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The B2B "Bad Economy" Cure: Five Reasons Why Now Is the Time to Embrace New Product Blueprinting
October 09, 2008
The only way to win in tough times is through organic growth. (Edited by Stacy Straczynski)
Economically speaking, and with apologies to Thomas Paine, "these are the times that try men's souls." Keeping the customers you already have is difficult in an age of consumer anxiety, vise-tight budgets and suddenly-Scrooge-like bankers. But actually growing your company in the way it needs to be grown in order to thrive long-term, well, it can feel like an impossible feat.
Don't despair. Dan Adams, author of New Product Blueprinting: The Handbook for B2B Organic Growth, has two words for you: organic growth.
"When debt financing flows freely, it's easy to grow your company through acquisition," notes Adams. "When consumers are on a buying spree, even a mediocre business can grow nicely. But when these go away—like right now—the real quality of a business shows through. After all, it's hard to tell how well your engine is running when you're coasting down a long, smooth hill."
A company's growth engine is its ability to deliver differentiated value to its customers through new products and services. Period. If you can't develop new "stuff" that customers want to buy—and keep doing it over and over—you won't be in business for long. As Peter Drucker put it, "The business enterprise has two—and only two—basic functions: marketing and innovation. All the rest are costs."
Many executives lose sight of this truth, says Adams, especially when growth comes relatively easily. They spend too much time thinking about investor relations, human resources, financial reporting and so forth. Yes, these are very important subjects—but they're not the engine. They're the mirrors, radio and lights. And the executive who fails to check under the hood will be sorely disappointed when it's time to climb the next hill.
If the first step is fully recognizing the importance of that organic-growth engine, the second is tuning it to a high-performance level. But how do the best companies do this? In recent years many large global B2B companies have adopted the New Product Blueprinting process. The process focuses on the "fuzzy front end" of new product development—an area that is at once critical and exasperating to business leaders. Simply put, you work patiently with your customers to create a mental picture of something that will excite them. Then you create a new product blueprint that answers two critical questions: "How will we make it?" (technical paths) and "How will we pay for it?" (business case).
Seven Steps of New Product Blueprinting
Of course, implementing New Product Blueprinting won't be easy. It means changing the DNA of your company so it routinely delivers more product value than your competitors—and we all know such change is daunting, indeed. But Adams insists this paradigm shift is absolutely necessary.
"Yes, these are tough times in which to shake up a company in such a way, but also exciting times" Adams says. "I believe the next frontier is to dramatically improve the way we develop new products. Future competitive advantage will come from what we design, not how faithfully or efficiently we reproduce it. Why be satisfied with great quality and productivity for making products customers yawn at…especially if competitors have the same quality and productivity?”
It's time to create your own product blueprint with these tips excerpted from Adams' New Product Blueprinting:
Step 1: Market Research. Beautiful product development in an ugly market segment makes no sense, so shift your potential opportunities early and cheaply. Use Internet-based market research, combined with simple but effective screening tools.
Step 2: Discovery Interviews. Technical-commercial teams interview customers using qualitative techniques to uncover dozens of needs in depth. Enter the customer's world to discover and understand what will excite him.
Step 3: Preference Interviews. In a second round of interviews, you quantitatively prioritize customer needs that are most important and least satisfied. Replace your internal bias with hard data—and kill your project if customers aren't eager for change.
Step 4: Side-by-side Testing. You compare existing products you may have with your competitors' best. This baseline helps you attack their weak spots, avoid getting blind-sided and optimize pricing, but it's only possible when you understand all your customers' options.
Step 5: Product Objectives. You now have a wealth of outside-in customer and competitive data. Use this data to create a blockbuster product design in which specific customer needs are targeted and market reaction predicted.
Step 6: Technical Brainstorming. You've got the "what" (your product design), but must now consider the "how"—preliminary technical paths to pursue. This brainstorming includes technical solutions that come from outside, as well as inside, your company.
Step 7: Business Case. Would a venture capitalist fund your project? Twelve points must be addressed in every blueprinting project. This drives out assumptions, bias, omission and wishful thinking before you begin heavy spending in the product development stage.
Sales & Marketing Management Magazine
This article is brought to you by Sales & Marketing Management, the leading authority for executives in the sales and marketing field.
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