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A Climate of Innovation
Know What You're Going For
Speed!
A Climate of Innovation
New product development doesn't occur in a vacuum, according
to TEC experts Mitch Goozé and Nick
Webb. In companies with a successful track record
of innovation, senior management understands that the process
involves a complex set of activities that cuts across most
-- if not all -- business functions.
"Start with an in-depth analysis of current marketplace
conditions and move on from there to specific goals,"
Goozé says. The analysis includes:
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Rigorous conceptual design |
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Target market research |
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Desired performance levels |
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Investment requirements |
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Projected financial impact |
Other important considerations: how does the proposed new
product screen against your current marketing strategies?
Will it dilute the focus of the company's overall plan? Is
there a danger that it will drain valuable resources from
other more profitable ventures?
"Use your existing market strategy as a guideline,"
Webb advises. "Know how your target buyers will greet
the proposed new product. Make sure it fits into your company
mission."
Ideally, the TEC experts say, new product development should
take place within an ongoing "climate of innovation."
For this to happen, everyone from the CEO on down should agree
on specific principles, including:
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We will honor idea generation
whether the idea works or doesn't. |
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We will learn from failure. |
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We will encourage creativity skills among
all staff. |
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We're committed to getting the best ideas
from employees and customers. |
New product strategy relies on exhaustive analysis of the
company itself (internal) and the marketplace at large (external).
"Do you know the extent of your current product line's
strengths and weaknesses?" Goozé asks. "Are
you fully apprised of technology needs for this line? Are
there gaps or deficiencies that should be addressed before
embarking on new product development?"
You should know your competitors, too. When it comes to product
design, production engineering, marketing and finance, what
are their strengths and weaknesses?
And, of course, the bottom-line strategic concern: profitability.
"Profitability should be assessed at each stage of development,
from manufacturing to launch to customer service," Webb
says. "This assessment includes calculating fixed and
variable costs, expected sales price and anticipated sales
volumes. New product development is costly but those costs
can be estimated and managed."
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