Basics of Product Development Management (PDM)

Ever find yourself needing to educate an audience on the basics of PDM? Wish you could concisely explain the basics of strategic PDM versus project PDM? Could you explain how PDM and Project Management differ? Then this article is for you.

Attempting to explain Product Development Management (PDM) to an audience unfamiliar with the discipline can, at least initially, seem to be too difficult a challenge. After all, New Product Development is a broad topic ranging all the way from the how to discover ideas to how to manage the ideas (or product portfolios) once they have entered into the decline stage. It would be quite easy to digress into discussions regarding research methodologies, product lifecycle, pipeline management, technology development, or even Six Sigma or TQM.

However, by following a few basic presentation principles, focusing on the theoretical approach, and following the sample template provided in this article, you'll find that it's not as daunting a task as you may have initially thought.

To make it as easy a process as possible, I have provided a real life example outline. I originally created this outline while volunteering on a marketing committee for a non-profit organization. Afterward I found myself using it every time I ran across an organization or committee that was grasping for a proven approach around which they could organize their efforts. I have found this particular version to be the most effective when talking to an audience that has very little or no understanding of PDM.

Organizing your Presentation
Organize your presentation in to two large sections.

In the first section provide a very high level view of the theory around Product Development Management. In the example provided, the first section explains that PDM is a cyclical, 4-stage discipline that can be applied to strategic planning activities as well as to single project or product development activities.

So the audience will be able to follow easily, example activities have been defined in the attached presentation as either "strategic" or "tactical". This helps with two things; first, it will help you keep the audience on track. If your goal is to explain the tactical view of product or program development, then you can derail strategic discussions by noting that those topics fall outside of the presentation scope according to these definitions. It also helps the audience categorize their own specialty like marketing communications, product management, technology, or manufacturing under the PDM framework.

In the second section, provide more detail. Sometimes, once listeners understand the basics, they want a bit more information. In spite of this, don't be tempted to start with the detail section first. If you do, you will find yourself bogged down explaining the difference between strategic and tactical applications, how some tool like QFD fits into PDM, or when each step is taken rather than communicating the PDM theory, process steps, and overall benefits of adopting the PDM approach.

Once your listeners are ready, and the PDM "vision" you're attempting to explain is clearly understood, then move on with the more detailed explanations found in the second section. For this section, focus on providing the tactical, or day-to-day activities of someone involved in implementing the PDM approach. If your audience can envision what they will be doing each day, what questions they will be trying to answer in each step, and who should be assisting them with their efforts during each stage, it will be easier for them to understand the process.

In the example provided, I outline the primary goal of the product development manager at each stage, the questions they are trying to answer, the groups they will be interacting with, and what they are primarily responsible for doing at each step. To make the presentation even more valuable to your audience, I recommend you modify this second section so it reflects the hosting organizations language or project names.

I have found that some audience members, although searching for a proven approach for organizing their efforts, are worried that they may have to "toss out" everything they have accomplished to date if they choose to adopt a PDM approach. To address this, sometimes I have added a third section. Created with the assistance of an organization employee, I compare the organizations current activities or completed projects to the PDM process. This tactic has proven to be an excellent way to convey how previous efforts and outcomes can be built upon while adopting a more rigorous, PDM based, approach to development.

Knock 'em dead!

Sample Presentation
Below is the sample presentation. Try to keep your slides brief with only three or four bullet points per page. Once you move into the second section you have a bit more license. You can provide a bit more detail on the slides so listeners can refer back to it afterward.

Section One - the overview of PDM Theory

Slide One : Product Development Management (PDM)

• It's a single discipline (or process approach) to developing an organizations programs, products or strategy

• There are four major phases (or stages)
- Discovery phase
- Planning phase
- Development phase
- Commercialization phase

• There are two perspectives
- Business level view (strategy development)
- Project level view (program or product development)

Slide Two : Four Components - The 2 Perspectives

• Discovery
- Business level: Budget reviews, portfolio reviews, and strategic direction setting
- Project level: Market potential, forecasting, feasibility, PIC

• Planning
- Business level: Pipeline loading, resource planning and forecasting
- Project level: Market verification, Specifying technologies, determining resource requirements, and validating time-line.

Slide Three : Four Components - The 2 Perspectives

• Development
- Business level: feature road maps, program architecture, program lines or families, and program platforms.
- Project level: physical development, prototypes, market plans, production plans, and market tests.

• Commercialization
- Business level: pipeline management, portfolio criteria, & program portfolios
- Project level: 3p's, partners, development & assumptions assessment, migration plan, and plan for design and phase out

Slide Four : Discovery - Short Answer

• Your goal
- Determine the objectives for your product or program and reach agreement on the customer program, and business requirements or constraints

• Four major topics of concern
- Market potential
- Forecasting
- Feasibility
- Program innovation charter

• Usually addressed by a team of "one"

• Team leader activities
- Solicit input & feedback from various departments or external experts
- Present findings to approval body of organization

• Note: stage-gate process is usually already in place

Slide Five : Planning - Short Answer

• Your goal
- Ensure your product or program is aligned with, and supports, your organization's strategy

• Four major topics of concern
- Market verification
- Specifying technologies
- Identifying resource requirements
- Validating a time line

• Leader + a skeleton team

• Team leader activities
- Lead in all four areas
- Solicit input & feedback from various departments or external experts
- Present findings to approval body of your organization

Slide Six : Development - Short Answer

• Your goal
- Actual program creation, in prototype form first to test assumptions

• Five major topics of concern
- Identifying and allocating resources
- Marketing plan
- Product plan
- Market testing
- Project management

