The Innovation Journey: Excelling at New Product Development by Joseph E. Johnson

?Introduction

New product development (NPD) is a critical process for businesses looking to stay competitive and grow in today's rapidly evolving market landscape. Listed are steps that explore the intricacies of NPD, its importance, benefits, and the key stages involved in bringing a new product from concept to market. Additionally, several NPD examples will be discussed for representative companies (NVIDIA, Google, VISA, JP Morgan Chase, Amazon, Eli Lily, Sherwin- Williams, and PPG) in the technology, financial, healthcare and material industries.

General

New Product Development (NPD) is crucial for businesses to remain competitive and grow in today's rapidly evolving market landscape. The importance of NPD lies in its ability to adapt to changing consumer preferences, maintain competitiveness, leverage technological advancements, create new business opportunities, diversify risk, and increase brand awareness. New product development also incorporates continuous improvement (CI) for existing products, as well as totally “new” products. ?By engaging in NPD, companies can stay ahead of market trends and meet evolving customer needs, ensuring their long-term survival and success.

?The benefits of NPD are numerous and impactful. First, it helps determine product acceptability by allowing companies to test new concepts with customers and gather valuable feedback for improvement. This process significantly enhances product quality through prototype testing and material and technology evaluation. Additionally, NPD reduces expenses and the chances of failure by conducting thorough market research and product testing, while minimizing risks and added costs. The customer must want and be able to use a new, cost-valued ?product, which is a staple of LEAN Six Sigma and Safety, Quality Delivery and Cost (SQDC). The NPD should be aligned with creating better marketing strategies by providing insights into customer pain points, competitive landscapes, and effective promotional platforms. From a holistic view, NPD promotes innovation by providing a structured approach to transform unique visions into tangible products, which fosters a culture of creativity and continuous improvement within the organization (1-8).

Importance of NPD

• Adapts to changing consumer preferences
• Maintains competitiveness in the market
• Leverages technological advancements
• Creates new business opportunities
• Diversifies risk and promotes profitability
• Increases brand awareness

Benefits of NPD

• Determines product acceptability
• Improves product quality
• Reduces expenses and failure risks
• Enhances marketing strategies
• Promotes innovation

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Common Failures

In my start-up experiences at multiple companies, new product development fails due to one of two main reasons. One, the company lacks a defined NPD process. A process is either lacking or not followed. “Hobby or pet projects,” project overruns, insufficient NPD funding and lack of resources/over extension are included with the lack of maintenance and planning.? The good news is that the “process” will eventually reach an equilibrium and hopefully be resolved.

Second, inexperienced, non-technical and/or non-financial leaders create an unrealistic, “academic” business plan. The issue here is either the product is expected to have unrealistic (impossible?) features or financials. Financials meaning that there is no valued product, one that can be made for a reasonable cost that will generate a profit. The last point is very common, in fact, in my last role and at several interviews with start-ups I’ve been told, “We’re not worried about (new product) costs. We have funding. We’ve got customers lined up. All we need to do is scale-up (a limited lab prototype or idea) and the costs should come down.” ??A “cool” product made in a lab combined with a well-spoken salesman may get grants and investors, but realistic, technical, and financial homework needs to be done for viable, commercial product transformation! (1)

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Understanding New Product Development

New product development is the process of transforming innovative ideas into successful products that meet market demands and align with a company's business objectives. It encompasses a series of stages, each designed to refine the product concept, assess its viability, and ultimately bring it to market (2-4,6,7).

Types of New Product Development

There are several approaches to new product development, each serving different strategic purposes:

1. New-to-the-market: This involves creating entirely new product categories or technologies that have never existed before. Examples include the introduction of blockchain technology or virtual reality headsets.
2. New-to-the-company: In this approach, companies enter established markets with products that are new to their portfolio. For instance, when Microsoft launched VR headsets or when smartphone manufacturers expanded into smart TV production
3. ?Extension of product line or Continuous Improvement: Companies add variations or p or improve quality to existing product lines to offer more choices to consumers. The beverage industry often employs this strategy, with companies like Coca-Cola introducing new flavors or drink types and M&M adding new colors and fillings.
4. Improvement of existing product: This involves upgrading current products with new features or addressing limitations. Microsoft's continuous updates to its Windows operating system exemplify this approach.
5. ?Repositioning: Companies may modify existing products slightly to target new market segments. An example is McDonald's repositioning of meals to appeal to adult consumers, in addition to children.

