What’s Your “Justification?”
Don’t let excuses override the opportunity to get products to market—and ultimately on the shelf—faster.
J. Kirkland Douglass
, Pivot International, Inc.
As the pace of innovation increases, product lifecycles must be shortened. Getting ideas into the marketplace quickly has become a necessity. The alternative is quick obsolescence and diminished profitability with an overabundance of product stuck on shelves.
Everyone talks of improving time to market, but it often is an objective that is endlessly discussed, and for which action is never taken, that hinders speed of development. There are endless justifications—many good reasons a product concept never quite gets to market in a timely fashion. Ultimately, delayed development usually boils down into one of two basic regrets:
• “It just took longer than we expected.”
• “We had this great idea, but by the time we got around to working on it…”
Let’s assume that you have a valid product concept that has been proven in the laboratory and in appropriate testing. There are two ways to delay introduction to the marketplace:
• Inefficiently begin the implementation phase of product development (“It took longer than we expected.”)
• Delay the start of the implementation process (“We had this great idea…”)
Inefficient Implementation
One of the primary causes for inefficient product development is the constant interruption of the process caused by overlapping responsibilities and, ultimately, competing priorities.
If your development team also has to support sales as well as marketing and/or manufacturing, the group’s development efforts are going to be constantly interrupted. Even if the team believes its primary function is to complete the new design in an expeditious manner, interruptions at work will constantly impose on the team’s time.
Interruptions negatively affect product development in two ways: They delay time to market by the length of the interruption itself, or when an interruption occurs, a developer’s train of thought is interrupted. Once he or she is back to the project at hand, it takes some time just to get back up to speed. This is not always an easy task and can lead to errors, which, in turn, cause more delays.
To be truly efficient, your product development team has to remove all other peripheral distractions or responsibilities and focus only on compliant implementation of the product concept. And just because your organization is compliant does not mean it is operating efficiently and getting your product concept into the market as quickly as possible. In fact, many companies establish laborious quality systems and processes that inhibit efficiency. The ability to focus resources in the utilization of an efficient implementation process will result in an improved product realization process.
The other cause for inefficient implementation is lack of competency within the development team. This is not a criticism of your development group—it simply is an observation that the implementation phase of product development may not be one of its core competencies.
Competency Is Developed by Constant Practice and Intense Focus
There are two factors at work here. First, is there opportunity to work on the skill every day, all day? Second, is there recognition this skill is one of great value and one in which you wish to excel? In a business framework, it is the recognition of a specific activity that needs to be a core competency of the company.
An engineering team that constantly works on the implementation of new product development and for which this activity is determined to be a core competency of the company is going to be more efficient at the process than an engineering team that sporadically works on new product development. The difference in the effectiveness of the two groups grows over time to a point where, relatively speaking, the latter group is not competitive in the market. If your engineering group does not work on new product development constantly, you will find yourself at a competitive disadvantage because of delays getting to market.
One of the problems many small to midsized companies encounter is the inability to truly identify their core competencies. This error most commonly is found in the misuse of senior technical talent. Within most small to mid-sized medical device companies, there are a few senior scientists who develop the ideas and technology for new products. This small group may not appear on the balance sheet, but the individuals in this group are some of the most important assets of the company.
However, the skill set required to develop new concepts is not the same skill set required for the implementation phase of new product development. The concept phase requires great creativity and an understanding of the fundamentals of science. It requires the imagination to perceive the world as it could be—not as it is. The skills required in implementation involve creativity but within a more limited scope.
Quite often, companies use senior technical talent to complete the implementation phase of the project. The result is doubly disastrous for your business. First, you are taking your most important technical asset away from his most important endeavor—keeping your company current and, hopefully, ahead of the market with new ideas for technologies and products. Second, you are asking someone without the appropriate skill set to implement the product concept—guaranteeing you will take longer to get to market than you should. For many companies, this often is a dilemma. It is not uncommon for senior technical personnel to enjoy the details of the implementation process. These individuals like to tinker. It will cost your company time, money and resources. Can you afford that additional cost?
