Preface

It has now been 20 years since we started to conduct research, work with companies, and experiment with methods for early phase innovation with students in corporate-sponsored projects and companies applying our methods. In the decade since the first edition came out, we have been able to work with companies and other educational institutions that have embraced our work and helped us further develop our ideas and new insights. One of the significant changes for us as a team in the last decade is the fact that we both no longer reside in the same place. Jonathan Cagan remains on the faculty at Carnegie Mellon University in Mechanical Engineering and co-director of the interdisciplinary one-year Master of Product Development program. Eight years ago, Craig Vogel floated down the Ohio River to Cincinnati. He is now Associate Dean in the College of DAAP at the University of Cincinnati. We have been able to experiment on our own and together in two different educational contexts and to work with new academic and corporate partners.

We are extremely proud and humbled by the reception of the first edition of the book in the corporate world and in academia, and by the global influence our book has had on the way companies work in the Fuzzy Front End early stages of innovation.

In addition to covering the ideas introduced in the first edition of this book, this second edition explores several new areas to complement the core ideas that have continued to be the basis of the integrated new product development (iNPD) approach. The new edition is still a combination of both a coherent structure for managing the Fuzzy Front End and methods that have been proven to ensure a high degree of success in producing innovative solutions. The case studies we are using reflect current Social, Economic, and Technology (SET) Factor issues and support the idea that innovation drives competitive positioning and profit. The case studies reflect a wide range of products and services and include a broader global representation.

In addition to the flattening of global competition, there is a new opportunity and challenge in the evolving relationship of product, interaction, and service systems and the evolution of local and global brands. Although we briefly touched on these topics in the first edition, they play a more significant role in the current argument we provide. The interest in Design Thinking has also been a significant part of how companies seek to become more innovative. We place the topic of Design Thinking in a deeper context of the need to balance qualitative empathic thinking, methods, and systems with quantitative, rational approaches.

When Google talks about producing a digitally driven car and Ford introduces two new cars at the Consumer Electronics Show, we know that we are on the brink of a new paradigm of what is possible. The BRIC countries are now competing with the original G7 for global market domination. We discuss how Brazil, India, and China are not only catching up, but leading in several markets and how microstates such as Singapore are embracing change faster than everyone else.

When the first edition was published, consumers were optimizing all of their purchases based on their desires with seemingly unlimited resources. Since then, 9-11 and a significant global recession have taken place. Consumers have shifted to making tough choices about how they spend their money. However, they still expect great experiences and they still purchase products for those experiences, even though their needs, wants, and desires might have changed. Consumers around the world are asking for more for less, so the challenge to innovate and control costs in what Dee Kapur calls pragmatic innovation are still the key elements for business success. We show in the case studies in this second edition that it is possible to have both low volume/high profit and high volume/high profit. Reading the SET Factors and translating opportunity gaps into product value while managing brand equity are still the keys to driving innovation and provide the most effective long-term return on investment.

1. A systems-level approach that integrates physical product and service design using the same research and product development methods

2. Methods to obtain insights into emerging trends in consumer and industrial markets

3. A means to navigate and control what is often called the Fuzzy Front End of the product development process, that portion of the design process in which the product and market are not yet defined and qualitative tools are needed to complement quantitative research

4. The use of qualitative research to understand the needs, wants, and desires of the customer

5. Techniques to assist in the integration of diverse team players, especially engineers, industrial and interaction designers, and market researchers and planners

6. A complete product development process that brings the product from its opportunity identification stage through to program approval and product patenting

7. An approach that connects strategic planning and brand management to product development

We provide case studies that demonstrate the successful use of the methods introduced in this book. We show that these methods apply to both products and services. We also include a selection of case studies across the globe, from the country level to the product level.

The book’s logical flow is designed to provide a useful guide for anyone involved in the product development process. Readers can also use the book by first scanning and then focusing on the areas initially perceived as most relevant. In either case, we have tried to make sure that the book is interconnected and cross-referenced so that issues addressed in one part are referred to again in other parts.

The book is divided into three main sections. The first section (Chapters 1–4) establishes our main argument that the best new products are designed by merging style and technology in a way that connects with the lifestyle and values of intended customers. The second section (Chapters 5–7) presents a process for creating such products by integrating different disciplines with a focus on the needs, wants, and desires of the customers. The final section (Chapters 8–11) provides additional case studies as further support of our argument and its application to several product categories. Chapter 8, “Service Innovation: Breakthrough Innovation on the Product–Service Ecosystem Continuum,” specifically calls out service and interaction design, and illustrates how the same tools and thinking are applied to navigate the Fuzzy Front End of the overall system as is used for the physical aspects of a product. Chapter 9, “Case Studies: The Power of the Upper Right,” includes case studies in U.S.-based products. This also includes a discussion on the potential for an open innovation process between open-minded companies and cross-collaborative universities. Chapter 10, “Case Studies: The Global Power of the Upper Right,” looks at the emergence of innovation across the globe, particularly in the BRIC countries and Singapore. Many of the products featured in the first edition have been retired. In Chapter 11, “Where Are They Now?,” we revisit many of those products to assess which are still active in the marketplace and which are no longer in production, and we use the SET Factors to understand how the marketplace changes.

