New Product Development - Dale McIntyre, Behr
I had the pleasure of interviewing Dr. Dale McIntyre, Vice President of New Product Development for Behr Process Corporation in Santa Ana about ... what else, new product development!
Dr. McIntyre differentiated between innovation and new product development processes because the upfront part -- finding opportunities, having ideas, and marrying them to concepts worth working on make up the "fuzzy" front end of product development. New product development comes next with product features development, testing, market testing, and packaging...and then the launch.
When asked about the differences between innovation and new product development in small and large companies, Dr. McIntyre pointed out that "the number of people that have to be involved to make a product a success is significantly different. The more people, the more formalism is required because of more resources and bigger risks are involved." New product development in large companies becomes a big project management effort with incremental checkpoints to reduce risk with clarification. "Behr uses Stagegate to help manage that complexity."
Smaller companies have a more internally developed development process in which a few people have shared knowledge and execution is easier. "Formal procedures tend to fail in small companies because the process gets bogged down with complexity. It doesn't yield value, it yields paperwork and wasted energy," he says based on his experience in both small and large development systems.
Small companies thrive when a few people apply systematic thinking in their areas of mastery in simple, smaller teams. Startups vary in size but have an inherent sense of intimacy of knowledge and goals. Federal labs, on the other hand, face a lot of risk and have much more complex systems, as do large companies.
"One of the best practices in new product development is for an organization to clearly understand what is CORE -- and master that. Outsource other things. Virtual situations can also be valuable when people talk to other people and share experiences. Often innovators think they are the first to encounter a particular issue -- but when they understand that lots of people experience the same issue, they understand that many solutions are possible," says McIntyre.
"Small local groups such as the PDMA -- Product Development Management Association which has chapters across the country -- helps members benefit from diverse perspectives and multidisciplinary solution processes.
Product Development ChallengesThe main problems that crop up in new product development include:
"Being first isn't always best," he says. "Large companies can have a 'fast follower' strategy and win. Some companies are never first -- always second. One company that used the "never first, always second" philosophy very successfully is the Japanese Electric Company.
"There's a reason it's called the 'Bleeding Edge!'"
A new product has to hit the market with enough force to overcome obstacles -- inertia, competition, distribution, and supply chain adoption.
Partnerships are very important in hitting the market with adequate force. Some options in partnering include:
Innovation + Distribution + Market Strength = Bigger Splash!
Finding co-development partners is difficult. "Keep your eyes open -- continually ask yourself, 'who could help me?'
Call different business associates to see what their biz dev goals are. Participate in trade associations. Find credible "introducers". Form a technical advisory board from among your suppliers and customers.
Technical Advisory Board for Innovation"Many innovations are brought to a company by their supply chain members when they review how they can better work together. These vetted idea people can be industry experts waiting to be asked for their input. Recently retired professionals have a lot of industry knowledge and often strong networks of contacts. High visibility professors can bring instant credibility. And don't forget a financial guy who can contribute a real world perspective," he advises.
"Many companies conduct a periodic review of company operations and products, and can spawn innovations that improve the company at strategic levels, which is outside the "product innovation" area, but can be very profitable," McIntyre notes.
A company benefits from having a contact point for outside ideas and input -- a conduit to the rest of the company. The Vice President of New Product Development is a good choice, "as long as there is agreement from executives to funnel ideas through a conduit and there are productive management contacts. This conduit becomes the advocate for ideas, and open mindedness and diplomacy are required for big ideas."
Priorities in New Product Development ManagementThe top priorities for the company's best value include:
Varieties of Profitable Innovation"There are innovation opportunities on many fronts," he explains, " -- not just products. The concept is "how do we deliver outstanding products at outstanding value? With paint, our product, we ask how we can make it the best buy -- a price differentiation. We also work with suppliers who deliver value. And we embrace technology and productize it for higher efficiency."
Innovation in Processes"Innovation in merchandising can be some of the most profitable of all innovation investments," he reveals. "Doblin lists ten types of innovation (ie: business models, networks, core processes, etc) and innovation in business models can made the most money for a company!
An example of a business model success for Behr was a new merchandising system -- the "Color Center" at Home Depot stores. This technological merchandising innovation was designed to deliver value to customers in a different way to make additional sales.
"Customers can bring in a favorite shirt and match the color...and walk out with matching paint. A computer helps choose matching colors. We introduced it in 2003 and nothing like it was on the market prior to that. It resulted in a huge increase in sales.
"We developed the system inhouse and partnered with a device company to measure the colors, a printer company to find a printer that would survive in retail environments, and design firms to design the layout of the system. But we kept the core value -- the color matching algorithms inhouse -- that's our core intellectual property," McIntyre emphasized.
New Product Profitability StrategyTwo words -- "adjacent category," he advises.
Suppliers are great to innovate with. It's a win-win situation. They share strategy, have built up trust so they can be open with one another, and will benefit from aligning with us. Our suppliers bring us a lot of great ideas from many fields, since we're multinatioal company, we deal with a matrix of opportunities from cultural differences, to new materials, to new engineering resources."
New Product Development in Tight Economic Times"During tough times, the strong get stronger. There will be a shakeout and it's a fight for survival. Innovation is the last place to cut costs. It's the companies who continue to innovte who will be positioned for coming out of the recession." McIntyre encourages product developers to look around more for more ideas. "To use a little of the free time for productive creativity and innovation. When you're busy you can't get into machinery schedules -- now you can."
Green Chemistry Insights"You have to work hard to make eco-friendly products. Customers want xxx features and they don't want to make compromises in features such as color, lifespan, etc. Volatile organic chemicals (VOC) are a bigger issue," McIntyre observes. "We have to get to a place where we all look at the total lifecycle -- from raw materials through manufacturing and distribution to end of life."
Consumers Report has recently tested paints for low-VOC, fade resistance, one-coat options, and advised that people need to research their paint choices every time they buy paints because of continual formulation changes to keep up with the times.
Innovation ... new product development ... these are our real world market strategy for keeping up with the times.
Dale McIntyre is Vice President of New Product Development for the MAC group at Behr Process Corporation. In addition, Dale leads the sustainability strategy effort for MAC. Prior to joining Architectural Coatings, Dale was the Group Director of New Product Development and Strategic Planning for Masco Corporation. He has also been involved in new product development in a number of high-tech start-up companies, a venture capital group, and a Department of Energy National Laboratory.
Dale is a recognized leader in Stage-Gate® International and was recently Vice President, Conferences & Events for PDMA International. He co-produced the 2008 PDMA International Conference and was co-chair of the 2008 "Greener by Design" Conference.
PDMA: Product Development Management Association
PDMA is an advocate and resource for the professin of product development and innovation. Upcoming 2009 programs include:
PDMA now offer their membership a significant discount on many of the courses that are offered through the Disney Institute. We have also worked to accredit their courses so that NPDP certified professionals can earn one PDH per hour towards NPDP recertification each year. Contact Sabina Gargiulo, International Conference Director of the Product Development and Management Association at 856-380-6831
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