Ensuring Successful New Products and Services

By Hans Hjort

When was the last time you reached into the refrigerator for a King Cola, 7Up Gold or Pepsi Blue? Remember pizza at McDonald's or Heinz chocolate-flavored French fries? From the Ford Edsel to the XFL, history is littered with costly product and service failures. While failure can occur for any number of reasons (e.g., poor quality, excessive cost, late to market, superior competition, etc.), many times it results from an inability to provide better value for the customer. Organizations can lessen their chance of failure by focusing on several key areas where mistakes are likely to occur.

Start at the Beginning

An organization focused on increasing revenue may immediately jump into developing a new product or seek a new market for an existing product. The development is rushed into motion as teams are assembled, market data is collected, designs chosen and prototypes built. The result can produce a poorly planned product that does not coincide with the business strategy, differentiate itself from competitors or deliver value to the customer. Instead, the effort can waste money and resources.

The initial steps to develop a new product should include determining if an opportunity exists to provide better value than is currently available from an existing product. The new product should also fit with the organization's business plan. Next, the organization should gain a thorough understanding of the market and its characteristics. This will help determine the expected profitability of the new product before expenses associated with engineering, production and marketing are incurred.

Unfortunately some organizations shortcut these critical steps, precluding them from effectively capturing and understand the voice of the customer, prioritizing customer requirements, determining trade-offs when requirements conflict (i.e., lightweight yet sturdy), and translating vague requirements (i.e., easy to use) into specific targets.

Utilize Best Practices

A relatively simple and inexpensive process has emerged to bring structure, organization, weights and measures to the decision making process. Quality function deployment (QFD) is employed throughout a growing number of product development and service industries to guide the planning process. QFD is largely credited as a key force behind the radical transformation of the Japanese automotive industry in the 1980s. The QFD chart organizes and assigns weights to desired performance parameters allowing organizations to clearly see the tradeoffs and compromises that often take place when deciding what features to include in a new product.

Once the performance parameters are defined the organization is poised to set specific targets. This process includes consideration of many factors such as product strategy, technical competitive assessments, development costs and investment risk. At the end of this activity, the organization can generate new concepts that best meet key customer and business requirements.

To produce successful products, it is essential that the entire organization share and effectively communicate the role of the customer. The product team should collectively own the strategy for addressing customer needs, applying technical know-how and resources and applying a shared understanding to evaluate and select the best solutions. QFD serves this purpose and is most effective when applied to three types of activities – planning, evaluation and deployment.

• The Planning Matrix: The starting point for a planning matrix is a crisp definition of the customer segment. The objective is not simply to develop performance parameters and targets, but to enable the organization to form a strategy for approaching the customer. The combination of this information drives the determination of significance for each performance parameter and identifies which parameters are critical for product success. The critical few parameters form the content of the design scorecard to monitor success.
• The Evaluation Matrix: Before each product solution is accepted, it must pass a filter of set requirements such as industry regulations and basic functionality. This process identifies solutions that provide the desired competitive advantage without violating any expectations. The evaluation matrix includes a description of the expected technology needs for the new product. Organizations should carefully consider the impact of the technology as it may require a time schedule that misses the window of opportunity to match customer requirements. If too much time passes between collection of the voice of the client and implementation, the client requirements may have changed.
• The Deployment Matrix: The deployment matrix identifies which subsystems are involved in delivering specific targets and to what degree they are involved. The matrix provides visibility to the connectivity of key deliverables derived from customer needs.

Conclusion: A Tool for Success

The benefits of QFD are numerous. Employing the QFD process aligns team members and management by providing visibility and buy-in at each step before moving forward with the project. It enhances management support by tying project decisions to strategic direction and prevents teams from operating in a vacuum since their activities are tied to the enterprise planning effort. In addition, QFD provides visibility to critical parameters and maintains a connection with the initial market strategy at all levels of the development effort.

Traditional product planning starts with analyzing the performance of an existing product and improving its features. The QFD tool can play a key role in transforming products to meet continually changing customer needs.

About the Author:

Hans Hjort has 15 years of product development experience and has for 18 years been facilitating QFD development teams to educate companies on how to plan and design winning products and services while improving time to market. Contact Hans Hjort at hjort (at) iti-global.com.