _planningprocess

is a barrierto breakthroughproduct development.

Providea detailed model thatenables companiesto recognize and

interpret a customers unmet and unspoken needs. This model will then

feedintothe ideation phase ofthe traditional product_planningprocess.

Immi ition: Le sforEarlyStageProduct _Planning

(Deli1 _!

troughPro

Chapter

2:

Background

Research

Fortoday's_{rapidly changing} market_{needs, the traditional planning}process_may

notbegood enough. Moreneedsto be donetodeterminethe complete set of

customer requirements sincethe traditional _planningprocess addresses_onlythe

needs thatcustomersknowthat_theyhave and can articulate. Christensen,

Anthony, Berstell, andNitterhouse

(2007)

noted that the root causethat

innovation isso failureridden isnotthat outcomes areunpredictable, butrather

that the fundamentalparadigms of_marketingwe follow formarketsegmentation,

building

brands and_{understanding} customersare broken. Thetraditional

product_planningprocess provides a predictable _{methodology for stepping}

througha process from concepttolaunchyetdoes not providethe tools, rigor or

emphasis_surrounding thecustomer's experiencethat isessentialto

delivering

great products. Cooper

(2005)

statedthat "thetraditional processismarginal at

best."

Traditional Product

Planning

Process

Inhis book "Product

Planning

Essentials,"

Kahn

(2001)

noted product _planning

canbe characterized asthetwoprocesses of product development and product

management. Product developmentrepresentsthe

"up

front" process, where

products are conceived, developed, produced, andtested.These activities occur

priorto aformal offering inthe marketplace (termed launch). Product

Immersion & (terai ge Appro hrough Prodi

commercialized, sustained, and_eventually withdrawn. This includes launch

endeavors as well as activitiesthatoccur after launch. Within theseprocesses are

a series ofstages, phases, gates and eventsthat include explorationofnew_ideas,

screeningtoachieve a prioritized list of potential _products, concept_testing, businesscaseanalysis, advanceddesign and development, testingtoensure

customer needs are met, and

finally

product launch.

Thetremendouscost of research anddevelopmentandthe unpredictable nature

of new productdevelopment initiatives have driven most product development

companiestopursue some formof standardized approachto

developing

and

delivering

new productsto the market.

Top

companiesknowthat the

marketplace is abattleground thatshows no _mercy to thecompaniesthatare

unableto providethe_{very best} in products and services. _Moreover, global

competitionhas increasedovertheyears _makingit more difficulttodifferentiate

one's productfromthe competition. Companies are_spendinglarge amountsof

theirprofit margins on research and development inefforts to come_upwiththe

next

big

thing.

Companiescan no longerexpect thata new product concept _going throughthe development process willbesuccessful. Theunpredictable nature of new product

development drove_manycompanies topursue some formof standardized

approachto

developing

and

delivering

new productsto themarket. A high level

of emphasis has been directedto change the simplistic,basic processes of

Immersion&Iteration: _LeadingEcIl ichesfor Eai; _Product

Planning

controlled process that the authors ofthispaper are_callingtheTraditional

Product

Planning

Process (T3P).

Phases and Gates ofProduct

Planning

Overthepasttwodecades the traditionalproduct _planningprocesshasevolved

intoa_{verysystematic,}

highly

structured and regimented process designedto

evaluate a multitude ofinputsto theproductdefinition. Thisprocessentails

several important

"phases"

and

"gates"

thatflowin sequential ordertomanage

the _development,

delivery

and refinement of new products. There isa checkpoint

or review after each phase where theproduct is testedagainst a set of criteria

specific to that phase.This check processistoweed-out_anyproductthat willnot

beviable inthe marketplace. Thegoal istoevaluatethe

"many

ideas"

a _company

haswith a set of customer requirements

sothat_onlythe best,worth-whilenew

product ideasare developed

by

the

company. Inother words, focusthe

company's scarce resources _onlyon the

ideasthat havethe greatest_probability

to besuccessful in the marketplace. This

concept selection process canbethought

of as afunnel goingthrough the

Figure2.1 Model of_{Product Planning}

production pipeline (Figure2.1).

(Graphicfrom Applied _MarketingScience_Inc.)

Product Definition

Target Technology Needs Design Identification Assessment Assessment Specification Concept

Development

'

Ideation Concept Concept [nine Screening Testing

Design&

Engineering Feature Prototype

Trade-On*

Evaluation

Go toMarket

Immersion& Iteration: I,e iduct Planning

Top

performingcompanies_clearly documenttheir traditional product_planning

processto provide a common systematic pathfrom concept tolaunchsuchthat

all parties involvedhavespecific roles, responsibilities anddeliverables.

Thereare_manyforms ofthe traditional product _planningprocess. Textbooks

such asEffective Innovation

by Clausing

&

Fey

(2004)

and NewProduct

Management

by

Crawford &DiBenedetto

(2005)

statethe process flowfrom

start tofinishwhile _describing, in_detail, whateach phase consists of. A high

level_summary ofthemajor phases is offeredbelow.

