A Product Innovation Charter (PIC) is at the heart of any business’ new product commercialization process. It contains why the project was initiated, the purpose, goals, focus, and boundaries of the project. It answers the “Who? What? Where? When? Why?” five questions in new product development projects.
The foundation of new product development and product management is based on a company’s clear strategic direction. During the strategic planning phase, the organization’s capabilities, relevant technologies and market opportunities are taken into account in order to create and deliver value to customers.
Product-driven companies will realize corporate strategies by developing new products, such as: expanding product lines, developing new market segments, obtaining higher profits, etc. At this time, new product strategies need to be formulated, which usually include: setting new products Objectives (sales, profit, market share….), understanding the contribution of new product development to the company’s strategic goals, defining technology, market and product range, etc., and a Product Innovation Charter (PIC) can be used to guide this process.
A Product Innovation Charter (PIC) is at the heart of any business’ new product commercialization process. It contains why the project was initiated, the purpose, goals, focus, and boundaries of the project. It answers the “Who? What? Where? When? Why?” five questions in new product development projects.
During the exploratory phase, a product innovation charter may contain assumptions about market preferences, customer needs, and sales and profit potential. As the project moves into the development phase, these assumptions can be verified through prototyping and market testing. While business needs and market conditions can and will change as the project progresses, the project direction must be cross-checked against the PIC as development work progresses to ensure that the PIC remains correct and the project is not deviating from its original direction.
A PIC is a written document, a strategic document prepared by senior management to map the company’s new product roadmap and guide the roles of various business units in new product innovation. It can also be considered a new product strategy. . A comprehensive and detailed PIC provides direction and focus for product teams, ensuring that products developed by product development teams are aligned with corporate strategy and market opportunities.
According to a 2007 PDMA study (Product Development Management Association, established in 1976), 29% of companies have a formal PIC and 75% have a new product policy (some derivation of the PIC). Generally, the more detailed the description of the PIC, the better the performance of the new product.
A typical PIC might contain:
Background : including the key points of PEST analysis (political, economic, social, technical) or internal and external situation analysis of the enterprise, the project purpose, and the relationship with the enterprise strategy.
Questions to answer may include: Why is this strategy in place? Why do this project? What are the scope and boundaries of the project? What is the role of the project team in achieving the goals? What are the project constraints, such as resources, marketing, technology, manufacturing, etc.? What is the status and development trend of the key technologies involved in the project? What is the internal and external environment of the enterprise, including competitors, laws and regulations, industry trends, market preferences, etc.?
Focus/Battlefield (Focus) : The focus of an enterprise should be on the place where it has a competitive advantage. This part contains the core competitiveness of the enterprise and how to maximize the use of the core competitiveness of the enterprise to obtain value.
Questions that need to be answered may include: What is the core competitiveness of an enterprise? What is the target market? What are the key technical and marketing activities? What value does the company’s competitive advantage bring to the target market? What are the advantages and disadvantages of competitors in terms of technology, marketing, market share, etc.?
Short-term/long-term goals (Goals-Objectives) : short-term and long-term goals and measures of the company’s new products. Each goal should have specific, measurable success criteria.
Questions that need to be answered may include: How will the project contribute to the company’s strategic goals, capture new markets or increase existing market share? What operational goals are to be achieved, increasing profits, increasing sales, increasing capacity or cutting costs? What are the relevant goals of the project, what is the financial budget, and when will it be listed?
Guidelines (Guidelines) : Essentially the product roadmap drawn by the product manager. It includes the time, cost, quality and profit of the product entering the market.
Questions that need to be answered may include: How is the work of the project team carried out, what is the format of the meeting, and when is the meeting held? What is the form and frequency of project reporting, and what positions are involved in the relevant stakeholders? What are the specific time-to-market and product quality regulations?
Take the smart children’s watch as an example: its brief charter can be: to develop a smart children’s watch with a camera, which can check the position and related data of the watch through the APP, and have a cloud platform system to view the information of all smart children’s watches. Sell through existing e-commerce and retail channels and be listed within one year. The main constraint is battery life, not only to meet the camera function but also to meet the 5G communication. To occupy more than 50% of the market share within two years.
Having a PIC does not necessarily guarantee product success, but it is important to ensure that the product reaches the market. It takes less than an hour for a product manager to get a clear answer to a new product development team’s questions about a PIC, and doing so early can get a lot of feedback on the PIC file, which in turn makes it more complete and clear. It can give the new product development team a stronger sense of purpose, preventing the team from wasting energy on opportunities that cannot be achieved or that do not align with corporate strategy.
At the same time, clear endorsement from the CEO (ideally, a public release) should be obtained as early as possible after the PIC has been developed. In this way, the new product development team can get priority support for the rest of the work, even when corporate resource constraints inevitably shift to other matters.
