PLM Critical Success Factor: Being "Right-To-Market" provides far greater competitive advantage than "Time-To-Market"– faster is not always better
by Dave Burdick

During the last 5 to 10 years, product development speed and cycle time have been the core strategic focal points of most product development organizations. Prominent business consulting organizations have long advocated that by getting products out the door sooner and gaining the "first mover" advantage, companies will experience a much higher degree of product success.  However, numerous examples have shown that simply being first to market does guarantee success. In the software spreadsheet market for example Visi-Calc was first to market but Lotus followed as the dominant player which in turn was dominated by Microsoft. In the mountain biking market, Schwinn was first to market with a mountain bike but companies like Trek and Specialized are the dominant player while Schwinn no longer exists. 

"Time-To-Market" Product Development Strategies are Dead

A "Time-To-Market" product development strategy built around the goal of getting products out the door quickly is no longer a winning strategy. In most industries today, companies by and large have achieved competitive parity with nearly equivalent product development cycle times. The automotive industry for example is operating on a two year program cycle versus the five year cycle just several years ago. While the mad rush to getting products out the door quickly has generated significant cost savings, product innovation, differentiation and quality for the most part has not improved. One needs to look no further than the rising warranty claims and product recalls in the automotive industry to understand this. Simply getting products out the door faster is no longer a sustainable competitive advantage. Therefore, companies must evolve the product development mission from the imperative of "Making Products Faster" to "Making Better Products". We call this new strategy "Right-To-Market"

"Right-To-Market" - The Winning PLM Product Development Strategy

Table 1 illustrates the key differences between a "Time-To-Market" versus a "Right-To-Market" product development strategy.  

Table 1: Key Differences Between "Time-To-Market" and "Right-To-Market"

Source: Collaborative Visions

In "Time-To-Market", the hallmarks of sustained new product success center on agility, flexibility, and innovation versus raw product development throughput speed. Agility is the ability to change course quickly in response to changing market conditions and opportunities. While many enterprises have invested heavily in technologies and processes for improving throughput speed, this often requires "hard wiring" the processes and technologies together, resulting in less flexibility and agility. Key to having an agile process framework is the ability to quickly adapt or change product features in response to changing market requirements, or to quickly incorporate externally developed features from innovative suppliers and business partners at any time during a product development program or project cycle

Achieving Higher Classes of Innovation is Paramount

"Innovate or Die" is a common mantra espoused by companies who rightly understand that innovation is the key to building a winning "Right-To-Market" product development strategy.  However it is important to target the right classes of innovation. Most product development programs and dollars are overly weighted towards small, incremental innovations (Linear Innovation).  Numerous studies on the leading corporate innovators (e.g. Sony, 3M, Nokia) have shown that these companies take greater risks and target more of their product development resources towards higher classes of innovation (see Figure 1). The ideal product development resource weighting should emphasize greater Customer-Driven, Category Killer, and Paradigm-Shifting Innovation since these classes of innovation can deliver much higher and more durable returns.

Figure 1: Product Development Innovation Matrix

Source: Collaborative Visions

Bottom Line

A PLM strategy centered on "Time-To-Market" product development throughput speed must be evolved towards a "Right-To-Market" strategy that incorporates greater process agility and targets higher classes of innovation in order to generate greater and more durable returns.