Phase 1

-Product Concept/ Definition /

Strategy

Phase 2

-Concept Generation

Phase 3

-Concept Selection / Evaluation

Phase 4

-Product Development / Robustness

Phase 5

-Technology

Transfer / Launch

Most companiestakea traditionalproduct_planning process and _modify itto fit

their culture,

industry

and workflow.

They

alsotailor the_sortingrequirements to

matchthe type of product_theyare_{producingalong}with_addingtheirown

best-practices. Allthis_tailoring is doneto increasethe likelihood of

launching

a

successful product. Infact, some firms believethat theirunique and customized

processes providethem a competitive advantage. All thesemodifications lead to

numerous variations ofthe process,_making the"traditional product _planning

process"

dingEdge ApproachesforEarlyStage Product _Planning (Deli'\

process _{mayvary significantlyfrom companyto company,} overallmostfollowa

similar phase gate approach thatbrings a concepttolaunch.

Two formal processes we reviewedtogain insighton the detailsofT3Pwere

Xerox's Time To Market

(TTM)

andKodak's KECP. Sincethescope ofthispaper

isfocused onthe _gathering andinterpretationofVoice ofthe Customer

(VOC)

onlythefirstthreephases are reviewedin detail.

Xeroxuses a_six-step phase approach withthefirstphase

being

front-endproduct

planningand _{strategy {Figure2.2)}. InthisphaseXeroxputs alot of effortin

reviewingeleven

key

factorsthat definethe boundariesoftheproduct/service

beforea project proposal isreleased. FromthereVOC'saretranslatedto

engineeringrequirements viathe_widelyused

Quality

Function Deployment

(QFD)

method. _QFD, alsoknownastheHouse of

Quality

(HOQ)

ties

product/servicedesign decisions

directly

tocustomer wants andneeds, i.e. the

VoiceoftheCustomer (VOC). Atthispointtheproductflowsthroughdesign,

development, anddemonstrationtolaunch. Amoredetailed viewoftheXerox

[mm

XEROX.

Drivers

larket Drivers

Front-end Product

Planning and _Strategy

Market Portfolio

Strategy Vision

Technology Drivers I

Execution and _Delivery

Proposal Design _Develop Demo Deliver ~

3.1

))

3.2 )) 3.3 ₎₎ 3.4 3.5

Figure2.2 XeroxOverview oftheTime-To-Market Process

In comparison, Kodak uses aneight_step phase approach as seen inFigure2.3.

Instead of

having

onephase, likeXerox, Kodak hasthree phases inthefront-end

beforethe productdesign starts. Kodakalsohas more phasereviews inthe

deliver/launch phase. Amore detailedviewofthe Kodak KECP processis

provided in Appendix 3.

Clearly, howthe_companyviews theimportanceofa particular_step withinthe

[image:23.559.58.497.66.396.2]

lachesfor_EarlyStage Product_Planning

ltrough Prodi

Kodak

DefineandRefine Value Proposition& Product

OfferingConcept

Product Concept Proposed

Product Concepts & TechnologyDevelopment

Production Systems Optimization

Productand

Marketing

LaunchDesign Stage

Product Design

Product Design Certification

Manufacturing& Operations

Product Launch Preparation

ShippingApproval

Production

Production Preparation

[image:24.559.73.505.62.406.2]

Producton Discontinuance

Figure 2.3 Kodak Overviewofthe KECP Process

This traditionalproduct_planning processis essentialto companiesin_sustaining

current product butit hassomeinherent flawswhenit comesto_producing a

breakthroughproduct. This is_{partly because} theinformationusedtocreate the

breakthroughproduct comesfromthecustomer. Thepoint is, _accordingto

Ulwick (2002), customersshould notbetrustedto come_upwith solutions.

They

are nottheexpertswhen it comesto the innovationprocess. Theproblems

associated withthetraditionalproduct _planningprocess will bediscussed in

Immersion & Iteration: I i Proclui I _Planning

Industry

Accepted Model

A synthesizedviewofthe traditionalproduct _planningmodel {Figure2.4),

incorporatestheconcepts of_Xerox, Kodak, McGrath, Crawford &DiBenedetto,

Kahn,

Clausing

and Frey. The focusof our project will beon components ofthe

firstthree phases, most_notably competitive assessment,gatheringVOC,

translationofVOC intocustomer requirements, businessand _{marketing plans,}

and _refiningand_confirming customer expectations.

