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In this article, Heather Kluter explains how Hyundai has used its own
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develop the second generation Santa Fe, launched in 2007
Global News
Chesbrough on Open Business China automotive conference 24 Report from China: Wuhan Conference examines the need for
Models p. 20 in Wuhan p. 24 innovation in China’s automotive industry Raja Irfan Sabir
5 News from the PDMA Executive Director’s Office Robin Karol Pammi Sinha and Visions Chapter Spotlight Editor Tricia Sutton review
the findings of recent research on creativity presented at a creativity
6 LAUNCH PAD: Who will you designate as “Launch Architect”?
workshop held by PDMA’s UK/Ireland affiliate.
Mark A. Hart
Editor-in-Chief
April W. Klimley
Phone: 732-530-1639
VisionsEd@pdma.org
April W. Klimley
T
Contributing Senior Editors
he term “innovation” seems to be every-
Greg Githens, GDG@catalystPM.com What is “Innovation?”
Gerry Katz, gkatz@ams-inc.com
where. You can’t pick up a copy of Business
Week or change televisions stations without
Specialty Editors seeing companies like Accenture or even British “A new idea, method, or device. The act of creat-
Certification Petroleum touting “innovation” as the answer to ing a new product or process. The act includes
Ken Westray, ken@nplearning.com everything. invention as well, as the work required to bring
From the practitioner point of view, these an idea or concept into final form.”
Chapters and Affiliates
Tricia Sutton, pasutton@suttonenterprises.com broad references can be very irritating. They are —Glossary
confusing, too. They do not hinge on one agreed- PDMA Toolbook 11
From Blogs to Books
Adam Hansen, ahansen@ideastogo.com upon definition. We all know that innovation
is certainly not simply creativity, invention, or “An idea, practice, or object that is perceived as
Launch Pad
process; nor is it synonymous with New Product new by an individual or other unit of adoption.”
Mark Hart, mark.hart@oplaunch.com
Development (NPD), although some people use —Everett M. Rogers2
Open Innovation
Michael Docherty, mdocherty@venture2.net it that way these days.
You’ll find two definitions of innovation in the You’ll also find another installment of the
Technology
box on this page. On Focus editor Greg Githens Katz–Orban debate over ethnography research
Ed Crowley, eacrowley@photizogroup.com
helped me find them, but I’d like to know your in this issue. And coincidentally we have an
Copyeditor thoughts on the subject. Please email me your excellent complementary case history on this
Andrea Herbert thinking on this term or a discussion of this technique: How Hyundai created a process
debate. After all, that’s part of what the Product called Touch the Market (TTM) that used this
Visions Advisory Board Development and Management Association type of research to develop the concept for its
Mark Deck / Bob Gill / Michael Menke (PDMA) is all about: developing consensus on a second generation 2007 Santa Fe. TTM was so
Chris Miller / Steve Uban
body of knowledge on emerging and/or changing successful that it is now being used at Hyundai
Advertising concepts. Maybe we can solve this challenge, or to develop other product concepts.
Roger Stevens at least clarify it. (VisionsEd@pdma.org). You will also find several articles on new
Phone: 1-317-926-6272 The popularity of this term innovation—what- directions at PDMA itself: reports from both
rstevens@ind.com ever it really means—has reminded us at Visions the Executive Director and the President and
that we should be pushing the envelope—that is, Chairman of PDMA, as well as an article on
Ms. Henry Van, PDMA
broadening our own “vision” of the NPD field. So recommendations from the new PDMA Global
Phone: 1-800-232-5241 x1
hvan@ahint.com
in this issue, you’ll see us focusing on several new Innovation Thought Leader Panel. These ar-
areas. One of these is lean product development, ticles may spur your own thinking on how you
Subscriptions a technique being used in many companies now, can participate more fully in PDMA chapter or
Bob Fogle, bobfogle@earthlink.net at times with a lot of confusion. This technique is national activities.
$85/year U.S., $125 abroad; very critical for innovators today, since many are Of course, one way to take part is by writing
Information on page 34 under a double whammy. They are being asked articles for Visions; or volunteering to be one of
Online Visions to innovate continuously, but at the same time to our sub-editors. Please feel free to give me a call
Available through the PDMA Web site,
spend less money at that activity than before. This about this at any time. We are always looking for
www.pdma.org article may help you as a practitioner to achieve more talent to help us stay on top of the product
both goals, or at least to reach for an approach development field.
Visions magazine keeps members on top of that can help you do that.
trends and developments in the New Product
Development world and the latest thinking
We also offer you an informative interview April Klimley, Visions Editor-in-Chief
of product development and innovation lead- with open innovation guru Henry Chesbrough, 28 Riverside Ave. Ste. 6H
ers. It is published quarterly by the Product from our Open Innovation Editor Mike Docherty. Red Bank, N.J. 07701
Development and Management Association And we bring you an excellent overview of May 3, 2007
(PDMA). Subscriptions included in PDMA
what’s going on in green product development, a
membership package; or available at $85 per
write-up of the Arizona Chapter’s spring sustain- Endnotes
year in the United States or $125 abroad.
1. Belliveau, Paul, Abbie Griffin and Steve
Visions welcomes articles on Product Devel- ability conference from Don Hardenbrook. Since Somermeyer, Editors, PDMA Toolbook 1, (Wiley &
opment and Management. Articles for the next green product development has moved to center Sons, 2002)
issue of Visions (September 2007) are due
stage very quickly, we will continue to bring you 2. Rogers, Everett M., Diffusion of Innovation, 4th
July 16, 2007. Please submit queries to the
Editor, April W. Klimley, by E-mail or phone. more and deeper coverage of this subject. Ed. (The Free Press , 1995)
JUNE
JUNE2007
2007 PDMA Visions Magazine
PDMA Update
During the past two years I have News from the Executive Director’s
written to you about how the Board of
Hamsa Thota
the Product Development and Manage-
Office
ment Association (PDMA), and our staff, have been reorganizing In this letter, I’d like to report to you on
the structure of the association and planning for the future—a two important initiatives that have paral-
more global, proactive PDMA. In this letter, I’d like to describe leled PDMA’s recent global and domestic
the results of our work. growth. In March, we launched a new co-
But first, let me recognize some of the volunteer leaders who sponsored conference on “Service Innova-
made this transformation possible. They include Past President tion.” It was held in San Diego, Calif., and
Robin Karol
Bob Gill and Board Member Bob Johnston, who initiated PDMA’s co-sponsored with the IIR. The conference
journey with work on strategic frontiers in 2003; K.T. Connor for was well attended and very exciting; and it spurred the creation
her leadership on the Governance Committee; and the members of of a new Service Innovation Network. We all should keep an eye
our Global Innovation Thought Leader Panel, who have continued on this exciting new area of growth.
this tradition. (See pages 28 and 29 for details.) Over the past year, we also expanded our administrative capa-
bilities substantially. PDMA has been built on the work of our
Reaffirmation of volunteer leadership dedicated volunteers, and it thrives on a culture of volunteerism.
So, what have we achieved? We are successfully navigating a However, we needed additional professional support behind the
major organizational and administrative transition in support of leadership of our volunteers in order to implement their ideas
creation of a more global PDMA; we have reaffirmed the primacy and strategy. We have built a strong, energetic team to support
of our volunteer leadership; and, in our maiden voyage under the our incredible volunteer community at our headquarters location
new bylaws and governance, we have created three new commit- in Mount Laurel, N.J., just a short ride from the Philadelphia
tees: Strategic, Operations, and Executive. airport.
With this new structure in place, we have been able to link We have added full-time marketing support, plus a specialist in
our Board-set strategy and priorities much more successfully conferences. And we are working on a new information technol-
with day-to-day operations and activities. For instance, we have ogy system for the organization. All this has enabled us to have
expanded our number of international affiliates through an ini- a stronger presence at each of our co-sponsored conferences, as
tiative spearheaded by PDMA Executive Director Robin Karol; well as additional marketing materials to display there and at the
we refreshed our brand with a new logo and tagline under the meetings held by our Chapters. I look forward to reporting to you
leadership of Mark Adkins, VP Marketing; and we approved a on further advances in the interests of implementing the strategy
new technology platform for the entire organization, through an set by our volunteer leadership and community.
initiative led by Chicago Chapter President Scott Miller.
These examples confirm the primacy of our volunteer Board Robin Karol
in setting strategy and the ability we now have to achieve results PDMA Executive Director
based on that strategy. Looking ahead, we plan to get even closer rkarol@dpma.org
to the needs of our members and others in the field of New Product April 19, 2007
Development through a new Voice of the Customer Study. We
will use that information to help us set the next generation of our
strategy through 2012.
I am very proud of these achievements, as well as the countless PDMA Governance Committee
volunteer leaders who contributed to them. Let me thank each and
every one of you; your leadership has ensured a bright future for • K.T. Connor, Center for Applied AxioMetrics (Chair)
a much more global PDMA. • Cecil Chappelow, PolyOne
• Tom Hustad, Indiana University
Hamsa Thota • Bob Johnston, Visterra Group
PDMA President and Chairman • Rich Notargiacomo, Kodak
April 14, 2007 • Cheryl Perkins, Innovation Edge, LLC
• Ira Uslander, Northwestern University
• Robin Karol, PDMA Executive Director (Ex-officio)
In a large percentage of new product efforts, most of the engineering development is finished before the launch plan is assembled.
Typically, the launch plan is built by a cut-and-paste method with a predisposition for popular components. To increase the effective-
ness of future launches, Visions Launch Editor Mark Hart introduces the concept of a “Launch Architect.”
F
rank Lloyd Wright was one of the most influential construc- gineering activities. This early-on approach ensures that the proper
tion industry architects of the 20th century. He is noted for resources are enlisted and that the components can be produced
designing structures such as Fallingwater (originally a private and orchestrated for maximum impact. Throughout development,
residence) and the Guggenheim Museum. A talented architect the launch architect refines the design and the appropriate high-
like Wright functions to transform the client’s generic desire level schedules, milestones, and checklists as illustrated in Exhibit
of “I want a nice building” into a marvelous result that creates 1 on this page. These are documented in the launch plan.
specific user experiences and provides the high-level view of the Without a comprehensive launch design, a launch plan is likely
builder’s requirements. to feature only a list of critical marketing-related deadlines. With-
To arrive at an approved design, Wright’s team engaged in out a designated launch architect, a launch is likely to be a collec-
many discussions with the client before construction began. Dur- tion of a few isolated examples of innovation mixed with whatever
ing construction, contractors made enhancements; but Wright’s is popular as illustrated in the comic strip on page 7. Besides core
skillful design provided guidance for everyone contributing to the development activities, it is common for team members to specu-
effort. In contrast, imagine building a house without the services late about selecting and integrating contributions from disciplines
of an architect. The resulting house would include the items on such as interaction design, industrial design, packaging, brand
a standard checklist such as walls, windows, and doors, but the management, search engine optimization, distribution channel
house would be inferior. management, partner management, public relations, advertising,
documentation, post-sales support, tradeshow management, Web
Launch plan development 2.0, or the next-big-thing to create a successful launch.
