Every business has a product development strategy.  Lean startup or fat business development budget, we’re all growing businesses with new products.  But not everyone does process improvement.

If you’re unlucky, your new product dies along with the rest of 90% to 95% of other business’ new products.

When you’re the lucky 5-10%, your product dies off at the end of it’s 2 or more year product life expectancy.  This is a classic business case for continuous improvement.

The product development process should result in a profitable product.  If 95% of products fail, this is a sign the process is broken.

The gap between the average success rate of 95% and our target, is the “why” for change.  This gap is everyone’s reason to change. Now we just have to figure out “how” to improve the process.


We focus on business growth through process improvement for:

  1. customer development
  2. employee development
  3. product development

Improving a process means you can play with the speed or results. Growing through better product development processes means you’re:


  1. Making it easier to find new ideas
  2. Developing new products faster


  1. Creating more profitable products
  2. Lengthening product lifecycle
  3. Finding more profitable ideas


product lifecycle management



If you’re using agile or lean product development process vs waterfall, that’s fine. Process improvement applies to both.

agile product development



First, we need to do is scope out all the noise you’ll find online about product development.


Complex, lengthy projects are a waste of time. You never get the results you want and most of the time the scope, data, and opinions change.

Lean process improvement avoids this by focusing on what’s critical to our ideal customer.

Product development is the same. If we’re going to make a great product we need to focus on what we’re NOT developing. This way we’re only left with what we DO develop.

Here’s what you’re not going to do:

  • Waste money on getting IP or patent
  • Spend money on a prototype
  • Design a product alone in your mom’s basement based solely on your needs, your family or friends opinions
  • Hire a designer, salesperson, marketer or anyone else
  • Find a manufacturer

That’s right. I canceled Christmas.

Those are all the fun things you’re looking forward to! It’s all such sexy cocktail chatter – except for the basement one.

That’s our little secret.

I don’t mean to deflate your birthday balloons. I – and many, many other entrepreneurs have gone down these roads before so be better and smarter than us. I see it every day and it never gets a different result.

If you want to survive, the valley of death, avoid the glamour. Because the key to finding out if you have a profitable business model is through your product or service development.

So need to build you an indestructible development process.


Now that we’ve scoped out everything we aren’t going, we can set our process KPI. This is what all action items drive towards.

We can make our process faster or better. Most of the time we improve both but it’s smarter to focus on one KPI than stretch yourself too thin.

  • ACTUAL – 95% new product failure rate
  • TARGET – 85%
  • GAP = 10% new product failure rate

The gap between the two is what you need to close. We won’t do any action items or invest time or money into something unless it drives us closer to closing that gap.

We also use the gap of 10% and turn it into money so we know how much to spend on this project.


We need to turn the 10% gap into money

1. 10% = X projects
2. Each project = $Y
3. X projects x $Y = Total opportunity cost

define the problem


We even keep our math simple. That’s because we have a bias for action. The faster we get to improving, the higher return on investment we’ll get for our continuous improvement.


So I know I owe you for canceled Christmas and deflated balloons. Here are a few rules to efficiently improve your business:

  1. All improvements tie to a strategic company goal
  2. Never improve unless there’s customer data to back the ROI
  3. Only improve the process bottleneck

If you’re developing new products you’re typing this back to a revenue or product strategic goal.

We covered how to get customer data in our previous post about new product ideas. I’ll jump right into the bottleneck.


The Theory of Constraints or ToC taught us that there’s always one step that slows everything else down.

If you improve or maximize the constraint, you improve the process.

How we find the constraint is with data. Grab a data sample of 10 products that have run end to end through your development process end to end.

Turn that data into a process map showing your steps, time and failure rate.


process gap analysis bottleneck


I scoured the interwebs for data and came up with the map above. It’s not going to match your process but it’s going to be close.

In our example, the bottleneck for both speed and quality is market testing.


In order to improve the bottleneck, you have to root cause the bottleneck. You can brainstorm potential root causes. But most people brainstorm wrong because:

  1. they never back up the ideas with data
  2. they don’t whittle down ideas into common themes using a tool like an Affinity Diagram.
  3. I like to make your life easier so let’s 5 whys.

Once you stop gaining insight, you’ve hit the root cause. This should be a common theme you see in multiple visible symptoms.

Root causes turn into countermeasures. They fill in the sentence “create X to close Y of the gap”

  • X = root cause
  • Y = the time, dollar or % you observed was being wasted in the process

In our example, this should say “create X to get a 15% decrease in new product failure”.

With these data points, you’ll be able to quickly and more easily prioritize each potential countermeasure.

benefit effort matrix continuous improvement


Product development and management is just another business process. Business process management – done well – results in increasing your cash flow and profit.

You may recognize the problem solving methodology we used above as DMAIC. You don’t need a certificate to be a lean or data-driven problem solver.

All you need is creativity. Even if you aren’t into process, we still share the common goal of trying to grow our businesses. We’ll share how we’re productizing our services and other brilliant product failures.

In the meantime, get your product development process map together. This way you can apply our process improvements to your business and rub it in our smug consultant faces.

Ashley Asue Guerrilla Analytics Private Equity Consultants
At 26, she was asked to create a new department to grow their Fortune 300 company using Lean Six Sigma continuous improvement.
While working with consultants and experts, she saw a common thread among their challenges and failures.
With this insight, she created a custom process to create a high-performance company.
As the only CPA and business architect in the US, she helps others use creativity instead of cash to efficiently build their businesses.