Phase 1 Phase 2 Phase 3 Phase 4 Phase 5

Definition Concept Product _Technology

Strategy \ \ Concept \ \_selection- \ \Development

-> >Transfer Product Concept /

Generation/

/ Evaluation

Vision

Market Segments Defined

Competitive Assessment

GapAnalysis

Differentiation_Strategy

Product Portfolio Review

Business Plan Evaluation

Technology Review

Architecture Review

Value Chain Review _]/

Target Market Analysis

Gather Voice Of the Customer

Translate Customer Requirements

SelectTechnology

Select Value Chain

Demonstrate Economical_Viability

Business /_MarketingPlan Updated

F

Refine Customer Expectations

Confirm Customer Requirements

Demonstrate_Technology Readiness

Complete Product Requirements

andSpecifications

Develop Detail Business Plan

PreliminaryMarket_StrategyPlan

ISC Plan

Figure2.4 Traditional Product_Planning Model

Inthe next section we will discussthree

key

hypotheses the traditional_planning

process presentsfor firms involved innew product development. These

hypotheseswill beused inconjunction with data fromthe American

Productivity

and

Quality

Center

(APQC)

and

industry

consultant Robert Cooper. The APQC [image:25.559.58.519.257.562.2]

Immi I _Leading Product _Planning

(Deli1

inthe productdevelopmentprocess. These activities_include; theVOC and

market _inputs, product _superiority, product developmentportfolios, _working

with customersthroughout the development process, and_working with

lead-users.

Focusing

onthese

key

areaswill provide insight intohowcompanies

gather VOC _needs, define_{requirements,} andinteract with customers. Thereport

will provide examples of eachproblem, validatethe exampleswith

benchmarking

data, and summarizeits

key

findings.

HI: Traditional Product

Planning

is

Rarely

Done Well

For _nearlytwo decades companies haverelied onthe traditionalproduct

planningprocess, _using traditionalVOC/QFD _methodologytoguide new product

innovation. _Yet, new productfailure rates are stillhigh andbreakthrough

innovationsare still rare. Thissectionwilldiscuss Cooper'sviewonthe execution

of"recommendedbest approachestoproduct_planning, inputfromNeal

(2002)

onthe areasthathave beenproblematic forthemarket research phase of

product planning, and data fromtheBooz-Allen-HamiltonGlobal Innovation

1000_survey thatshows companiesspend lesson_R&D,yet out-pace their

industriesacross a wide-range of performancemetrics.

Cooper

(2005)

showed that_{for every}seven new product _ideas, aboutfour enter

development, 1.5 is launchedand _onlyone succeeds. Ofthe initiativesthat do

succeed, _onlya feware_truly innovative. The analysis will showthat firms are

ineffective at _capturingand

interpreting

customerrequirementsand _reflecting

Immersion & Iteration: _LeadingEdge Appro lucl _Planning

Cooperalso investigated_whysome businessesare betterat new product

developmentthanothers. Cooper

(2005)

usesthe term "best to

describe firms that_consistentlywin the waron productinnovation.The names of

thesefirmswill soundfamiliar: companies such as Proctor& Gamble, 3M, Apple,

GE, Johnson &_Johnson, and Kraft Foods. Those firms not viewedas winners are

firmsthat introduceextensions or incremental improvements of_existing

products, where profit and growthfrominnovation are smallerthan

breakthrough products. Throughthe APQC studies, best performing businesses

were selected basedon theirperformance on metrics

including

successrate,

failurerate, on _time, onschedule, etc. (Figure 2.5), forprojectsthat enteredthe

development phase.

The_top 20%offirms (for each_metric) were definedas the "bestperformer,"

the

bottom 20% were definedasthe"worst and those inthe middle of

the pack weredefinedas

"average."

Considerthe percent offirms_meeting profit,

sales and market share objectives. Thefactthat the average valuesfor all three

ining

Average

Rating

on each Performance Metric

% Revenue coming from NP's

% Profit comingfrom NP's

Projectsthat Met MarketShare Targets

Projectsthat MetSales Objectives

Projectsthat Met Profit Objectives

Projects onSchedule

Projects on Budget

% ofProjects Commercial Failure

% ofProjects _Commercially Successful

0.0% 20.0% 40.0% 60.0% 80.0%

Best Performers Average Companies ?Worst Performers

Figure 2.5 APQC Performance Metrics

Nextconsiderthedistributionoftheresults: the_top performers achieved a 50%

increaseinperformance over theworst performers. Alsonote the_gap between

bestand worst performersforpercent of profitfromnew products (43.6%vs

21.6%). Thesegaps suggest that_many businesseshavea

long

_waytogo to be

consideredbestperformers.

Forall metrics, the best performers scorehigherthanthe worst.

By

_comparing

besttoworst, firmscan

identify

bestpracticesas abasis for

benchmarking

studies. We used Cooper's benchmark data tohighlightproblems with the

traditional product_planning processand as a benchmark for ourinterviews.

Cooper (2005) noted thatwhile productdevelopmentis often thoughtof as a

[image:28.559.71.495.55.381.2]

Immersion& Iteration: _LeadingEdge Approache Product _Planning

frequently

kill products.The data in Figure 2.6 from Cooper's

(2005)

bookon

Product

Leadership

showsthat _only 19%of average businessesexcel atidea

generation. Forthis

key

activity, _{only 38%} ofthebest performers (and 11.5% of

the poor _performers) handlethejobproficiently.

