| An analytics company COO needed help to fast-track the development of a new marketing solution for the company’s customers. The solution must include a payment gateway to increase the customer base and revenue exponentially. The increased cash flow will fund the investment to integrate with the enterprise platform and make the solution “Great.”
Many companies gather long-term employees and form a “New Product Introduction (NPI)” team. This team leads the strategic product development for a quick market entry. It often has readily available resources and no accountability. For them, expenses are part of corporate overhead, and revenue is an afterthought. The whole endeavor is distant from the realities of introducing a new strategic product.
What are the issues?
The Organizational Design
- The NPI team is not a separate business unit; the product developers and solution designers report to the technical organization’s hierarchy. The technical organization wants to internally develop everything, including the payment gateway, and integrate it with the enterprise platform, which is still under development.
- Internal development is time-consuming and severely impacts the market entry schedule. It will prevent the company from significantly increasing its addressable market soon and achieving its revenue growth objectives.
- The business development organization, accountable for sales growth, has little influence on the direction and speed of the NPI team.
Accountability
- The NPI team has no skin in the game. There is no urgency to introduce the new product, turn a profit, and support the company objectives for actual, sustainable, high growth. Revenue generates cash inflow. The expense is a cash outflow. Either make cash inflow higher than the cash outflow, or your venture is dead, period. Often NPI teams ignore this fact.
- Without a payment ability, the solution will have numerous downsides. It will set a precedent of “free.” Charging for something available for free initially will turn off the customers. And it will prevent the company from monetizing the proven demand for the solution.
The NPI team must devise a “Jugaad, ” an innovative fix or a simple workaround. With creativity, a team can make existing things work or create new things with minimum resources. The objective is to do it quickly with minimum effort. When a “Jugaad” will do, go for it. It is far better than losing in the market because you need a solution. You can make it a great solution later.
An endeavor without a clear path to quickly capturing a meaningful market share and making a profit isn’t a business. It is a daydream.
I would love to hear about your experiences! Please share your stories here.
Satish Mehta
Author, Speaker, Coach
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