Article
Using Your Strategic Product Development Firm Effectively
Strategic product development firms are a great resource to help accelerate your project and improve its likelihood of success. How you engage with them will determine how much benefit they will provide. We have some advice.
Determining if You Should Engage a Product Development Firm
You’ve got a product development schedule your team has to meet to ensure your product’s success. But when you compare that schedule to your available resources, the math doesn’t add up. It’s time to call in the reserves by engaging a product development firm to close the gap and get back on track. Sounds logical right?
The answer to that question depends heavily on the quality of the input that informs your product and product development plans. When used as a component of a well-conceived plan, product development firms can be a great resource to help accelerate your time to market. On the other hand if you don’t have a clear plan in place for them, the opposite can happen, leading to blowing your budget and schedule. To get the maximum value from your product development partner, you need to evaluate your goals and answer three critical questions before you engage them:
- What’s the real problem I’m trying to solve with my product?
- How much time do I have?
- What’s the budget available to my product development firm?
Understand the Real Problem Your New Product Will Solve
You probably wouldn’t want a surgeon to take you straight into surgery without working up a proper diagnostic on your condition. (Talk about a painful way to troubleshoot.) Or how about your auto mechanic? You probably wouldn’t want them to rebuild your transmission without first looking under the hood or test-driving your car. These seem like logical conclusions, right?
So why would you consider heading straight into production with a product that isn’t suitably informed by its stakeholders? This is especially critical if you’re looking to refresh an existing product line. Few things are worse for your brand than providing your target market a product refresh that doesn’t substantially improve on the previous generation—it’s a telltale sign of stagnation and complacency. When you launch a new product, it’s your big chance to address unmet user needs from the previous generation without having to admit that you didn’t address them last time. Take advantage of this opportunity!
There are many ways to inform your product’s development. You could consider doing it yourself. If that’s not an option, a product development firm can create a tailored approach to meet your specific needs by using techniques such as ethnographic research, empathetic studies, surveys, polls, and observational audits to name a few. Regardless of how you approach it, this effort is critical to glean the valuable insights that ultimately drive your product’s success. If you don’t have these capabilities in house, or they’re not available to you, then a product development firm’s outside perspective is a great option.
Build and Test Prototypes Early and Often to Validate Your Strategy
You need a foundational understanding of your stakeholders’ needs to clearly define your product’s solution space. Only when you have that in place can you formulate your strategy. Your strategy execution, however, remains untested.
Be sure to have your product development firm test early solutions in prototype form to get focused target-user feedback and validation. Continual iteration of your solution in this manner is more cost-effective than testing more completed solutions and having to redo them. Make sure you establish what you want to learn from your prototypes so you know when you’re done. This will prevent your team from getting trapped in an endless cycle of prototyping. Trust your strategy and execute the plan. Remember, this is exponentially more cost-effective than redesigning a flopped product.
Don’t Let Development Time Be Your Only Consideration
Once you’ve identified the real problem you’re solving for your stakeholders, ask yourself how much time you have to come up with the solution. It’s a critical factor that determines how much impact your development effort can have on your product and it strongly influences how well informed your solution will be. (Do I have time to talk to target users? Who else is affected by this product?)
Product development can be an expensive journey, so ensuring that the outcome of your effort is well received when the product hits the market should be on top of your priority list. Nowadays your job depends on it. Just keep in mind it takes time to do this well; you should never rush into it just to get it done.
Be realistic about how much time you allow for the proper research and strategy development. It could mean the difference between a successful product launch and a flop.
Plan ahead and be leery of unrealistic schedule forcing functions. There always seems to be a trade show or board meeting coming up that hamstrings the amount of time you have to develop a considered solution. Sometimes this is unavoidable, but there are almost always other ways of showing meaningful progress without risking the success of your project and overextending yourself in the process. Leverage your product development firm to help out with this; an outside perspective can be a lifesaver.
At some point, you’re likely to find yourself short on time and facing a “go/no-go” decision about your development program. In these situations, it’s critical to stand back and re-evaluate the go-to-market plan to optimize for it maximum impact given the constraints you face. Do the best you can before caving in and assuming added risk just to move forward. It’s usually better to show up to the market a bit late with a more considered solution than delivering a rushed product that nobody wants.
Allocate the Right Budget to Your Product Development Firm
Now that you’ve decided to leverage a product development firm, identified the real problem and the timeline to solve it, the next challenge is establishing a budget for them.
Budgeting for product development firms can be challenging because of their business model. Your business model, as a product company, is to invest in the design of your product and then sell copies at a price that allows you to profit when you sell them. Product development firms, on the other hand, only sell their ideas, experience and skills. For them to remain in business, they must profit from the development work itself. This can make them appear overly expensive when compared to the cost of your internal staff.
But only looking at cost misrepresents the value they provide.
The bulk of any development project’s time and effort will be spent on the engineering and production ramp-up activities. The quality of the up-front definition and conceptualization of your product will determine how efficiently your engineering team can implement it. Poor or inadequate attention in this phase can cost massive schedule and budget issues later in the project. Good product development firms stay in business because they are experts at preventing problems like this.
Product Development firms are a great resource that can help you achieve superior results, but only if engaged and leveraged appropriately. Never hire them in a panic. Make sure they are capable of informing, augmenting, and enhancing your long-term strategic vision.
To get the most benefit from that great resource, you must to address these three items before you engage them:
- Solve the right problem.
- Establish a reasonable timeline to solve it.
- Allocate a budget that supports the results you want.
The rest is easy.
