What's the Problem?
Businesses mostly don't really listen to customers in spite of their rhetoric.
Breakthrough NPD is primarily focused on solving one problem, but it is a big one.
The Problem: Most product development projects fail.
That means most product development investments do not meet their ROI objectives. They lose money.
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Is it really that bad?
Not only is it that bad, but it's been that way for at least 50 years. Consider these expert statements more than 50 years apart.
"Recently, studies have been made to determine the fate of products that have been brought lovingly into existence, fully developed, mass-produced, and finally presented to the unsuspecting customer. By actual count, new products put on the market by 200 leading companies showed a tremendously high 80% rate of failure." (Ehrenfried, 1955, New England Council 1953 -- as quoted by Grabowski, 1995)
"... approximately 80 percent of all new products or services fail within six months or fall significantly short of forecasted profits ..." (Zaltman, 2003, p. 3)
Depending on industry, new product development failure rate ranges from 50% to 95%.
So the best industries are failing half the time. The worst miss 19 out of 20 times.
There is enormous value to capture here.
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Is it important?
Today: Yes if you want to grow.
In the future: Yes if you want to survive.
After two decades focused on increasing efficiency and productivity the big gains there have been made. The lifetime of products is continually shrinking. So the primary avenue for revenue growth is already new product development. It will be essential in the future.
Besides the lost revenues, product failure also results in low customer satisfaction, which is a long lasting cost and lowers employee morale.
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Why do smart people get it so wrong?
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