It’s been said many times that “hope is not a strategy.” Everyone’s heard the stories of those who stumbled upon great inventions that revolutionized their tiny corner of the world (like 3M Post-It Notes or Disney’s mythical “flubber”), but in general, new business development, and in particular, new product development is a lot more structured than that. Even when you are exploring unchartered waters, it still helps to have a goal in mind so that you can build even a rough plan for how to achieve that goal.
I’m working on a new product development project and one of the first essential activities is to ensure that everyone impacted by the new product exploratory agrees on the objectives of the project. You see, everyone says, “We want more business! We want to grow!” But they don’t always take the time to determine specifically what they are looking for. “We need new products—we don’t know exactly what it is, but just bring us your idea and we’ll tell you if it’s any good.”
This is not a recipe for success. It’s so much more efficient to outline the criteria against which the project or product will be measured—even if you aren’t certain exactly what the outcome will be.
Usually, the easiest measurements include gross revenue, but the more specificity you can provide up front the better your outcomes will be. Are you looking for $1MM idea, a $5MM idea, or a $100MM line of business? Also, what’s the timeframe expected to generate that revenue? In general, there’s a “build” that happens in most industries as consumers become more aware of your new offerings, so it’s important to think through your timelines leading up to (and through) commercialization.
It is helpful to gain agreement with every interested party, as each will have their own perspectives on what you should be striving for—the VP of Finance has certain gross margin expectations, while the head of Sales needs products that deliver specific turn rates in order to sell it in to his retailers. Brand Management will be looking for those innovations that enhance the brand’s image and answer unmet consumer needs, whereas Manufacturing is concerned with how much excess capacity this new product will use and how it will integrate with current manufacturing processes. Getting everyone’s desires and expectations out in the open up front will streamline the evaluation process and ensure that the innovation process is not just a “fluke” (or a flubber) but is a methodical system for new business development.
If you’d like to help bring consumer-oriented innovation to your business, come talk with us about how we can help facilitate the growth of your business.