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The Eight (or is is Seven?) Stages of New Product Development

1. Idea Generation The NPD process begins with brainstorming and collecting ideas for new products. These ideas can come from internal sources, such as employees and R&D departments, or external sources like customers, distributors, and market trends
2. Idea Screening In this stage, ideas are evaluated based on their potential profitability, market viability, and alignment with the company's business strategy. Ideas are categorized as "strong" or "weak" to determine which concepts warrant further development
3. Concept Development and Testing The selected ideas are developed into more concrete product concepts. This stage involves creating value proposition charts, analyzing competitors, and identifying key product features. The concept is then tested with a small group of potential customers to gather initial feedback
4. Business and Marketing Strategy Development At this point, the company develops a comprehensive business case for the product, including profit projections, marketing strategies, and return on investment calculations. This stage is crucial for securing internal support and resources for the project
5. Product Development The product concept is transformed into a tangible prototype or minimum viable product (MVP). This allows for hands-on testing and refinement based on internal evaluations and customer feedback. The goal is to create a product that meets the identified needs and preferences of the target market
6. Test Marketing Before full-scale launch, the product undergoes rigorous testing:

• Alpha testing: Internal staff and engineers evaluate the product's performance and functionality.
• Beta testing: A select group of customers tests the product in real-world conditions, providing valuable feedback for final adjustments

7.??Commercialization The final stage involves launching the product in the market. This includes setting up production facilities, implementing marketing campaigns, and preparing distribution channels. The launch date is carefully chosen, and the company ensures that customers are adequately prepared for the new product's arrival.

8.??Post-Launch Review Some companies use an eight stage of post-launch review. This stage is typically done right at or soon after launch. Singular or continuous post-launch evaluation is crucial to monitor product performance, gather user feedback, identify opportunities for improvement, and make necessary adjustments. Crucial for the post-launch review is to focus on the NPD process and/or product and question what went well and bad and areas to improve. Many companies do not have a post-launch review, as it may be part of another process like the general portfolio or marketing review.

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Implementing Successful New Product Development

To maximize the chances of success in NPD, companies should consider the following best practices:

1. Customer-centric approach: Involve customers throughout the development process to ensure the product meets their needs and expectations.
2. Cross-functional collaboration: Encourage teamwork between different departments such as R&D, marketing, and production to leverage diverse expertise
3. Clear objectives: Establish well-defined goals and success metrics for the NPD project
4. Balanced strategy and execution: Maintain a equilibrium between strategic planning and practical implementation
5. Product roadmap: Develop a clear timeline and milestones for the product's development and launch
6. Thorough research: Conduct comprehensive market research to understand customer needs, competitive landscape, and potential challenges
7. Iterative testing: Perform multiple rounds of product testing to refine and improve the offering
8. Focused approach: Stay committed to the core product concept while remaining open to necessary adjustments
9. Time management: Set realistic deadlines for each stage of the NPD process and review meetings with key stakeholders
10. Adaptability: Remain flexible and ready to pivot in response to new information or changing market conditions

By following a structured NPD process and implementing these best practices, companies can significantly improve their chances of bringing successful new products to market. This not only drives growth and profitability but also helps maintain a competitive edge in an ever-changing business landscape.

NPD Company Examples

Several industry-related companies were chosen for reviewing their new product development process and some recent new products. Selected industries and companies include: Technology (NVIDIA and Google), Financial Services (Visa and JP Morgan Chase), Consumer (Amazon), Health Care (Eli Lily and Johnson & Johnson), and Materials (Sherwin- Williams and PPG). It was found that all these companies used a 7-step NPD process; no post-launch eight step was noted in the references. Again, post-launch reviews may be part of other processes. Below are some of the new products these industry leaders developed using a NPD process. (9-17)

NVIDIA

NVIDIA is a technology company specializing in graphics processing units (GPUs), artificial intelligence (AI), and high-performance computing. NVIDIA developed a personal AI supercomputer using the NPD process. Project DIGITS is a personal AI supercomputer developed by NVIDIA, featuring the NVIDIA GB10 Grace Blackwell Superchip. It provides AI researchers, data scientists, and students with access to powerful AI computing capabilities, enabling the development and deployment of large AI models on desktop systems and cloud infrastructure.(9)

Google?

