Go To Market (GTM) is the most important strategic element of most organizations. A GTM strategy is essentially an action plan that specifies how a company will reach customers and achieve competitive advantage. The GTM strategy provides the blueprint for delivering a product or service to the end customer, taking into account such factors as market potential, pricing, product features and functions, quality and reliability, global supply chain management, customer service, and many other factors. A GTM strategy is (or should be) the complete business plan for new product development.
Based on years of direct product development experiences with clients and benchmarking data, about 80% of new products are either late to market, exceed the development budget, miss the target price and its negative operating margin impacts, and has significant commercialization issues after release. There are literally dozens of complex root causes for these outcomesbut they all point to an inefficient execution infrastructure within the complex network of professional, knowledge-based development processes. It is also no secret that the majority of these problems are caused by inefficiencies and delays earlier in the development cycle (e.g., idea generation and screening, concept development and market testing, moving features and functionality, technical and financial feasibility, etc.).
For those who work in new product development, the story is the same: the development timeline remains fixed but most of the work becomes jammed into the remaining smaller segment of the development timeline. Everyone acknowledges the importance of avoiding this dilemma but too many activities get done in the 11th hour . . . with a cutting of many critical corners and shortcuts.
Recognize the Detractors to GTM Excellence
Design research on customer and market requirements, combined with thorough technical and financial feasibility analytics provide significant leverage in improving the velocity and quality of an organization’s GTM strategy. A solid business case for the development project is essential. Then the key to execution is robust development processes and best practices from concept to commercialization. Organizations must understand that this major change is a race: competitors are also striving to build robust development processes and best practices to reduce time-to-market, increase market share and revenue from new products, produce superior quality and reliable products, and create the unmatched total customer experience.
The first step in moving in the right direction is for organizations to stop and take a hard look at what is happening in their development organizations today. It is not unusual to find the following conditions in many development organizations:
- Organizations struggle with selling too many variations of products and services to the marketplace, often cannibalizing their own brands. Organizations are anxious to add new products to their portfolio but hesitant to remove old, obsolete, or unprofitable products over a number of fears and excuses. A better, data-driven balance of mass customization vs. variety reduction is needed. Product proliferation is a common development detractor that requires an objective, fact-based rationalization effort to pare down the portfolio and improve profits.
- Organizations claim to have a formal, documented development process but it is impossible to follow. In many cases the documented practices sit in a binder and serve the interests of an ISO auditor more than the technical development resources who perform the work. Additionally, these documented processes do not reflect for real robust best practices for executing a rapid GTM strategy. So the actual development process breaks down into a fragmented, non-standardized, and hidden set of tasks and information that can change on a daily basis.
- Development resources are unrealistically overloaded in terms of true capacity to execute. A closer look at the work streams of individual development projects are filled with delays, misdirection, changing and conflicting priorities, and rework swirls, all of which result in significant waste, cost, and lost time. The actual status of projects is often managed by perceptions rather than data and facts.
- Many professionally trained and certified project managers have been downsized in the recent recessions. What was once a full time discipline is now being handled more casually and on a part time basis by individuals who already have an overloaded plate of responsibilities. All of this adds to the lack of clarity, design defects, and delays in every single work stream element in the total GTM cycle, especially the most critical front end activities.
- Many activities are unintentionally but constantly out of synch, especially in organizations engaged in global product development. This includes hardware and software interfaces, international requirements, legal and compliance issues, literature and packaging, service and spares management, logistics and supply chain strategies, etc. The repercussions of many documented process steps briefly visited, postponed, or totally skipped earlier in the development cycle also surface as much larger downstream issues.
- Product and software designs get too far along in the development process before the need for a change is discovered, creating excessive wasted time of limited technical resources – and life cycle cost. Excess/obsolete inventory, tooling changes, disruptions in daily operations, overnight freight and other premium charges, and the engineering parts boneyard are all too common. Some projects accrue as much as 60% to 75% of resources and cost before a decision is made to pull the plug on a project.
