New product development is an essential part of the entrepreneurial landscape. Many people become entrepreneurs because they see a need or problem in the marketplace and have an idea to address it, improve the user experience or simply create a new efficiency. In many cases, they create something new and innovative that improves people’s lives or even changes history. Consider Bell, Edison, Westinghouse, Jobs and Wozniak.
For companies of all sizes, from big corporations to small businesses, new product development is crucial. Without constant innovation, sales will be in danger of declining. New products help companies continue to grow, thrive and generate revenue.
Toronto executive Robert Morton, principal at RLM Consulting, is experienced in the area of new product development. He works with established companies and entrepreneurs alike to help them develop, shape and launch new products.
Prior to establishing his firm, Rob spent more than two decades holding a variety of leadership positions in the financial services industry, working in securities, asset management, equities, capital markets, and mutual funds. In addition to serving as an executive for three years at Home Capital Group, Inc., where he oversaw the areas of financial support, treasury, strategic and capital planning/development, procurement, and investor relations, he spent 21 years holding a variety of executive positions at State Street Bank.
Today, he advises business leaders across a range of industries on strategy, strategic planning, organizational effectiveness, and, of course, new product development. He talks about why and how new products are crucial to the success of every company.
Why would a company want to introduce a new product? Is it dictated by marketplace factors?
Rob Morton: Yes, new products are created to fill a need or meet a demand in the marketplace, and sometimes to introduce something new that has the potential to be successful. Product types are across the board and could be tangible or even intangible, like experiences.
Sometimes, a new product will replace an existing product. Other times, existing products are introduced to new audiences, or rebranded and re-introduced. New products will often help a company grow its bottom line. It’s important for all forward-thinking companies to be aware of marketplace trends and identify opportunities to think about how they can better serve their customers.
It seems that there’s a lot of opportunity to improve upon existing products today, given the number of online forums on which people discuss product features. What types of new products are developed or reintroduced most often in today’s ever-changing marketplace?
Rob Morton: All types. Companies continually improve on previous versions of their own products. For example, smartphones, like iPhones and Androids, are regularly updated with new operating systems and features, and reintroduced. Sometimes a new process leads to a new products. For decades we brewed coffee in coffee pots. Then Keurig came along and completely reinvented the coffeemaker, and now many homes and offices have them. They changed how we practiced a longtime habit. For companies, revising and reintroducing an existing product provides a way to boost an existing revenue stream or create a new one.
What are the steps a company goes through in developing and launching a new product, and what are their needs when they seek outside counsel?
Rob Morton: Generally, they’ve identified a need or opportunity, so they want to move forward with addressing it through either a new or improved or enhanced product. Now they have to come up with exactly how they’re going to respond, and what type of product they’re going to create. Early on, we’ll discuss features, benefits, look, feel, potential uses, and more. Once the concept is determined, the research and development phase begins, which includes such activities as prototyping, testing and analyzing the results. At a point during all this work, there’s also discussion about product naming, branding, packaging, and marketing. Once everyone is satisfied and ready to proceed, we roll it out.
What are the challenges related to creating and introducing a new product?
Rob Morton: The main challenges can include determining what exactly the new product will be, creating the product’s design based on a number of factors and, of course, creating a demand in the marketplace. As I described, it can be a complex, even arduous process at times, but it’s well worth the time, cost and effort if the potential ROI justifies it.