Over the past year we have worked with a number of companies helping to improve their new product development efforts. These new product development consulting projects have ranged from concept ideation, assessment of development processes, portfolio systems design, project management, and gate review management. Many of these projects were very successful from the clients’ point of view and rewarding to us to be a part of their success. The results were dramatic with one client reducing their new product development cycle time from 3 years to six months! Another client identified a new product platform that will increase their overall revenue by 20%. Still another increased the profitability of their new products by 50-80% by conducting customer value analysis.

These client new product development successes where authentic because they delivered real shareholder value — improved financial returns. Like the difference between silver or silver plate they may both have the appearance of value but only silver is authentic, not something with a thin veneer of value like silver plate. The difference between silver or silver plate is best determined when a chemical (Nitric acid) is applied on the surface of the metal. A black color means it is a cheap base metal and not authentic silver. How do you determine if your new product development effort is silver or silver plate?

Based on my experience over this last year authentic new product development programs have several common factors while underachieving programs where missing these factors.

Factor 1 – Measurable and Accountable Senior Management

In the successful new product development initiatives senior management was heavily engaged in establishing the goals and objectives with aligned measurement systems. The easy part for senior management is making themselves visible about the importance of the NPD initiative. Today this is commonly done via a “Presidential” activity such as an email, a speech at a national sales meeting and pictures in the company newsletter. No matter how well these tasks are accomplished, they remain largely of low value like silver plate. Real value is achieved when senior management has a single-minded quest for accountable performance metrics. The classic problem is not making the business units/divisions/SBU accountable on a short, medium and long term basis. The senior management team needs to make the corporate NPD objective very real to the next level of management and make sure these are very task objectives. When the NPD initiative is new for a company it is very important to make them accountable, actionable and attainable.

Factor 2 – The Trivia Many

A wall of silver-plated platters is not worth the value of one silver platter. Bad project concepts seem never to die. These bad projects continue to resurrect themselves time-and-time again. This poor bad practice behavior seems to start at the grandfathering phase of the beginning of a NPD initiate and continues from one project review meeting to another. The result is that there are too many below average and low value incremental projects continuing to plague NPD pipelines. The best performing companies seem to do a much better job of making sure the active NPD projects have real value and not just silver plate value. This quest in selecting a superior project is built not based on opinions or some sort of “strategic” reason but based on real metrics. The sliver standard of project selection metrics evolves around customer value and the business strategy. We all know actions speak louder than words as an example, after considerable training and months of elapsed time, at a project review meeting for a company most of the projects were lacking critical information to make a selection decision. However, when this management team made their project selection, they were not deterred by the lack of measurable information. The sad element was the lack of discernment between the real thing and silver plate.

There is a difference between silver and silver plate and in new product development it is the “silver” standard.