The secrets of good product design.

Post 524 - There’s a certain amount of homework involved in recognizing and turning new technologies into new products. Steve Jobs of Apple says, “Mostly, this involves picking up things you can see on the periphery ... I always pay close attention to the whispers around me.” Jobs goes on to say that spotting new technology isn’t the hard part. “The hard part is, 'Who’s the customer? What’s the product? How are they going to buy it? How do you tell them about it?'”

“Always design a thing by considering it in its next larger context - a chair in a room, a room in a house, a house in an environment” according to Eliel Saarinen.

People interact with products on two levels: physical and emotional. The physical part is called “ergonomics” - what feels good to people. Some designers call the emotional level "psychonomics"- what makes people feel good. The baseline of good design is a perfect balance between the two. Form and function are developed together and are intertwined. A design that stands the test of time is done as efficiently as possible and has nothing more than it needs to do the job. Charles and Ray Eames's molded-plywood chair of the 1940s is a perfect example. The wood was molded into flexible shapes that perfectly conformed to the body and absorbed shock when the sitter moved. Herman Miller's Aeron chair is descended from that Eames chair but it’s more concerned with performance - action, movement, and mobility.

Like the Eames chair, the Aeron is pared down mechanically to exactly what's necessary and its cushion uses the least amount of material needed to achieve comfort. That’s the real art and skill of a designer: to achieve elegance in design with the highest degree of efficiency. Ultimately, any well-designed product or experience acknowledges the user. It's that respect for the user that makes a design great. That's true for a table, a chair, a book, a film or a Web site.

Designing a product is not so much about the end product as it’s about the process of use. This is especially true for Web design, which isn’t dealing with an immutable, static object. Instead, the focus is on designing sequential, ongoing activities - creating a series of linked interactions and experiences.

However, it's always good to remember Doug Adams' observation: “A common mistake that people make when trying to design something to be completely foolproof is to underestimate the ingenuity of complete fools.”

Causes of problems in product development.

Problems in the product development process are often related to:

- Bad linkages across functional structures.

- Unclear business strategy.

- Inadequate marketing information.

- Unclear responsibility for decision making.

- Incomplete membership in the product development team.

- Inability to achieve cross-functional convergence.

- Consideration of divergent viewpoints is cut short too soon.

- Inadequate product ownership.

- Structures and systems are unclear between divisions.

- Data isn’t used or integrated into decision making.

- Culture is conflict adverse.

- An R & D perspective predominates.

- Third party relationships are poorly managed.

- Culture has a “home run” mentality.

- Poor management of evolving expectations.

- Costs of entering a new business are miscalculated.

- Poor boundary management.

- People lack a sense of reward for meeting the overall objective.

- Prevailing concern is only with time to market.

- Convergence is forced.

- The role of “product champion” precludes objectivity.

- Constraints on promoting new market products.

- There’s a lack of cross-functional trust and respect.

- The functional areas own the objectives.

- Knee-jerk problem solving.

- Problem-centric culture is highly rewarded.

- Assumptions on market readiness are incorrect.


Typical dilemmas in high-tech companies include:

“I don’t really know how / when a product development project gets officially sanctioned .”

“We got a request for an additional feature on a project at pre-pilot” (usually because engineering wanted to introduce a new feature they felt could easily be incorporated into the current design).

“I don’t know how long it takes us to develop products - we never measure it.”

“Marketing won’t define the product.” - Technology departments.
“Engineering want us to design the product for them.” – Marketing department.

Organizing the product development process.

High-performing processes today are low-cost, flexible, accurate and fast. They must also be simple because complexity is a breeding ground for errors, delays, high costs and inflexibility. Simple processes must be organized around big work assignments since piecing many little jobs together creates non-value-adding overhead. These big jobs must be assigned to professionals who know how the process works, who understand the business as a whole, who are free to make decisions, and who can work without traditional supervision. As a result, favorite themes in successful new technology companies are connectivity, mobility and interactivity. World-class companies excel in managing concepts, competence, connections and human capabilities.

An effective product development process has:
- divergent phases when different perspectives and opinions are surfaced and explored, and
- convergent phases that involve understanding and agreeing on shared frameworks.

If there isn’t enough convergence and divergence on the front end, then the process takes longer and problems and variations are generated at the back end. To properly control this, project managers need to be skilled in dealing with conflict and able to manage disagreement in a positive way. In addition, key players need to have strong agreement about operating norms and practices from the very beginning of their involvement. Problems and variation are also caused by the organizational context of the product development team - for example when managers are constantly pulling people in and out of projects, or changing the direction and priority of the development effort.

It’s important to put a clearly defined boundary around the product development process. If product development is a project management exercise with overlays from the functional organizations, then it’s essentially a vertical system trying to do horizontal coordinating work.

An increasing number of successful companies are organized around functionality and customer needs instead of around products and functions. They’ve created a horizontal or lateral cross-functional organization for maximum product effectiveness. Wherever people are located in the value chain, they know who they’re linked to and have cooperative agreements with them. Companies invariably end up with strategic alignment problems when there’s not enough lateral teaming up through the hierarchy. The challenge is to develop a process that puts senior managers, who hold the resources, in touch with employees lower down in the organization, who although they know the technology and the customers best, are typically disenfranchised from the strategy process. These parties need to have deep discussions together about opportunity and destiny, unencumbered by the conservatism and lack of expertise of those in between.

