L. A. SECTION ENTERPRISE CHAPTER

The AIAA L. A. Section Enterprise Chapter gathered on March 17, 2009 to hear Tom Wien expound on the process a business should follow when deciding whether to introduce a new product (or service), and the characteristics of disciplined product and market development processes once a positive decision has been made. His term for describing this cycle of activities is "concept to commercialization", and it consists of three major phases, which in his terminology are:

1. Do a Reality Check
2. Illustrate the Vision
3. Execute with Discipline

Wien has extensive experience helping companies to use a disciplined approach that minimizes guesswork in deciding whether to introduce a new product. He stresses the need for checks and balances in all phases. When working with clients, he utilizes guided and constrained brainstorming in evaluating concepts, both quantitatively and qualitatively. He also uses focus groups but limits them mostly to the task of identifying key product attributes of a qualitative nature. Illustrating his techniques, he pretended that Enterprise Chapter attendees were clientele he would be advising, and quickly engaged them in interactive discussion.

Phase 1 – Reality Check

In the first phase, reality check, Wein uses a "concept scoreboard" to evaluate the concept of the product. The evaluation takes place in five areas: buyer interest, product differentiation/specs, category size, product fit within the company, and customer opinion. These five areas are prioritized relative to one another by assigning to each a weighting value such that the sum of the five values adds up to ten. Within each area, the product is given a score from zero to ten. The maximum weighted score that any product can achieve is therefore 100; i.e., a score of ten in every area times the sum total of the weighting values (ten).

The buyer interest area indicates the likelihood that trade and distribution channels will push the product. Product differentiation/specs rates your product against competition to determine whether it has unique and sustainable advantages over the others. To illustrate the process of differentiation, Wien used an example of smartphones, rating Apple iPHONE versus BlackBerry Bold versus HP iPAC Data Messenger as good (2 points), better (6 points), and best (10 points) on each of the following product attributes: screen size/type, keyboard size and touch, multi-media capability, e-mail capability, and length of talk time. The total points were then divided by the number of attributes to arrive at an average score for product differentiation. The category size area earns a high score if the market for the product exhibits a strong growth trend and longevity. The product fit area consists of an assessment regarding the ease with which the product can be assimilated into the production and marketing operations of the company. Does the venture represent a business for which the company is noted? How successful is the assimilation likely to be? Opinion rates the degree of customer enthusiasm, or lack thereof, about the product. In the smartphone case, Wien assigned a weight of 3 to both buyer interest and differentiation, 1.5 to both category size and product fit, and 1 to opinion (adding to 10). Of the three products rated, the highest score was 95 and the lowest was 64. How your product compares to competitive products is very important in deciding whether to proceed further.

If your product concept is validated, the next step is to validate the financial soundness of the potential venture. The most important challenge here is to achieve realism in the estimates. Factors used to estimate future orders include buyer feedback, results of consumer research, market share data based on company experience. If these three sources result in contradictory sales estimates, caution is in order! Other factors affecting the viability of the project include the size and timing of the investment the company is willing to make, and the production capacity and availability of facilities. The return on investment must be based upon a realistic estimate of revenues, costs, and cash flows over a time frame including development, production, and a realistic sales lifetime.

Phase2 - Illustrate the Vision

Once the reality check is met satisfactorily, the next step is to illustrate the vision. A large part of this phase is a marketing plan that lays out various levels beginning with objectives, an analysis how to deal with competition, and metrics to measure performance. The next level deals with accessibility and positioning in the market. Successive levels deal with the design of distribution channels and facilities, their promotion, and finally, full implementation.

Complementary to the marketing plan are a product development plan, a supporting production facility plan, and a financial expenditure plan, all with appropriate milestones representing steps to completion.

Phase 3 – Execute with Discipline

At its heart, Phase 3 is all about project management to ensure that the project remains on schedule and within budget. Wien has found that Microsoft Project is not used as much for project control as one might expect or updated as often as it should be for good control. He has therefore developed a simpler reporting system to help management track the progress of the project more easily. Each report statuses the project as of a certain date. It lists the major task groupings, identifying a leader and helper responsible for each grouping. Each grouping is assigned a completion date, and consists of various phases. Completion dates for the processes or events described in each phase are specified in terms of the number of days remaining from the date of the report. Completion dates less than 10 days from the date of the report are further highlighted.

With his "Traffic Light"™ Project Tracker, Wien helps management keep all project leaders "on the same page", thereby enhancing the execution of the project.

To gain a better understanding of the reality check, the product differentiation process and the Traffic Light™ Project Tracker report, go to the AIAA Enterprise home page and click on the Archive of Speaker Presentations at Chapter Meetings and download the wien.pdf slides from the 3/17/09 meeting. The graphics will add special meaning to the word descriptions above.

Guido Frassinelli 05/04/09