Percent of

Business

that

Execute

each

Activity

Well

Idea Generation

MarketResearch (incl.VOC)

Value-to-Business Assessment

Pre-launch Business Analysis

PreliminaryMarket Assessment

Business/ FinancialAssessment

Design & DevelopmentofProduct

In-house ProductTesting

Customer TestsofProduct

Production/OpsStart-up

MarketLaunch

PostLaunchReview

0.0% 20.0% 40.0% 60.0% 80.0%

[image:29.559.61.489.118.488.2]

IBestPerformer Average Business?WorstPerformer

Figure 2.6

Quality

of Execution - Impact

on Performance

The dataalsoshowsthat_only18.3%oftheaverage businessesexecute the market

research/VOC _planning stagesofthe productdevelopment process properly. On

topofthat _only 37.9%ofthe bestperformers executethis phase well.

By

contrast,

the technical work on theseprojects has muchhigherratings. Thethreebest

activitiesaretechnical_development, in-houseproduct_testing, and production

start-up.

Clearly

the frontend ofthe projectisexecuted more _poorlythan the

while 42.3%ofthe back-end activities are well executed. Allthreeofthe _top rated

activities occurintheback-end oftheprocess,whilethe threeworst, Idea

Generation, MarketResearch, andValue-to-Business, occurinthe front-endpart

oftheprocess where products are defined.Also, Cooperreferenced Crawford

(1979), who hasundertaken perhapsthe mostthoroughreviewof new product

failurerates, as _saying35% of new productsfail

largely

duetopoor execution in

the _planningstage.

Neal

(2002)

noted therewere two

key

areasthathave beenproblematic forthe

market research phase oftraditionalproduct planning:

1.

Marketing

researchis_{poorlyfunded,} where somecompanies consider

spendingon market research anexpense, not an investment inrisk

reduction.

2. Companies aretoo oftenrushedtoget new products outthataretheresult

of poor_planning orweakstrategies.

Conventionalwisdom oftenviews R&D as a predictableblack boxthat

automaticallytranslatesideasinto successful new products. Suchwisdom also

holdsthat strategiesthatfocuson

increasing

R&Dspends will

likely

maintain

innovativegrowth. Evidence _contrarytothese notions is thestudies conducted

by

Booz-Allen-Hamilton

(2006)

on theGlobal Innovative 1000 firms. These

companies might not

develop

thehighest number of products or services, but

theyconsistentlyreapthe greatest financial returnfrom every dollar _theyinvest

Immersion & Iteration I > (Deli\

1. Lessthan 10 %of companies arehigh leverageinnovators

Only

94 ofthe Global Innovation 1000companies achieved

significantlybetterperformance per R&D dollarover a sustained

five-yearperiod

These innovatorsspend (as a percentage of_sales) about 44%of what theother

906 Global Innovation 1000 members spend onR&D. But_{theyconsistently}

outperformthe median intheir

industry

forsuch variables as salesgrowth, gross

margin _percentage,gross profit growth, _operating marginpercentage, _operating

incomegrowth, totalshareholder return, and market capitalization growth as

showin Figure2. 7below. These results rangefrom 20% betterin AverageGross

Margin tosix times better forMarketCapitalization Growth.

700%

600%

500%

400%

300%

200%

100%

0%

630%

250%

290%

330% 340%

80%

20%

i i

Average Avergae Shareholder Sales Growth _Operating Gross Profit Market Gross Margin _Operating Return Income Growth Capitalization

Margin Growth Growth

[image:31.559.56.491.347.659.2]

LeadingEdgi tchesfor_EarlyStage Product_Planning Products)

These high-leverage innovatorsand companies with thebest overall performance

distinguishthemselvesnot

by

the _moneytheyspend, but

by

the capabilities _they

demonstrate in _ideation, project_selection, developmentand commercialization.

H2: Traditional Product

Planning

Done Well

Only

Generates Incremental

Results

Companieshave

difficulty

_executingthe traditionalproduct_planningprocess, as

previouslynoted.

During

_{the mid-90's,} growth was_comingthroughchangesto

existing products, wherethe demands and rewardsforincremental improvement

spurred companiestofocus on current products. Cooper

(2007)

statedthat if

product innovationwereeasy, halfthecompanies intheU.S. and Europewould

be

incredibly

_wealthyand others would notbe

doing

so well. Coopers data

showedthat the bestcompanies see 47.6%of annual sales and 49% of annual

profits _{coming from} new productdevelopment. _Nationally,U.S. companies spend

about 4.9%of sales onR&D, anumber thathas not changedfor decades. What

havechanged are sales revenues returns fromthese investments. New product

revenueshave dropped from 32.6% in 1990to 28.0% in 2004.