Sprinting to market with a next-generation product is more like a rugby match than a relay race. Start with a one-page product description. As soon as top management approves it, set up teams in engineering, marketing and manufacturing, no more than ten people in all. Think of a multidisciplinary team that stays on the project from start to finish, passing the ball back and forth as they move down the field together toward product launch. Designers start work before feasibility testing is finished. Manufacturing and marketing begin gearing up well before the design is completed. These different contributors work together under a program manager. Team members need to be technically excellent, have good interpersonal skills and have a broad enough perspective to be able to understand what others have to say. Reviewing the evolving design regularly saves expensive changes late in the game. However, too many reviews waste time, so the team needs to operate with autonomy. As long as they’re within a pre-agreed range of costs, time and performance characteristics, they should be free to make their own trade-offs without checking in with senior management.

Business units are then organized around the following learning cycle:

• Business portfolio planning - “Do we invest resources to proceed further?”

• Product generation and definition - “Do we invest resources to develop it?”

• Order fulfillment - “Can we make it?”

• Product support process - “Is it a go - or a no-go?”

• Customer experiences the product and comments favorably

• Mature production - “Does it consistently meet specs?”

How to recognize a "good" product.

How do you recognize a “good” product?

• A “good” product helps the company get known and accepted in the marketplace so it can move up the food chain later on. Netscape’s web browser is an example.

• A good product gives customers the capability to do more than they need to do at the moment. Delivering more value than customers expect creates product loyalty and increases the chances of creating a truly “hot” product.

• A good product ensures that the company is first to market with something that boosts distinctiveness was well as improving functionality.

• A good product incorporates correct assumptions about market readiness. Set realistic goals - don’t make the product a loser by aiming for unreasonably high sales.

• A good product reduces the ease with which competitors can copy the innovation.

• A good product neutralizes a competitor’s advantage.

• A good product supports a price premium.

• A good product grows in revenue by at least XX % a year.

• A good product has a return on equity greater than XX %.

• A good product exploits the company’s core technologies.

• A good product is faster ... cheaper ... closer ... friendlier. As Loretta Lynn says, “You have to be first, better or different.”

• A good product leverages your business partner’s capabilities.

• A good product contributes to your customers' success.

• A good product builds market share quickly.

• A good product creates a new platform of capability by using cross-functional processes for competitive advantage.

Rubbermaid asks these three questions:

- Who is your customer?
- What relevant service are you providing for them?
- Which of our business strategies are you satisfying?

Best Practices for New Product Development.

1) Plan for "right-to-market" v/s "speed-to-market."

Although being among the first to introduce a new product or extension of an existing product is an important goal, creating a product that will satisfy customers should be a higher priority. Companies can often have greater success entering a market late, but with a better product. The Thermos Electric Grill and IBM's ThinkPad notebook computers are good examples.

2) Focus innovation on product elements that are "visible and valuable."

IBM ThinkPad developers looked at all available technologies that would give their product more value for the customer, whether these were invented by IBM or not. Technological innovation should only be used to develop product features that the customer will be aware of and find valuable. Digital speedometers, for example, were soon abandoned by auto manufacturers when they found customers weren't aware of them and didn't think they added value.

3) Get physical fast.

Rapid prototyping to create tangible product models in the early stages of development allows engineers, designers and customers to learn more about a product's use by interacting with it, even if it’s just a physical mock-up, and to observe how customers use the product in the their own environment.

4) Have total team involvement in marketing research.

When it comes to researching customer requirements, it's better to have too much data than too little. In addition to surveys, quality function deployment methods and focus groups, the IBM ThinkPad team formed industry and customer advisory councils, and had "Customer Call Days" where members of the development team called customers directly to discuss the product.

5) Go beyond traditional market research.

Customers want it all. If you ask if they’re interested in a specific feature, they’ll invariably say "Yes." The Hewlett-Packard Digital Multimeter team asked customers if they had to choose from a list, which features would they keep. This "forced pain" questioning adds quality to quantitative data.

6) Have a complete model of customer needs.

The $APPEALS model introduced by Peter Marks in Defining Great Products, includes Cost, Availability, Packaging, Performance, Ease-of-use, Assurances, Life-cycle costs, and Sanctions (or social influences). This format offers a good starting point to understand customer's buying behavior as well as other factors that influence competitiveness.

7) Think "total product."

A customer's relationship with a company doesn’t end with the sale, but continues through service, upgrades and maintenance. It’s more economical to sell more to existing customers than it is to find new customers.

8) Ease-of-use opens new markets.

"Human factors" design can make a product more accessible. The less specialty knowledge required to use a product, the larger the potential market.

9) Understand the science of your product.

Defining a product's specifications means understand its physical and technological limitations. Knowing the trade-offs of the science and technology up-front can make the path of product definition clearer.

10) Choose your team carefully, then make them accountable.

