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Tips for Improving the Product Development Process

16 Feb Tips for Improving the Product Development Process

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Would you want your product launch to have results similar to the launch of the Nintendo Wii, selling 600,000 units in the first eight days, or would you prefer to launch something like a Betamax, which could only record for one hour, causing it to fail?

Root Causes of Product Launch Failures
An estimated 70% of new product launches fail within two years, according to research published by Aquent. It is important that companies understand the underlying causes of such failures in order to prevent it from happening to them. New products fail due to problems that occur before, during and after a product launch. Listed below is a chart that shows many of the root causes of these failures.

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New products or services should be independently tested by customers or potential customers prior to launch (via alpha and beta testing) so that feedback can be obtained in order to tailor the marketing message, make changes if necessary and to gain information on which customers to target and what they are willing to pay for the product or service. The product development team needs to engage with marketing, sales, advertising, and public relations professionals early in their project to obtain input on the launch process and to inform them of the benefits of the product. These professionals can help turn the product benefits into a compelling story that customers can relate to.

Effective Leadership = Successful Team
Excellent team leadership is one of the most critical assets for creating successful outcomes. Step one for the team leader is to very clearly define the team members’ roles and responsibilities. Step two is for the team leader to ensure that there is a central repository for critical documents for the entire team to access, including requirements, customer research, business plans, roadmaps, roles & responsibilities, and many more. Step three is to communicate effectively with the entire team.  Leaders must ask questions of team members, encouraging them to share their views.  Sometimes, a team member might not want to share their thoughts in front of others and the team leader needs to help them to open up or, worst case, speak with them one-on-one to get their input. Highly effective leaders need to set limitations as well. Decisions must be made and analyzing the input of others for long periods of time can stall a decision. Good leaders must be able to sense when politics or strong opinions are interrupting the effectiveness of the group and must be able to deal with them while keeping the team together.

There are other avenues beyond the product launch that effective leaders need to focus on. Executive sponsorship for a new product is critical, particularly in larger organizations.  Not only does the team need their sponsor to approve and fund the project, but they also need to get the executive sponsor engaged so that they are excited about the project and want to see it succeed.  In addition to support from their sponsor, team members need to discuss their project with others in the organization and keep their ears to the ground to find out if anyone is playing politics by saying negative things about their project.  When companies have limited funds to invest in new projects, these types of games can be played.

The Cost of a Product Launch Delay
A product launch delay of eight months can cost a company from 17%-37% of Net Present Value, depending on the competitive environment, according to the innovation consulting firm OakStone Partners.  While a product launch delay can be costly, launching a product before it is ready can be a bigger mistake. For example, Windows Vista was launched at its scheduled time and was an epic failure due to serious software flaws.  Effective leaders need to identify when it makes sense to delay a launch.

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Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC which includes InvestmentBank.com and Crowdfund.co. Nate works works with middle-market corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He is the chief evangelist of the company's growing digital investment banking platform. Reliance Worldwide Investments, LLC a member of FINRA and SIPC and registered with the SEC and MSRB. Nate resides in Seattle, Washington.
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