Themajor reasonforthis

drop

in revenueisthe failureof_{many firms}toinvest in

breakthroughprojects.

Why

is this? Cooper

(2007)

noted the major_issuewas

investment

by

projecttype. Thedatashowedthat thebest _performingcompanies

have higher value projectsin theirdevelopmentpipelines, and a muchbettermix

1. The bestperformershave twiceas_many true innovations intheir pipeline

(17.1%)

thando theworst performers (8.5%).

2. Theaverage business in the mid-90'shada higherproportion of

innovations

(20.4%)

than today's bestperformers.

3. Almost halfthe projects in the worst performers portfolios are small

projects; tweaks, modifications, and extensions (46.5%), almost 2X more

than the best performers.

Development Project Type Best Performers 2004

Worst

Performers

2004

Average

Performers

1990

Newto theworldinnovation 17.1% 8.5% 20.4%

Newproduct lines 31.1 23.0 38.7

Additions to_existing productlines 25.8 22.0 20.5

Improvement&modificationsto_existing

products 26.0 46.4 20.4

Total 100.0 100.0 100.0

Table2.1 PercentageofProjects inthe Development Portfolio

Whatarethe causesfor thisportfolio shift inthe past15 years? Cooper's

(2005)

studiesidentified established roadblocks such as_{reducingtime-to-market,} urgent

customer request and_making thequarter-by-quarter. However, the biggest

roadblock wasthe lack ofbreakthrough, _innovative, creative,_{game-changing}

ideas inthe

firms'

pipeline.

Eveniftheseroadblocks are removed, _whyare companies

investing

_along these

linesof projecttype? Cooper

(2005)

statedthat "me too" [image:33.559.49.495.58.510.2]

Immersion&Iteration: _{LeadingEdge Approaches for}

EarlyStage Product _Planning (Deln

ratherthan theexception of_manyfirms' new productefforts, andtoooften,

companies assumethatproductfeatures and

functionality

arethesame as

customer_benefits, when infact_{theymay be}oflittlevalue to thecustomer. The

threemost common scenarios associated with poor performance are:

1. Copycatprojectsthatyield_boring, undifferentiated products

2. _Extensions, modifications, and minor improvementsthat is _easyand often

urgentlyneededto

keep

the product line

"fresh."

3. Technology-driven projects, wherethe technical_{community decides}what

the customer wants

(technology

_push)

In Figure2.8, Cooper's

(2005)

datashowsthateventhe bestcompanies who

followthe traditionalproduct _planning process are superiorin_meeting customer

needs_only58%ofthe time

-on average a 40-42%failure rate.

The

key

data points showedthatwhile 60% oftheaverage performer's main

benefits areimportant to thecustomer, _only 34.3%ofthe average performers

offer new and uniquebenefits, 38.8%oftheaverage performers are superior to

thecompetition in _meetingcustomerneeds, and 40.6%oftheaverage performers

have superior_qualitythantheircompetition. The numbersforthe average

Iinnn

Percent

of

Businesses Whose

New

Products

are

Superior

to

Competition

Products Main Benefitsare Importantto Customer

Product Offers CustomerNew& Unique Benefits

New Products are BetterValue for_Moneyfor Customer

New Products areSuperiortoCompetition in

MeetingCustomer Needs

New ProductshaveSuperior_Qualityvs

Competition

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

[image:35.559.56.490.65.371.2]

Best Performer Average Business ?Worst Performer

Figure 2.8 New Product

Superiority

- Impact

on Performance

As a result of

investing

thisway,firms are_spending R&D _moneytoproduce

projectsthat are not _capturing intendedmarket share (poorproduct

performance). This is a

bankruptcy

_scenario, where firms havemadethe same level ofR&D _spendingforwell over ten years, fora lowerreturn on_investment,

resultingin incrementalprojects thatjustaren't

delivering

value tocustomers.

Thereare two major reasons_whythe traditional _planning model producesthe

results shown above. _First, the model focuses on short termincrementalproduct

improvementsbecause thatiswhat company's want and it is whattheirstrategies

tell them to do

-it is built intothe firms'

corporate culture. Investment

by

project

type

directly

ties intothe shortterm quarter-by-quartergrowth_{Wall Street}

age Product_Planning

describe

-theirknowledge isrelevant_onlyto the current products_theyhavein

their shop. Thisone-two punchis a_{self-reinforcing}

loop

thatwillnotbreak

unless firm's have thewherewithal and couragetorecognize that a problem exists.

Beforea patient with chronic illnesscan bemade _healthy,theyfirstmust

recognize_they haveproblem.

Unless afirm can create breakthroughideas, the trendinthe datashown

by

Cooperwill continuebecausetheorganization will not havebreakthrough

projects towork on (no ideas, noprojects, and no senior management support).

It takes immersiontocome _up with game_changing ideas.