Analogous to someone like Wright, a “Launch Architect” is In the absence of a launch architect, reductionism prevails.
the primary designer of a product launch. After understanding Suboptimization occurs when team members emphasize certain
the potential of a new product idea, a launch architect combines popular components while ignoring other components to the point
his or her extensive knowledge from disciplines that range from of reducing the potential for launch success.
engineering sciences to social sciences to create an innovative “Launch architecture” is the interdisciplinary design of new
launch design. The initial design should be developed following product launches. It provides a robust, system-level plan to
the ideation phase or in parallel with the very early traditional en- complete all of the development within the project constraints. It
Exhibit 1: The Role of the Launch Architect Is to Refine Design
includes the entire launch environment from the macro level of as an alternative to the “build it, then learn how to sell it” sequence
prioritizing product features to the micro level of developing the common in many development environments. This concept advo-
search engine optimization strategy. cates a new “launch design drives development” method.
“
ergy is the positive in- product solved my problem. It was easy to purchase and learn. It
Without a designated cremental performance
gain of the team that
is a delight to use.” Or “Wow!”
Launch Architect, a launch is is greater than the pre- Mark A. Hart, NPDP, Visions Launch Editor, is the founder of OpLaunch,
likely to be a collection of… dicted performance of
the individuals working
Finleyville, Pa.
Launch innovation
Opportunities for innovation are enhanced when a creative and
valuable launch design is shared with the entire multidisciplinary,
networked development team and improved by the feedback
process shown in Exhibit 1. The launch design guides decisions
regarding team composition and highlights opportunities for col-
laboration. A launch architect expands the development team’s
vision of how a diverse set of contributions will fit together to
fulfill the needs of end users, buyers, distributors, and retailers.
Under these conditions, implementation is efficient and cost-ben-
efit analyses are representative of system objectives.
I coined the phrases launch architect and launch architecture
while preparing a proposal for a potential client in November 2006
PDMA Visions Magazine JUNE 2007
Up Front
In Focus: Tools Part 1
Comprehending innovation tools–
Understanding functions and form to get
better results,
Gregory D. Githens, Managing Partner, Catalyst Management Consulting,
LLC, Findlay, OH (GDG@CatalystPM.com)
Gregory D. Githens
When innovators connect with each other, the first topic for discussion is often, “What tools are you using?” Success in product
development and management is largely an approach to find new tools and to implement the effective ones. This article gives the
innovator three tools—SWIFT, RAID, and FAME—and pinpoints the factors that make each tool effective. The article concludes with
four suggestions on how to become a better tool developer and user.
W
orkers—be they manual laborers or managers—want enced in my January 2005, Visions article.3 FAME represents the
better and more tools because tools can make their work Frequency of reporting metrics, the Audience for the metric, the
easier and the results of higher quality. Most people Mechanism of communication, and the Expectations of behaviors
intuitively regard a tool as something that helps with work, so I resulting from the information. The FAME tool helps the user
define a tool as an “object” that people perceive as contributing overcome the misperception that metrics are a “data dump” from
to results. The Exhibit 1 formula suggests two questions. The first the accounting department, or a “silver bullet.” Metrics are a form
is, “What is the result you want to achieve?” While it seems to be of communication that managers use to gain insights for taking
commonsense, I observe proactive action. FAME helps to answer the questions, “Who
“
that many people spend needs to see the metric? How often do they need to see it? How
Tools might make your work so much time in motion will they receive the information? What is the expected use?”
that they have lost sight of As an aside, the FAME and RAID acronyms suggest a sequen-
easier, but they might require their goals. A tool cannot tial ordering that might be unnatural. For me, it makes the most
more thinking than you are help them much until they sense to sequence communications by Audience then Expectation
decide what they want. then Frequency then Mechanism. However, the resulting AEMF
willing to invest.” The second question is, order is not memorable. Nor is AIDR, which is probably the most
“How much force are you logical sequence for addressing the anxieties of a project. One
willing to apply?” Tools important difference in the analogy of hand tools and managerial
might make your work easier, but they might require more thinking tools is that managerial tools are largely stored in an individual’s
than you are willing to invest. Even if the individual is willing to memory; so, an individual’s skill starts with the ability to remem-
apply effort, some tools require the cooperation of others—and ber the tool at the needed time. See the endnotes for more on the
they may be unwilling. My readers who have some knowledge of use of acronyms as a business tool.4
physics might recall the definition of work as “the scalar product The third acronym is SWIFT, which stands for Strengths,
of the force applied and the distance moved by the object.” One Weakness, Individuality, Fixes, and Transformation. Product in-
can see the parallel in Exhibit 1 on page 9 with the definition.1 novators use this tool in NPD concept development as described
in Chapter 10 of PMDA ToolBook 2.5 The SWIFT tool helps to
Three examples of a managerial tool overcome the problem that people unintentionally filter out novel
To set the stage for a conceptual look at tools, I want to describe product ideas, giving the ideas too little assessment and evaluation.
three examples of managerial tools used in innovation. These tools As I pointed out in the RAID discussion earlier, people tend to
may be familiar to those individuals who are well-read in Product avoid ambiguity. Consequently, the organization tends to develop
Development and Management Association (PDMA) literature, safe-but-uninspired product ideas. With the SWIFT tool, the team
but they could be new to many readers. They are simple, yet serve identifies the strengths and weaknesses of the concept. The team
to illustrate the theory. then clarifies the individuality of the concept, meaning, “What
The first is RAID, as described by me in Chapter 8 of PMDA makes the concept novel or different?” The “fixes” step is intended
ToolBook 1.2 An initial risk management activity is for the team to to shore up the weaknesses that could cause decision-makers to
generate a list of “concerns” that could affect the project’s success. kill the idea, and the “transformation” step results in a revised
RAID is a classification strategy and stands for the Risks, Assump- product concept statement that incorporates the fixes.
tions, Issues, and Dependencies that New Product Development
(NPD) managers must manage in projects. The team will get Function and form of a managerial tool
improved results by using techniques specific to each classifica- One similarity in the analogy of hand tools to managerial tools
tion. For example, one uses assumptions analysis to understand is that we can use the common framework of Function, Form, and
uncertainties in assumptions, issues management for issues, risk Fit (the 3Fs) of an item for evaluating a tool. When we describe
management for risks, and schedules for dependencies. the behavior of a tool with regard to the intended outcome, we are
The second acronym is FAME, a metrics communication tool describing its function. When we characterize the item to others,
that I learned from Mary Wojtas of Abbott Laboratories and refer- we are usually describing its form. Last, our evaluation of the
JUNE 2007 PDMA Visions Magazine
interfaces of components of the item, or with other items, or with applies the element of concept organization to clarify and catego-
the user is the fit. This article explores the hand tools–managerial rize perceptions and data. The element logic involves the mental
tools analogy for just the categories of function and form, and operations to reach a conclusion. The ingredient ingenuity is the
leaves the discussion of fit for a future article addressing the is- pragmatic application of imagination to solve a problem. I think
sues of managing innovation with relatively more sophisticated that RAID is mostly a tool of concept organization. FAME uses
and complex tools. concept organization but adds an element of deductive logic.
Starting with the concept of function, suppose you need to have SWIFT embraces concept organization and logic, and adds the
a surface covered with paint. Many people would jump quickly element of ingenuity.
and intuitively to a solution: use a paintbrush or roller. Surely,
there are alternative solutions, and some of those alternatives Outstanding versus mediocre innovation
are improvements. We can look to the common NPD practice of In my experience, the difference between outstanding innova-
functional analysis for help with the requirements for the tool. tion and mediocre innovation is one of decision making—indi-
Functional analysis starts vidually and collectively.
Exhibit 1: People Use Tools to Achieve Results
with developing a state- Tools simply facilitate de-
ment of functions (written cision making, sometimes
as a verb + noun = the activ- by sparking analytical
ity that yields the desired Tool + Applied Force = Result insights and sometimes
result). In the surface-cov- by improving communica-
ered-with-paint example, tions between people. You
the primary function is this: should dedicate yourself
apply paint. Given the function of apply paint, it should be easier to making better (and faster) decisions to get your organization
to see that there are numerous techniques for applying paint—for to improve its innovation performance.
example, dipping, spraying, and brushing. Managerial tools help a person think better. They make the user
Managerial tools—the concern of NPD practitioners—are more conscious of his or her thinking and data. A good manage-
similarly amenable to functional analysis. Let’s return to the three rial tool sparks questions that lead to insights. In the examples
tools of RAID, FAME, and SWIFT and express the functions of provided here, the tools foster innovation by helping us reframe.
each tool using the verb + noun format. The basic function of RAID helps us reframe anxieties into categories that can be ad-
the RAID tool is that it helps the user categorize concerns. This dressed systematically and consistently. FAME helps us reframe
further implies that the analyst may choose to quantify risk, man- metrics in terms of communicating for improvement, rather than
age issues, and so forth. The basic function of the FAME tool is as a scorecard for blaming. SWIFT helps us reframe product
that it helps the user structure communications. Thus, we design concept weaknesses into novel, competitive offerings.
the metric strategy in terms of how the audience uses the metric Where might you go from here in your use of tools? I have four
information. Finally, the SWIFT tool is more sophisticated. Its suggestions. First, you might work to develop mastery-level skill
basic function is that it helps the user increase the robustness of with your existing tools. Second, search for better tools to increase
the product concept statement. SWIFT helps the user to recog- performance of existing functions. Third, search for more tools,
nize novelty, recognize potential flaws, develop mitigation, and matching problems and needed functions with capabilities. And,
rearticulate product concepts. finally, start a structured analysis of the individual and organiza-
Recall that the form relates to how we would describe an item tional “toolbox.” Implementing these recommendations will help
to another person; for a hand tool, you describe the materials. I you maximize the tools you select and improve your New Product
own an old hammer with a wooden handle, a steel head, and a Development process.
small steel wedge to enable the handle to join to the head. One can Greg Githens is a Senior Contributing Editor to Visions, and Managing
improve a hand tool by using different materials. On a recent trip Partner, Catalyst Management Consulting, LLC, Worthington, Ohio.
to the hardware store, I notice that there are a lot of wood-replac-
ing “improved materials” in tools—for example, a composite, Endnotes
designed to make them lighter, stronger, cheaper, etc. 1. See http://library.thinkquest.org/20331/physics/pwork.html.