Make sure the functions represented on your team are appropriate to the project. The JBL Sound Effects team had a seat reserved at every team meeting to represent the customer. Even when that seat remained empty, it still left a physical reminder for the rest of the team to keep the customer in perspective.

Planning for breakthrough products.

Breakthrough products are rare and consume unpredictable amounts of time and money - “they take what they take.” The most frustrating cases, which are often the most important ones, are next-generation core products (like the Ford Taurus) which are true advances and whose success is central to a company’s fortunes. Introducing frequent small improvements based on customers’ reactions is less risky than taking one great leap forward based on the prognostications of market researchers. That way, new products are a series of little pops, not big bangs. Variations on existing products are predictable enough that phased development works, especially for companies that dominate mature markets. H-P believed it could grow incrementally by integrating its test, measurement and computer capabilities to provide unique offerings (information appliances such as hand-held gas chromatographs, for example) for customers building complex networks. Innovations that depend on technical platforms or infrastructure that others lack provide a sustainable source of competitive advantage. Little advantage comes from just developing clever technical applications.

Faster product development comes from pausing to plan basic technologies. Technology planning keeps developers from chasing technical sophistication that only engineers can appreciate. In most new products, only 20% of the design brings added value. It’s important to establish checkpoints for a technology’s readiness and robustness before letting the designers use it. Think about successors to new products as well as the products themselves. If you don’t plan new generations early, you end up looking at your competitors’ innovations saying, “I wish we’d done that.” Trying to recover quickly by adding features that you didn't initially think results in an expensive, unreliable, untimely (late) product.

Experience suggests that successful marketing strategies emerge from identifying multiple niches, focusing on just one niche and doing very well there, then leveraging this success into other segments. As a company increases its volume through success in other segments, it can re-define the market in terms of its product or service. When Peoplesoft started out, for example, prior to merging with J.D.Edwards and being being acquired by Oracle, it knew it couldn’t compete against much larger software companies. So it concentrated on creating a client-server capability for HR applications and won 70% of that market segment, thus becoming the industry leader. This enabled it in time to move into other segments, such as finance. It now provides Human resource management systems (HRMS), customer relationship management, Manufacturing, Financials, Enterprise Performance Management, and Student Admin. software solutions to large corporations, governments, and organizations.

The difference between a new product idea and a business revolves around the question of how are you going to make that first sale.
- Find people with pain.
- Define that pain.
- Then define the market size.
Alternatively,
- Find industries in pain.
- Find the people in those industries who feel that pain.
- Then get a Beta customer, someone who says, “Yes, I think I could use that.”

Involve customers in new product development.

A 1989 McKinsey study showed that products that got to market on time and 50% over budget eventually earned only 4% less than those that were on time and on budget. Products that got to market six months late and on budget earned 33% less than those that were on time and on budget. In a fast changing world, it’s especially important to get new products and services into the marketplace as early as possible rather than waiting to perfect them. Once they hit the market, no one can anticipate where that will lead or whether they’ll succeed or not. Sanctioning experiments with uncertain outcomes is the best way to make progress quickly. The penalties in being late to market in a growing business far outweigh overruns in development costs or the potential waste of having to shut down a development team. Strategies that move organizations in the right direction can be quickly refined through rapid experimentation and adjustment when managers concentrate on failing and learning faster than the competition. Every new product decision has two parts. First you make it, and then you decide to continue it or change it.

As the president of a hi-tech company explained to me recently, “We’re making products daily that are still evolving, delivered to a market that’s still emerging, using a technology that’s still changing on a daily basis.” In uncertain times, much of the route forward may be invisible from the starting point. The only way to see the road ahead is to start moving because clarity emerges more readily from error than from confusion. In a business environment where progress depends on serendipity and spontaneity, high risk and high rewards go hand-in-hand. In many organizations, however, the quest for efficiency drives out opportunities for experimentation. This is a mistake. The quick rise of Casio and Sharp in hand-held calculators and of Ricoh, Canon and Sharp in plain-paper copiers came largely from launching more new high-quality products that the competition did. Time-to-market is as important for success as proprietary technologies and processes. If you wait to move until everything is certain, you can be sure your competition will get to market before you.

Business and product development strategy should be driven primarily by customer needs, values and priorities. Ask, “How do the customers we’re targeting want to deal with us?” Then design the product from the outside in. Make the customer’s use of the product, not the technology, central to all product development. Employees need to develop an instinctive understanding of target customers. Don’t launch a product just because engineering loves a new technology. Consult target users at every step of the way, from the initial idea stage to the actual rollout. Customers don’t want drills; they want holes. Strive to move customers into the design arena, making them part of the design process, developing them into “prosumers” rather than just accepting them as consumers. Success comes not from satisfying customers, but from keeping customers reasonably dissatisfied with what they have so they’ll welcome new products.

In high technology companies, the products are complicated and the people who use them often know as much about how the products work as the people who develop them. Researchers at MIT found that 77% of the innovations in equipment used to make semiconductors and circuit boards came from customers. As technologies become more complicated and users more sophisticated, customers are no longer the passive recipients of a company’s products but the engines of innovation instead.