Summary: Our goal should be to move new products from concept to launch as quickly as possible. To do that, there are a couple of things we need to know, like how many product ideas we need in the pipeline, what stages are in the new product development process, how ideas advance through the stages, and how product ideas drop off and at what percentage do they drop off through the various stages.

In this post, I am going to talk about one product development life cycle that I had experience with during my career and how it worked.

Newell Brands: A Large Consumer Goods Conglomerate

In 2017, I was working as a Senior Marketing Manager at Jostens, which at the time was a division of Newell Brands. Newell Brands is a very large manufacturer and distributor of consumer products. Newell Brands is the parent company of brands like Rubbermaid, Yankee Candle, Calphalon, PaperMate, and Mr. Coffee, just to name a few. All in all, Newell Brands will finish 2021 with just shy of $11 billion in net sales. A part of how they get to those sales are what I want to highlight in this post.

Newell Brands knows that the more products they have taking shelf space at brick-and-mortar retailers like Target and Walmart, as well as on Amazon, the higher market share they will collectively hold in the consumer product space within the different product categories. The only way to get that premium shelf space is to have the newest, most innovative products on the market, before their competitors.

Ideas Drive New Product Development at Newell Brands

During my time at Newell Brands, one of the things that most intrigued me was the new product development methodology. At regular all staff meetings, internal email newsletters, and on the company intranet, there were always calls to action for employees to submit product ideas, regardless of your position or which one of the Newell subsidiaries you worked at. If you worked at Sunbeam but had a product idea for Rubbermaid, you submitted it.  Newell Brands was always hungry for new product ideas from employees.

What Newell Knows

What Newell Brands knows, and frequently told all of its employees during my time there, was that the more new product ideas we could produce, the more products we would land on shelves at major retailers, and ultimately, the more revenue we would generate.

The New Product Development Funnel

One of the visuals we often saw at Newell Brands was the new product development funnel. I have sketched out my version of it below as an example, but overall it is a pretty straightforward model.  It is a sideways funnel showing that product ideas entered from the left (wide mouth of the funnel) and made their way through a variety of different stages. For simplicity, I am only showing four stages, but depending on the product category and brand, there were numerous different stages ideas would go through. At each stage, ideas that did not meet certain criteria did not continue through the funnel. For example, early stages of the funnel might consist of feasibility studies, market testing, and consumer surveying. Product ideas that did not pass those stages dropped out. The ideas that did pass those test stages, some eventually got to development, test, and launch stages.  Only a lucky few products, out of all the ideas that started, ultimately ended up on a shelf at a retailer.

The New Product Development Equation

While I loved hearing about the funnel Newell had created to gather, vet, and launch new products, it was the formula behind the funnel that most impressed me.

Thanks to over 100 years of product experience, Newell Brands knew exactly how many product ideas they needed at the left side of the funnel to get to the desired number of products they would have to bring to market to remain competitive in the market.

No different than a sales funnel, Newell was able to work backwards from the goal to know exactly how many ideas they needed employees to generate. They knew how many product ideas would drop off at each stage of the funnel, again, based on many years of doing this, to reach their goal.

It all comes down to a numbers game.

While Newell leadership never told employees exactly how the funnel worked its way down, let's walk through a simple example.

Let's say Stage 1 drops 50% of the product ideas, Stage 2 eliminates another 25%, Stage 3 slices off 25% of the remaining ideas.

Knowing these numbers are very consistent based on years of experience, if Newell Brands wants to launch 100 products next year, they would need to start with 3,200 initial ideas. Obviously the numbers in this example are for simplicity, so imagine the number of ideas a company like Newell Brands has to start with to launch thousands of products each year.

Continuous Innovation and the Product Development Life Cycle

The example above demonstrates a once-through process of developing a set number of products by the end of a time period. However, that is not reality. Product concepts are moving through this product development life cycle all the time, leading to a desired continuous innovation process.

Imagine a huge flywheel, where product concepts are entering the flywheel and finished products are exiting the flywheel. This flywheel never stops and the more you feed the flywheel, the faster it spins and shoots out more and more completed products that are ready for the market at an amazing speed.  This is the desired state you should shoot for when it comes to product innovation and development.