Medical Device Daily Executive Editor

SAN FRANCISCO – Okay, you've got the product idea – now, how to deliver on it?

After hearing earlier in the day about how to encourage and gather innovative thought (Medical Device Daily, March 15, 2005), attendees at the Frost & Sullivan Medical Devices Executive Summit at the Hyatt at Fisherman's Wharf spent their Monday afternoon listening to – and participating in – interactive sessions on how to convert those ideas into marketable products and how to do it more quickly.

Daniel Walsh, who heads the medical devices and diagnostics industry practice at PA Consulting Group (Plainfield, New Jersey), touted discipline in both product development and project management as keys to the process. "Project management is critically important to the medical device industry," he said.

In leading a session on "Delivering Innovative Products: Effective Innovation Needs Discipline," Walsh said that innovation unto itself clearly isn't enough. "Products are only innovative if they get to the market," he said. "Otherwise it's just a clever idea."

Citing a phrase familiar to those involved with product development, he said, "I despise the term fuzzy front end.' That implies that products are a result of serendipity."

Instead, Walsh said, product developers need to understand the context and drivers of their business. That, he said, is how innovations can be converted into effective products.

In his view, successful product development is a matter of dealing with the uncertainties that are inherent in such a process. "Uncertainty is a big, honking risk," he said. "You need to quantify [uncertainties and] knock them down."

As part of dealing with uncertainty about how a product will perform, Walsh emphasized the need to deal with proof-of-principle early on. That, he said, "is going to reduce the likelihood that you're going to fail later."

He further cautioned that companies should "make sure the development is the right one" by being disciplined about measuring the process. A key, he noted on an accompanying slide, is to "nail down the requirements and prioritize."

The "nailing down" is part of what he terms "getting serious when it comes time to develop."

He told his audience: "Make sure the development is the right one [and] be disciplined about measuring the process."

Switching to a slide labeled "Taxonomy for Effective Innovation," he acknowledged that taxonomy is a "fancy, consultant's word" for "a framework to guide your actions."

What it does, Walsh said, is help companies ask – and get answers to – the questions that will guide the drive of product idea through to the marketplace.

For example, "you need to know what's going to drive and constrain the market when your product reaches it."

Referring to a previous session on listening to the voice of the customer in product development, he cautioned, "the voice of the customer is critical – but it also can be misleading."

Walsh emphasized the development of a sound "technology strategy," saying, "You need to learn how to get from Point A to Point B."

A key pair of questions to answer early in the product development process, he said, are: "Is someone going to pay money for this technology?" and "Are there enough people willing to pay money for it [in order to] make a business out of it?"

Understanding the market first, Walsh said, will result in "plenty of other opportunities."

Once companies have set up what he characterized as "a disciplined and effective development process," Walsh set forth what amounts to a mantra to direct the drive of a product to market: Stick to the plan, measure to the requirements, "don't lose your nerve" and – of utmost importance – "deliver!"

As for what else can help move a product along, when the notion of obtaining upper-level management backing of a product idea came up during an end-of-the-day Q&A session, he gave it high marks.

"You need the highest-level management sponsorship first," Walsh said, adding that the management backing has to take the form of more than just a "we need to do this" pronouncement from some top executive. That support, he said, "has to be proactive, not just a declaration."

In another session, Barry Allen, entrepreneur in residence for Canadian-focused venture firm Ventures West Management, addressed the subject of developing a new medical product for commercialization and getting it to the market.

He touted the speed-to-market advantage larger companies can gain by intelligently planning their partnerships with early-stage firms where innovative products are being developed.

Hailing discovery-driven planning, a process promulgated by Rita Gunther of Columbia University (New York) and Ian MacMillan of the Wharton School of Business at the University of Pennsylvania (Philadelphia), Allen cited it as "a useful tool" for what he termed "new and disruptive technology."

The former CEO of VSM Med Tech (Vancouver, British Columbia) said one of the most useful aspects of discovery-driven planning is that it "acknowledges that strategic ventures are risky but provides tools for managing that risk."

While conventional planning "assumes managers can extrapolate from historical data," Allen said that discovery planning requires those managers to "envision" what is "unknown and uncertain," and most importantly, "not yet obvious to the competition."

After noting that new ventures are undertaken with "a high ratio of assumption to knowledge," he added wryly: "Assumptions about the unknown generally turn out to be wrong."

Among the tools to use in the process, Allen said, is a "reverse income statement," which should be based on profit, not revenue. That, he said, "puts structure and discipline into your plan."

Then fashion a "pro forma operations" document, laying out all activities related to the venture. These need to be "specific and measurable."

A third tool is the "key assumptions checklist," which, Allen said, "establishes a process for challenging and checking all assumptions."

Update each document as the venture unfolds and new data is uncovered, he said.

Allen said the key to eventual success is the Stockdale Paradox: "Retain faith that you will prevail in the end, regardless of the difficulties, and at the same time confront the most brutal facts of your current reality, whatever they may be."