Blockbusters: The Five Keys to Developing GREAT New Products

by Gary S Lynn, Richard R Reilly

Overview

What Makes a BLOCKBUSTER?

More than half of all new products fail in the marketplace. But companies can dramatically improve their odds of success by implementing five key practices — all within their control. Drs.Gary Lynn and Richard Reilly share the results of a ten-year research study illustrated by the inside stories of nearly fifty of the most successful products ever created.

Lynn and Reilly explain the five keys for companies wishing to develop the next blockbuster. Without these crucial elements a blockbuster new product is virtually impossible:

Compelling Product Vision • Product Improvisation • Information Exchange• Senior Management Commitment • Teamwork

Product Details

ISBN-13:	9780060084745
Publisher:	HarperCollins
Publication date:	08/14/2003
Edition description:	2002 First Edition
Pages:	272
Product dimensions:	5.50(w) x 8.69(h) x 0.68(d)

About the Author

Gary Lynn, Ph.D., is one of the leading scholars on new product development. Formerly a design engineer with high-security clearance at General Electric, he founded the Innovation Research Institute, a company that designed and launched new products in the medical field.

Richard Reilly, Ph.D., a nationally-recognized expert on individual and team assessment, was a research psychologist for Bell Laboratories and AT&T. Lynn and Reilly are professors at the Stevens Institute of Technology in Hoboken, New Jersey.

Read an Excerpt

Chapter One

How Blockbusters Happen

Our Research -- and Why We Did It

Great companies succeed and endure because they continually produce great products. Companies fail because they have forgotten this simple truth. Manipulating inventory values, accelerating depreciation schedules or moving corporate headquarters offshore does not create value. Even establishing world-class customer service will do little if a company's products or services are inadequate. To produce real value, companies must develop and launch great, blockbuster products -- this is the heart and soul of any successful business. How to do just that is what this book is all about.

How do blockbusters happen? Is there a way to analyze what blockbuster new product development teams do right? And can your teams learn from those extraordinarily successful teams? We have been looking for the answers to these questions for over a decade. In the process, we have investigated the policies and practices of more than seven hundred new product development teams-including several who created some of the most successful products ever developed that became household names, such as the Black & Decker Dustbuster, the IBM PC, and Corning optical fibers.

The blockbuster teams whose keys to success we uncovered had enormous impact not only on their companies, but their industries as well. Consider: Colgate Total toothpaste became the best-selling toothpaste in its first month on the market, knocking Crest from its vaunted position after thirty-five years. Motorola's cellular telephones created a whole new multibillion-dollar division for the company. AT&T's transistor ushered in thecomputer revolution. The Zip Drive computer storage device saved Iomega from near death in 1994. CAT scanners allowed General Electric to dominate the medical imaging field for two decades. Plain paper photocopying provided Xerox with a platform upon which it created a new industry. The Apple IIe cemented Apple's leadership in computers for six years -- several lifetimes in the world of high tech -- and in the process made personal computers a reality for the home user. The Handspring Visor, a personal digital assistant, captured 25 percent of the U.S. market a mere month after launch. Corning's optical fiber turned the company around from a glass manufacturer to a provider of telecommunications equipment and, along the way, revolutionized long-distance communication.

How did they do it? What were their "secrets"? Did the companies and new product development teams that developed these blockbuster products have anything in common? And if they did, can we generalize from their formula for success so that other companies can follow it when creating new products? The answer, in a nutshell, is yes. After analyzing new product development teams from disparate companies big and small that make everything from Army tanks to chewing gum to computers, and after studying teams that have created blockbusters and those that have developed flops, we believe that we've discovered their "secrets," the five critical practices that blockbuster teams follow and that losers do not.

We have reached our conclusions only after a decade-long journey that began in 1992 when Gary, a former R&D director, launched a study about how new product development teams functioned. In 1996 he accepted a position at the Stevens Institute of Technology, where Dick, an organizational psychologist whose specialty is statistics, was a professor. Within a month, we decided to pool our expertise, and began what would turn out to be a ten-year research study of how highly successful new products are brought to market.

