By: Anne Orban
Successful new product development is a result of doing a lot of things right – but unless you are working on the right things, it doesn’t matter how well you implement your stages and gates process.
In the 2012 PDMA Foundation Global Comparative Performance Assessment Study that surveyed new product development success drivers, overall success was measured in terms of the metrics represented in this CPAS table. (Table 1)
Don’t be caught up in semantic misunderstanding of the word ‘idea’ in this context. Don’t think for a minute that The Best start out with 4.5 ‘ideas’ for 1 success. They most certainly do not. According to the CPAS study The Best start with twice as much investment in getting the right ideas to work on compared to The Rest, as shown in Table 2.
This graph (Table 3) is much more representative of the process and progression needed in Stage 0 to find the right ideas to work on. The data points in red are a result of the 2012 CPAS study and represent what The Best are now doing.
Just look at the number of raw ideas you need to begin the process of finding actionable ideas. Then recognize how they are reduced during the progression of assuring that selected ideas are on strategy and represent problems worth solving that are yours to own. Please also note, the success rate for new product introductions in this process progression is between 67% and 70% — much higher than commonly held appreciation for innovation success rates.
In the CPAS 2012 study, the overall cost of a success for The Best is half that for The Rest. But, as represented by the CPAS table (Table 2), the Best are spending twice as much cost on idea generation, than The Rest, indicating the importance of more ideas to get better ideas.
So, for generating ideas, what idea generating methods are The Best spending their money on and time doing? Cooper and Edgett investigated this question in their 2007 study: Ideation for product innovation: What are the best methods? , published in the March 2008 PDMA VISIONS magazine. They surveyed over 160 companies and they gauged popularity and perceived effectiveness of eighteen methods for generating ‘excellent, high-value product ideas’. I have created Table 4 to capture their results.
There is no doubt that ethnographic research and other VOC techniques can be costly. There is no doubt that they are also successfully used by The Best. The Best target their resources to work on less early stage product ideas, but they do so with the confidence that they are working on more of the right things, because they have invested significant resources in idea generation to get the right ideas.
Bibliography
Cooper, R. G., & Edgett, S. (2008). Ideation for product innovation: What are The Best methods. PDMA visions magazine, 1(1), 12-17.
Markham, S. K., & Lee, H. (2013). Product development and management association’s 2012 comparative performance assessment study. Journal of Product Innovation Management, 30(3),
Stevens, G. A., & Burley, J. (1997). 3,000 raw ideas equals 1 commercial success!. Journal of Research-Technology Management, 40(3), 16.
