Shipulski On Design

Posts Tagged ‘Product Development Engine’

Pent up demand is everywhere.  After almost two years of cutting inventories and pushing out purchases, companies are ready to buy. And with credit coming back on line, they’re ready to buy in bulk.  Good news?  No, great news.  We’re back on our growth path. And that’s good because Wall Street now expects growth. But, together this wicked couple of pent up demand and Wall Street’s appetite for immediate growth has created a powder keg that’s ready to blow.

Companies want more new products to satisfy the pent up demand (and Wall Street).  Growth through new products is a theme heard around the globe; there’s a relentless push for more products – early and often. Resources be damned, best practices be damned, we’re going to launch more products. Were going to market and will fix it later. The battle cry – Don’t launch, don’t sell!. However, the real battle cry is more aptly – Ready, fire, aim!  We’re going too fast.

I’m all for productivity, but we’re heading for a cliff, a cliff some have already accelerated off of, albeit in an unintended way.

a

We’ve forgotten the golden rule – provide value to customers, or you’re hosed.

a

Customers value function, or “what it does”.  Function first. But in this need-for-speed environment that’s just what’s at risk. To reduce time to market, we eliminate tasks (best practices?) in our product development processes. All good unless we eliminate tasks that make the product function as intended.  All good unless we load our engineers so heavily they don’t have time to design in functionality.  We must be careful here.  If you’re first to market and your product doesn’t work, you should have waited.

I believe launching too early is worse than launching too late because a botched launch can damage your brand, the brand you’ve taken years to build. (Click this link to see a post on brand damaging.) As we know, word gets around when your product doesn’t work (or accelerates on its own).

Satisfying the siren of pent up demand can run you into the rocks if you’re not careful.  So block your ears to her song, and take the time to get your products right.

2009 is a tough year, especially for CEOs.

CEOs have a strong desire to do what it takes to deliver shareholder value, but that’s coupled with a deep concern that tough decisions may dismantle the company in the process.

Here is the state-of-affairs:

Sales are down and money is tight.  There is severe pressure to cut costs including those that are linked to sales – marketing budgets, sales budgets, travel – and things that directly impact customers – technical service, product manuals, translations, and warranty.

Pricing pressure is staggering.  Customers are exerting their buying power – since so few are buying they want to name their price (and can).  Suppliers, especially the big ones, are using their muscle to raise prices.

Capacity utilization is ultra-low, so the bounce-back of new equipment sales is a long way off.

Everyone wants to expand into new markets to increase sales, but this is a particularly daunting task with competitors hunkering down to retain market share, cuts in sales and marketing budgets, and hobbled product development engines.

There is a desire to improve factory efficiency to cut costs (rather than to increase throughput like in 2008), but no one wants to spend money to make money – payback must be measured in milliseconds.

So what’s a CEO to do?  Read the rest of this entry »