Marketing should establish the customer’s problem before product development starts and engineering should develop the solution
Over the years, there have been a lot of introduction failures because the company literally got the cart before the horse or worse, they put the horse back in the stall and tried to let engineering pull the cart themselves. Two problems are likely to emerge when this happens: either the customer starts to engineer the product, with engineering in a “tell me what you want and I’ll build it” role or engineering goes on a feature-oriented chase in a “if we just add XYZ (i.e., dual-load locks) it will be a homerun.” Be particularly watchful for the homerun mentality, because it usually fails. Engineers often adopt it, because a homerun is a great career enhancer - - and it’s easy because they don’t have to focus on the solution to a problem, they simply have to make the solution. In one case, a company’s engineering group had well over a hundred change items that they were working on and the product still wasn’t selling. Marketing ascertained that throughput was the problem and forced through the change. Suddenly, the product started selling. Engineering was flabbergasted: not a single customer had mentioned that throughput was an issue.
The role of marketing in product development is to extract the problem out of the customer. It is like pulling teeth: no one wants to let others know they have problems, so they try to just give their solutions. When you have a problem, it’s YOUR problem. When you have a solution, it’s the VENDOR’s problem. Plus, it’s a lot more fun to play vendor engineer in the product development role. Customers often have little breadth of responsibility in their own jobs, so playing vendor engineer puts them in the lead role in an abusive relationship where the vendor has to listen to them. Problem is, the customer has little stake in the solution and they seldom have the time to fully scope out their problems. The typical result: you build it and they don’t buy it. You lose, but they lose also, because they don’t get a solution that dispenses with their problem. Even when they do buy, the customer has told their solution to every vendor that will listen. So, there is little innovation and differentiation for those who follow. The hard part is figuring out what the customer’s problem really is.
The best way to do this is to gain an intimate understanding of the customer’s business model and how your products interact with it. When problems are found, it is important to figure out if they need solutions. This takes you back to Bob Graham’s four horsemen of marketing: needs, wants, features, and benefits. It’s easy to find out what features they want. What most people fail to do is distinguish between needs and wants. Customers will give you a want list, within which, the needs sometimes lie. The key to distinguishing between the two is that all needs must have a specific benefit. For example, in the case above, the real issue was that adding this system into the customer’s process would raise cost-per-good die over existing methods. Raising the throughput solved this problem, which was impeding the implementation of the solution the system was originally developed to solve. So not only was there a benefit, it was significant enough to change the customer’s business, which prompted the purchase. But had this equipment company done this first, the product would have sold with few glitches. Once you have figured out the needs and benefits, the right features drop out. The wants just become a want list that they won’t pay for.
It is important that marketing only focus on the problem and leave the solution to engineering; that they integrate all customer solutions back into their original problems to ascertain true needs and benefits; that they keep customer-engineered-solution-making to a minimum; and that they never let engineering off the hook with a prefabricated solution.
The role of a supplier’s engineering team is to develop solutions and engineer them into products. My experience has been that they are truly brilliant people who will come up with much more innovative solutions than any customer or marketing will. The reason is that they understand all the development issues related to a system more intimately than anyone. That’s their job. A good example comes from the late eighties, when planar inter-metal dielectrics (IMD) were being developed, which made multi-level metallization possible. Customers wanted a better LPCVD furnace. But their real problem was step coverage and they needed a uniform planar oxide that didn’t need to be reflowed, which destroyed underlying metal layer. The benefit was far greater integration, as well as device speeds. Applied Materials and Novellus used needs-benefit marketing and went after the problems developing two completely different systems that both companies built entire businesses around. The engineering team at Applied came up with cluster tools that offered unparalleled control. Novellus came up with a system that offered low cost and productivity, with results that matched customer needs. Because both were well differentiated, both became very successful. The customers won, because they got two really good solutions. Those that chased the customer’s wants lost out, as they had dominated the LPCVD furnace market.
It is the role of management to ensure that this process occurs and that it is unimpeded by the different parties trying to do the other’s jobs. The first warning signs of this are when there is decision migration throughout the organization. GCA failed largely because of this management issue. I remember one particular visit where the marketing team only wanted to talk about what alignment technologies the customer wanted and the V.P. of engineering only wanted to talk about the market. Later I found that there were internecine wars going on between marketing and engineering, where neither trusted the other to do their jobs. Meanwhile, management was too disengaged to see what was happening and too disinterested to stop it. Keep marketing decisions in marketing; engineering decisions in engineering; and a lot more progress will be made.
Sometimes marketing and engineering are merged into teams to solve these management issues. In this case, it is still important that the process be maintained. That problems, needs, and benefits are established before product development occurs. There are many more examples that could be made here, but most are too sensitive to talk about in this decade.