Our journey starts in the 19th Century
Product development has come a long way in the last 150 years. You can be baffled when you see the evolution of how we approach the development of new ideas. Looking back to the 19th century, we see a landscape dominated by individual inventors. These ingenious minds were often driven by a desire to solve practical problems they encountered daily. They frequently served as visionaries, conceiving solutions and artisans, building them with their hands.
It’s essential to consider the limitations of the 19th century. Widespread access to electricity did not yet exist, significantly restricting the types of solutions inventors could create1. Additionally, complex machinery for mass production was still in its early stages, meaning most inventions were likely handcrafted in workshops or small factories.
Validating ideas back then also presented significant challenges or was almost impossible. You traveled by horseback, meaning reaching a large pool of potential customers could take weeks or months.
Despite these limitations, 19th-century inventors laid the groundwork for future advancements.
The Industrial Revolution
Fast-forward to the beginning of the 20th century, we encounter the Industrial Revolution. The widespread adoption of electricity in factories during the early 20th century revolutionized manufacturing. Electricity, coupled with the development of complex machinery, enabled mass production of goods on a previously unimaginable scale.
The Industrial Revolution witnessed the rise of iconic figures like Henry Ford, who revolutionized car manufacturing with the assembly line; Samuel Morse, inventor of the telegraph; Alexander Graham Bell, inventor of the telephone; The Wright Brothers, pioneers of powered flight; and many more. However, it’s essential to acknowledge that individual inventors didn’t solely drive innovation. This era saw a rise in collaborative efforts between inventors, engineers, and business leaders who worked together to bring ideas to life.
While mass production offered significant advantages, reaching a large customer base remained challenging. Early marketing relied on traditional methods like print advertising and traveling salespeople. However, the emergence of department stores and mail-order catalogs sowed the seeds of future marketing strategies during this era until two innovations redefined the game.
Mass Media Changed It All
Radio and television. Pioneered by Guglielmo Marconi (radio) and a team of inventors, including John Logie Baird and Vladimir Zworykin (television), these technologies shattered communication barriers. They ushered in the era of mass media. Suddenly, companies could reach millions of consumers across vast distances, fundamentally changing the marketing landscape.
This newfound ability to connect with a national audience birthed the discipline of modern marketing. It wasn’t just about creating new products anymore; companies now had to consider how those products resonated with consumers on an emotional level. Advertising strategies shifted to focus on brand building, product desirability, and crafting a compelling narrative. Eye-catching visuals and persuasive messages became essential for capturing consumer attention in a crowded media landscape.
Furthermore, the rise of mass media intensified competition. A company on the United States West Coast could now effortlessly reach potential customers on the East Coast, creating a national playing field. This fierce competition spurred a focus on three key areas:
- Efficiency: Companies streamlined manufacturing processes to minimize costs, keep pace with demand, and compete on price.
- Scalability: Production lines had to adapt to meet the potential of a national market, allowing companies to ramp up production quickly.
- Desirability: Products needed to stand out from the crowd. Functionality remained important, but companies also had to consider the emotional appeal of their offerings and how they could connect with consumers’ aspirations and desires.
This confluence of factors – mass media, marketing, and heightened competition – fundamentally reshaped product development in the mid-20th century. It marked a shift from an invention-driven approach to one that considered the product and how it was presented and positioned to a vast and diverse audience.
Enter the Stage-Gate Process: Managing Complexity in a New Era
However, this new reality also presented significant challenges. Products became more intricate, requiring a more structured approach to development. Resource allocation became crucial as companies juggled a wider range of products competing for attention. Additionally, the competitive landscape demanded faster time-to-market without sacrificing quality.
In response to these challenges, various structured approaches to product development emerged throughout the 20th century. The stage-gate process was one of the most influential methodologies to address these complexities.
While the concept of stage-gate can be traced back to earlier management theories, its formalization and widespread adoption began in the mid-20th century. Notably, Robert G. Cooper played a pivotal role in refining and popularizing the stage-gate process in the 1980s through his research and publications. This structured approach aimed to bring discipline and efficiency to new product development, particularly in light of the complexities arising from the media and marketing revolution.
The stage-gate process breaks down product development into distinct stages, each with specific deliverables and decision points (gates). Here’s a breakdown of its core functionalities:
- Clearly Defined Stages: Each stage focuses on specific aspects of development, such as idea generation, feasibility studies, prototyping, testing, and launch. This clarity ensures that all bases are covered before proceeding to the next stage.
- Gate Reviews: A gate review is held at the end of each stage. This review involves key stakeholders from different departments (engineering, marketing, and sales) who assess the project’s progress and viability. Based on the review, the project can be:
- Approved: The green light is to proceed to the next stage.