2. Gregory D. Githens, “How to Assess and Manage Risk in NPD
It is more difficult for us to describe the components that make
Programs: A Team Based Approach,” chap. 8 in The PDMA Toolbook
up a managerial tool. My own experience is that tool development for New Product Development (Volume 1), eds. Paul Belliveau, Abbie
is serendipitous. I find that I subconsciously invent or modify a Griffin, and Stephen M. Somermeyer (Hoboken, N.J.: John Wiley &
tool, and then afterwards recognize the accomplishment. The Sons, 2002).
starting point for making tool development more purposeful and 3. Gregory D. Githens, “Advice from PDMA’s annual ‘Metrics That
systematic is describing the basic components of managerial tools. Matter in NPD’ Workshop,” Visions (January 2005) [online edition];
Fortunately, I was able to find some research from a team of in- available from http://www.pdma.org/visions/jan05/metrics.html.
novators at the multinational company Philips, one of the largest 4. See http://www.businessballs.com/acronyms.htm.
5. K. Brian Dorval and Kenneth J. Jauer, “The Birth of Novelty:
electronics companies in the world, founded and headquartered in
Ensuring New Ideas Get a Fighting Chance,” chap. 10 in The PDMA
The Netherlands. I cannot tell you whether the managerial tools
6
Toolbook for New Product Development (Volume 2), eds. Paul
program continues, but I found the work logical and consistent Belliveau, Abbie Griffin, and Stephen M. Somermeyer (Hoboken, N.J.:
with my experience. Here is how I interpret their answers to the John Wiley & Sons, 2004).
question, “What are the components of a managerial tool?” The 6. Jerry Rhodes, Conceptual Toolmaking, Expert Systems of the Mind
components of a managerial tool use or blend three core mental (Oxford, U.K.: Basil Blackwell Ltd., 1991).
elements: concept organization, logic, and ingenuity. The mind
Gerry Katz
Gerry Katz’s contrarian article in September 2006 Visions expressed skepticism about the appropriateness of this very popular research
technique in certain situations. In the March issue of Visions, Anne Orban wrote a rebuttal to that article; here is Gerry’s response.
I
’d like to thank Anne Orban for her thoughtful rebuttal to my sometimes difficult to persuade against its use despite the potential
Viewpoint article in the September 2006 issue of Visions. I realities of the market under study.
firmly believe that this kind of healthy debate can only help
to better inform New Product Development theory and practice The value of onsite interviews
and further the cause of our profession. Even so, I would like to I also fear that Anne has missed my point when she asks “Why
address some of her concerns directly. would it not be of value to talk with corporate risk managers in
The tone and essence of Anne’s article suggests that she feels a their offices?” It is not that onsite, observational interviews would
need to defend ethnography against an unwarranted attack by me, not be of value, but rather that they would not add any apparent
as if I were saying that ethnography is not all it’s cracked up to be. value over interviews conducted in some other venue. Conversely,
Nothing could be further from the truth! As I wrote in my original if the study in question concerned copying machines or fitness
article, I’ve now used ethnography on more than 30 cases over equipment, the exact opposite would be true. One must keep in
the past few years; and in nearly all, it has been highly beneficial, mind that onsite interviews take longer and cost more per inter-
even essential, in gathering a complete understanding of customer view, both in professional time and in out-of-pocket expenses,
needs. To be sure, we were not the first to arrive at this party. I than other methods—hardly a trivial concern given today’s tight
give Anne and her colleagues immense credit for their numerous product development schedules and budgets. As in all things,
articles and presentations, which have had a major impact on my compromise is often necessary to ensure that the VOC is captured
own understanding and application of ethnographic research. accurately, quickly, and affordably.
“
developer’s toolbox. added relatively little. This company has actually now expressed
Anne is right to em- its intent to move more toward central-location data collection for
Ethnography should be phasize the importance these latter types of studies. Precisely my point!
treated as one of several of clearly articulating re- I’ve seen countless new market research tools come and go
search objectives before in New Product Development. Some are clearly fads, while oth-
complementary tools in the any discussion of research ers—like ethnography—have deservedly earned their place in
product developer’s toolbox.” method or sample size, the product developer’s toolkit. But never have I seen a single
but eventually research- tool render obsolete decades of established marketing science. In
ers must get down to the the October, 2001 issue of Visions, I published an article entitled
brass tacks of execution. “The One Right Way to Gather the Voice of the Customer,” the
And from what I’ve seen, it doesn’t always happen this way. Far point of which was that there is no “one right way.” I still stand
too many prospective clients approach us with ethnography as a by that conclusion!
precondition, making our first task as consultants to explore with
them both the underlying objectives behind their prospective re- Gerry Katz is Executive Vice President at Applied Marketing Science,
search and the practical realities of all the available techniques for Inc., in Waltham, Mass.
their market. Only then are we able to recommend for or against
using observational techniques. Yet because ethnography has now
become “the new black” in Voice of the Customer (VOC), it is
Katherine Radeka Tricia Sutton Katherine Radeka, NPDP, President, Whittier Consulting Group, Inc.
(Katherine.radeka@whittierconsulting.com) and Tricia Sutton, PMP, NPDP,
President, Sutton Enterprises, Inc. (pasutton@suttonenterprises.com)
What is Lean Product Development? The term has many different meanings. This article describes the varieties of approaches that call
themselves Lean Product Development and explains how lean principles and practices place customer value at the center of product
development.
L
ean Product Development can mean many different things. raw materials, inventory, and labor—and did it significantly faster
In some companies, lean product development simply stands and cheaper than traditional mass-production techniques.2 Since
for “doing more with less.” In others, it has become a euphe- then, “lean” has leapt into the corporate lexicon: Lean Manufac-
mism for downsizing, off-shoring, and de-investing in product turing, Lean Office, Lean Enterprise, Lean Supply Chain, Lean
development. Companies with “Lean” or “Six Sigma” corporate Six Sigma, and now Lean Product Development.
initiatives often use lean product development to describe how In 1996, James Womack and Daniel Jones published Lean
they apply their toolkit Thinking,3 which outlined five principles that they believed a lean
“
in the product develop- organization embodied throughout the enterprise: (1) value, (2)
Consultants and authors ment function. But very identifying the value stream, (3) flow, (4) pull, and (5) perfec-
few of these definitions tion. A lean organization understands what value means—for
who tout Lean Product describe how a lean ap- a specific customer at a specific point in time, knows how the
Development talk about a proach can help a prod- value stream creates that value, improves the flow of value to the
uct development team customer, leverages the power of pull systems, and relentlessly
wide variety of different deliver products better, pursues perfection.
things.” faster, and cheaper than Lean manufacturing has evolved a number of specific tools
they have been able to for improving production productivity. These tools include value
do in the past. stream mapping, a tool for visualizing flow in a factory process;
To add to the confusion, the consultants and authors who tout 5S, which cleans up and organizes a physical space; and kanbans,
lean product development talk about a wide variety of different which control the flow of work-in-progress inventory through the
things. Some emphasize waste elimination. Others talk about how factory. It seemed natural to the proponents of these tools to move
to improve flow in product development. Visiting
the experts’ Web sites leads to more confusion as
the lean jargon proliferates: kanban systems, value
stream maps, 5S, A3, obeya, etc. (See the PDMA
Glossary at www.pdma.org for a definition of some
of these terms.)
We are writing this article to clear up some of
the confusion about lean product development
and to show how some of the ideas can help any
team develop products more effectively, whether
or not “lean” is the right label for your improve-
ment efforts.
“
lean companies in the automotive industry, from General Motors, development, one has
Ford, and the rest. limited usefulness,
Such strict definitions challenge conventional thinking about and one is simply Some of the (lean) ideas
how to run a business. For example, companies spend inordinate “lean” in name alone.
amounts of resources on documentation and reporting. Product Each approach has
can help any team develop
developers report on project status, write detailed specifications some elements that products more effectively.”
and technical briefs, conduct extensive market analysis, etc., all are unique and some
of which contribute absolutely nothing to customer value. In the areas of overlap. Ex-
lean world, these activities are all waste. hibit 1 presents a visual model of the lean product development
The lean enterprise differentiates between waste that is com- landscape and how these approaches relate to each other. Exhibit
pletely unnecessary (such as rework to fix a mistake) and waste 3 on page 14 compares the approaches, including summarizing the
that is necessary (such as regulatory requirements and some man- benefits to be gained to help you determine which approach(es) to
agement activities). All unnecessary waste should be eliminated lean will fit your organization and your most pressing needs.
and the necessary waste should be minimized. For status reporting,
this directive means replacing fancy PowerPoint® presentations (1) Toyota Product Development System
with simple one-page status summaries. This approach to lean product development is grounded in re-
Since customer value is at the center of lean thinking, Toyota search that describes how Toyota develops its own products better,
has gone to great lengths to put direct understanding of customer faster, and cheaper than U.S. automakers. This research shows that
value in the hands of the people who need it most. At Toyota, chief Toyota’s product development system developed alongside the
engineers lead development projects and are chosen for their abil- famous Toyota Production System, and the two support each other.
12 JUNE 2007 PDMA Visions Magazine
While they share the relentless pursuit of perfection and a “kaizen” Exhibit 1: The Landscape of Lean Development
mindset that makes every member of every team responsible for
finding ways to do things better, they are not the same.
The hallmarks of Toyota’s product development process include
frontloading the effort into the early stages of development to
ensure a smooth transition to production at the end of develop-
ment, the chief engineer, set-based concurrent engineering, true
partnerships with suppliers, and a deep understanding of the role
that knowledge plays in
“
product development.
The University of
The hallmarks of Toyota’s Michigan began re-
product development process s e a r c h i n g Toy o t a ’s
product development
include frontloading the in 1995. The findings
effort into the early stages are best documented in
two books published in
of development.” the last 18 months. The
Toyota Product Devel-
opment System by James
SOURCE: The Author
P. Morgan and Jeffrey K. Liker describes the elements of Toyota’s
product development in detail.6 Dr. Allen C. Ward’s book, Lean
Product and Process Development was just published in Febru- Exhibit 2: Lean Approaches with the Most Potential
ary 2007.7 It describes the concepts and practices that Dr. Ward
observed in his early attempts to translate the ideas into U.S.
companies. Unfortunately, Dr. Ward died in a plane crash in 2004
before he could see his ideas translated into reality.