H3: Even ifDone

Well,

Traditional Product

Planning

Does Not Have the

Process

Capability

to DeliverBreakthrough Products

Confusion can permeatetheproduct developmentprocess becausethe

difficulty

in understanding customer's needsis often a_costlyand inexact process. Even

when customers knowwhat _theywant, _they cannot communicateor transferthat

knowledge_clearly or completely. Consequently, the customer offers requirements

in alanguage that is familiar tothem; unfortunately, that

"language" is not

particularlyharmonized withthe creation ofbreakthroughproducts.

Additionally, companies continuetodefine "requirements" as _any kindof

customerinput; wants, needs, benefits, solutions, ideas, desires, demands,

specifications, etc. Ifyouwant to

develop

breakthrough products,

following

the

linn

traditional process doesnot have the process_capability tocollectthe typeof

requirementsthat create breakthrough _products, and costs offailure in the

traditional process arehigh. Ulwick

(2005)

noted that newproduct failures cost

morethan $100 billion dollars toUScorporations a year.

There isadditional proofthat the traditionalproduct_planning processitselfdoes

nothavethe process _capabilityto producebreakthrough products, and thatfine

tuning

itwon't work either. Thomke and von Hippel (2002, _pg6) stated that

product development "is oftendifficult becausethe needed information (whatthe

customer_wants) resides with thecustomer and the solution orinformation (how

to_{satisfythose needs)} lies withthe manufacturer. _{Traditionally,} theonus has

beenwiththemanufacturerto collectthe needed informationthrough various

means,

including

market research and informationgatheredfromthe field. The

process can _{be costly} and

time-consuming

becausecustomer needs are often

complex, subtle, andfastchanging. Frequently, customers don't

fully

understand

their needs until_{they try}out prototypesto explore whatdoes, anddoesn't

Thetraditionalproductdevelopment process can be a

long

drawn-out churn of

trial and errorbetweenthe product manufacturer and the customer. Sometimes

the manufacturerdevelopsa prototype based oninformation from thecustomer

thatdoesnot produce breakthroughconcepts. Thecustomer and manufacturer

iterate backforth between flaws, softwarebugs and corrections.

Following

the

traditional model, this cycle repeats itselfuntilthecustomer issatisfied often

luct Plain

shorten the cycle?What is _missingin the_planningprocessbetween a _company

that deliversgood products and one thatdeliversbreakthroughproducts?

One factorstands out above all others inthe traditionalproduct_planning

process; ironically, it istheinputs fromthe customerthat is not reliableas the

sole source for breakthroughproduct development. Whencompanies gather

customer requirements_theydo notknowwhat typesofinputs_they needto

obtainfrom the customer. Norcanthecustomer describethe

"unexpected"

or

"delight"

featuresthat make a product greatbecausethe customer's reference

pointis theperformance ofthecurrent product.Yetthere are new approaches

thathave been developed thatcould expedite theproduct developmentprocess.

Thomke and vonHippel created a customer-as-innovator approach wherethe

manufacturer or productdevelopersuppliesthe customer withtoolssothat the

customer candesign and

develop

theapplication-specific part ofthe product on

theirown. This does not eliminatethe needtodeterminehow theproduct should

work; rather itmakes product developmentbetter and faster fortwo reasons.

First, firms canbypassthe expensive and painfulmistake-prone processto

understandthe customer needsin detail. Second, thetrial-and-error cycles that

unavoidablyoccur

during

productdevelopment can move muchfaster because

the iterationswill beperformed _solely

by

the customer. But

developing

the right

tool kit for customersis

hardly

a simple matter.

Specifically, toolkits must provide fourimportant capabilities. First _theymust

1mm ation I eadini

kthiough

whatdoesand doesn'twork.This issimilar tocomputer simulation where

customerscan

try

outdifferentscenarios without

having

to manufacture the

product. _Second, tool kitsmust be user-friendly suchthat customers do not

needto undergo extensive

training

in ordertousethe tool kit. _Third, thekits

must contain useful components and modules thathave beenpre-tested and

debugged in order tosave customers from re-inventingthe wheel. _Lastly, these

kitsmust contain information aboutthecapabilities andlimitations ofthe

process toensurethe customer's designwillbe somethingthe supplier can

produce. Thereisalsohard data thatsupportsthelack of process_capability in the

current product developmentprocess.

Cooper

(2005)

noted that there arefive _{marketing best} practices identified in

theirAPQC

benchmarking

study, as shown inFigure2.9Cooper's datashows

thatfor the "average business" _only 11.4%useMarket _Research, 17.3% _study

Buyers'

Behaviorand _only 26.3% maintainthecustomer

learning

experience

beyondthe initialVOCeffort. A closerlookatthe datashows _only 15.4%ofthe

worstperformers work_closelywith_customer's,

hardly

12.0%work withlead or

innovative customers, and0%of worst performers define productsfrom market

research.