• Leader + a complete team

• Team leader activities
- Co-lead in the five areas
- Solicit input & feedback from team members and external experts
- Present findings to approval body of your organization

• Note: development based "stage-gate" sub-process usually kicks in

Slide Seven : Commercialization - Short Answer

• Your goal
- Driving the product or program so it fulfills its strategic role for the organization

• Five major topics of concern
- Price, promotion, and distribution plans finalized
- Partner involvement / alignment
- Process review (assumption & development review)
- Development road map sometimes called a migration plan
- Deciding on plan for ending the life of the program

• Leader + a complete team

• Team leader activities
- Co-lead in the five areas
- Solicit input & feedback from team members and external experts
- Present findings to approval body of your organization

Section Two - more detail for the more advanced audience

Slide One : Discovery - Long Answer

Market potential
- Two key areas: consumer needs & market potential
• Assists with defining goals
• Assists with defining performance parameters
• Assists with defining target market

- Key questions regarding needs identification
• Who to study; Where to study them; How to study them
• How to capture the information; How to analyze the information

- Key questions regarding market potential
• Who would use the program? Who would use the program the most?
• Who would value the program the highest?
• Who would be the most likely to not use the program? Who would only use the program only if persuaded?

Slide Two : Discovery - Long Answer

Forecasting
- "Guesstimate" of how many consumers would use & how much they might pay for the program through time (0 - 3 yr)

Feasibility (determining achievability)
- Key questions regarding feasibility
• Do we have the technology? Does the technology deliver the benefits needed? What is the cost of acquiring new technology? • Are there intellectual property issues? Is our new process patentable, copyright-able, or trade marketable?

Program innovation charter
- Statement of team's understanding of the organization strategy
- How this program (product) supports that strategy
- A detailed, cross-functional work plan, all of which initiates the team's role in contributing to strategic objectives

Slide Three : Planning - Long Answer

• Market verification
- Customer and market research
- Verifying specifications have been executed properly
- Verifying that customer needs are met by program

• Specifying technologies
- Developing a technology development plan based on discovery

• Identifying resource requirements
- Developing a detailed resource requirements plan
- Verifying assumptions with cross-functional experts
- Communicating the plan to approval body of the organization

• Validating a time line
- Cross-functional verification of time estimates
- Details requirements from prototype changes, product development to launch, and post launch

Slide Four: Development - Long Answer

• Identifying and allocating resources
- Communicating team resource needs to stakeholder departments
- Cross-functional alignment: acquiring agreement for resource support

• Marketing plan
- Finalizing price, promotion, and distribution plans
- Soliciting input from sales, partners, and manufacturing or developers
- Communicating team resource needs to outside departments
- Acquiring cross-functional agreement - resource (funding) agreement

• Product plan
- Documenting the migration of product aspects through time
- Communicating anticipated upgrades or changes
- Reflects competitor and consumer reactions
- Cross-functional alignment: acquiring agreement

Slide Five: Development - Long Answer

• Market testing

- Program feature testing (qualitative)
• Diagnostic testing using alpha, beta, gamma testing
- Alpha: in-house; Maximum secrecy; Least cost
- Beta: "real" customers or users, specifically recruited as testers; Aware the
products are prototypes
- Gamma: "real world" reading of customer reactions; Product marketed normally; Designed to measure user response to the product and its marketing; Not designed to provide a reading of sales volume

- Program feature & sales testing (quantitative)
• Conjoint analysis
- Highly sophisticated tool used in later development stages
- Measures relative importance of various features (including price)
- Key questions: what is the optimal bundle of features? What does the price sensitivity chart look like? What price provides the optimal profit? How much sales will the new product take from competitors? How much will the new product cannibalize my current product? What happens when the competition copies us? What happens when the competition changes their price
- Incorporate diagnostic and sales & market research findings in to plans

Slide Six : Development - Long Answer

• Project management
- The process of documenting tactical duties & responsibilities with dates of delivery and names responsible party

• Include steps for the marketing plan, product plan, and market testing details
- Used to measure team progress

• Provides estimates on likelihood of achieving final launch date
• Documents reasons for missed milestones

• Archives information for final project assessment
- A "living" document
- Software available

Slide Seven : Commercialization - Long Answer

• Price, promotion, and distribution plan review

- Metrics:
• Estimates on volume, cost, & profit are evaluated against actual values
• Estimate of discovery phase cycle time are evaluated against actual time

- Goal is reducing time to market of new products

• Process review (assumption & development review)

- Metrics
• Total time, total cost
• Quality obtained as defined by customer and team
• Resource utilization, resource availability
• Filing of copyrights and/or or patent applications (or continuations)

Slide Eight: Commercialization - Long Answer

• Initiate operational activities associated with next three life-cycle stages

- Growth
• Focus - Performance assessment, product value measurement, & product introduction assessment (financial)

• Activities
- Measure investment versus sales revenue, profit margins, market penetration, the percentages of trial and repeat sales achieved, or sales volume
- Compare to project projections

• Next step
- Propose strategies and tactics to be implemented when growth slows and product enters the mature stage

Slide Nine : Commercialization - Long Answer

- Maturity

• Focus
- Measure & monitor ongoing investment of CREATE versus profit

• Activities
- Develop program changes, improvements, line extensions, and reducing costs

• Next step
- Enter discovery phase for replacement program

Decline
• Focus
- Program retirement or exit

• Activities
- Transition or retire; Coordinate intro of replacement

• Next step
- Communicate with customers and suppliers to ensure orderly transition to replacement

Slide Ten
Good Luck!