- Many new products require a significant amount of technical and engineering support (e.g., ECNs, customer service and field performance problems, warranty and returns, chargebacks, etc.) after release. This can quickly add up to a million dollars of unplanned costs against operating margins, and a huge resource drain on future GTM efforts in the pipeline.
These points are but a few of the real inefficiencies impeding an organization’s ability to execute their GTM strategies. These situations have direct, far reaching consequences and waste beyond product development and into manufacturing, the supply chain, the supply base, customer satisfaction, market reputation, and ultimately the organization’s financial performance. Our intent is not to be critical but to raise awareness as the first necessary step of improvement. These situations are created by brilliant and committed people with the best of intentions – but their effectiveness is limited by the process, not their own individual actions. GTM executives must recognize the need to change these situations if they want their GTM activities to improve at breakthrough levels. These breakthrough levels of performance are not so obvious, but they represent many millions of dollars in new opportunities. The remainder of this blog discusses several key enablers of breakthrough improvement in GTM.
Best Practices in GTM Excellence
Rapid GMT best practices have a significant impact on the front end development processes and a much larger impact on smoothing out the noise and inefficiencies throughout the total development process (e.g., product/process design, verification testing, quality, cost, launch, less post-launch ECN and customer support). In this economy organizations cannot bank on making up operating margins for their GTM inefficiencies over time, especially if the organization is a complex manufacturer of low volume/high mix products.
There are many best practices in a robust GTM strategy including the sourcing and selection of a great rapid design and prototyping partner. Below is a list of key best practices for achieving GTM excellence.
- GTM excellence requires the right front end customer and design research including comprehensive business analytics – a data-driven business case, projective objectives, ethnographic design research, perspective markets, competitive advantages, competitive activities, opportunity window, risks, and design issues/challenges. This step should also include sensitivity modeling to evaluate potential risks in the analysis (or the need for more analysis).
- GTM excellence is a real time, collaborative, and open thinking effort between the design and prototype firm, the development team, and the ultimate customer. This is a living, real time, and well executed effort by this dedicated high performance team with the right tools and skills, who can quickly research, design, and evaluate options without the vague approval responsibilities, and lengthy and costly “over the wall” review cycles.
- GTM excellence first and foremost addresses strategic customer, market, and company needs. It also extends beyond product design issues and addresses industrial design and aesthetics, branding, family appearance and fit, ergonomics, manufacturing and assembly, packaging configurations, user interfaces, and other options that impact the total customer experience.
- GTM excellence incorporates a well-documented process that includes specific early-on best practices for design research, concept, mock up, evaluation, and verification. The process also includes responsibilities and timelines, acceptable cycle time guidelines, milestones, and performance metrics. The intent of these specific phases is for the team to keep adding, evaluating, and eliminating design concepts (e.g., it is a bad and costly practice to keep adding questionable requirements or functionality).
- GTM excellence requires a formal, cross-functional implementation approach that addresses the full spectrum of enterprise requirements (e.g., sales and marketing, design, finance, manufacturing, customers, suppliers, other stakeholders). This approach engages frequent customer inputs and feedback before and during product evaluation. The synergy of collaboration far outweighs the limited thinking and guessing what customers and the marketplace wants by a particular executive or function.
- GTM excellence is conducted following the organization’s accepted processes, proven best practices, design/supplier standards and guidelines, and structured design and phase/gate reviews. The goal is not to add rigidity or complexity in the form of work flows, components, parts, and suppliers to the mix. In the event of pure Greenfield technology projects, it is permissible to work outside of the design/supplier standards and guidelines with the executive development team’s approval. One size fits all is never an effective approach. High risk projects should follow more rigid development best practices; lower risk projects or derivative products can follow a more relaxed development process. A well-defined and executed balance is always the best approach.
- GTM excellence always incorporates 3D CAD and parametric modeling, risk assessment and contingency planning. GTM is not an exact science although there is a high degree of science within it. There are many unknowns and unforeseen events in most development projects that range from incorrect specifications to actual field feature performance to material variation to manufacturability to supplier capabilities and everything else in between. It is very easy to model these risks and contingencies with technology.