Google is a multinational technology company specializing in Internet-related services and products, including online advertising technologies, a search engine, cloud computing, software, and hardware. Google developed the Gemini Artificial Intelligence (AI) model. It is Google's largest and most capable AI model, designed to be multimodal, understanding and operating across text, audio, video, and code. It is flexible, running on devices ranging from mobile phones to data centers, and is integrated into products like Bard and Pixel 8 Pro.19 (10)

Visa??????

Visa is a global leader in digital payments, facilitating transactions between consumers, merchants, financial institutions, and governments. Their new product: Visa Flexible Credential. This product allows users to toggle between debit, credit, rewards points, and Buy Now Pay Later (BNPL) when completing a transaction, providing a versatile and user-friendly payment experience.(11)

JP Morgan Chase???????????

JP Morgan Chase is a leading global financial services firm specializing in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. The company’s new product involves services and hardware. ?JP Morgan Chase launched a biometric checkout service that allows consumers to use face or palm recognition for payments in e-commerce or in-person scenarios. The service aims to streamline checkout processes and reduce friction, with features like loyalty point integration and digital receipts. It has been piloted with merchants and is expected to launch broadly next year.(12)

Amazon?????????????

Amazon is a multinational technology company focusing on e-commerce, cloud computing, digital streaming, and artificial intelligence. One of Amazon’s new products is Echo Pop. Echo Pop is a compact, semi-spherical smart speaker introduced in late 2023, designed for smaller living spaces like bedrooms and dorms. It features Alexa capabilities, can play music, audio-books, control smart devices, and includes built-in eero (mesh wireless networking system) for a Wi-Fi extension.(13)

Eli Lilly?

Eli Lilly is a healthcare company engaged in the discovery, development, and marketing of human healthcare products. Donanemab (branded as Kisunla) is a drug developed by Eli Lilly for early Alzheimer's disease. It is an infusion of a monoclonal antibody administered every four weeks, targeting amyloid in the brain to slow memory decline in patients with early-stage Alzheimer's or mild cognitive impairment.(14)

Johnson & Johnson???????

Johnson & Johnson researches, develops, manufactures, and sells pharmaceutical products, medical devices, and consumer products. One of their many new products focused on stoppage of bleeding in operating rooms. The ETHIZIA Hemostatic Sealing Patch is a treatment option for surgeons to address bleeding and leak sites during surgery, especially in difficult-to-control bleeding situations. It received CE mark approval in 2023 and demonstrated significantly faster bleeding control in clinical trials.(15)

Sherwin-Williams??????????

Sherwin-Williams is a global leader in the manufacture, development, distribution, and sale of paints, coatings, and related products. Sherwin-Williams used a NPD process to develop a Heat-Flex? ACE (Advanced CUI Epoxy) which is an ultra-high-solids epoxy developed with a functional chemical enhancement (addition of MIO- micaceous iron oxide) ?for mitigating corrosion under insulation.(16)

PPG??????

PPG is a global supplier of paints, coatings, and specialty materials. The company used the NPD process and launched ENVIROCRON? Primeron powder primer series in 2023. The primers, consisting of epoxy or polyester resins, corrosion inhibitors, and specific additives are designed to provide high corrosion resistance for metal substrates such as steel, hot-dip-galvanized steel, metalized steel, and aluminum. The products also offer corrosion protection for multi-layer systems, extending lifespan and preserving metal integrity.(17)

Summary

New product development (NPD) is a critical process for companies to remain competitive and drive growth in today's rapidly evolving marketplace. By following a structured approach that includes idea generation, screening, concept testing, business analysis, product development, test marketing with customer interactions, and commercialization, companies can significantly improve their chances of launching successful products. The NPD process not only helps determine product acceptability and improve quality, but if done correctly, reduces expenses, enhances marketing strategies, fosters innovation, and increases profitability.

Key industries like technology, finance, consumer goods, healthcare, and materials all employ NPD processes, albeit with variations tailored to their specific needs. Companies such as NVIDIA, Google, Visa, Amazon, Eli Lilly, Sherwin-Williams and PPG have successfully leveraged NPD to bring groundbreaking products to market, from AI models to biometric payment systems to corrosion-resistant coatings.

