When a client tasked Mark Schwartz with developing a new folder, he went back to school. He handed students disposable cameras to document how they used similar products.
From that, Product Development Technologies Inc. ideated a folder that opened from the top, not the side, so students could retrieve papers out of their backpacks without emptying the contents.
“Having products that are not me-too but really exciting things people want to buy means those customers come back year after year,” says Schwartz, the company’s CEO. “If you don’t constantly come up with new and unique products, eventually you’ll die.”
Smart Business spoke with Schwartz about the innovation process.
Q. What’s the first step of innovation?
The first part is research and strategy, and that’s really at the core of innovation. [It’s] all about: Who’s your target market? What’s your price point? What are the trends? What do users want?
The real key to innovation is getting informed first with all the stakeholders and what the competitors are doing. For example, our employees go to lots of different shows. We really don’t (make) a lot of appliances, but we still go to the appliance show, because it helps us get acclimated with what the latest trends are, what the latest forms are, the latest colors, the latest features. Those innovations can get cross-pollinated into something like a medical device.
By far, the biggest thing is customer research, understanding the needs of the customer.
There’s two ways you do that: There’s the articulated needs and then there’s what we call the unarticulated needs. Articulated is doing research and going out in the field and talking to users about what they like or don’t like about products, bringing in prototypes, getting their reaction. The second part of that is using ethnography tools to spy on them, essentially, and watch people using things. They drive innovation without even knowing it. Someone may fiddle around with a tool, for example, and you’ll realize, ‘Wow, if that had a light on it, that would be really helpful for them.’
In the old days, people did a lot of market research, quantitative stuff, and I really think the trend is going away from that to more direct voice of the customer and ethnography.
Q. How do you determine whether ideas are viable as products?
Everything has to be grounded in reality. We talked about innovations, trends, the needs and desires of users. But the one thing we didn’t touch on is the reality of price points, time to market, budgets. You have to take all that stuff and you have to do a feasibility study to say, ‘We’d really like a 10-inch color display with one week of battery life, but it’s a $50 price point. That means we’ve got to make it for $30.’ Pretty soon, reality sets in and some of the stuff gets tempered a little bit.
But that’s innovation again because now you’ve got to get clever. You’ve got to find ways to make a product that has a good business case behind it financially.
We’ve got about (100) people and there’s a lot of broad expertise. We also do a lot of technology scouting. Last quarter, we had 42 suppliers share with us their road maps, what’s going on with displays, what’s going on with batteries, what’s going on with buttons, what wireless technologies are happening. You’ve really got to tap into all that in order to create the business case.
That’s all part of the strategy. It’s developing the product description before you embark into the development process. Some companies really don’t do that adequately and they find out [changes] well into the engineering process, and then it’s really expensive to change it.
Q. What should be included in an initial product plan?
A typical product description is going to talk about the marketing elements of the product: What’s the price point? Who are the competitors? What might the features be? What’s the go-to-market strategy?
There’s another element of the product description that’s technical — the specs. Does it need to be waterproof? Do you need to drop it from 4 feet or 8 feet or out of an airplane? How does it need to perform? How long does the battery need to last?
Then you need the budget stuff. What’s the time to market? How much tooling can we afford? ...
All those things need to be wrapped into a plan or a product description. All the disciplines get covered for that. Engineering has to do their feasibility. Marketing has to do their feasibility. Research needs to do their research. The CFO has to get involved with budgets.
You’ve got to have a facilitator; that’s usually what we call a product manager. That person helps corral all the disciplines and document what needs to get done.
Q. What advice would you give leaders on innovation?
Take the blinders off. Sometimes companies tend to get a little bit of tunnel vision and they really get zoned in on their vertical without really looking around at neighboring things — neighboring competitors, neighboring technologies, analogous devices — and looking to see if there is an innovation there. We draw inspiration from the auto show every year, because there’s always something innovative that might end up in some other product.
I’m biased, of course, but I also think that companies should, on occasion, outsource. We deal with consumer electronics, public safety, medical, and that cross-pollination of technologies and trends is all really healthy once in awhile to get your blinders off and get you out of tunnel vision.
How to reach: Product Development Technologies Inc., (847) 821-3000 or www.pdt.com