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Strategic Planning and Innovation Management

On the way to the products and services of tomorrow

Jürgen Gausemeier: “The conventional schools of development methodology teach that the early phases of conceptual design determine the success of a product. During my long industrial experience as product development manager I made the experience that the success is determined in an even earlier phase – the phase of strategic product planning. This phase sets the goals for the product development.

We didn’t always achieve the objectives which where predetermined by the product planning or sales department. Sometimes we were too late, sometimes the product was too expensive, and sometimes both coincided. Often we had so called spot landings: we built exactly what sales had called for. But even in these cases we often had problems as sales already had new requirements. That was the time I began to be more and more interested in the question where the requirements on the products for future markets come from. To shorten a long story: mostly they come “off the top of one’s head”. In any case they were not a result of a systematically and strategically oriented product planning.

Product planning is often neglected. Many companies tend to rely on their flexibility. But according to my experience success depends essentially on the ability to identify future success potentials as well as threats for the established business as soon as possible. It is trivial that it is necessary to initiate the corresponding actions early enough. That characterises product planning.”

Flexibility itself is not enough; it depends on strategic competence as well

Strategic product planning consists of four fields of activity: foresight, product discovery, business planning, and conceptual design (cp. figure). The aim of foresight is to identify the potentials for future success; therefore we usually use the scenario technique. The objective of product discovery is to find and specify ideas for new products and services. Business planning initially deals with the business strategy. Based on this the product strategy will be developed. The product strategy contains statements on how to deal with the number of product and production variants demanded by the market and on updating the product program during the product life cycle. The production strategy results in a business plan.

Cycle of tasks in strategic product planning

The illustrated tasks have to be handled in a close interplay. Within the cycle of strategic product planning we deliberately cover the phase of conceptual design because a valid business plan requires a product concept. As a matter of course the product concept has to provide statements about the production, i.e. the production system has to be designed in interplay with the product.

Strategic product planning is multidisciplinary teamwork

In many companies we unfortunately find a hidden wall: on the one hand there are marketing experts who take care of foresight, product discovery and especially business planning. On the other hand there are engineers waiting patiently for a development request. This wall has to be overcome as the aim of strategic product planning is to present a business and product concept which should be promising in an entrepreneurial and technical point of view. In order to achieve this specialists from sales, product marketing, development and product planning have to work together systematically and target-oriented. That is the real challenge.

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