If you read my column in June entitled, 5 Mistakes to Avoid in Product Development , you are now likely avoiding a bunch of common problems, such as losing control of the product development costs, losing focus on the product requirements, failure to monitor schedule, unchecked scope creep, and inadequately resourced projects.
In the spirit of continuous improvement, here are five more mistakes to avoid. I suspect these will ring true, too.
1. Failure to Confront the Issues
Escalating bad news is, at best, painful. It is not uncommon for poorly managed teams or companies to want to “shoot the messenger.” Is it any wonder that team members will sit on problems, trying to brute force through obvious failure, rather than raise their hand to identify the issue? Eventually the smell of the decomposing body becomes obvious to all. At that point, it is often much more costly in terms of time and expense to deal with the issue.
2. Losing Control of the BOM
This is crucial. The project starts out with a target Bill of Materials (BOM) cost, derived from the following chain:
Retail price > Average Selling Price >
Wholesale Price > Manufactured Cost > BOM cost
In a well-structured set of product requirements, this “top down” approach is validated through a rough “bottoms up” evaluation to ensure that the goals are right from a business standpoint and are realistically achievable. Assume, for this example, everything was done right at the start.
Now, after several months’ effort, the design is fairly mature. At this point, someone on the team starts to do a roll up of what the BOM cost looks like. Disaster strikes. The BOM cost projection is significantly higher than originally projected. At best, the business value of the project is compromised. At worst, the projected BOM cost totally invalidates the business assumptions.
How to avoid this? At project kickoff, make sure the BOM budget target is broken down into subsystem targets. Make sure team members are making early and frequent updates to their projections. It may be impossible to fix things easily at the end of the project whereas, if addressed early enough, issues can be investigated and managed within the team. As with item #1 here, getting bad news on the table early allows for the issues to be resolved with the least impact.
3. Wrong Team
There is no project so small that it cannot be screwed up. Thinking that a project of lower priority or seemingly lower complexity can be staffed without senior engineering oversight or with team members who have performance issues, is short sighted and often doomed to fail. Even the seemingly simplest projects can fail if the right team is not assembled to execute them.
4. Ignoring Market Intelligence
The world is a dynamic place and the pace of change and new product introductions is accelerating. It is not uncommon for new product development processes to take nine months to two years (or more in some product categories -- especially medical devices). The competitive landscape