In Bringing Products to Market, Speed is of the Essence
The cover article in the March 27, 2006, BUSINESS WEEK, provides excellent insight for small-to-medium-size businesses seeking to streamline production and distribution systems to gain competitive advantage.
The article is entitled “Speed Demons; How Smart Companies Are Creating New Products – And Whole New Businesses – Almost Overnight.” Authors Steve Hamm and Ian Rowley observe:
“The pace is picking up across such industries as retailing, consumer goods, software, electronics, autos and medical devices. In many realms, the time it takes to bring a product to market has been cut in half during the past three or four years. St Nissan Motor Co., the development of new cars use to take 21 months. Now, the company is shifting to a 10 ½-month process. In the cell phone business, Nokia, Motorola and others used to take 12 to 18 months to develop basic models. Today, it’s six to nine months.”
This new “speed” paradigm is a function of a number of variables:
- The ability of a marketer to select from great numbers of suppliers and channel members.
- The ability to connect with technologies suppliers all over the globe through the Internet.
- A riskier management philosophy where it’s OK to fail once in a while because if you don’t it means you’re not trying hard enough. It’s the laggards who end up the losers, they write.
In designing production and distribution systems, the authors present several “Best Practices” that modern marketing companies of all sizes should embrace.
Find New Ways to Spot Hits. The long methodical Procter & Gamble system of flushing out ideas, testing and researching, won’t work today. Unless a company is prepared to pounce on a new idea quickly, its competitors will steal the initiative. Smart companies of all sizes must constantly be mindful of opportunities. If something works in one industry, maybe it can work in other industries.
Keep Your Launch Teams Agile. The traditional “gauntlet” of presentations, reviews and refinements just slows down the process, according to Hamm and Rowley who advocate a more informal process where a few key people meet regularly – sometimes away from the office. Raving Brands, an Atlanta-based fast-casual restaurant franchiser, provides a model. CEO Martin Sprock says, “We take a lot of pride in moving quickly and not having a committee sitting around and planning things.” If an approval is needed, it’s often a cell phone call away.
Break Your Unwritten Rules. “Every company has them (unwritten rules). They’re those mental crutches that say this is the way we do it because this is the way we’ve always done it,” write Hamm and Rowley. They use the example of California’s Jackson Enterprises, a wine maker, when confronted with the worldwide glut of wines in 2004. Jackson decided to break all its rules and created two new brands in a matter of weeks. Suppliers and distributors were brought in for brainstorming sessions that included two Stanford students with no background in wine. Ten crazy ideas were refined to two and the new products both sold more than 100,000 cases – 10 times more than initial projections.
Hand Off Tasks To Specialists. Hamm and Rowley assert that “Outsourcing companies don’t just do things more cheaply anymore; they can do them better and faster.” Outsourcing specialists are everywhere in both manufacturing and distribution. The smart company will develop a stable of capable outsource specialists.
While Hamm and Rowley acknowledge that speed is the desired result, they realize that most companies are mired in the conventional wisdom; “bogged down in bureaucracy and old models of doing things. That’s a recipe for trouble.” They quote tech industry consultant Bruce Richard of AMR Research, Inc. – “There are two kinds of businesses: the quick and the dead.”