Cooper (2005, _pg 179) notedthe major reason forthese poor grades wasthe

failure

by

firms to "adopt a_strongmarket orientation in product _innovation, an

unwillingnessto undertake theneeded market_assessment, and

leaving

the

customersout oftheproduct developmentspell _{disaster. It'slike} abroken record:

throuel

roachesfi : Product

Planning

markets, and market_launch; and inadequateresourcesdevoted to _marketing

activities are common weaknessesfoundin_{virtuallyevery study}of_whynew

products fail."

Thedataand_{commentary from Cooper}tiesusbacktoThomke

and vonHippel.

Percent

of Business that

Conduct

Market Interface

Activity

Well

Work _Closelywith Customers/Users to _Identify

Needs

Work with Leadorinnovativecustomersto

generate ideas

Product Defintionis Determinedvia Market

Research

Interfacewith Users Throughout Development

Studies ofBuyer Behavioras Inputto Plan

IBest Performer Average Business ?Worst Performer

[image:40.559.62.512.130.470.2]

0.0% 20.0% 40.0% 60.0% 80.0%

Figure 2.9 VOC and Market inputs- Impact_on Performance

The Cooper input showsfewproductdeveloperswork_closelywithcustomers,

and Thomke re-affirmsthat the traditional productdevelopment is a

long

and

costlyprocess oftrial and error. Also, fewcompanies workwithleaduser because

thetool kitneeded to

develop

new products requirescomplicated, robust

engineeringpractices. Lastly, oftheworstperformers

-nobodydefines a

productthrough market research. How can you builda successful new product

Inn u

want to affordthe time and expensetodeliver breakthrough products, in factthe

traditional processtells themnotto.

Market research as a

key

tool to

help

define the product throughoutthe

development cycle _maybea_{costly, lengthy,}and iterativeprocess, butcontinued

customer contact isessential for breakthroughproduct development inthe

market.

Our

key

_summaryofthe problems

facing

the traditionalproduct development

process arethe following:

1. Overthe last 15yearscompanies arespending thesameamount of sales on

R&D

(4.9%)

fora smaller return ontheirinvestment.

2. Thetraditional productdevelopment processfocuseson incremental

resultsdriven

by

theneed forshortterm profits (WallStreet_effect).

3. The lack of_{breakthrough, game-changing} ideas inthefirm's product

development pipeline. It is herethat the team will provide a new model,

applying immersionthat isused as an input to the traditionalproduct

development processto

help

generate breakthroughproducts.

Inthe next section we will discussinterviews withlocal firmssuch as_Xerox,

Kodak, Corning, DirectMail

Holding

andJohnsonand Johnsonthatvalidate the

problems with the traditionalproduct process. This willbe _followed, in

pproachesfor Earl Product _Planning

secondarycase research of

highly

innovative companiesthat haveappliedthis

Chapter

3:

Primary

Research

-Assessing

Product

Planning

Processes

Introduction

Inorder tovalidate

Coopers'

claims stated earlierthe researchteam performed

interviewswith localcompanies affiliated withthe MPDprogram. Thetarget

interviewees were people whose roles and responsibilities involved_collectingand

interpreting

VOC's.

Aquestionnaire was created to_specificallyfocus onthree

key

areas in the product

development process: "voice ofthe customer /market _inputs", "product

definition", and "productperformance against competitive

products."

Thequestions in "voiceofthecustomer /market

inputs"

section aredirectedat

howwell companies obtain customers needsthroughclose interactionwiththe

customer, work withinnovativeusers, _marketing actions,market_studies,

customer _{tests, field}trials and studies of customer

buying

behavior.

The questionsin "productdefinition" section are pointed at

defining

the target

market, the concept, benefits, features, specs, requirements and_positioningof

the product _earlyinthe developmentcycle. Also howwellcompanies ensure

Imnii lachesfor_EarlyStage Product_Planning

Thequestionsinthelastsection "productperformance againstcompetitive

are todefinetheproducts_abilitytomeetthe customersneeds andhow

itcompares to thecompetition and its'

unique customer value.

Focusing

the _study onthesethree

key

areas will provide a close insight into how

the localcompanies gatherVOC'sand definerequirements forproductstomeet

thoseneeds. In addition, itwill also enable a second validation ofthe data Cooper

collected.Thequestionnaire was supplied inadvanceto the intervieweestoallow

sometime todigest theinformation. Then

during

thecourse oftheinterviewthe

questionnaire was completed.

Additionally

as part of a separateindependent_study theauthors puttogether an

electronic_surveywiththesame questions and sentit outto alarger_group within

KodakandXerox forcomparison. Therange of peoplesurveyed was also

increasedto includenotjust _marketingpeople butproject managers and

engineers.The decisionwasto includethisinformation in thisresearch paper to

bettersupport thestudy.

Therewere atotal of34 respondentsforboththe_surveyand theinterview

questionnaire withthe _majority ofthem

being

in the market area.

