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Mahler Interview with Innovation Expert:
Marc Meyer

What can companies do to better manage the way they develop new products?

First, they have to set more ambitious targets for product development and not just sell the same old stuff to the same customers over and over again. They have to focus on new, emerging market needs and on new types of applications for their technologies. That requires more innovative thinking in both the front-end, marketing aspect of the business, and in the back end — in technology and manufacturing.

Second, they have to understand that, to sustain success over the long term, they can’t rely on a single product; they have to generate a constant stream of new products that target growth markets. The best companies do this by developing “product families.” These are sets of individual products that share a common platform of technologies and address related market applications.

What are the advantages of product platforms and what companies use them?

The primary advantage of the product platform approach is that it allows you to leverage common subsystems and interfaces, including core technologies and manufacturing processes, to produce a wide range of market applications. This helps you to extend your product line to new types of users and to grow your revenues without having to reinvent the wheel. Honda, for example, uses the same core engine technology to produce passenger vehicles, sports cars, and SUVs. As a result, Honda’s return on assets is the envy of the auto industry. IBM is another good example. They’re developing a common architecture for their server lines that utilizes the same components to produce a whole range of servers, from low-end models to some of the fastest computers in the world.

How does a company make the transition to product platforms?

Product platforms are most useful when they address new sets of users and new applications. To identify them, you have to expand your market research beyond surveys of customer preferences to include “latent needs” research. This is more difficult, but it’s far more powerful as a source of competitive advantage. In terms of engineering, you have to transition to the types of technologies that can be integrated as building blocks into common platforms that will generate whole families of new products.

Every aspect of your business needs to be reassessed, however, including sales and marketing, distribution channels, even finance. Unlike existing products, which often demonstrate incremental growth from year to year, derivative products from common platforms may start off slow but then experience exponential growth. So you may have to develop a new set of financial models.

What should be the role of senior management in developing new products?

To marshal the energy and resources you need to introduce common subsystems and manufacturing processes, leadership has to come from the very top. Senior management has to be directly involved in building the teams that will create the new platforms and products. They have to bring together highly talented, pragmatic experts from a variety of functions — manufacturing, marketing, R&D, finance — and then give them the time, support, and resources they’ll need to aggressively pursue new applications of the company’s technologies. If necessary, senior management should also make adjustments to company culture and work systems to make sure that innovators don’t get shot down, for example, and that new applications have time to build momentum.

How does the Strategies for Growth workshop help executives apply this approach?

First, we look at these issues from a simple and focused conceptual basis. Then we examine case studies of how companies from different industries have successfully implemented these concepts. Finally, we use a step-by-step approach to help participants apply what they’ve learned to their own business growth opportunities.

For the best results, we encourage companies to send a multifunctional team to the workshop. They bring along their company’s new product ideas and leave with solid, actionable plans that can be implemented, evaluated, and measured. To help move the process along, participants have the option of returning for a one-day, follow-up session, and companies may request that a Mahler team be sent out to provide assistance on-site.

Marc Meyer is a professor of entrepreneurial studies at Northeastern University and a consultant to top corporations. He can be reached at 617-373-5948 or by email at Marc is co-author of The Power of Product Platforms (available from The Free Press and from major online booksellers).

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