Chapter 1, “What Drives New Product Development,” explains the forces that generate opportunities for new product development. This chapter introduces the process of scanning Social, Economic, and Technology (SET) Factors that leads to Product Opportunity Gaps (POGs) and new market segments. Four case studies of successful companies and the products or services they deliver illustrate this process: the Margaritaville Frozen Concoction Maker, the BodyMedia FIT System, the services provided by Starbucks coffeehouses, and GE Healthcare’s Adventure Series MRI for children.

Chapter 2, “Moving to the Upper Right,” outlines our major premise. To produce new products, a company needs to commit to “moving to the Upper Right.” This phrase represents an integration of style and technology through added product value based on insight into the SET Factor trends that respond to customers’ emerging needs for new products and services. This chapter introduces our Positioning Map to model and map Upper Right products.

Chapter 3, “The Upper Right: The Value Quadrant,” focuses on consumer-based value and further refines product opportunities into what we call Value Opportunities (VOs). We have identified seven Value Opportunity classes—emotion, aesthetics, identity, ergonomics, impact, core technology, and quality—that each contribute to the overall experience of the product. The categories work for physical products, service-based products, and larger systems. The challenge is to interpret the VOs and their attributes and translate them into the right combination of features and style that match with current trends.

Chapter 4, “The Core of a Successful Brand Strategy: Breakthrough Products and Services,” discusses, through corporate and product branding, how to make moving to the Upper Right a core part of a company’s culture. Products and services are the core of a company’s strategic planning and brand strategy, and they should be driven by the theme of user-centered interdisciplinary product development. Establishing a clear brand identity necessitates integrating customer values with company values in a way that differentiates a company and its products in the marketplace.

Chapter 5, “A Comprehensive Approach to User-Centered, Integrated New Product Development,” is devoted to planning product development programs through the presentation of an integrated new product development (iNPD) process for the early stages of product development (the Fuzzy Front End). Most product programs go through a stage in which the product opportunity is researched, prototyped, and evaluated. However, many companies do not have clear methodologies for this frequently underdeveloped stage of the product development program, which costs them significant resources. The process we have developed helps companies navigate and control this process by keeping focus on the user. The process is broken into four phases that take the development team from the stage of identifying opportunities to the program approval stage where intellectual property is identified and protected.

Chapter 6, “Integrating Disciplines and Managing Diverse Teams,” focuses on team integration and management. Effective interaction of disciplines is integral to the product development process. We describe how team members (particularly designers and engineers) can work in a context of positive tension where they use their different perspectives to a competitive advantage for the whole team. We also lay out a strategy for breaking down actual parts and components of the product and, by understanding their impact on customer lifestyle and complexity, determining where integration is required to effectively design them. The chapter concludes with insights on how to manage interdisciplinary teams.

Chapter 7, “Understanding the User’s Needs, Wants, and Desires,” focuses on developing a comprehensive approach to understanding the user’s behavior. We discuss the use of existing and emerging methods for understanding how consumers use products and translating that understanding into what we refer to as “actionable insights,” which become the basis for developing appropriate product characteristics. These approaches empower the product development team to translate customer preferences into appropriate style, ergonomics, and features.

Chapter 8, “Service Innovation: Breakthrough Innovation on the Product–Service Ecosystem Continuum,” is a new chapter that focuses specifically on service design, discussions on interaction and interface design, and the design of the larger product–service ecosystem, accounting for logical and empathetic perspectives. Although service design has become a discipline in and of itself over the past decade, the tools, methods, and thinking necessary to navigate the Fuzzy Front End of services are the same as for physical products and their larger system.

Chapters 9, “Case Studies: The Power of the Upper Right,” and 10, “Case Studies: The Global Power of the Upper Right,” highlight additional case studies of successful new product development, representing a range of product and service categories and types of product development teams. Chapter 9 is divided into two sections: U.S.-based products and open innovation between companies and universities illustrating the potential benefits of an authentic partnership for the creation of breakthrough products and the advancement of a new kind of educational program. Chapter 10 focuses on globally based products, with particular focus on the BRIC countries and Singapore. Chapter 10 illustrates the emergence of new sources of innovation across the globe.

Chapter 11, “Where Are They Now?,” describes the current state of products that are no longer relevant as case studies for this edition, yet were invaluable to the success of the first edition. In some cases, SET Factor changes or strategic choices in companies have caused them to no longer rate being considered as breakthrough. We felt it was important for readers to understand how fragile success is and how constant innovation is required to maintain lead positions in markets.

The Epilogue concludes with a look at the characteristics of future innovators and final thoughts on why companies should commit to using the iNPD process.

GE Healthcare created a fantasy experience to help children get through highly technical and formidable medical experiences that are scary and can require sedation. They created an empathic interface experience through the Adventure Series to allow technicians and nurses to use their highly effective technology help diagnose a child’s condition. The staff feel better about their work, parents are relieved, and there is minimal impact on the child’s psyche.

All these contrasting examples successfully defined the SET Factors in their markets and understood the opportunity they had to introduce new value into their respective markets. Then they translated that insight into highly refined executions that were just in time to connect with the consumers’ emerging value expectations. They got it right in the beginning, in the Fuzzy Front End of the new product development process, and were able to keep the vision alive through to the introduction of the product in the market. In addition to discussing these and other case studies, this book gives you the steps to effectively structure your early product and service ideas to ensure that, when you get to the stage of high-quality execution, you will not have to make time and cost changes that might compromise your success.