- GTM excellence relies on rapid prototyping as the point to evaluate, discover, and redesign ideas into the final product. This is achieved through hand worked models, 3D printing, quick turnaround machining, paper appearance mock ups, and the like. This is also the time to conduct drop tests, environmental tests, or accelerated life tests on critical design features.
- GTM excellence is the robust set of processes and best practices that shakes out as many of the real and potential design, manufacturing, quality, release, and cost flaws as possible, as early in the development cycle as possible. The investment in time and resources is well worth it in this stage. A 35¢ problem resolved during the rapid prototype process can save millions of dollars in life cycle costs after commercialization. For those who have quantified these downstream activities, design verification spins can cost as much as $30K per pop; ECNs can generate hundreds of thousands of dollars in hidden surprise operating costs. Warranty and returns can quickly grow to millions of dollars. These wastes consume significant unscheduled “rework” resource time and clog up the development process even more. These costs also add up exponentially.
- GTM excellence is the entire set of robust processes and best practice in an organization’s new product development process. For example, plugging just a great rapid prototyping process into an inefficient total new product development process is a sub-optimizing proposition. Great rapid prototyping definitely improves the GTM strategy, but organizations must also build the robust structured stage/gate and review processes (e.g., design, verification testing, technical implementation, commercialization, post-release market and supply support, etc.) and best practices for breakthrough GTM execution.
Obviously this is a partial list of the major enablers of GTM Excellence. Each of these points require significant, concentrated analysis and process reengineering/invention to achieve major breakthroughs in GTM. Organizations can make a dramatic impact in their GTM strategy within 3-6 months with the right technical assistance and the ROI is astronomical! Emerging technology also plays a key role in achieving GTM excellence.
For example, one of our clients implemented a digitized development process and stage-gate scheduling system with due dates and responsibilities for each task of each open development project.
- They use cycle time guidelines and development team inputs to create the initial schedules. As task due dates and the person responsible approached, a yellow flag is displayed on a public digital dashboard. As tasks reached a late status, a red flag is displayed on the digital dashboard.
- At any given time all product development managers, engineers, and support resources can view several cuts of the status. One display looks at individual projects and the green, yellow, and red flags (and responsible owners) that are activated. Another display looks at the number of green, yellow, and red flags by resource for either performance or bottleneck situations.
- Development teams use this real time digital visual system to better manage and pull shared technical resources to the most important demands, and to prevent yellow flags from drifting into a red status.
Just like the TPS disciplines, a red flag triggered an instant shut-down and caucusing of project managers and development teams to resolve the problem on the spot. They are able to understand in real time, the relative impact on resources and other projects in their decision-making progress.
GTM Excellence: Every Organization’s Most Critical Strategic Initiative
GTM excellence is the lifeblood of successful organizations, especially in this warp speed global economy. Competition is fierce, product life cycles have shrunk drastically, and success for most organizations is very dependent upon revenue growth from new products and/or services. Organizations cannot sustain success without a steady stream of rapid, innovative, and successful new products.
GTM excellence is a journey of breakthrough improvements, not a band aid or quick fix to the symptom of the day. There are so many other critical success factors in the total concept to commercialization development process. Many organizations have a great GTM strategy but they are unable to execute due to an inefficient new product development process. Hence they miss the market windows of opportunity and millions of dollars in new revenue potential. Organizations that wish to be successful with their GTM strategies can no longer amortize over time, the sins of their present problematic designs and inefficient new product development process.
About the Authors
Terence T. Burton is President and Chief Executive Officer of The Center for Excellence in Operations, Inc. (CEO), a management consulting firm that works with mid-market and private equity organizations on Go To Market (GTM), Supply Chain, and other strategic and operational improvement initiatives. CEO is located in Bedford, New Hampshire with offices in Munich, Germany. Terry is the author of a new book by McGraw-Hill, Global KATA: Success Through the Lean Business System Reference Model™.
Joseph J. Schappler is President and Founder of Helix Design, Inc., a product design firm offering industrial design, design research, mechanical design and prototyping services, located in Manchester, New Hampshire.