“In order to make money you have to spend money.”
This quote stands as a good prelude to the two challenges of product development. Most people groan at this saying, which is of course even truer if you want to make a lot of money. Let me put this into perspective, I come from the product development world where I have worked for the past 18 years, and have designed everything from DNA analyzers to telecom equipment to ankle braces, Propane Grills, and Sippy Cups. You can even say in the product development world that it takes a lot of money to create really cool products that people will actually want to buy because you actually have to spend time and money to figure out what they want.
However, from my perch as both a Mechanical Engineer and a Program Manager it seems that “Penny Wise, Pound Foolish” is more often the rule than not in the ever tightening budgets of the product development world.
I’ve witnessed two common versions of this thinking:
1) Companies ‘save’ by eliminating the budget for Program Management.
We’ll have the engineers do it.
2) Companies ‘save’ by short-changing the Industrial Design process.
It’s just a widget. It doesn’t have to be beautiful.
Here’s why these approaches are counter-productive and can cost you more in the long run:
Program Managers mitigate risk at all phases of the development cycle, but Engineers only mitigate risk in the specific areas they are managing. I know this because I’ve been on both sides of the project. I’ve been the dedicated PM and the engineer that needs to act as a part-time PM. Overall program responsibility covers the whole project. (see the chart below)
Can you imagine spending tens of thousands or hundreds of thousands of dollars developing a product without asking and answering questions about meeting cost targets or standards for product improvement? Yet companies do this every day. I’ve already worked on two programs that made this mistake this year already, and it’s only half over as of this writing. This mistake cost one of these programs nearly half a million dollars, but the customer was adamant that they wanted to save the fifty-thousand dollars up front. For you finance-types, that’s a ROI of 900% in one year.
Industrial Designers design for value. In the same vein, it is a common misconception that industrial designers just make things sexy. Good Industrial Designers explore root issues up front and iterate quickly and inexpensively that explore the usability and desirability of features or the whole the product. This prevents the Product Development teams from spending more time and money on the iterations in the prototype phase which requires a lot more time and money.
Here’s consulting giant McKinsey’s take from a recent quarterly:
In the Product Development world, intelligent management and design, especially at the beginning of the project, makes all the difference between the costly mistake of going far down the wrong path or starting out on the right trail, much like in the Oh-Be-Joyful picture at the top of the article. I really wonder why so many companies routinely dismiss this and are so pound foolish.