“Too much paperwork!” is the one of the most common and most passionate complaints we hear from our clients. The project team loathes creating it and the decision-makers loathe reading it. They don’t see the value. Yet typical product development processes requires voluminous documentation. Why so much paperwork?
1st… to make sure nothing is overlooked, the documentation requires evaluating the project through different lenses: financial, technical, value proposition, market, competition, legal, regulatory, manufacturing, supply chain, sales, customer service, etc. For more complicated and risky projects, this complex documentation may make sense because there is a lot of uncertainty. But for other projects, some of these analyses may be unnecessary due to the company’s knowledge and experience of the product.
As an example, let’s consider the situation of a consumer electronics company. On one of their product lines, big box retailers were demanding Bluetooth® as a feature in the next product upgrade. In fact one of the largest retailers would not stock the new product if it lacked Bluetooth. They knew losing sales to this big retailer would mean a huge loss in revenue on this product line and they would not be able to make up that loss in other ways. They had to keep the retailer happy in order to keep their business.
In this situation, where is the big risk? Is it around commercial success? No, because they already knew the market and industry. They had no experience with Bluetooth, so this was an area of risk for the company.
A standard phased and gated system would approach this product development project by working through the prescribed activities: evaluating the market, competitor products, financials, legal issues, etc. The technical analysis would probably note that the project is technically feasible because other companies have done it. They identify the Bluetooth feature as an area of risk, but are pretty sure that they can make it work.
Instead of spending time writing a detailed market analysis to justify adding Bluetooth®, the company should spend their time understanding the new technology and the issues involved in adding it to their existing product.
The 2nddriver of paperwork complexity is the progression from macro to micro detail. In the earlier phases, documentation typically takes a macro or high level view of the project, then drives down into more detail with each subsequent phase.
For example, the first phase of the market analysis may require estimating the total size of the market in terms of sales dollars. If it is attractive, the second phase may require determining an appropriate segmentation system and parsing the market size estimates by segments. The third phase may require estimating adoption rates over 5 years by segment.
This approach doesn’t take into account existing knowledge. If we already know the size of the market and how to segment it, and adoption rates are one of our biggest unknowns, why wait until phase 3 to tackle this risk? We waste time and effort documenting things we already know while delaying work on important things we don’t know. If we learn adoption rates will be too low to make the project worthwhile, all the work in phases 1 and 2 was unnecessary.
Lessons learned… identify the biggest areas of risks on your project, resolve the uncertainty around the risks, skip the unnecessary prescribed activities and decrease the paperwork that goes with it! These principles are integrated with our new adaptable approach to developing products called Exploratory PD. We are currently writing a book, and we welcome your comments. www.exploratorypd.com
Strategy 2 Market helps companies increase growth and decrease product development complexity. www.strategy2market.com
For more information or to speak with one of our consultants, please contact Mary Drotar at 312-212-3144 or [email protected]