Why the Delays?
Once you have an idea, the clock starts ticking. If you don’t get around to taking action, the lost time is no different than being inefficient. You are increasing the amount of time it takes to get your idea into the market. Your first question has to be, “Can you afford to fund the project?” If the answer is yes, then the real issue is whether you wish to add resources (fixed costs) or outsource the effort (variable cost).
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• “It’s a big project. I’ve got to think about how to organize it.” David Allen is an international author, lecturer, founder and chairman of the David Allen Company—a personal productivity guru who made the observation that the smarter you are, the more likely you are to procrastinate or hesitate in addressing large complex projects. He observed that because you are intelligent, you understand the scope of the work that is in front of you and there is a strong tendency to freeze in the face of what appears to be an overwhelming task. His response to the overwhelming is to identify the next action step required to move the project forward and concentrate only on that step—the more granular the step, the better. If you have a history of sitting on product concepts for prolonged periods before actually implementing them, you should consider using an outsource product development company.
• “I’m too busy fighting fires to get to it right now.” This actually is a variant of the David Allen problem mentioned earlier. You have a lot on your plate, and the thought of taking on another project seems overwhelming. Again, you should consider outsourcing the product implementation. Get it off of your mental to-do list and delegate the responsibility to an organization for which this work is a core competency.
Ultimately, what you need to develop within your organization is a sense of urgency with regard to product development implementation. Good product concepts are extremely precious, and unlike fine wine, they don’t get better with age. In fact, from an economic standpoint, a moderately good product concept that is efficiently developed and delivered to market in a timely fashion usually is far better than a superior product that is agonized, delayed and fretted over and is many months late to the market.
Outsourcing as a Solution
For most small to midsized companies in the medical device market, there is a lot to be gained by outsourcing the implementation phase of product development. Consider the benefits:
• Product development implementation should be a core competency of your outsource partner. As a result, you should be significantly faster to market.
• The development also should cost you less. Be careful when you evaluate your outsource option with regard to cost. There are too many instances in which an executive believed outsource development quotes were high and that internally, he or she could do it for much less. That usually means that the executive may not be aware of all of the costs involved in developing a product and isn’t making an “apples-to-apples” comparison.
• If you use an outsource partner for product implementation, you are operating with a variable cost. You get to use the provider when you need its expertise, and the partner is not on your books when you don’t need its assistance. This frees up capital to invest in the activities that should be core competencies for your company.
If you make an error in choosing an outsource partner and schedules are missed or services are not delivered as promised, it is easy to terminate this relationship. The outsource partner has no excuses, as there is direct accountability. There are no human resource or internal morale considerations when it comes to saying, “You didn’t do the job, and I am going to use someone else next time.”
By using an effective outsource partner, you let your senior technical talent focus on the opportunities that make these individuals so valuable to your company. Because a good outsource partner will have a broad base of experience, it should be able to provide a larger scope of design alternatives than what you might get internally.
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There are a lot of reasons for being late to market with a new product. They all cost you money—lots of it. As little as a six-month delay in getting to market can reduce the economic value of your new product by more than one-third.
Focus on time to market as an important financial, as well as a marketing goal. Bring a sense of urgency to your organization regarding getting new ideas into the market fast. Look at your current organization. Ask yourself if new product development implementation is a core competency of your company. More important, should it be? If the answer is no, consider making a strategic change in the way you do business. Consider outsourcing the implementation phase of your new product development.
SIDEBAR:
Looking for an Outsource Partner
Here are some criteria when considering outsourcing the implementation phase of product development to another company:
LOOK for an outsource partner that has a demonstrated design control process and is compliant with ISO 13485 and CFR part 820.
LOOK for project management experience. A major aspect of the implementation phase of product development is project management.
LOOK at the people with whom you will be working. Interview to make sure that you are comfortable with the people with whom you will be working.
LOOK for the technical expertise necessary to implement your product concept. Does the company have the expertise internally? If not, does it know how to get what you need?
LOOK at the company’s history. Does the company develop products that are easily manufactured?
