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6 Common NPD Metrics | |
Or "How to Measure Success"
Measuring success in New Product Development (NPD) is not quite as easy as it is in sports, since there is no universal "score". Scoring a success in NPD depends on many things, but first the firm has to decide on exactly what is "success". Each firm and each individual on the NPD Team are likely to define "success" in personal and professional terms, that may not overlap with the definitions of "success" of other team members or of the team.
For example, consider the definition of "success" by several NPD Team members.
Mary, an R&D Engineer supporting the development of the prototype defines success, "There are no major revisions between the prototype and the final commercial product."
John, the Marketing Advisor for the NPD project calls the project a success if, "Market penetration of the new product reaches 40% within one year."
Finally, Judy, the division manager intends to call the NPD project a success if, "The NPV (Net Present Value) of the project is greater than $10,000,000."
Apparently, each individual on the team has chosen a different measure of success, ranging from personal goals to specific financial goals ($10M NPV).
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Greetings!
Happy New Year!This issue of The Village is filled with celebrations. First, we welcome 2011 and wish all of you health and prosperity. Global NP Solutions is also celebrating our one-year anniversary of The Village newsletter. Finally, we are celebrating the addition of lots of new on-line classes for New Product Development Professional (NPDP) training. Check out the current schedule here. Let us know what you're celebrating and receive $250 off any 2-day NPDP training course in 2011. Send an email to info@globalnpsolutions.com with the subject line CELEBRATE!
Register for a free 45-minute webinar on "What is New Product Development?" Thursday, 20 January, 2011 at 1:00 pm Central Standard time. Sign up with your email address using the widget on our blog page here. |
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Innovation Fun Fact | |
Top Invention of 2010
One of the top 10 inventions of 2010 is a drag-racing snowmobile. And, in case you're not sure what drag-racing a snowmobile looks like, click on the photo of Shawn Watling, on the Top 10 inventors of 2010, below to see a fun 8-minute video. The 'Frankenstein' was fast, and a dynamometer test revealed that 85 percent of its engine power was delivered to the ground, while a typical snowmobile only hit about 55 percent. This result led Shawn to discover that it was the rear suspension on front drive manufactured snowmobiles that increased rolling resistance and prevented adequate track tension. Read more of the Top 10 Garage Inventions here. |
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Recommended Reading | |
How They Blew It
 Since our featured article (next) is on Failure, this month's recommended reading is a short book by Jamie Oliver, called " How They Blew It: The CEOs and Entrepreneurs Behind Some of the World's Most Catastrophic Business Failures." Oliver tracks the stories of 16 men who brought the large banks and other institutions to collapse during the recent grand recession. Six ended up in prison. How They Blew It is an interesting look at greed, corruption, and fame driving otherwise successful men to failure. Perhaps a good reminder for the new year to concentrate on ethical profit-making, like new product development! |
| Why Do Innovation Efforts Fail? | | |
3 Common Causes
Successful New Product Development (NPD) involves taking an idea to commercial launch via a path littered with design land mines, finicky customers, and technical gaffes. It's a wonder that any new products see the light of day!
 Of every dollar spent on NPD, 75¢ is spent on products deemed "failures". Of these wasted dollars and cents, 2/3 are spent during the later product development stages. Stage 3 (Development) is often considered the most expensive, and irreversible, stage in an NPD Process.
Yet failure, by definition, is a step along the pathway to NPD success. In fact, many companies purposefully design "killer variable tests" into the New Product Process in order to force early failures; thereby freeing resources to work on more promising ideas in the new product portfolio.
Three common causes of NPD failure are misalignment of strategy, intolerance of risk-taking, and cultural.
Learn Best Practices for New Product Development by enrolling in a 2-day course now.
Read more about the causes of new product innovation failures here. (Approximately 5 minutes reading time.)
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