However, the NPD process is not without challenges. It requires significant resources, carries inherent risks, and demands a delicate balance between innovation and market demands. Communication is also key in the process. As product life cycles continue to shorten, mastering the art and science of new product development becomes increasingly crucial for business success, becoming more profitable, and maintaining a competitive edge in an ever-changing business landscape.

? 2025 All rights reserved. This article is copyright protected. Please contact author about authorized use.

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References

1.?????? Value Analysis Tear-Down: A New Process for Product Development and Innovation, Yoshihiko Sat and J. Jerry Kaufman, Industrial Press, January 2004

2.?????? 8 Stages of New Product Development Process, 04 Jun, 2024; Geeks for Geeks, https://www.geeksforgeeks.org/8-stages-of-new-product-development-process/

3.?????? New Product Development (NPD): New Product Development Process In A Nutshell, Gennaro Cuofano, April 16, 2024; FourWeekMBA, https://fourweekmba.com/product-development/

4.?????? What is new product development? Know all the benefits, IdeaUsher, https://ideausher.com/blog/new-product-development/

5.?????? “Winning at New Products: Creating Value Through Innovation”, Robert G. Cooper, Basic Books, July 2011

6.?????? New product development: 7-step guide, Atlassian, https://www.atlassian.com/agile/product-management/new-product-development-process

7.?????? New Product Development: from Initial Idea to Product Management, Marc Annachino, ?Butterworth-Heinemann, September 2003

8.?????? “Leveraging Constraints for Innovation: New Product Development Essentials”, Sebastian Gurtner, Jelena Spanjol, Abbie Griffin, Product Development and Management Association series, Wiley Press, 28 August 2018

9.?????? NVIDIA Puts Grace Blackwell on Every Desk and at Every AI Developer’s Fingertips, Jan 6, 2025, NVDA Press release, https://nvidianews.nvidia.com/news/nvidia-puts-grace-blackwell-on-every-desk-and-at-every-ai-developers-fingertips

10.?? 23 of our biggest moments in 2023, Google Technology, The Keyword AI Blog, Molly McHugh-Johnson, December 20, 2023, https://blog.google/technology/ai/google-product-launches-2023/

11.?? Visa seeks to “revolutionise the card” with array of new product launches, Tyler Pathe, Fintech Future, North America Edition, 20th May 2024, https://www.fintechfutures.com/2024/05/visa-seeks-to-revolutionise-the-card-with-array-of-new-product-launches/

12.?? JPMorgan to launch biometric checkout next year, Payments Dive, Caitlin Mullen, March 11, 2024, https://www.paymentsdive.com/news/jpmorgan-payments-biometrics-checkout-face-palm-pay-popid/709844/

13.?? Every new device Amazon has launched in 2023—and all the new devices coming soon, About Amazon News, Dave Johnson and Connie Chen, September 27, 2023 https://www.aboutamazon.com/news/devices/amazon-new-devices

14.?? Lilly sales surge on obesity, diabetes drug demand, BioPharma Dive, Jonathan Gradner, https://www.biopharmadive.com/news/lilly-mounjaro-zepbound-obesity-diabetes-drugs-2023-earnings/706673/

15.?? Johnson & Johnson 2023 Health for Humanity Report, Medtech Innovation, Bleeding Management, https://healthforhumanityreport.jnj.com/2023/global-health-equity/medtech-innovation.html

16.?? Sherwin-Williams Launches Robust Ultra-High-Solids Epoxy CUI-Mitigation Coating, Strengthens Current Lineup for the Best Resistance to Corrosion Under Insulation, Sherwin-Williams Media Center News/Heat-Flex CUI-Mitigation Coatings Press Release, June 1, 2023, https://industrial.sherwin-williams.com/na/us/en/protective-marine/media-center/news/heat-flex-mio-enhanced-advanced-cui-epoxy.html

17.?? PPG introduces PPG ENVIROCRON Primeron powder primer series for high-performance corrosion protection, PPG Press Release, March 14, 2023, https://news.ppg.com/press-releases/press-release-details/2023/PPG-introduces-PPG-ENVIROCRON-Primeron-powder-primer-series-for-high-performance-corrosion-protection/default.aspx