A little background…Virtually every department in an organization is touched by product development, meaning that multiple people, functions, processes and infrastructures must be coordinated. As a result, product development is complex and needs to be managed as a system. When consulting with our clients, Strategy 2 Market (s2m) treats product development as a system, integrating important elements: strategy, market understanding, process, teams and organization, portfolio management and metrics.
Notice below how the change from the old strategy of acquiring new products and technologies externally to the new strategy of developing them organically affects the product development system and increases the level and types of risks the system must handle.
For now, it is important to consider how the change in strategic direction requires a corresponding change in the other elements to make the whole product development system work. The table below offers a quick analysis of the important shifts in strategic activities.
Acquisition StrategyStrategy
Portfolio Management
Market Understanding
Product Development Process
Organization
Product Development Metrics[iii]
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Organic StrategyStrategy
Portfolio Management
Market Understanding
Product Development Process
Organization
Product Development Metrics[iii]
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[i] Steven C. Wheelwright and Kim B. Clark, Revolutionizing Product Development, Quantum Leaps in Speed, Efficiency, and Quality. (New York: The Free Press, 1992). p. 36-37.
Wheelwright and Clark differentiate between know-how and know-why. Know-why is a deep understanding of ‘why’ a technology works as it do. Know-how is a practical knowledge of ‘how’ to apply the technology. Firms must identify the depth of knowledge needed for each technology.
[ii] Ibid.
[iii] Based on Abbie Griffin and Albert L. Page, “PDMA Success Measurement Project: Recommended Measure for Product Development Success and Failure,”Journal of Product Innovation Management 13 (1996): 478–96.