We found that almost no research had been done on the subject of how blockbusters are developed and commercialized. Yes, there were books and articles on incremental innovation, radical innovation, breakthroughs and disruptive innovation, but no one had written about how companies develop and commercialize products that become blockbusters -- and compared and contrasted their strategies with those of not-so-successful products, as well as downright failures. Only when you did the two could you accurately determine those factors that are particularly critical for extraordinarily successful new products. We set that as our goal. Thus, ours is the only multiphase, systematic, large-scale study of extraordinarily successful, award-winning-blockbuster-successes, as well as not-so-successful teams and outright failures, that anyone has ever done.

As we began collecting data from various new product development teams, we knew we had to find a way to factor out those aspects of team behavior that were merely background "noise" and did not impact outcome, and concentrate on those practices that did. This proved to be one of our toughest challenges.

Benchmarking For Success

The first step was to figure out how to design a research protocol that would ferret out truly world-class "best" practices from the moderately successful ones. The technique for doing this is known as benchmarking, a system developed at Xerox, where it is defined as "the continuous process of measuring products, services, and practices against the toughest competitors or those companies recognized as industry leaders."

By adopting the best practices that benchmarking identifies, companies can achieve truly phenomenal gains, sometimes as great as 2,000 percent, and in as short a time as eight months. The typical new process adopted in this way reduces cost, cycle time, and error rates by up to 60 percent. With benchmarking, Cadillac reduced customer complaints by 60 percent; Western Electric lowered manufacturing operations inventory by $1 billion, and Fuji Xerox doubled profits in its thirty-two retail outlets in just a year. Not surprisingly, many companies have employed this research technique as the tool of choice for improving operations.

But benchmarking effectively requires knowing what and whom to benchmark. Consider what happened to Lance Armstrong in the 2000 Olympics. As the four-time Tour de France winner, he was the overall favorite, but a simple mistake cost him the gold. He was drafting a pack of riders near the final leg of the race -- saving his energy so he could blow past them in the final minutes for victory ...

Blockbusters. Copyright © by Gary Lynn. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.

Table of Contents

	Acknowledgments	xi
	Preface	xv
1	How Blockbusters Happen: Our Research--and Why We Did It	1
2	The Five Critical Practices at Work: Putting the Puzzle Together at Iomega	15
3	The Buck Starts Here: A Top-Down Initiative for Total Toothpaste	33
4	Clear and Stable Vision (Part 1): Building Project Pillars at Polycom	57
5	Clear and Stable Vision (Part 2): Building Your Own Project Pillars	75
6	Lickety Stick Improvisation: Nailing Process with the PowerShot Staple Gun	99
7	Information Exchange: Creating a Knowledge Core at Apple	127
8	Collaboration Under Pressure: The Evolution of the Handspring Visor Team	149
9	What about Radical Innovation? Seeing the Light--Corning's Fiber Breakthrough	175
10	The Message to Management: Breaking Through the Bureaucracy at NASA	205
Appendix 1	Measuring Team Performance: A Case Study	215
Appendix 2	Industries and Companies Who Participated in This Research	223
Appendix 3	Test Your Knowledge	225
	Notes	229
	Index	237

Editorial Reviews

A product development expert and a former research psychologist, now both professors at the Stevens Institute, combine their knowledge into a slim but useful volume illustrating their innovative approach to New Product Development (NPD). Two-thirds of new products fail in the market, the authors say, but those that go on to become "blockbusters" have five factors working in their favor: active leadership from the highest level of management; "Project Pillars," or clear, established parameters for the product; "Lickety Stick," or the flexibility and tenaciousness to market test until the product "sticks"; goal-oriented teamwork (no psychological tricks); and continuous exchange of information about everything among everybody. The authors demonstrate each of these principles with a case study, including Colgate's Total toothpaste (effective senior management practices) and the Powershot Staple Gun (early and frequent consumer testing). They go on to consider two more complex cases, Corning Glass's decades-long struggle to create the fiber-optic industry and the victory of the Jet Propulsion Laboratory over NASA's entrenched bureaucracy to create the Sojourner Mars lander. The authors recognize the complexity of most of the issues and the serendipity of the regulatory environment (such as the 1986 breakup of AT&T), and they manage to avoid jargon. This volume respects the intelligence of its readers and offers them insights into proven NPD methods. B&w charts and graphs. (Oct.) Copyright 2003 Cahners Business Information.

