Inside-Out New Product Development is least way on several levels. Least Expensive, Least Time, and Least Controversial.
And Least Effective.There must be a better way.
Let me begin by saying clearly that I’m criticizing the process of Inside-Out product development. I am not criticizing the practitioners! Most of us want to contribute to great outcomes and work hard at it.
“People don’t want to fail. We let them.”
-Jeremy P., a former leader and mentor
Inside Out product development is when happens when internal constituencies drive the process. Inside out product development results in undiscovered and underserved customer needs. Below, I summarize the vital interests I’ve observed:
| Constituency | Vital Interest |
|---|---|
| Engineering | They justifiably want to design. Anything that gets in the way of their core skill set is wasted time. |
| Sales | They are in contact with customers and often believe they can most effectively speak for the customer need. Sometimes, they believe they lose face internally if they are not seen as the expert on the customer. |
| General Management | They need revenue and profit now. |
| Finance/Accounting | They are under pressure to control costs. |
| Manufacturing | All too often, they are at the end of the process and have to execute miracles for an on-time launch. They can’t get finalized drawings soon enough. |
Why Inside-Out Product Development rarely works
Significant blind spots arise when internal constituencies drive new product development. A more nuanced view looks like this:
| When New Product Development is Internal Constituency Driven… | … There are Blind Spots to Success |
|---|---|
| Sales | •Chasing Competitors’ Products •Features often are bolted on to existing platforms •Chasing market price of existing product. Margin pressure. •Customer’s interests are undiscovered and underserved |
| Engineering | •Innovation may not address the customer’s actual need •Cost of product may not be linked to customer’s actual need •Customer’s interests are undiscovered and underserved |
| Manufacturing | •Simple-to-manufacture may not address the customer’s actual need •Cost reduction may remove value from customer’s actual need •Customer’s interests are undiscovered and underserved |
The Most Important and Least Heard Constituency
The end-user customer is the most important and least heard constituency. Customers don’t proactively create an urgent problem of begging to give you insights about their business! Reaching out to customers to garner their input is classic Non-Urgent and Important work. Consider these headwinds:
- It’s time consuming and expensive to send a team to interview a representative sample of end-user customers.
- The selling skill set is different from discovery of new product requirements. Few organizations invest in this skill set.
- Getting time with end-user customers is difficult. Their time is precious. And we’re still grappling with post-COVID-19 workplaces.
- The end-user customer rarely can communicate their needs in the language of a product specification.
Key Takeaway:
- Inside-Out Product Development is the most convenient, yet least effective means of product development.