This version of lean product development is the one that we
have seen achieve the most dramatic results. The practices that
Toyota uses internally to grow and share knowledge—its lean
system—are readily transferable to other organizations, which
can begin to see results quickly. Unlike other forms of lean
product development, these practices help the entire product
development team spend more time directly creating customer
value immediately.
methods emerge from their observations. The authors explain that there are five primary approaches to lean (Exhibit 1).
They believe that of these three have the greatest potential to maximize value
The most frequently cited sources for this work are Don of product development (Exhibit 2).
Reinertsen’s Managing the Design Factory8 and Mary and Tom
Poppendieck’s Lean Software Development.9 Reinertsen and the
Poppendiecks use the original principles behind lean—value, the utilization to improve flow—which gets more products out the
value stream, flow, pull, and perfection—as their point of depar- door faster with the same resources.
ture. They then ask, “What do these principles mean in a product
development organization?” While the authors end up in very (3) Design for lean production
different places, the advice they have for product development This approach optimizes product designs so that they are easier
teams is highly insightful and relevant. to make in a lean production environment, including the manu-
Reinertsen integrates the concept of flow with queuing theory, facturing, assembly, supply chain, and distribution. Much of the
information theory, and the theory of constraints to develop an impetus for applying this approach has been from the manufactur-
approach to managing flow in a product development organiza- ing functions, particularly as companies make increasing efforts
tion. The Poppendiecks begin with the concept of value and the to move lean tools and practices through the enterprise. Although
value stream in a software development project. They synthesize some teams have focused exclusively here, most have combined
lean concepts of waste elimination, pull, and perfection with best this approach with one or more of the other approaches to lean.
practices from agile software development to gain some insights This approach consists of a set of tools for reducing the down-
that apply to any product development team—not just software stream costs of the product in manufacturing, service, and support.
teams. The tools draw from methods used inside Toyota and elsewhere
Both sets of authors have suggestions for improving resource to make products easier to manufacture and assemble. The best
“
uct reliability. not address the knowledge sharing or the early problem-solving
and technical learning through experimentation that is inherent
If a practice is not centered (4) Lean toolbox in the Toyota Product Development System.
on delivering a lot more value This approach at-
tempts to apply tech- (5) Relabeled lean
from product development, it’s niques from lean manu- Unfortunately, “lean” is considered a hot word right now; and it
not lean.” facturing in product de- has been co-opted inappropriately by tools and methods that have
velopment. Most often, little to no actual connection with lean thinking or lean principles.
a team will try to put Some use “lean product development” to describe a kit of tools
together a value stream map for the product development process. that improve product development performance but without the
Less frequently, they will use other tools from lean manufacturing, overall theme of increasing value or eliminating waste.
such as 5S, work cells, and kanban systems in the engineering Others take ideas that have been around for a long time in
environment. product development, such as phase-gate life cycles, and apply a
We are skeptical about how much this approach increases ac- lean label to them. If one looks below the surface, it’s essentially
tual value creation in product development. Engineers, scientists, the same tool with a “lean” label on it.
and marketing analysts are not production workers; and product Lean is more than just a toolbox or a label. If a practice is not
development takes place over months and years, not hours and centered on delivering a lot more value from product develop-
days. These tools have the potential to do more harm than good, ment, it’s not lean.
especially if trying to force information and knowledge creation
processes into a linear flow. As stated earlier, these tools are not the Recommended approach
ones that Toyota uses in its own product development process. Exhibit 2 on page 13 visually depicts what we believe is the best
There are areas within product development that look more like combination of approaches. We have found that the best approach
manufacturing, and these areas do benefit from lean manufacturing to lean product development integrates the Toyota Product Devel-
tools. Prototype and model shops, procurement teams, and testing opment System with the lean-principles-centered approaches of
departments often do repetitive tasks on short cycle times. These Reinertsen and the Poppendiecks, and supplements with design for
micro-processes are natural candidates for transactional waste lean production tools. This synergistic combination helps product
“
5. Durward K. Sobek II, “Principles that Shape Product Development
How well do you know Systems: A Toyota-Chrysler Comparison” (Ph.D. dissertation,
The practices that Toyota your end users? What University of Michigan, 1997) 88.
constitutes value for end 6. James P. Morgan and Jeffrey K. Liker, The Toyota Product
uses internally to grow and users? How well do you Development System: Integrating People, Process, and Technology,
(New York, N.Y.: Productivity Press, 2006).
share knowledge—its lean know your intermedi-
7. Allen C. Ward, Lean Product and Process Development
ate customers (channel
system—are readily partners, resellers, cor-
(Cambridge, Mass.: Lean Enterprise Institute, 2007).
8. Donald G. Reinertsen, Managing the Design Factory (New York:
transferable to other porate buyers)? What Free Press, 1997).
constitutes value for in- 9. Mary Poppendieck and Tom Poppendieck, Lean Software
organizations.” termediate customers? Development: An Agile Toolkit for Software Development Managers
What are the inherent (New York: Addison-Wesley Professional, 2003).
tradeoffs between delivering value to intermediate customers and 10. Kai Yang and Basem S. EI-Haik, Design for Six Sigma: A
Roadmap for Product Development (New York: McGraw-Hill
end users? How can you transcend those tradeoffs?
Professional, 2003).
Next, take a good, hard look at your product development pro-
cess. Some consultants advocate creating a value stream map of
your process, but we do not believe that’s necessary. It is usually
easy enough to find the low-hanging fruit. Where do you produce
documentation that is always out-of-date because no one both-
ers to read it or no one cares if it’s obsolete? Where does your
product development process require creating “sales pitches” for
internal customers? What deliverables does your process require?
Which ones directly contribute to customer value? Which ones
just get stuck in a file drawer? Which meetings engage all of the
IV`ZVC:L
participants and in which ones do participants read E-mail while
waiting for the few minutes that are valuable to them?
9^gZXi^dc ^c
Think about program leadership: Who in your organization
makes the major decisions about product development? How
well-integrated are marketing and engineering? Do they have the
?DDEL7J?ED
ability to speak the same language? Do you have anyone like a
Toyota chief engineer who has the ability to see the whole picture:
customer, market, and technology?
Take a hard look at how much effort you exert in the end of
Drive growth through
the process versus how much you spend in the beginning, when
innovation with Innovare’s
exploration is relatively cheap. How difficult are your transitions
to production? What can you do to “move the mountain” for- customer-centered research
ward—to put more efforts in the early stages of development so and front-end process.
that you use fewer resources later and avoid unplanned loopbacks
due to failures?
Finally, what organizational barriers foster the waste of rein-
vention? How easy is it for teams to share information with each
other? How easy is it for one product team to benefit from what
another product team has learned?
These areas tend to be low-hanging fruit in product develop- 617-479-3818
ment, where putting on a “lean hat” for just a few minutes can
help identify new ways of working to achieve better, faster, and
www.innovare-inc.com
cheaper—all at the same time. Innovare is a registered trademark of Innovare, Inc.
©2007 Innovare, Inc. All rights reserved.
Customer-centric innovation is a mantra in product development right now. But there are so many approaches to it: How does a company
select one—especially at the concept stage? Or know that the process it has developed will really bring it the right customer input?
In this article, the authors explain how Hyundai did this, and is now incorporating its new customer-central process called “Touch the
Market” into product development efforts throughout the company. Their article focuses on the first use of the process: development of
Hyundai’s second generation Santa Fe, launched in 2007.
T
he second generation of the Santa Fe, which Hyundai in- organization, the Consumer Insights and Advanced Product
troduced in 2007, represented an entirely new design direc- Development teams at HMA had to convince the rest of the
tion for our company. It is a sleek, car-like, sophisticated, organization that this would be an effective way to develop and
crossover vehicle tailored to consumers in the United States, communicate new product concepts. Typically the bulk of inno-
very different from its predecessors, as shown in the photo on vation work is done within the research and development (R&D)
this page. Within the company, the car was the result of a major department. However, many of the ideas and opportunities to
challenge—to create a vehicle that would be considered “asser- please the customer fall outside of R&D. Consequently, HMA
tive yet graceful.” had to develop a plan to involve “innovators” from a cross-section
In order to meet that challenge, Hyundai Motor America of the company, both in the United States and South Korea, from
(HMA) took an entirely not only Design and Engineering but also from Product Planning,
“
new approach. In fact, Market Research, Marketing, and Public Relations. Developing a
Touch the Market began as... at the start our product consensus was essential for us to obtain a buy-in to improving the
development, design product innovation process—a very encompassing structure.
an unsanctioned event...that and engineering teams
eventually became an approach actually headed for a Developing better vehicles
skating rink rather than Our challenge was clear: How can we develop better vehicles,
that critically influences new the office. The idea was vehicles that better fulfill the needs of the customer? These are
vehicle programs.” to scoot around the ice formidable challenges and it takes a lot to achieve them. But we
with the kind of “grace knew that companies that learn to manage the overall product
and speed” we were aiming at. We watched while Olympic medal- development process, internally and across all the groups in a
ist Rusty Smith raced around the rink at top speeds, bringing to very large and often disjointed company, are in the best position
life the Santa Fe’s design objective. to achieve this. The competitive landscape of the automotive
Smith put on a skating demonstration and talked about aspects industry is changing fast and dramatically. Best-in-class product
of his sport that convey graceful assertiveness. You can do Power- developers and manufacturers are better able to coordinate the
Point slides all day long, but we wanted a real-life design metaphor. vehicle development process internally and on a global basis.
