Design Thinking & New Product Development

New Product Development in any company, is a big investment of time, money, resources, efforts & hopes. The rate of success of the new products in the market is abysmally low.

Here are some quick pointers:

• Harvard Business School professor Clayton Christensen says, of the 30,000 new consumer goods are launched each year and 80% of them fail

• A Nielsen statistic says that more than 85% of new CPG (consumer packaged goods) products fail.

• The failure rate for new products launched in the grocery sector is 70 to 80 percent, according to Inez Blackburn of the University of Toronto.

Now the question, why do they fail .... lets the look at this research graphic.

We clearly see market & thus customer - play a large role. Another quick listing of reasons shows the reason for failure as below

• Overestimation of market size

• Poor design

• Incorrect positioning

• Wrong timing

• Priced too high

• Ineffective promotion

• Management influence

• High development costs

• Competition

• Customer doesn’t want it

Typically NPD (new product development) follows a stage gate process- some of the more used models are below :

BAH Model (Booz-Allen-Hamilton)

1. New product strategy

2. Idea generation

3. Screening and evaluation

4. Business analysis

5. Development

6. Testing

7. Commercialisation

Cooper’s Stage Model

1. Generating

2. Screening

3. Concept Testing

4. Business case analysis

5. Product Development

6. Test Market

7. Commercialisation

8. Launch

We believe that design thinking and mindsets if adopted properly along with the stage gate models can get a higher probability of success.

Here's our comparison stage gate new product development and how design thinking can complement it

Design thinking and New Product Development

Expanding on the graphic above:

• Design Thinking's technique of low fidelity prototyping can ensure that customer feedback is received beyond the market study stage

• Stage gate models, post the screening stage call from one idea that you work on and develop vs design thinking will let you take many bets - you can create many low to high fidelity prototypes and test them

• Given the nature of organisational functional silos, many times, NPD results in incremental improvement in the product vs disruption. The observation, empathising, reframe/define stages of design thinking ensure that you spend time, understanding the customer environment to discover latent, unmet needs and then try and solve for them

• The stage gate process we only look at the product, not the end to end to process. We need to ensure that customer experience of buying, using/fitting, maintaining your product is also superb.

• Design thinking requires that a multi-disciplinary team comes together to work, in the sprint. It requires collaboration, cohesion, argument, these ensure that when a product is finally chosen for development, everyone is bought it - from R&D, design, marketing, operations, finance....

• One of issues of stage gate process produces is that of the fuzzy front end .... design thinking thru the point of view statement, personas, interviews, customer immersion provides a clarifying lens.

Here is our model for merging NPD, design thinking and value engineering.

The EPS bridge model

We believe with this model, we can get best of both worlds - NPD & Design Thinking, for consumer and also B2B manufacturing companies.