Publishers Weekly

All companies, no matter what size or in what industry, need to generate innovative new products and services if they are to succeed. Increased competition, both domestic and global, the rapid pace of new technology, and changing customer demands have created a marketplace that is more competitive than ever before.

One innovative product can alter the future of a single company, lead to entirely new families of products, and may even usher in a whole new industry.

In Blockbusters, Gary S. Lynn, Ph.D., and Richard R. Reilly, Ph.D., professors at the Stevens Institute of Technology in Hoboken, N.J., share the results of their exhaustive 10-year study of highly successful new product development teams.

This study discusses the five critical practices that all successful new-product teams must follow. Lynn and Reilly explain why senior management involvement, having a clear vision for a new product, sharing information, knowing your customer, and teamwork are keys to creating a winning new product.

To illustrate how the best new-product teams work, Lynn and Reilly tell the success stories of Colgate, IBM, Polycom, Iomega, Apple Computer and other organizations.

Based on data from the authors' 10 years of extensive research, here are the five "golden rules" of new product development that the best teams followed:

1. Commitment, Not Contribution of Senior Management. Blockbuster teams had the full cooperation of the highest level of management. Senior managers were either intimately involved with most aspects of the project, or they made it clear that they totally supported the project.
2. Clear and Stable Vision. Blockbuster teams stayed on course by establishing "project pillars" early on -specific, unchanging goals for the product that the team must reach.
3. Improvisation. Blockbuster teams did not follow a structured, linear path to market. Instead they moved "lickety stick." That is, they were flexible, trying many kinds of ideas and prototypes in rapid succession (lickety) until they developed a prototype that clicked with their customers (stick).
4. Information Exchange. Blockbuster teams did not limit their information exchange to formal meetings. They shared knowledge in dozens of small ways — from coffee klatches to video conferencing to hundreds of e-mails.
5. Collaboration Under Pressure. Blockbuster teams focused on goals and objectives instead of interpersonal differences. They built coherent teams, but they were not especially concerned about building friendships or even insisting that everyone like each other.

These five practices fit together like interlocking pieces of a puzzle, and it was this "fit" that helped teams create blockbusters. All five practices must be implemented for success — implementing one or two isn't enough, as revealed through the study. If a NPD team in the study executed the five practices poorly or not at all, its probability of failure was almost 100 percent. But if a team excelled at the five practices, its probability of failure was only 2 percent.

The following is an examination of each of the five practices:

1. The Buck Starts Here. Blockbuster products do not happen without the intense personal involvement of senior management. Usually this is the CEO — or the person who will be the next CEO or division head. Lynn and Reilly found that without the active participation of senior management, NPD teams were unlikely to create blockbusters, a finding that challenges the advice given by many management books today.
2. Have a Clear and Stable Vision. Having a clear idea of the product-to-be is a key element in creating a blockbuster. But a great idea is not enough to ensure success. Your chances of turning a good idea into a big success increase dramatically if you establish specific parameters of what the product will be.
3. "Lickety Stick" Improvisation. The authors call blockbuster practice number three improvising "lickety stick." This practice advises team members to go from the first concept to prototype to market test to the next concept, prototype and market test "lickety" until the product "sticks" with the customer. Each effort doesn't have to be perfect; it just has to be better than the last one.
4. Information Exchange. When Lynn and Reilly asked blockbuster team members how they handled communication across disciplines, they found that this wasn't a problem at all — team members readily shared information.
5. Collaboration Under Pressure. Why do some teams never seem to pull together? Why is collaboration sometimes so hard to achieve? Lynn and Reilly found that effective teamwork is a natural by-product of implementing the other practices they discuss in their book. This brings us to the last rule of blockbuster product development: Teamwork matters.

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