The research and product development teams were charged with One way to become an agent of change is to combine data with
communicating “assertive grace” so that Hyundai could design its creativity. This melding can act as a change agent to transform a
second generation 2007 Santa Fe. So began a weeklong series of company into a consumer-centric enterprise. Our thought was to
events that we called “Touch the Market” attended by cross-func- create a new approach that combines team building and consumer
tional teams from research (and lat-
Hyundai around er, product inno-
the globe. In this vation) to educate,
article, we want to excite, and create
guide you through cross-functional
the process we and extended
used to come up, project team man-
at long last, with agement. We were
our second genera- looking to go be-
tion Santa Fe. yond information
In order to ad- exchange in order
vance the state of to achieve two pri-
product develop- mary goals. We
ment within the Hyundai used “Touch the Market” to develop the concept for its second generation Santa Fe, launched in 2007 wanted to build
Hyundai Motor America, headquartered in Fountain Valley, Calif., Inspiring the team through ethnography
is a subsidiary of Hyundai Motor Company of Korea. Hyundai cars In order to help the team gain a deeper understanding of the
and sport utility vehicles are distributed throughout the United glamour mom, we ventured out into where these women lived:
States by Hyundai Motor America and are sold and serviced by their homes, hearts, and world. We got to know what mattered
more than 665 Hyundai dealerships nationwide. to them, so that we could make the Santa Fe more meaningful to
them. This type of ethnographic research takes into account that
what people say does not always jive with what they think and
Incorporating Voice of the Customer feel. So we watched, listened, asked questions, and let people
TTM events such as the one we ran come at the Voice of the speak freely about their lives. Ethnographic research allowed
Customer (VOC) from a different angle. Stemming from tradi- us to approach consumers as whole individuals in order to cre-
tional VOC, TTM events are inspired by target consumers and ate products that connect them to the Hyundai brand. Working
give event attendees the chance to interact directly with this target closely together as a cross-functional team, we were able to bring
consumer. In this case, we chose image target consumers—a the lives of our image target into every aspect of the product
much narrower consumer base than the ultimate consumption development process.
target for the product—so that product development would be During TTM, the group met a number of carefully selected
tightly focused. target customers in their homes to get a better direct, hands-on
The process for the Santa Fe development began almost five understanding of their lifestyle and typical activities. Our members
years ago with a segmentation study conducted by Hyundai to also spent the day shopping with the glamour moms in order to
identify consumers’ unmet needs to help shape the concept. The gain a better understanding of what motivates their purchases.
study uncovered some key design aspects not yet present in SUVs We uncovered numerous insights; some of these are listed in the
on the market at the time. These included glamorous design box on page 19.
(as opposed to the boxy shapes then on the market)—a vehicle
designed to generate attention and one that makes its drivers Aiding non-American participants
and passengers feel pampered and confident. The R&D teams The team also explored model homes in a community-style
at Hyundai synthesized the data and developed an interpretive development favored by the target consumer. This activity was
translation of the research to create the Santa Fe concept: Asser- especially helpful in aiding the non-American participants in un-
SOURCE: Hyundai
Hyundai screened numerous women to identify those who fit the demographic and lifestyle description of Glamour Moms, their target customer
for the second generation Santa Fe. Here are some of the slides they used showing this research.
derstanding the typical American suburban home and lifestyle. The result of all this TTM work was profound; it is the Z-shape
The team also experienced driving in the United States. We took profile for our second generation Santa Fe that emulates a speed
rides through Southern California to experience different vehicles. skater’s race stance and profile and gives the vehicle a sense of
We drove from Orange County to Palm Springs and back again in speed. The interior combines a high-tech look with the warmth
order to do the same type of driving our target customer would do. of wood, much like the design feelings inspired from the model
We wanted to experience various aspects of the vehicles—styl- homes visited and homes of the glamour moms.
ing, interior appointments, Through TTM, the team was able to lay out the basics of a
“
performance attributes. successful product development and communication experience
Touch the Market is We decided not to include to develop our second generation Santa Fe. The success of this
now a formal part of the current direct competitors experience has led to additional TTM events for other projects
to the Santa Fe, opting with even greater attendance and corporate attention. Attendance
development schedule.” instead for inspiration ve- has grown from 12 participants to nearly 20 per event, and the
hicles in order to reinforce number of functional groups attending has grown from four to
the need to look outside the segment to achieve leadership in the eight divisions. The output has become more sophisticated and
segment. permanent, and focus target consumers are now a recurring part of
Finally, an overnight stay in Palm Springs at the Estrella Hotel, a the four-year product development cycle, with the same consumers
complex that is modern yet glamorous, inspired the team to come providing feedback as the concept evolves.
up with key design imagery intended to inspire the designers of
the new Santa Fe. Improving the TTM structure
The TTM experience has since been significantly enhanced
The result of Touch the Market research by the addition of a competitive activity, with the group split
Participant feedback to the TTM events has been overwhelming. into small teams intended to energize the participants and lead
Consider the quote below, received from a Korean designer: to deeper understanding of the concept. On the final day of the
“The Santa Fe TTM was such a refreshing opportunity for me event, teams gather for concept ideation—a creative burst applied
in building the Santa Fe marketing strategy. Though the ways to the now clearly understood concept that results in an impres-
you chose to execute the event were actually so strange for a sive list of new ideas for the vehicle. Through team challenges
typical Korean like me because all I knew about TTM (Touch the and brainstorming sessions, the participants explore the concept
Market) was that it’s just a kind of market research. I really want in spirited discussions, which will ultimately lead to new innova-
to show my appreciation for your efforts for Santa Fe TTM and tions. Creative ideation yields numerous innovative features that
your kindness to me.” enhance the framework of the concept.
PDMA Conference Calendar—2007 and 2008
2007 2008
Sept. 29– Oct. 3 PDMA 2007 International Conference Jan. 21-23 7th Annual Co-Development/Open Innovation
The Product Innovation Connection Conference
Information. Education. Experience. (PDMA/Management Roundtable)
Venue: Disney’s Contemporary Resort, Orlando, Fla. Doubletree Paradise Valley Resort, Scottsdale, Ariz.
www.globalexec.com/pdma2007/index.php www.roundtable.com/codev/
Dec. 3–5 10th Annual Voice of the Customer Jan. 28-30 2nd Annual Front End of Innovation in Europe
(PDMA & IIR) (PDMA &IIR)
The CALEO Resort & Spa in Scottsdale, Ariz. Vienna, Austria
www.iirusa.com/voc
Dec. 17–19 3rd International Conference on Innovation & NPD PDMA February 13th Annual Strategic & Operational Portfolio
India Conference 2007 Management
Product Development for Developing Country Markets: (PDMA & IIR)
Scope, Challenges and Management Date and location TBD. Usually in Florida.
(PDMA & PDMA-India)
March Service Innovation Design & Development
Indian Institute of Management, Bangalore, India (PDMA & IIR)
Dec 17-18 PDMA India Conference www.iirusa.com/service
Product Development for Developing Country Markets:
May 19-21 6th Annual Front End of Innovation
Scope, Challenges,and Management (PDMA & IIR)
(PDMA & PDMA-India) Boston Seaport Hotel, Boston, Mass.
Indian Institute of Management, Bangalore, India www.frontendofinnovation.com
PDMA’s conferences offer expertise and information on virtually every aspect of innovation and New Product Development (NPD). Details
and updates can be found at the PDMA Web site, www.pdma.org.
As the leading writer on Open Innovation, Henry Chesbrough provides insights into this field that are well-respected throughout the
corporate world. Chesbrough has just published his second book, Open Business Models: How to Thrive in the New Innovation Land-
scape (Harvard Business School Press, 2006). His new book discusses creation of a business model for Open Innovation. Interviewed
by Visions Open Innovation Editor Michael Docherty, Chesbrough offers observations that are sure to be useful to active practitioners
in the New Product Development field.
M
ichael Docherty: What do you think is behind the interest for open innovation, that we would need to engage the business
in and popularity of Open Innovation? side of organizations in the innovation process in order to reap the
Henry Chesbrough: I think that many people in many full potential benefits of a more open business. More particularly,
companies felt that the earlier model of internal R&D [research the business model is itself something that companies need to
and d evelopment] was no longer effective. Too little productivity, innovate, in order to get the most out of their innovation efforts.
too many spillovers, too long a timeframe to go from inception And very few companies have any clear processes that seek to
to market—these were longstanding complaints. Two additional innovate their business models. So I wrote this book in hopes of
factors that have compounded the problem are the rising cost of inspiring business model innovation.
R&D and the ever-shorter product life cycles in the market, should Another important idea in the second book is the idea of emerg-
one be so fortunate as to get a project through to the market. ing secondary markets for intellectual property (IP). While this
What was missing was any alternative way to address these trend is at a very early stage, the presence of a secondary market
problems. Open innovation increases R&D productivity, captures will have powerful influences over how we organize innovation in
or leverages spillovers in other markets, shortens the time to get the future. You see companies now like Qualcomm with IP-centric
to market, and shares the rising R&D costs with others. business models. You see intermediary companies like Ocean
Docherty: With the Tomo trying to facilitate trade in IP. This will enable new ways
“
great successes that com- to innovation profitably, and it may also imperil some traditional
panies like P&G and Kim- ways to innovate profitably.
We have many stories berly-Clark are claiming Docherty: Do you see companies looking more globally for
about R&D success, but still with open innovation, why technologies and partners? Is this a trend that we can expect to
aren’t we seeing more see accelerating?
lack any large sample data companies adopt open Chesbrough: Yes and yes. Useful knowledge is now very
on bottom line return on in- innovation models even widely distributed in most industries. If you’re in the cellular or
faster? wireless telephony business and you’re only tracking the research
vestment from adopting Open Chesbrough: That is a and development activities of companies and universities in the
Innovation.” very good question. I see United States, you’re missing a great deal of what’s available. In
two primary factors that countries like Finland, Taiwan, South Korea, and Israel, smaller
—Henry Chesbrough are inhibiting the spread societies are well ahead of the United States in technology de-
of open innovation. First, velopment and especially deployment. This means that many of
we have many stories about R&D success, but still lack any large the value-added services that sit on top of wireless are emerging
sample data on bottom line return on investment from adopting there first.
open innovation. Second, moving toward open innovation requires But it should be pointed out that not all industries are opening
a number of changes to many organizational processes. These up their innovation process. I don’t think that the nuclear power
changes are costly and time-consuming themselves, so many industry is seeing much startup activity, or university research
companies are playing “wait and see.” activity. The same is true for military weapons systems. Even in
Docherty: What is the main concept behind your new book, the defense area, though, some portions of the sector are opening
Open Business Models? What was your motivation in writing up. The CIA [Central Intelligence Agency] has created its own
it? venture capital fund, for example, called In-Q-Tel. This fund
Chesbrough: Open Innovation was well received, but it was helps startup companies pitch new software and cryptographic
received mainly by the technology and R&D community. I be- technologies to the intelligence and defense communities.
came increasingly convinced, as I talked about the opportunities Docherty: Some companies appear to equate open innovation
“
er than in purchasing or they have in managing intellectual property issues within their
The companies…who have business development. partnering and co-development activities. What issues are you
This means staffing the seeing and do you have any advice on how companies should
embraced Open Innovation tell function with former approach this within their co-development efforts?
