Product Development and Management Association (PDMA) on innovation and failure

VentureOutsource.com rubs elbows with Richard Notargiacomo, a former product development manager with Eastman Kodak and now the chairman and president of the Product Development and Management Association (PDMA). Founded in 1976, the PDMA is a volunteer-driven, not-for-profit organization with the mission to improve the effectiveness of people engaged in developing and managing new products, covering new goods as well as services. (http://www.pdma.org/)

In this exclusive interview, read what Richard says about challenges electronics companies face when launching new products; quantifying value from innovation, common product development failures, and more.

Transcripts from that discussion follow...

VentureOutsource.com: You have an interesting background. Your work in product development management while at Eastman Kodak was during a time when Kodak, and the film industry in general, was reeling from dwindling sales. Kodak badly needed an injection of innovation into the Company's existing and new product lines. Kodak later revealed several lines of high-quality, innovative electronics products to boost sales. Can you please discuss three (3) challenges electronics companies must address when looking to launch a new electronics product into a market that's not been tested previously?

Notargiacomo: I tend to be concerned about fundamentals and the fundamentals couldn't apply more than they do to new products into untested markets - in any industry. So first, I would want to understand how the product aligns with the customer.

What problem, need, or experience is being addressed, and what sort of customer will find the proposed solution sufficiently appealing to part with his/her money? Plus, how many of these customers are there apt to be out there?

You need to be careful on this one since the early adopters are going to look a lot different than the early or late majorities, (remember the early days of cell phones with salespeople thrilled to have ‘the brick' that was in the market initially) but I think it's still the critical question.

The second area of concern is how trends in the market, in technology, and in competition are affecting the fundamentals.

Richard Notargiacomo - Product Development and Management Association

Richard Notargiacomo
President and Chairman
Product Development and Management Association (PDMA)

Lastly, is the need to be flexible in what, when, and where to launch.

New data can emerge at any time from the market, from the labs, and from competitors. The more you're ‘locked in', the more you are vulnerable to any issues that arise from new information. You cannot afford to be vulnerable. In my work with companies large and small, I've been able to observe that getting these things right is a key precursor for market success.

VentureOutsource.com: You talk about "...quantifying value from innovation" as part of a product company's risk (appropriate) management. Can you please explain this for our readers?

Notargiacomo: An innovation program, like other programs in a business context, should have a clear set of objectives and goals. I call it ‘the innovation imperative'. These objectives and goals need to indicate what's expected from the innovation program and what sort of revenue / earnings profile will result. This will be determined over the interval the new products and services are in the innovation portfolio and should be reflective of the desired risk / reward profile. The key here is to use the appropriate methods to measure the risk at the individual project level while comparing results to the goals, over an appropriate time perspective, at the portfolio level.

You also need to be very aware of the pitfalls of using processes and measures appropriate for line extensions and derivative products on more disruptive or radical innovation projects. For more disruptive programs, you need to harness the risks and learn from them; something you probably cannot afford to do in line extensions where you simply want to manage and minimize risks. This is what I call "risk (appropriate) management". And, don't forget, in innovation there are really two classes of risk: