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Building a Case For a New Design February 15, 2012

Posted by Tim Rodgers in Product design, strategy.
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My current responsibilities include managing a product design team, and lately I’ve been spending a lot of time reminding folks about Newton’s First Law of Motion. That’s the one that says that a body in motion stays in motion and a body at rest stays at rest, unless acted on by an external force.

This comes up because engineers are often surprised and disappointed to find out that other people don’t immediately support their new designs, and this sometimes leads to dark mutterings about the technical abilities and hidden agendas of those critics. What they’ve forgotten is that anytime you propose something new, regardless of how compelling it may seem, you’ve got to convince people that there’s some ultimate, net benefit in what you’re proposing, otherwise the current design will always be preferred. It’s easier to stay in motion (or stay at rest).

This shouldn’t be difficult, at least at a conceptual level. After all, there must have been a reason for proposing the new design in the first place, some problem that someone thought needed to be solved. Any new design that enables an essential product function has to provide some improvement in performance and/or a reduction in cost, which might be material cost (cost of the parts), factory cost (labor and yield), or warranty cost (reliability, product returns, and customer support).

In the idealized analysis, the cost to develop and implement the new design — including tooling, prototypes, and qualification testing — is compared to an estimate of incremental revenue from the higher performance (more units sold or higher sales price per unit), and the cost difference per unit multiplied by the number of units manufactured with the proposed design. The net benefit of the new design has to be greater than the cost, obviously, but the net benefit also must be greater than “no action,” or other alternatives that cost less to implement.

“Cost savings” is an easy banner to rally behind, but “performance improvement” isn’t necessarily compelling. In a competitive market higher performance is worth the investment only if customers care about the improvement and it leads to more net revenue. Just because you can do it doesn’t mean the business can benefit from it.

When the product design team understands how their choices impact the product’s contribution to the business’s financial metrics, they’re much more likely to generate ideas that will be supported by the leadership.

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