me that their first such deals R&D executives, who Chesbrough: There was an article in Business Week just re-
understand the compa- cently on this very topic. IP management is a critical skill that must
are very painful to negotiate. ny’s technologies and be mastered to prosper with open innovation, because whether you
But…it gets better the second processes. They will are bringing external technology inside or taking unused internal
know what will work technology outside, IP figures prominently. The problem is that
and third time around.” and what won’t work the traditional processes used to manage IP are anchored in a
—Henry Chesbrough with the internal part of closed innovation approach, where control is everything. Very
the company. few technology partners will give you complete control over all
What else is there to of their IP in a development arrangement. Instead, you’ll need to
open innovation beyond scouting? One whole area omitted in discuss who has what rights and what access to each other’s IP,
the P&G conception is letting unused internal ideas flow to the both during the partnership and after its termination. These require
outside, through licensing, joint ventures, spin-offs, and increas- new legal and negotiating skills.
ingly, spin-ins, where a technology is allowed to go outside into The companies I know who have embraced open innovation tell
a new venture, but is later brought back into the company. me that their first such deals are very painful to negotiate. But they
Docherty: Do you see any other trends toward companies de- also tell me that it gets better the second and third time around.
veloping more formal networks of external development partners, The very best companies have developed processes and tools that
beyond technology scouting? take the lawyers out of the day-to-day loop and let the business
Chesbrough: Very much so. One trend is so pronounced that parties negotiate within well-defined parameters.
the government is now collecting data on it. The National Science Docherty: In your new book, you talk about the growing role of
Foundation [NSF] reported data on extramural R&D (where the intermediaries in the open innovation marketplace. As companies
company paid for it, but the work was conducted outside of the become more proficient at both scouting and co-development, will
company) and on collaborative R&D (where a company worked this need for intermediaries decline or increase and why?
with another organization on an R&D project). In the year 2004, Chesbrough: The function of the intermediary is here to stay,
the NSF found that three to four percent of R&D spending was I think. While it is good for companies to develop their own
spent on extramural R&D, and another three to four percent was processes and skills, intermediaries will be able to serve a much
spent on collaborative R&D. These are not huge percentages, but broader market than most companies. They will be more active
they add up to $9 or $10 billion in R&D for that year. And the participants in the market and will have better knowledge on
fact that the government has started to collect these data is itself what deals are being done with what arrangements. Only the very
significant, in that it must see this trend developing, or else it would biggest companies can replicate this internally. The rest will be
not have bothered to ask these questions on the survey. well-advised to team up with intermediaries. And some of the very
Docherty: You talk about the role of out-licensing in your new largest organizations, like P&G, have taken equity positions in
book. Do you see this simply as a tool for leveraging unused some of the leading intermediaries, like NineSigma, InnoCentive,
intellectual property, or also as a way to leverage others’ busi- Yet2.com, and YourEncore.
ness models?
Chesbrough: The way companies manage out-licensing var- Henry Chesbrough is Executive Director of the Center for Open Innova-
ies with the company and its strategy. Most companies early on tion at the Haas School of Business, University of California Berkeley. He
are trying to make a little extra money for their unused IP. Over was named as one of the Scientific American Top 50 Business and Tech-
time, however, as companies gain experience and confidence, nology leaders for 2003. Michael Docherty is Visions Open Innovation
they see more strategic ways to employ licensing. One of them is Editor and President of Venture2 Inc., located in Delray Beach, Fla.
suggested in your question: to leverage other companies’ business
models. This means that the company watches what the other
companies are doing with their technologies, and learning from
that experience. In many cases, the licensees have developed a
different business model that finds value in a technology that the
licensor did not perceive. In other cases, a licensee sees the market
As corporate interest in sustainability has mushroomed in the United States, more and more companies are figuring out how to “go
green” in their product development efforts, not just their facilities. The author describes the Arizona Chapter’s recent conference on
sustainability.
O
n March 9, 2007, the Arizona chapter hosted its third an- State University, was the moderator for the panel. Some very lively
nual Product Development and Management Association interaction took place between the audience and the panelists as
(PDMA) conference. Attended by over 50 registered par- different views on sustainability and industry trends were shared.
ticipants, this year’s conference focused on a topic that is now One very important theme was the need for more awareness by
catching the attention of businesses and the media alike; its theme senior management on making sustainability an important part of
was Innovate through Sustainable Technologies. The intent of this business strategy and senior management commitment.
year’s conference was to showcase some of the emerging trends in
sustainability across several industries. In addition, we looked at The U.S. Center for Sustainable Development
what was driving voluntary compliance in the personal computer The first presenter for the conference was John Potts, CTO for
(PC) industry and the efforts in China to address sustainability in the China-U.S. Center for Sustainable Development (CUSD).
the world’s fastest-growing manufacturing economy. China has become the global source for manufacturing. Unfor-
tunately, this designation also places China as the second-largest
Conference planning contributor to the global warming problem (behind the United
Planning for the 2007 Annual Conference started immediately States), he pointed out. Statistics such as 10,000 new towns and
after the 2006 Annual Conference. The convergence of several 300 million homes to be built in China in the next 15 years put
thought-provoking books, particularly China, Inc. by Ted Fish- into perspective the costs to the environment caused by economic
man, The World is Flat by Thomas L. Friedman, and most visibly growth. Whatever solutions are developed for sustainability will
An Inconvenient Truth by need to be embraced by the People’s Republic of China in order
Al Gore, highlighted the to have any significant effect.
“
fact that not only is the The CUSD has been designated by the United States govern-
[There is a]… need for world getting flatter but it ment to be the official agency to work with China on sustainability.
is also getting environmen- The CUSD not only has government representatives from the
more awareness by senior tally dirtier. A conference People’s Republic of China but also Chinese industry associations
management on making showcasing companies in and universities (Beijing, Tongji, and Tsinghua Universities). Last
various industries that are but most important, an elite list of multinational corporations such
sustainability an important making a more conscious as Ford, HP, Intel, British Petroleum, and Philips hold invited
part of business strategy.” effort corporately to im- positions on the board and are recognized as global leaders in
prove their environmental environmental and social responsibility. Through the CUSD,
footprint through product said Potts, the Chinese government has been open to best prac-
innovation was something worth pursuing. tices and thought leadership from industry leaders on defining a
We formed a conference planning committee consisting of “cradle to cradle” approach to its economic and environmental
individuals from Arizona PDMA (Chapter Board members Asit development.
Goel, Peter Miller, Pete He, Glenn Grossman, David Zuckerman, The growth engine of the past century was the corporate en-
and Don Hardenbrook), Arizona State University (Dan Shunk, terprise. This same growth engine will be essential to our future
Braden Allenby, Jay Golden, Jim Hershauer, and Prasad Bora- for well-designed, sustainable solutions. Technology, and its
kar), and the China-U.S. Center for Sustainability (John Potts). application to sustainability challenges, is a major component
Several sessions spent discussing sustainability started drawing of China’s plan to address the country’s challenges. Potts also
out the vastness of the subject. We agreed that the focus would theorized that sustainability will mimic the quality revolution.
be on product development and what companies are doing in the The lessons learned in quality need to be applied to accelerate
area of sustainability. sustainability efforts.
This year’s event was kicked off by an invitation-only pre-con- Doug Kunneman and Robert Green of NatureWorks LLC, a
ference panel discussion consisting of the conference speakers and subsidiary of Cargill, presented a session on the NatureWorks
hosted by Dial Corporation, along with its parent company, Henkel Polymer (PLA). One of many new biopolymers on the market,
Corporation. Jay Golden, Director, National Center of Excellence PLA is used to create packaging products that are 100 percent
on SMART Innovations for Urban Climate and Energy at Arizona biodegradable. In fact, PLA will completely decompose in 47
22 JUNE 2007 PDMA Visions Magazine
to meet environmental standards as part of their selection process,
and EPEAT allows them an efficient and credible means of verify-
ing that equipment meets criteria. Given that there was over $21
billion in total federal and state IT budgets as of March 31, 2006,
PC OEMs can not ignore making sure their equipment meets
EPEAT standards. There are now over 300 PC and computer
display products listed on the EPEAT Web site (www.greenelec-
tronicscouncil.org/epeat/index.htm). EPEAT has proven to be so
successful that the Green Electronics Council has been asked to
expand EPEAT to more consumer products.
Today, automobile makers in the People’s Republic of China face a crisis in innovation as they try to move past their dependence on
outside technology and ramp up to compete in a vast and rapidly growing market. To address this challenge, PDMA-China and Wuhan
University of Technology, with other sponsors, held a conference in December 2006 on New Product Development (NPD) in the automo-
tive industry. Here are some highlights.
C
hina’s automotive industry represents an extraordinary case to mature growth through innovation. The conference was a joint
study of the development of an emerging market. Its central effort of the Product Development and Management Association
lesson underscores the need for innovation to sustain the (PDMA), PDMA-China, and Wuhan University of Technology.
Chinese economy. China is fast transitioning to a full market The conference was co-chaired by Hu Shuhua, Chair Professor,
economy. A number of key forces are now playing out in China, Wuhan University of Technology, and Hamsa Thota, President
among them the high potential the Chinese market represents for and Chairman, PDMA.
global companies, a large number of economic and industrial Attendees included executives from local and foreign compa-
reforms implemented by the government, and the growing reli- nies, researchers, news reporters, and students of management and
“
ance of Chinese industry the engineering sciences. Speeches were delivered on the first and
on imported technology to second days, with two sessions on each day, while the last day
China may become the ‘mini maintain its manufactur- was filled with open forums and discussions in which experts,
vehicle kingdom’ of the world in ing edge. With this sce- researchers, and scholars exchanged their views and ideas.
nario unfolding, the First
10 years.” International Conference Envisioning the move toward innovation
on Automotive Industry The conference started with welcoming remarks from Hu
Innovation was held in the historic city of Wuhan in the People’s Shuhua in which he gave an overview of the conference theme. He
Republic of China on December 1-3, 2006. also invited all of the guests to what proved to be an inspirational
The of the conference was China’s Automotive Innovation and exhibition of some of the new vehicles (including mini cars and
Independent Development. Its goal was to create China’s premiere electric cars and vans) being manufactured in China.
forum for discussion on how to guide China’s automotive industry The formal morning session started with Hamsa Thota’s speech,
“
tor GE Global Research, Shanghai, commented about automobile the country itself
industry trends. He noted that the industry is facing overcapac- through their own
ity and fierce global competition, along with the requirement to development ef-
To make use of this potential,
meet customer needs that are becoming ever more personalized. forts. “And if the the Chinese automotive industry
Also having an impact are rising costs for raw materials and fuel. same pattern is
Based on these circumstances, he believes that the only companies followed appro-
requires ‘Indigenous Innovation’.”
that can win will be those that use technology to produce new priately,” he said,
energy/hybrid electric vehicles (HEVs), plug-in HEVs, and new “China would be able to develop its independent automotive
materials of less weight and lower cost. industry efficiently and effectively.”
