“The future ain’t what it used to be.”
Sometimes product development projects do not live up to their initial promise. Knowing when to shut down a project can be an essential ingredient to success.
Most new product ideas start with high expectations, but over time, some start to fade. Worse, this process often happens a bit at a time until one day you realize you have wasted a lot of time, money, and energy on a project that should have been killed long ago.
Having a defined product development process with “gates” at the end of each step can be an effective method for avoiding this problem. The classic product development method consists of the following steps:
Requirements Document, Conceptual Design, Detail Design, Design Verification Testing, and Pilot Production
Every project should start with a Requirements Document, and many should and will end there. Sometimes it is just not possible to meet all the requirements for the available budget, and it is essential to be truthful and not succumb to wishful thinking.
Sometimes it is not possible to know if a product can be successful until well into the Conceptual Design phase. A word of caution: Know the difference between technology development and product development (request our white paper here) and delay further product development until the technology can be proven.
The critical risk factor at the Detail Design phase is unit cost and development cost. Break Detail Design into two phases. In phase one, produce a drawing tree of the product. This drawing tree details all the components and subassemblies in the product and can be used to validate the unit cost with manufacturing and development costs with engineering. After confirmation, the drawing tree can be used as a project plan to define the scope of each subassembly and the interface between each subassembly.
Having a formal gating process for each step in the product development is the best way to prevent negative ROI. At each gate point, there are four possibilities:
Continue: Nothing is learned that changes the product vision, and it should continue to the next stage.
Pivot: It is now clear that the product in its current incarnation will not result in a positive ROI; however, we can change the product vision somewhat (a pivot) so that it can produce a positive ROI.
Refine: It is now clear that the product in its current incarnation will not result in a positive ROI; the project requirements/conceptual design/detail design should be refined.
Eliminate: It is now clear that the product in its current incarnation will not result in a positive ROI; the project should be shut down.
For more tips on avoiding product development mistakes, read our white paper: Top 10 Reasons Why Product Development Projects Fail.