The Sterling Woods Group’s Proprietary Framework To Develop A New Product Development Mission Statement
Behold the power of setting goals, writing them down, and communicating them broadly. A study by professor Gail Matthews showed executives who shared written goals were twice as successful as those who thought about their goals, but did not write them down.
Furthermore, a separate research project from the DeGroote School of Business proved that, just like for individuals, companies that write down their new product goals and use it to guide New Product Development (NPD) efforts are more successful than those who don’t.
In the last article we discussed the first phase of The Sterling Woods Group’s New Product Development process, Strategic Planning. We outlined a plan for better understanding your ABCD’s: audience, business partners, content, and dynamics.
In this article, we will synthesize the results of your research and analysis into the “New Product Development Mission Statement,” which is the written strategy that guides your innovation project.
The Sterling Woods Group has developed this seven-step framework for developing an NPD Mission Statement.1.Problem statement. What problem are we going to solve (i.e., meet an “unmet need,” or meet a “met need” better)?
2.Our advantage. Why are we uniquely positioned to meet this need?
3.Target audience. Which audience segment are we targeting?
4.Business partnerships. Which business partners will benefit from us meeting this need?
5.Financial guidelines. What are the high-level financial targets and rules of the road?
- Investment budget
- Timeline
- ROI / time until breakeven
- Customer count targets
6.Strategic fit. How does this product fit in with overall company strategy?
7.Risk and diversification. How risky is this project?
- New audience vs. new monetization of existing audience vs. further monetization of existing audience
- Existing business relationships vs. new business relationships
- Existing content vs. repurposing existing content vs. completely new content
- Level of competition
- Is it diversified relative to other initiatives?
If you’d like a blank NPD Mission Statement template to use with your team, please send me an email with some information about you and your company, and I’d be happy to send you a free template.
To help bring the concept of an NPD Mission Statement to life, let’s look at an example. Below is an NPD Mission Statement based on an actual project. The details have been modified to preserve confidentiality.1.Problem statement.
Due to a lack of content on the subject, many golf instructors do not understand how the laws of physics affect golf. The impact is instructors do not sell as many clubs as they could if they had the information, since based on actual case studies, this knowledge would allow instructors to better recommend clubs based on characteristics of the student’s swing.
We will distribute practical, easy-to-understand content on the physical relationship between a golfer’s swing and the resulting ball flight, so golf instructors can become more effective at recommending and selling golf clubs to their students.
2.Our advantage.
We have over 12 years of content, research, and data on how the laws of physics affect ball flight. We also have established a brand that stands for authority and is recognized and respected by professionals in the golf industry (The PGA TOUR, major equipment manufacturers, etc.). We already have a captive audience of over 10,000 golf professionals who subscribe to our newsletter and could help get the word out.
3.Target audience.
Golf instructors who recommend and sell golf clubs.
4.Business partnerships.
Equipment manufacturers, as they are also interested in instructors selling more of their clubs. The PGA TOUR and USGA, who already have education initiatives in place.
5.Financial guidelines.
- Investment budget: We can invest up to $250,000 cash in the first year
- Timeline: Launch within four months
- ROI / time until breakeven: Earn back the investment within 12 months from launch
- Customer count targets: At least 5,000 golf instructors engaged in content within first 12 months, 20,000 within first two years
6.Strategic fit.
This fits into one of our top goals of the year, which is further monetize the golf instructor market. This project has two benefits: (1) Direct monetization of the product, and (2) Further development of our brand with this segment, and subsequently selling them other (higher priced) products
7.Risk and diversification.
This project is medium-low risk:
- It involves new monetization of an existing audience
- Leverages existing business relationships (e.g., with golf club manufacturers)
- Repurposes existing content
- There is little to no competition
The project is diversified because we have other initiatives that are at other risk levels – some higher, some lower.
The goal of the NPD Mission statement is to focus everyone on the problem we are solving: for whom, with what resources, and other general expectations. There are a lot of elements you might think are missing – we will get to these aspects in future phases. For example:
- Note that we do not talk at all about product form. We don’t say if this is an online school, an events business, a digital magazine, etc. Decisions about form come later, in Phase 2 (Concept Generation and Selection)
- We have not finalized a business model. This will come in Phase 3 (Economic Evaluation).
- We have not yet committed specific development, design, or marketing resources. We’ll need to figure out resource needs as part of Phase 3 and deploy those resources in Phases 4 (Development) and 5 (Launch)
For a refresher on all the phases, please see this article.
If you did not analyze and research the ABCD’s of your business, please go back to this article.Once you have completed your “homework,” we recommend hosting a full-day offsite with your senior management team to discuss the results of the ABCD research and to debate potential NPD Mission Statements. Best practice would be to come prepared to the offsite with three “straw man” options for NPD Mission Statements. In the offsite, executives should discuss the merits and pitfalls of each, and make modifications as necessary. If consensus is not reached in the offsite, then a list of open questions to research further should be compiled by the end of the day. Once those questions are answered, the CEO should reassemble the group to discuss again and finalize.
What To Do with the New Product Development Mission Statement
Successful companies use the NPD Mission Statement to set the vision, keep the team on track, and avoid scope creep. First, the NPD should be communicated broadly – especially to all participants in the project, but also to the organization at large. The link to overall corporate strategy should be made clear in corporate communications.
Once the project starts, there will inevitably be discussions about how to deploy resources. The NPD Mission Statement should serve as an arbitrator for such debates. Not sure if a certain feature should be implemented or not? See how aligned that feature is with the NPD Mission Statement for guidance.
The NPD Mission Statement can be changed, but not on a whim. Should you discover new data in a later NPD phase, then I would recommend reconvening the senior management team to consciously make any changes to the NPD Mission Statement. As management guru Andy Andrews says, “Successful people make their decisions quickly and change their minds slowly. Failures make their decisions slowly and change their minds quickly.” Once an NPD Mission Statement has been approved, managers should be slow to change their mind, as the NPD Mission Statement has been grounded in thorough understanding of your ABCDs.
More on Risk and Diversification
Clients typically have a lot of questions about this step in the process. An upcoming article focuses on this topic.
We work with clients to develop new products in one of two ways. One option is to have The Sterling Woods Group do everything for you (including creating the NPD Mission Statement with your input), while you focus on your core business. For those who prefer a more “DIY” approach, we offer training and coaching services, through which we teach you our methodologies and help you develop a team to make you more successful at new product development.