One academic presented basic facts about the Chinese automo- Concluding his speech, Hu Shuhua proposed that the Chinese
tive industry, highlighting its general situation, its deficiencies government build a National Automotive and Innovation Project
and problems, and the current status of Chinese independent (NAIP) to help in the development of the Chinese automotive
automotive innovation. He had the following advice for enhancing industry through independence and technical innovation. To
the innovation capabilities of the Chinese automotive industry: implement the NAIP, he suggested the following three-stage
“The Chinese auto industry should: (1) Set up a scientific evalu- framework: (1) Government support—The Chinese government
ation system of independent innovation ability, (2) Strengthen should focus more on the automotive industry, as compared to
auto talent training, (3) Improve the core competition ability of other industries, and establish a separate department to work on
independent automotive brands, (4) Construct innovation systems NAIP; (2) Development of two necessary platforms—a Manage-
and public platforms, and (5) Improve the core competition ability ment Innovation Platform and a Technology Innovation Platform;
of key parts manufacturers.” and (3) Development of new-generation vehicles.
Several other speakers followed, giving their points of view
about Intellectual Property (IP) management, the current status Food for brainstorming
and development of an independent and innovative Chinese At the evening session, held in the School of Management Sci-
automotive industry, development of the electric automobile ences, Wuhan University of Technology, academics and students
industry, and more. of management gave some interesting presentations, which also
showed the students’ enthusiasm toward innovation, its tools,
Innovation in auto electronics key to growth and its effective management in today’s rapidly changing and
The second day’s sessions began with a speech on “Auto Elec- highly concentrated markets. Because the conference theme was
tronics and Innovation” by Dr. Ronald Busch, President and CEO, a new concept to most of the attendees, they were anxious to
Siemens VDO Automotive, Asia-Pacific & China, who stated that learn about innovation and its implications for the automotive
“today, auto electronics is one of the most important factors in industry in China.
the auto industry. Automotive-specific trends include sustainable The conference ended on the third day with open discussions
mobilizing, increasing safety and comfort, and seamless con- and visits to some of the beautiful locales in Wuhan. Overall,
nectivity.” He referred to the following as the important elements the conference proved a success, giving the attendees new ideas
of innovation for the near future: invention and idea generation, regarding automotive industry innovation in China and provid-
development, industrialization, sales and marketing, profitable ing a forum to brainstorm about them. It also left participants
turnover, and better quality of life/harmonious society. still wrestling with some core questions about how China should
Another scholar presented his research on Mini Vehicle and develop its automotive industry in the future. These questions will
Indigenous Innovation of SGMW (SAIC-GM-Wuling Automobile form a good basis for discussion in future conferences.
Co., Ltd.), describing the market opportunities and challenges for
the development of mini vehicles in China. He concluded with Raja IrfanSabir is a Ph.D. candidate at Wuhan University of Technology,
the prognostication that “China may become the ‘mini vehicle Wuhan, Hubei, People’s Republic of China.
kingdom’ of the world in 10 years.”
Spotlight on UK/Ireland
PDMA affiliate holds workshop on
creativity in product development
Attendees discuss a variety of challenges
Pammi Sinha Tricia Sutton Pammi Sinha, Ph.D., Newsletter and Membership Coordinator for the UK/
Ireland Chapter and Program Director for BSc Hons Fashion and Textile
Retailing, University of Manchester, Manchester, England (pammi.sinha@
manchester.ac.uk) and Tricia Sutton, PMP, NPDP, Visions Chapter Spotlight
Editor and President, Sutton Enterprises Inc. (pasutton@suttonenterprises.com)
Creativity is assumed to be critical to the field of New Product Development (NPD). However, few understand its role well enough to
improve the creative process or foster creativity in development teams. In a workshop early this year, the members of PDMA’s UK/Ireland
affiliate debated this question. The discussion centered around the findings of recent research on NPD creativity.
—Tricia Sutton, Chapter Editor
E
ach year the PDMA UK/Ireland affiliate holds a workshop to person comes up with a different understanding because each
receive the benefit of research done by its academic member- contacts only one part of the elephant. The story reflects the
ship. The affiliate held its fourth workshop, “Researching need for a combination of approaches in order to obtain a more
and Making Sense of Creativity,” on January 18, 2007, at the Man- comprehensive and accurate understanding.
chester Business School, University of Manchester, Manchester,
U.K. Aimed at examining the role of creativity in collaborative Methodology selection in design studies
New Product Development, the workshop was co-funded by the Dr. Claudia Eckert of the Engineering Design Center, Depart-
Arts and Humanities Research Council (AHRC). ment of Engineering, The University of Cambridge, Cambridge,
“
Drs. Helen Perks and U.K., discussed her personal experience in examining the design
Pammi Sinha, co-chairs of process in general and creativity in particular with designers of
This thought-provoking...event the workshop, welcomed knitwear and helicopters.
focused on current methods used 39 delegates from a variety Eckert noted differences in creativity between experts and
of disciplines and institu- novices. She also discussed her observation that design behavior
to research creatively.” tions across the United remained similar across disciplines, even though the actual activi-
Kingdom, Ireland, and ties and complexities of the projects differed.
Europe. The universities included Manchester, London, West- Eckert concluded by discussing her rationale for selection of
minster, Cranfield, Salford, Nottingham, and Groningen. This research methods. The method selected depends upon the situa-
thought-provoking and lively event focused on current methods tion and research question, the expectations of the research peer
used to research creatively. A major theme running through the groups, and the researcher’s self-awareness (e.g., how easily you
discussion was that there is a need for a multi-disciplined and build relationships with people, how well you pick up on cultural
collaborative approach to researching creativity. references, how much you enjoy detailed analysis), and the ex-
pectations of the research peer group.
Methods and approaches in the psychology of creativity Dr. Martin Stacey, School of Computing, De Montfort Univer-
Professor Ken Gilhooly of the School of Psychology, University sity, Leicester, U.K., described the complexity of researching the
of Hertfordshire, Hatfield, U.K., began the workshop by discuss- design process as a “multilevel process.” He identified a number
ing three main psychological approaches and methods used in of ways of looking at design and creativity, such as cognitive
the study of creativity. He noted that there were many ways to psychology, artificial intelligence, sociology, soft systems, and
research creativity; each approach focused on a different aspect ethnography. Stacey argued that the main problem with research-
and used different methods for different problems. ing creativity currently is that there are no set criteria across disci-
Evaluating cognitive processes typically involves experiments plines to judge which theories and models are supported or refuted.
with verbal protocols and think-aloud tasks. These methods may Additionally, comparisons between conceptual frameworks have
interfere with a person’s insight, which requires unconscious focused on criticisms rather than synthesis.
thought processes that cannot be verbalized. Assessing individual Stacey discussed work that he and Eckert conducted about the
differences involves the use of psychometric tests and the ‘big fashion industry. Designers work in the continuously shifting
five’ personality factors (neuroticism, extraversion, openness, context of current trends. A fundamental question was where
agreeableness, conscientiousness); and those methods can result the context originates. In the fashion industry, trends can come
in over-generalizations about the study population. from the designers, magazines, forecasting bureaus, retailers,
Gilhooly concluded with the analogy of the “blind men and and consumers. Although consumers do not directly influence
the elephant problem” based on an old Indian fable where each trends, sales figures will direct companies. Designers, however,
“
moderate. further research,
the delegates came
Why brilliant ideas trigger illegitimate acts away with a bet- Creative ideas emerge even
Dr. Babis Mainemelis, Assistant Professor of Organisational ter understanding in unsupportive climates.”
Behaviour, London Business School, London, U.K., discussed of factors that may
how creativity research has focused on idea generation—not influence creativity
social evaluation. Noting that creativity literature often examines and methods to further understand creativity. They also came away
climates that promote creativity, he pointed out that creative ideas with recommendations to focus future research as well as some
emerge even in unsupportive climates. The reasons for why and early results to build their teams’ creativity.
how this happens within organizations may be explained by a
number of factors: intrinsic motivation, a love of the work itself; Pammi Sinha, Ph.D., leads newsletter and membership efforts for the UK/
persistence; nonconformity; openness; and the individual’s cre- Ireland Chapter and also is Program Director for BSc Hons Fashion and
ative identity (the creative adventure). Organizations may respond Textile Retailing, University of Manchester, Manchester, England. Tricia
to this rule-breaking behavior in a number of ways, from funda- Sutton, PMP, NPDP, is Visions Chapter Spotlight Editor and President
mentally shifting their perspective to organizational tolerance of of Sutton Enterprises Inc., Waukegan, Ill.
creative deviance.
As globalization pushes forward, PDMA has taken time to develop a new mandate. The Board of Directors created a special panel to do
so. In this article, two members of the panel describe its recommendations and how they will help PDMA achieve its goal of “Connect-
ing Innovators Worldwide.”
T
he Product Development and Management Association
(PDMA) is in the process of transforming itself from a North PDMA Global Innovation
American-centric organization into a global association
with the mandate of “Connecting Innovators Worldwide,” as the Thought Leader Panel
association’s new tagline points out.
The new PDMA mission is to champion development and dis- • Peter Beven, Director, Australia Institute of
semination of the best in New Product Development (NPD) and Commercialisation
management knowledge throughout the global community, thus • Connie Chang, Resident Director
enabling people and businesses to grow and prosper through in- U.S. Department of Commerce
novation and management of new products for world markets. • Brian Christian, President, DASO Consulting
• George Day, Professor, The Wharton School
PDMA creates new panel • Alex Kandybin, Vice President, Booz Allen Hamilton
Several years ago, PDMA members were asking how the as- • Umesh Ramakrishnan, Vice Chairman, Christian & Timbers
sociation should innovate to achieve this new mission. To get • Larry Schmitt, President, Inovo
broader, expert advice, PDMA created a special panel in August • Kyle Spainhour, Vice President, Motorola
of 2006 to assist the Board of Directors in creating a new strategic • Bill White, President, DuPont Canada
• Gregg Zank, Chief Technology Officer, Dow Corning
“
framework for innova-
tion. The purpose of this
PDMA is in the process of framework would be to The innovation framework
transforming itself from a North help PDMA define its own The panel presented its innovation framework and recommenda-
role with respect to innova- tions to the PDMA Board on March 15, 2007, at PDMA’s annual
American-centric organization tion. Because the needs strategic planning meeting in Philadelphia. Larry Schmitt, Presi-
into a global association.” of PDMA members and dent of Inovo and one of the panel members, presented the panel’s
customers have evolved findings. Exhibit 1 illustrates the proposed innovation framework.
from their traditional focus on product development to the broader This framework has provided a base for subsequent work that is
requirements of innovation, the Board felt that it was important ongoing. The three-dimensional model was well received by the
for PDMA to expand its offerings to fit these new, broader needs. Board, which applauded its simplicity and intuitiveness. Each of
The implications of this new innovation role for PDMA’s entire the 48 cells of the cube contains know-how relevant to that specific
enterprise strategy were believed to be significant. innovation topic area.
