Five Crucial Steps to the New Product Development Process

Tags: Industry, Insights

Over the last decade or so, the product development process has shifted from being reactive to proactive. Previously, creatives simply brainstormed and threw ideas around. At that time, harnessing employees as idea machines was very much in vogue. Legions of companies followed the book, “Your Creative Power” published in 1948 by Alex Osborn, a partner in the successful B.B.D.O. marketing agency. The book set the course for “group think.”

A publication in Harvard Business Review (HBR) in 1979 changed everything. Not only did E. Ralph Biggadike put HBR on a path of applying rigorous academic research to address provocative managerial questions, but his article, “The Risky Business of Diversification was the first to publish data related to how companies could expect to fare when they expanded their product portfolios. Essentially, this article became the manifesto for the new product development process.

A historical review suggests that the product development process has had four major phases over the last century or so. In the early 1900s, a “solopreneur” simply executed his idea and brought it to the market without any testing. In the 1950s through 1970s, companies brainstormed and then brought the favorite idea to market without any testing. By the 1980s through the 2000s, the product development process had been formalized, typically handed off to creatives in marketing agencies to brainstorm then test concepts. At the turn of the last century, customer co-creation and design thinking infiltrated the fourth evolutionary phase of the product development process, which was amplified by the megaphone that is social media.

Here, we present a flashback to the reactive product development process typical of the end of the last century and compare it to the proactive, step-by-step process it is today.

Flashback: The Product Development Process in the 1980s – 2000s

The new product development process at the end of the last century was simpler because it was executed as an internal “group think” and orchestrated under a hierarchical organization. There was little to no room for external opinion, let alone an opportunity for customers to shape the new product. The process looked like the following.   

  1. Internal creatives sit around a table and brainstorm until they have an idea for a new product.
  2. The product idea goes to R&D where the technology and mechanics of development are hammered out.
  3. The product is then tested with a small live focus group or, perhaps, with some limited in-home testing.
  4. The marketing agency dials up their campaign planning.
  5. Marketing concepts are then tested with a small group, and may or may not be tested in tandem with the final product to help coax out product positioning.
  6. The product is launched.   
  7. In some cases, post-launch market research is conducted. However, by this time, it is too late to fix something that the customer does not like. At best, the marketing agency can take a reactive position and try to alternatively position or promote the product – as is.

Some of the top creative directors in the world were assembled about a decade ago and asked how they approached ideation – was it simply pure genius? Various tactics were employed, from working in brightly colored, playful environments to taking the team out for a beer. These tactics shared one aspect: new product development was at their discretion, not in the hands of the customers. Design thinking and customer co-creation had not yet entered the mix.

The Impact of Design Thinking & Customer Co-creation

Brainstorming started to fall out of favor largely due to pushback to one of its key tenets which prohibited negativity to let ideas bloom. Most parties agreed that constructive criticism and dialogue were essential to drive actionable ideation. The fall out came in response to new levels of complexity in the modern world of vocal customers and a plethora of choice.

Metrics and analysis emerged with the edict that companies should study their own histories and resist the urge to punish failures but to learn from them instead. In parallel, the elements of design thinking were gaining prominence, demanding a delicate balance between planning and process with creativity and innovation. Additionally, customer co-creation and the resultant insights were the new imperative requiring that permission to operate as a brand would continue only if identified flaws would be addressed before the product was launched. The infusion of customer feedback into all aspects of the new product development process had begun.

Today’s New Product Development Process: Step-by-Step

Although there is variability with the new product development process (some groups favor a five-step process whereas others favor six or seven steps), the key aspects are essentially the same.

  1. INVESTIGATE: Right at the beginning of a product lifecycle, conduct behavioral research. Talk to your customers to hear about what they are up to, what they want, need and how they live. Empathize with them and truly get to know them. Ethnography is a wonderful technique that works well here.
  2. INTERROGATE: Speak with customers directly to identify unmet needs and understand what they are missing or what could make their lives better. Customer engagement here is mission critical. Stated another way, it enables the brand connection to uncover how, why and when a customer will engage with your offering.
  3. IDEATE: Design thinking mandates dialogue with customers to understand who they are. KLC takes the conversation one step further by putting customers in the driver’s seat. Doing so not only enables you to get to know them better, but it also affords greater contextual incorporation of their insights – not just their feedback – into every stage of the product development lifecycle.
  4. ITERATE: While prototyping, iterate and collaborate with the customer. Allow customers to see the product in each phase of development and ask what they like versus dislike and what’s missing. Repeated direct engagement not only ensures that customer insights are integrated with every iteration of the product, but it sets a foundation for brand loyalty.
  5. EVALUATE: Once you have worked through a number prototype-customer feedback-prototype cycles, it is time to evaluate it for market acceptance. Test the final product against identified customer needs and preferences, then seek out the answer to the burning question, “Is it something a customer will ultimately purchase?” Conduct one final, preemptive disaster check before launching and at least one additional post-launch evaluation.     
  6. PERPETUATE: Once in market, continue to do all the above to perpetuate your brand. Keep your product relevant by constantly testing the waters. Maintain open dialogue with your customers to keep your eye on if/how their needs have changed. Tweak the product, packaging and/or sales channels regularly to keep up with their changing needs. This is mandatory to stay relevant.

The key difference between the product development process of the last century versus today’s process is reactivity. Formerly, only marketing had the opportunity to regroup and adjust a campaign. Doing so in a reactive way, there was no opportunity for the product to be changed. In contrast, today’s new product development process is anchored on the theme of proactivity where customers’ needs, behaviors and ideas are intimately integrated from start to finish.


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