“The purpose of business is about creating (and retaining) customers.” - Peter Drucker
What makes innovative new products succeed? From my perspective as a long-time technology company executive and entrepreneur, the formula is ultimately simple: recognize an unfulfilled user need; create a vision of how the product will fulfill that need; build strong relationships with early customers.
Once a product is launched, the key to profitable growth (and the essence of strategic management) is to seek new sources of competitive advantage relentlessly. In our rapidly changing world, competitive advantage is at best temporary and must be constantly pursued and renewed.
For lower middle market technology firms such as Newport Board Group serves as advisors, shorter product life-cycles require accelerated product development. You must establish a market presence before larger, more dominant firms have time to enter the product/market space. Therefore initial product launches should aspire to be at best near bulls eyes. Then the action shifts to enhancing and expanding the product rapidly: intense market pressures require no less.
The challenge for high tech product management is to balance the competing engineering and sales biases: technical elegance and feature creep. The key for a product manager is to inculcate the entire product development and launch team with a framework that guides decision making at every step of the product development and launch process.
High tech product development faces long odds
An axiom at a large computer company was if you led two successful product launches you were rewarded with a VP title. Most initial development activities fail to meet technical objectives. Of the remainder, only a small percentage are commercial successes.
While there is no key to success, I found a useful framework buried within a research study done many years ago at the University of Sussex to be exceptionally insightful. Project Sappho systematically compared 29 factors that differentiated commercially successful and unsuccessful innovations.
The top six factors ring true to anyone who has been intimately involved in product development and launch activities.
Companies that develop innovative successful products:
- Understand user needs better.
- Have fewer bugs in production.
- Employ greater sales efforts.
- Have fewer after sales problems (my take: manage expectations better).
- Have better external communications.
- Have a single technical innovator in the organization (my take: so that you build a horse not a camel, which as we know is a horse designed by a committee).
It is also interesting note that in larger successful firms, those responsible for product development and launch were usually more senior. They had more authority to make decisions without a lot of cumbersome bureaucratic oversight by higher-ups.
In conclusion, as Thomas Edison opined, “Vision without execution is hallucination.” Successful product launches require a shared vision of—and a willingness to act on-- the key factors that drive success.
About the Author
Laurence is an experienced CEO and Board member in the technology and services industries. He has experience leading startups, IPOs, management buy outs and turnarounds in both private and public companies with worldwide operations. He has deep expertise in development and marketing of software, hardware and integrated systems in sectors including aerospace/defense/intelligence, software, semiconductor, manufacturing, energy services and publishing. Learn more about Laurence or contact him here.
Connect with Laurence on Linkedin
Photo credit: www.informationlaw.com