This ad hoc panel was named the Global Innovation Thought
Leader Panel. The intention was to form a body of innovation ex- X-axis—Three types of innovation
perts from outside the membership of PDMA’s Board, which itself The three dimensions of the cube require some definition. The
is populated with individuals having deep innovation expertise. first dimension, on the x-axis, refers to the three types of innova-
In this way, PDMA would get the best of both inside and outside tion: product/service, business model, and operational. These
thinking engaged in this critical initiative. The ten members of three types are intended to capture the full range of focus areas for
the Global Innovation Thought Leader Panel are listed in the box innovation in which organizations might engage. Product/service
on this page. These panel members represent industry, academia, innovation is the most commonly known variety and refers to in-
governmental institutions, and private consulting practices. The novation in the basic offering provided to the customer. Business
panel held a series of teleconferences, starting in September of model innovation is a little less intuitive and refers to innovation
2006. These sessions were led by the panel’s three consultants, in the way in which a particular product or service offering cre-
in conjunction with PDMA Executive Director Robin Karol. ates value. Operational innovation relates to innovation in the way
By March 2007, the panel had arrived at a consensus around an internal practices, processes, and tools are designed, often with
innovation framework and set of recommendations for PDMA’s the intent to improve effectiveness or efficiency but also with the
Board. potential to increase value received by the customer.
“
ness model. Finally,
The recommendations
The panel offered three primary recommendations: First, it
PDMA understands These recommendations...
the need to under-
suggested that the Board accept the proposed innovation model. take a VOC process set the stage for a great deal
Second, it recommended that the Board undertake an innovation
initiative to reinvent itself, following the same processes and using
as the next stage in of work in the future.”
this innovation initia-
the same tools that it offers to its members and other customers. In tive. Appropriately,
other words, the panel’s suggestion was “Doctor, heal thyself.” PDMA planned to
“
Third, the panel rec- begin this VOC study at the PDMA/IIR Front End of Innovation
ommended a Voice of Conference in early May in Boston.
The panel recommended… the Customer (VOC) Clearly, these recommendations are only a start. They set the
a deep dive qualitative study study to better under- stage for a great deal of work in the future. PDMA is, however,
stand the current and committed to evolving its role to meet the expanding innovation
of current as well as potential future needs of its mem- needs of its members and other customers. After all, if PDMA is
future customers.” bers and other custom- to be an effective advocate for innovation and for its members, it
ers. In other words, the must deeply understand its customer base and continuously spawn
third recommendation innovation in its own offerings. The vision that the PDMA Board
simply emphasized the need to get the innovation process started has for the organization is that it be an example of innovation to
in the right place—with the customer. More specifically, the panel its entire customer base.
recommended going beyond written surveys with multiple choice The Board offers its sincere gratitude to all members of the
questions to undertake a deep dive qualitative study of current as Global Innovation Thought Leader Panel for their time and
well as future customers. The panel felt this type of study might commitment in helping PDMA begin this important innovation
enable PDMA to understand more fully how best to serve the journey.
interests of members—and potential members—and capture the
valuable nuggets of insight that lead to innovative solutions. This Brian Christian is Founder and President of DASO Consulting LLC,
customer knowledge will be used to help define the appropriate located in St. Joseph, Mich. Hamsa Thota is President and Chairman
innovation scope for PDMA going forward. It will also be the fuel of the Board of PDMA. He founded Innovation Business Development
that will feed the next stage of the innovation process, the idea Inc., St. Simons Island, Ga. Both are on the Global Innovation Thought
creation stage. The innovation landscape is rapidly changing; and Leader Panel.
if PDMA wants to be an important part of this landscape in the
future, it must understand its customers better and more deeply
than other organizations that offer the same or similar services.
Adam Hansen, Visions Resource Editor and Creative Process Consultant, Ideas
to Go, Inc. (ahansen@ideastogo.com)
Adam Hansen
T
his edition of From Blogs to Books is short. We only have China and the innovation that drives those products. Meanwhile,
room to discuss two books—a “must-have” for the new indigenous Indian and Chinese companies are creating intellec-
product professional who is regularly addressing multiple tual property and innovations that will compete with those same
external and internal constituencies; and a book that looks at the Western companies.
true impact of China and India on Information Technology (IT) “In IT and the East, James M. Popkin and Partha Iyengar ex-
and innovation overall. amine the vital questions these developments raise: What’s the
long-term impact of high-tech outsourcing? How will innovation
Made to Stick: Why Some Ideas Survive and Others Die be managed in the future? Can Western firms compete in Asian
By Chip Heath and Dan Heath markets while protecting key intellectual property? Will the in-
Random House, January 2007, 304 pages novation engine inexorably shift east? What would such a shift
mean for Western countries currently driving innovation? The
Among the important questions answered in this book are: authors also discuss the emerging alliances between Indian and
“What are the qualities of ideas that really ‘stick’?” “How does Chinese technology companies and outline the implications for
truly communicating differ from sharing data?” And “What’s ‘The Western businesses.
Curse of Knowledge’?” Made to Stick pulls together research in “Filled with extensive interviews with high-level executives,
memory and emotion with key learning from, among other cases, government officials, and academics from around the world, IT
those persistent urban legends that we’ve all heard. The brothers and the East is the first book to articulate the challenges that new
Heath have distilled the key principles into a helpful mnemonic business scenarios and capabilities in India and China pose for
(“SUCCES” for Simple, Unexpected, Concrete, Credible, Emo- Western technology firms.”
tional, Stories) and make it clear that using these principles will
help your ideas be more “sticky.”
This approach works, they assert, because it helps you as a
message crafter to overcome “The Curse of Knowledge,” the
simple notion from psychology and economics that the more
we understand something, the harder it is to place ourselves in
a position of being naïve to it—we simply can’t remember what
it was like not to know it, and thereby underestimate the need
to provide enough cognitive and emotional hooks for others to
grasp it. The authors point out that we are on the receiving end of
“The Curse of Knowledge” anytime we’re talking to IT support
(apologies to all readers in IT!), and in doing so, effectively help
us grok the concept by using Simplicity, Concreteness, Cred-
ibility, perhaps at least some Emotion and a Story that we might
all be able to share.
Do yourself a favor and at least browse through this book the
next time you’re in a bookstore, and check out a handful of podcast
interviews with the authors (HBR IdeaCast, Social Innovation THE POLITICS OF
INNOVATION
Conversations, etc.). Worth your consideration.
IT and the East: How China and India Are Altering the
Future of Technology and Innovation
By James M. Popkin and Partha Iyengar The challenge of new product
Harvard Business School Press, April 2007, 226 pages development isn’t coming
up with the next big thing,
From the publisher: it’s moving it through the
system. Big Bang uses concise
“The center of gravity in the technology world has shifted east. research results, empowering
Today, India and China are churning out some of the world’s Idea Farming sessions,
best-trained computer science and electrical engineering gradu- quantitative concept ranking
ates. In both countries, consumer classes and domestic markets what’s next? and innovation DNA analysis
to successfully drive the idea
for technology have ballooned. Western high-tech firms are 404.614.0660 l bigbangip.com to commerce.
increasingly sourcing their products’ assembly from India and
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32 JUNE 2007 For information on how to join and for a detailed list of Team Membership benefits please visit www.pdma.org.
PDMA Visions Magazine
PDMA News
Anthony Di Benedetto
T
he Journal of Product Innovation Management (JPIM or the
Journal) is well over 20 years old and is still going strong. JPIM: Upcoming Major Articles
With that milestone in the past, it was time to look back
and see how the Journal, and indeed the academic discipline of July 2007
product innovation itself, has matured. As these things go, it is “NPD Planning Activities and Innovation Performance: The Mediating
still a young discipline, and we have witnessed its evolution thus Role of Process Management and the Moderating Effect of Product
far in the pages of JPIM. Innovativeness,” Sören Salomo, Joachim Weise, and Hans Georg
The May 2007 issue opens with an article that will be of special Gemünden
interest to our academic readership: It is a retrospective on JPIM “Which Tangible and Intangible Assets Matter for Innovation Speed in
written by Wim Biemens, Abbie Griffin, and Rudy Moenaert. Start-Ups?” Ans Heirman and Bart Clarysse
They document JPIM’s development over its first 20 years and “Does Market Orientation Facilitate Balanced Innovation Programs? An
comment on its impact on the academic community in term of Organizational Learning Perspective,” William E. Baker and James
knowledge stock and flow. They examine, for example, the use M. Sinkula
of academic sources by JPIM authors, as well as the use of JPIM “Development of a Design Audit Tool for SMEs,” James Moultrie, P.
articles by authors writing for other journals. John Clarkson, and David Probert
Though we could do better in some ways (we ought to be bet-
“Learning to Reduce Inter-Organizational Learning: An Analysis of
ter cited in the strategy and management literature, for example), Architectural Product Innovation in Strategic Alliances,” Roman
JPIM has clearly established itself as the leading journal in the Grunwald and Alfred Kieser
growing area of technology innovation management.
Also appearing in the May 2007 issue is a Perspectives article by
Jeff Thieme, who uses a social capital perspective to examine the
contributions made by the most-published academic researchers in
the area of innovation management. Many of the names he cites
will be familiar to our regular JPIM readership. Taken together,
these two articles are a wonderful snapshot of our journal and
academic discipline at this stage in their evolution. I hope you
enjoy them, and all the rest of these upcoming issues!
States $35; multiple copies: 10 for $200. Plus Innovare ..................................Page 15 Directors-at-Large
Don Abraham
shipping. Contact Bob Fogle at bobfogle@ Innovation Focus ......................Page 7 Cecil Chappelow
earthlink.net (860-350-5010). K.T. Connor
PDMA International Conference........Page 30 Tom Hustad NPDP
Web Advertising PDMA Team Memberships...............Page 32
Gerry Katz NPDP
Cheryl Perkins
Advertisers have their display ads posted on Ira Uslander
the Web site in a special advertising portion of Photizo Group ...........................Page 33
Visions online. Stratgyn Institute ....................... Back Cover
List compiled May 9, 2007: See the PDMA Web site for subsequent changes and more current information (www.pdma.org).
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