Guest blog by Russ Singleton
I’ve been fortunate, living in Silicon Valley, to be able to meet and talk with Russ Singleton, a very experienced R&D executive from whom I’ve learned a lot about how to structure an organization for successful product development. For those of you who can’t meet with Russ in person, I’ve asked him to author this series of blog posts describing his experience in developing highly complex, innovative new products—from semiconductor manufacturing equipment to molecular diagnostic systems to surgical robotics. I hope you’ll enjoy these conversations with Russ as much as I have.
-Aaron Joseph
Development is the best of times. Development is the worst of times.
Company A implemented Phase Zero before development. Company B marched straight to development in the hopes of launching faster.
Compared to Company A, Company B seemed to be making progress. They’re launching their product faster than Company A. But the consequences of a lack of Phase Zero will become painfully apparent further down the road, when it’s much more expensive to fix.
Two vital components of Phase Zero are understanding the customers’ job and the key attributes of strategic fit to the market. Without it, teams are relying on a belief that as long as the product “works” people will buy it. And that rarely, if ever, happens. This is the story of Company B.
The Problems of Company B
I was brought aboard Company B as a business unit manager. Company B had just developed a product for measurement in chip manufacturing. The business faced two main issues: their cutting-edge technology’s performance was not meeting the customers’ needs and the product was unreliable. The product was shutting down the customers’ manufacturing lines and leading to some very angry customers. When I joined, I was tasked with figuring out if and how their product issues could be fixed. Otherwise, the whole thing would need to be shut down. I couldn’t disclose to the team that the entire business was on the line but that was very much the case.
Diagnosing the root cause of Company B’s problems meant understanding the customers’ job and understanding the current market needs – both of which would’ve been clear had the team undergone a Phase Zero. From the customers’ perspective, we analyzed what would provide the most value and worked backwards to determine what the product needed in terms of technology and strategic fit. The chief scientist came to the conclusion that our product technology couldn’t meet the customers’ requirements in this market segment. And we learned that there was a much higher bar for product reliability than we had assumed. It was clear at this point that we couldn’t fix the product for this application. But which direction to go? To where should the team pivot?
We started our diagnosis by spending a lot of time visiting with customers and gaining a better understanding of their job. We discovered that if we repositioned the business to target an adjacent market segment we could deliver an effective product without needing to radically change the technology. Still the adjacent market segment had high reliability requirements.
Continuing with our diagnosis, we did something fairly interesting. We moved the VP of R&D into a new position to serve as a liaison for the customers into tech support. He quickly gained an appreciation for the level of product reliability needed in the customers’ job. He worked with the new VP of R&D to deploy engineering managers and engineers into the field to solve customer problems. The R&D team became champions for the customer and made fixing reliability issues their top priority.
Fortunately, Company B’s experience had a successful outcome. We repositioned the business and fixed the product’s crucial reliability problems. The company then went from a multi-million dollar business to more than fifteen times that over the next four years.
The diagnosis for the above Company B took several months and the implementation took considerably longer. Company B needed to objectively assess the situation, calculate the costs to repair, and make an informed decision. And this decision had to be made at the CEO level. While the product team definitely offered their recommendation, the company management ultimately needed to make the final choice. This choice was based on the expected cost vs. the expected new market opportunity; and whether they had the required funds to implement the plan.
Sometimes the best decision is to end the project. I know other Company B’s, usually divisions within a larger company, who decided to shut down a problematic product development project and allocate the team and resources to a more promising product.
Rescuing a Product
The “emergency” Phase Zero to rescue a product is similar in principle to the blank-slate Phase Zero with a few crucial differences. The new emergency Phase Zero is less like creative exploration and more like a SWAT team operation. There are constraints to exploration because the new solution will need to fit within already established parameters. Because this is a rescue mission, the team will also likely be working under a lot of pressure from management and in a very stressful environment. But compared to the consequences of spending funds on completing or selling a flawed product, implementing an emergency Phase Zero can be less expensive and potentially much more beneficial in the long run.
Summary
Company A did get to a successful launch in the original targeted market. Company A took the time to do Phase Zero. They had imposed additional requirements on their product pathway such as reliability and chose a different technology than Company B that was able to meet the customers’ requirements. Company A did make a successful business in this market.
In contrast, Company B skipped Phase Zero and paid the price, requiring expensive changes to get to a successful second launch. It was in an adjacent market, not the original targeted market. Fortunately for Company B, the outcome was positive in the long run. They had a good team in place that enabled them to pivot into a new direction.
A good team can take risks, make quick decisions, and adapt to new challenges. As in product development, it was the combined cross-functional contributions: marketing positioning, reliable product design and good manufacturing that enabled their success. Not just the technology they created.
Further Reading
- Developing Products in Half the Time by Preston G Smith and Donald G. Reinertsen
- Competing Against Luck by Clayton Christenson
- A Five-Step Road Map to Growth into an Adjacent Market by Stephen Wunker
Next Post: Post-Mortem Pre-Celebration
About the Author
Russ Singleton is a results-oriented high-growth and transformation executive with experience across MedTech, Healthcare IT, Genetic Sciences and Semiconductor Equipment sectors. He has a passion to maximize results for startups and global, mid-sized businesses. He does this by transforming culture, driving customer-focused strategy, and leading market-oriented technology innovation.
As interim VP of R&D at Medrobotics, a surgical robotics startup, he was hired to jumpstart stalled efforts to secure CE Mark for a surgical robotics product. After successful approval, he joined full-time to lead transformation of the R&D organization. Prior to Medrobotics, Russ has extensive experience including CEO, COO, General Management and VP R&D.
Russ holds a Ph.D. and M.S. in electrical engineering from the University of Illinois and a Bachelor of Engineering from the Pratt Institute. He is also a graduate of the Management of High Technology Companies program at Stanford University’s AEA Executive Institute.
Comments from LinkedIn
Jackie Fahrner Operations Leader (expertise Supply and Demand Management, Program Management, Business Transformation) Problem Solver, Bringing Structure to Chaos
“I’ve been there. I still say one of the best recommendations I brought forward to leadership was to stop the development of a product that would miss the market window. It wasn’t popular at first, but “grew” on the team after a while as they were allocated to products that would ultimately yield big returns for the company.”
Russell M Singleton Transformational Executive Leader – Maximizing results of startup and growing medical device and life science businesses through: Transformative Leadership | Customer-Focused Strategy | Market-Driven Innovation
“I’ve also had a similar experience to you. Not the story above, but in two other situations where which we shut down a program to move onto the next ones. Thanks for your story, Jackie”