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Success by Design: Cost of Product Development vs. Movie Production

A major issue encountered in every new product development is the non-recurring development expense (NRE) required to develop a new product. Small evolutionary changes are safe and less expensive, but they are never as successful as a groundbreaking innovation. Making a major funding commitment up front is always harder to justify, but small incremental steps often result in big compromises. The cost of product development is also a function of the process used and the effectiveness of the organization doing the development.

Traditional development processes that start with “feature lists” often result in much effort being wasted on features the customers never use. If movies were made the way most tech companies develop new products using ad hoc processes, movie production would cost billions, not millions. But it doesn’t have to be that way.

A little advanced planning can go a long way toward a successful new product release. In the movie business, production is extremely expensive, so that phase is preceded with a plan. Long before filming begins, they start with a concept, then a script, and a story board to determine what scenes need to be produced and when.  Then they plan the process to increase efficiency of filming operations.  For example, they schedule all scenes to be filmed in the same location at the same time, not in the order they occur in the film.

The same concepts can also be applied to product development.  The product process at most firms reminds me of a comic in a software magazine: the manager tells his programming staff to start writing code right away, while he goes to find out what the code is supposed to do.  Before development begins, all the stakeholders should have a common vision of what the end result will be.  In order to gain that common vision, the requirements and customer needs must be understood and clearly defined long before considering the design, product characteristics, and features.

Ideally, an initial product design will include only those features that will actually be used, and avoid wasting resources for development of unnecessary capabilities.  Feature lists and focus groups are not effective tools for defining a new product.  In most cases the target users cannot effectively define what they need, but they know it when they see it, and vote with their wallets. Careful observation of target customers usually reveals the truth about what they’re buying.  Hence the classic example: “What she wants is a 1/4″ hole in the wood, not a 1/4″ drill.” As a result, simply asking what the customer wants is frequently ineffective, and often misleading.

Once the product is adequately defined, the design process must allow the development team to work with reasonable efficiency, and the most common problem is poor communication among team members.  Open, effective communication between team members is critical and can make the difference between success and failure.

One of our product development clients insisted on micromanaging every tiny detail of his project, insisting everything be done his way, and punishing his staff if they make an error.  As a result, none of his employees take responsibility for anything and when something inevitably goes awry, no one will tell him about it.  When he finally does find out, instead of focusing on fixing the problem, he focuses on identifying the person to blame.

Most of the time, his people know exactly what the cause is and what needs to be done.  But they won’t speak up, in fear of retribution.  Needless to say, most of the developers they hire do their best to find another job as soon as they can.  Not surprisingly, his projects are always over budget and behind schedule.

Another of our product development clients has a limited grasp of the technology, but encourages a free and open dialog between his staff and vendors, resulting in faster and more effective product development efforts.

There are many resources available to avoid these problems for firms that are willing to put aside egos and obtain objective evaluation and assessments from outside sources can see the forest despite all the trees.

To learn more about what works and what doesn’t in the product definition and early phases of development, read “The Inmates are Running the Asylum” by Alan Cooper.  It’s a short history of bad designs followed by some recommendations for applying the concepts used in movie production to product development.

Starting next time I’ll relate some of the movie production processes that can be applied to product development.

– Ken

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