- Paused: Requires further work or clarification before moving forward.
- Terminated: Stopped if deemed not viable or aligned with company strategy.
- Focus on Efficiency: By identifying potential issues early at stage gates, companies could save time and resources by terminating non-viable projects before making significant investments.
- Improved Communication: Stage-gate fosters department communication and collaboration by providing a shared framework and clear milestones.
The stage-gate process significantly influenced product development in the latter half of the 20th century. It reduced risk and increased success rates by making informed decisions at each gate, mitigating risks associated with new product development, and improving the overall success rate of launches. It also increased efficiency by streamlining time, money, and personnel.
While the process ensured thorough planning, it also streamlined activities by focusing resources on promising projects with clear goals. This enabled companies to bring products to market faster and capitalize on emerging opportunities.
Dawn of the Internet
Another pivotal shift in product development, one as transformative as the Industrial Revolution, occurred at the end of the century: the emergence of the Internet. While the Industrial Revolution facilitated mass production, the Internet revolutionized communication and information sharing, forever altering the product development landscape.
One of the Internet’s most significant impacts was its ability to foster global collaboration. Geographically dispersed design and engineering teams could now work together seamlessly on product development projects. This dynamic facilitated the creation of more complex and innovative products by leveraging expertise worldwide. Companies were no longer limited by physical proximity, allowing them to tap into a wider talent pool and accelerate development.
The Internet also ushered in an era of faster time-to-market. Electronic communication via email and early forms of e-commerce streamlined communication with suppliers and distributors. Product development cycles speed up by more rapid feedback and iteration. Companies could gather feedback early and often, make adjustments quickly, and bring products to market more efficiently.
Furthermore, the Internet provided a treasure trove of customer insights and feedback. Online surveys, social media platforms, and online review sites emerged as powerful tools for companies to understand their target audience. By analyzing online data and engaging directly with consumers, companies could develop products that are more aligned with consumer needs and preferences. Fueled by the Internet, this customer-centric approach led to a new generation of products that resonated more deeply with the market.
The Internet’s impact extended beyond communication and market research. The creation of e-commerce platforms allowed companies to bypass traditional retail channels and sell directly to consumers. E-commerce disrupted traditional sales models and provided companies a global platform to reach a wider audience. Companies could tailor product offerings to specific international markets, further expanding their reach and customer base.
The dawn of the Internet marked a turning point, not just in communication but also in how we developed, marketed, and sold products. This digital revolution continues to evolve, shaping how we create and interact with products in the 21st century. Here are some key trends shaping product development today:
Agile Methodologies:
Traditional, linear development processes, where products were meticulously planned and built before release, began to give way to agile methodologies. These iterative approaches emphasize flexibility, rapid prototyping, and continuous feedback loops. Teams work in short sprints, releasing and testing features incrementally, allowing for course correction based on user feedback and market demands. This process fosters adaptability and ensures products remain relevant in a dynamic marketplace.
User-Centric Design (UCD):
The Internet empowered customers, allowing them to voice their opinions and preferences. Companies responded by adopting a more user-centric design (UCD) approach. UCD places the user at the heart of the development process. UCD involves conducting user research, gathering feedback throughout the design process, and iterating based on user needs. Companies can succeed tremendously in the marketplace by creating products that solve real user problems and deliver a positive user experience (UX).
The Rise of Data-Driven Decision Making:
The Internet age ushered in a wealth of customer behavior and preferences data. Companies leverage this data to make informed decisions throughout the product development process. Companies use data analytics tools to identify market trends, analyze user behavior, and measure the success of features. By basing decisions on data rather than intuition, companies can create products that are more likely to resonate with their target audience.
The Era of Open Innovation and Collaboration:
The Internet has fostered a culture of open innovation and collaboration. Companies increasingly engage with external stakeholders, including startups, universities, and customers, to develop new products and technologies. This open approach allows companies to tap into a wider talent pool and ideas, leading to more innovative solutions (source: https://en.wikipedia.org/wiki/Open_innovation).
The Future of Product Development: Continuous Evolution to the AI Revolution
The methodologies and approaches discussed above represent a significant shift in product development. The focus has moved from an internal, product-centric approach to an agile, user-centric, data-driven, and collaborative approach. As technology evolves, we can expect even more innovative methodologies to emerge, shaping how products are created and brought to market.
We are currently experiencing another fundamental shift in how we approach product development. AI will change the playing field once more. If the internet allows us to communicate and collaborate faster, AI will help us analyze and create even quicker.
The AI revolution will not just be about how we use the technology but also how well we integrate it into our development process, from discovery to delivery. Are you ready for the new era?