Thecompanies interviewed are asfollows:

f

f"YRNTNCr

Corning

Incorporated isanAmerican manufacturerof

glass, ceramics and related materials, _{primarily for} industrial and scientific

Immersion <V Itei

employsabout 25,000 people worldwide with annual revenue as of2006 of$5.17

billion.

dEfth

Direct Mail _Holding, LLC

(DMH)

is afull servicedirect mail

companythat mails over 1.5 billion pieces_annuallythrough_servingthe

fundraising, financial, healthcare, publishingand consumer products markets.

Direct Mail Holdingsis a _companythatwasbuilt through acquisition. Itincludes

Alaniz LLC in Iowa, Focus DirectinTexas,Mail America inVirginia,

International DataManagement inOhio, andCreative

Mailing

and

Marketing

in

Oklahoma and California, Diamondback Direct in Maryland and Shanghai, China.

The privately heldcompany's revenues now exceed $140 million_annuallyand it

employs morethan 1200people.

y Space Systems Division

(SSD)

is aleader in remote sensing,

V ITT

command and control_systems, satellite_{communications, tactical}

warning/attack assessment,and space launchservices. Headquarteredin

Rochester, NewYork, SSD provides commercial and government customer'shigh

performance, bestvalue remote_sensingproducts and services. Thebusiness

leverages corporate resources and employs over 2,600people worldwide.

%[

g>\f\2*Jkjr Eastman Kodak

Company

is an American multinational

public _companywhich producesphotographic materials and equipment.

Long

known for itswide range of photographicfilm products, Kodak hasfocused in

recent years onthree_primary markets: digital _photography, health_imaging, and

Immersion &Iteration lachesfor_EarlyStageProduct_Planning

51,100

(2005)

and istheworld's foremost

imaging

innovatorwith sales of$10.7

billionin 2006.

t_ . _.. , , _ . Ortho Clinical Diagnostics isaJohnson & Ortho-Clinical Diagnostics &

aMHtHOlmfoWttOM company _ -

,__-i i i r

Johnsoncompany.

They

area

leading

provider ol

high-value diagnosticproducts and services forthe global health care community.

Ortho Clinical Diagnosticscorporate offices are in Raritan, NewJersey, while

theirmain research

facility

is in Rochester,NewYork.Thebusiness hastwo

major segments: Transfusion Medicinewhichis involved in_{screening human}

blood, and Clinical_{Laboratories,} whichdoes a_variety of chemicaltesting.

.^_. . Sensis Corporation is a global provider ofsensors,

flSensis

information_processingand simulation and_modelingthat

advancehuman _{security,safety} andhealth. The_Syracuse, NY_{based company has}

offices acrosstheworld, and_technology deployed in morethan25 countries

acrossfivecontinents, theprivately-held _companyoffers innovativesolutionsfor

airdefense, airtraffic control, airline and airport operationsmanagement, and

dataintegrationanddistribution.

V I

,

IJf^Y

Xerox Corporation is aglobaldocument management

company, which manufacturesand sells a range of color printers,

black-and-white _printers,multifunction systems, photo copiers, digitalproduction_printing

presses, and related_consultingservices and supplies. Xerox is headquartered in

[mini .i.l _eaditij pproaiIn (Delh

around _Rochester, NewYork_employing-53,700

(2006)

withan annual revenue

of$15.9 billion USD

(2006)

Analysis

Thedata from thequestionnaire hasbeen tabulated anddisplayed in graphical

form below. A_copy ofthequestionnaire and all theinterviewnotes can be found

in Appendix1ofthisreport.

VOC and Market Input

The data in Figure3.1shows thatall scores are_{very low}

(<15%)

forthe

'always'

category. This indicatesthat the current processesthecompanies are_performing

are not

being

carried out efficiently. Thisresult is_surprisingsincethe companies

surveyed have been using theirproduct _planningprocess foralmosttwo decades.

Onewould expecttheiranswers toberated much higher.For example, question

#1, _workingcloselywithcustomersto

identify

needs and problems is rated 45.7%

for" often"

and 40.0%for "sometimes."

A_{company striving} to bea best

performer should havethe highest percentagesinthe

"always"

category, not

"often"

or

"sometimes."

This performance would beunacceptable ifthiswere a

tageProduii _Manning (Deli

VOC and Market Inputs

gj

t

1

1

1 Work closelywith 2 Workwithlead(innovative) 3.Producl definitionis customers/userstoidentify userstogenerateideas determinedbymarket

needs/problems research

Questions

4 Interfacewith users 5 Performstudiesofbuyer throughout the product behavior asaninputto launch

development process plans

I Always Often ? Sometimes _Rarely ? Never

Figure 3.1 VOC and Market Inputs- Questionnaire Results

Additionally, two importantresults canbeseen fromthe responsesto question

four,

interfacing

with usersthroughout theentire product _planning process, a