Part One : Of a three-part series on managing technology risk and reducing the likelihood of product development disappointment
Technology based product development has surged during the past decade as innovators and entrepreneurs leverage advances in technology to create exciting new products and platforms. Many of these new product offerings are disrupting traditional businesses and industries.
This revolution has transformed how technology augments how we live, work and play. Change has not been limited to smartphones and mobile devices, but has found valuable application in medical, life sciences, health, sports, transportation and even in our homes.
The success of several high-profile products and platforms has fueled an arms race amongst the business and investment community to identify and fund new ‘technology based’ opportunities. Entrepreneurs and enterprises are aggressively seeking and embracing new ideas founded on novel technologies. Their goal is to identify the next big transformational opportunity and address it with a novel and compelling platform or product solution.
The immense pressure to be first to market with a novel technology-based solution belies the reality and challenges inherent with developing new products around new technology or science. Initial excitement about a promising new opportunity can lead to overconfidence and overpromising, especially when soliciting investment. One example of this is Theranos.
Theranos is a sordid tale of what can go wrong; leadership lacking integrity and a gross misrepresentation of the facts to investors, partners and the public. At the core of this story is a product/platform concept that was based on technology that was not sufficiently mature for product development.
There is an unspoken ‘truth’ that many entrepreneurs choose to neglect when attempting to leverage ‘bleeding edge’ or even ‘leading edge’ technologies as part of an accelerated product development timeline. The reality is that this decision often portends schedule and cost overruns, and frequently results in disappointment and failure.
TECHNOLOGY DEVELOPMENT VERSUS PRODUCT DEVELOPMENT
In an effort to accelerate development and reduce time to market, many entrepreneurs and organizations unwittingly attempt to complete technology development in parallel with product development. This approach sounds very appealing since a parallel technology-product development path promises a quicker return on investment.
In practice this is a risky proposition. Especially so when large investments in capital equipment, tooling, and facilities are required. Resetting the development plan and redesigning the product as a result of technology missteps late in the design process can be extremely costly and time consuming. Tooling redesigns, manufacturing equipment and/or process changes are very expensive.
Many entrepreneurs and organizations fail to recognize the difference between technology development and product development. Further, they lack the mindset and tools needed to ascertain if and when a key technology is sufficiently mature for product development.
Entrepreneurs and project teams that take the time to candidly assess the maturity of their core technology before embarking on product development are in a much better position to make good decisions and plan accordingly for the risks inherent with commercializing technology.
This challenge may seem unique to the technology industry and our current business investment climate. The truth is that it is not a new dilemma. These are exactly the same questions and challenges that program managers at the National Aeronautics and Space Administration (NASA) and the U.S. Department of Defense (DoD) have faced for decades. Whether it is a new rocket, spacecraft, satellite, aircraft, tank or other advanced system, there has always been a tension between incorporating new technologies into systems (products and platforms) and running an efficient and successful product development program.
There are many systems in the United States inventory that include and leverage bleeding edge technology to give the country a technical, tactical and strategic advantage. That said, this advantage comes at a significant cost. Most of these systems and platforms endured a painful and protracted development history that significantly exceeded their original approved schedules and budgets.
Both the V-22 Osprey and F-35B Lightning development programs suffered tremendous schedule and budget overruns as the technical teams struggled to integrate novel vertical lift technologies into the aircraft platforms.
An investigation by the United States Government Accountability Office (GAO) concluded that delaying the resolution of technology gaps until product development can result in a 10x cost increase to the original development budget. And delaying the resolution of technology gaps until after the start of production could increase costs by 100x.
The key take-away from the GAO report : Development initiatives that select more mature technologies at the start of product development are much more likely to successfully achieve their stated product goals.
WHEN IS TECHNOLOGY READY FOR PRODUCT DEVELOPMENT
With this in mind, NASA and DoD adopted Technology Readiness Levels (TRLs) as a guide. This tool provides a framework and a common language for systematically assessing a technology’s maturity. It also characterizes the risk posed by the technology if it is included in product development. The tool provides a set of benchmarks that associate different TRLs with different levels of demonstrated performance, ranging from paper studies and basic research to proven performance on the intended product and ready for commercial deployment. The tool also describes the likely consequences of incorporating a technology at a given level of maturity into a product development initiative, enabling decision makers to make informed choices and plan accordingly.
The primary purpose of TRLs is to reveal the gap between a technology’s maturity and the maturity demanded for successful inclusion in the intended product.
With TRLs as guides, the options available to product managers and decision makers can be framed, they can;
1. Delay product development until the technology has been matured to an acceptable level.
2. Reduce the product’s requirements so that a less advanced, but more mature technology can be used.
3. Proceed with technology and product development in parallel, but plan for and be prepared to incur significant increases in risk, schedule and cost.
This is common sense and sounds obvious, but the truth is that many businesses and entrepreneurs continue to attempt concurrent technology and product development without acknowledging or planning for the risk that they are accepting in doing so.
New product development is a big investment and if the window of product launch is missed, the investment may be for naught. Commercial enterprises and investors have very little appetite for schedule and cost overruns, particularly of a 10x to 100x magnitude. Entrepreneurs, start-ups and technology companies generally have a larger appetite for risk and may be more willing to accept unpredictable development roadmaps or even failure. Further, they are more likely to embrace technologies that are insufficiently mature in order to create excitement and attract investors. The balancing act comes with recognizing that this approach will likely require more time and money to complete the development and subsequent launch of their envisioned new product or platform.
TECHNOLOGY MATURITY BREEDS PRODUCT DEVELOPMENT SUCCESS
Aspiring entrepreneurs and product designers should bear in mind that the path to successful product development, commercialization and launch is best started with mature technology. And that the novel design implementation of that technology, plus the creative will and fortitude of an intrepid team are the key ingredients to success.
Technology advancement is a key ingredient for creating novel and exciting products and platforms. Awareness and planning are responsible for successfully transferring technology into a commercial ready design. TRLs are a useful tool for assessing technology maturity and planning a successful product development initiative.
So, how does a product manager or entrepreneur use TRLs to assess technology readiness?
Part 2 of this series will introduce the various technology readiness levels, and what they mean for product development. And more importantly, how to use this tool during your planning phase.
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