Just as keeping a trim waistline is good for your health, maintaining a trim new product development (NPD) pipeline is important to funding successful innovation and improving the bottom line. Consider these statistics from innovation guru Dr. Robert G. Cooper1. He finds that for every seven new project concepts, four will enter development, and only one to two will be commercialized. Even then, there is no guarantee that commercialization will translate into profitability. That is why the next best thing to a quick win is a quick loss-eliminating unsuccessful NPD projects before they unnecessarily drain company resources.

The idea of any loss as being good is counterintuitive, but it makes sense in the broader context of the four typical NPD outcomes.

Quick Win
Clearly this is the ideal. It is characterized by early validation from customers or supply chain partners who are interested in a concept and understand the value being delivered. Though a win in this case isn't a launch, customers signal they are ready to buy. In business-to-business environments, they may even collaborate to develop the product, drive out costs, or bring the product to market.

Quick Loss
This is often a good, second-best outcome, particularly when financial and human resources are scarce (see figure 1). By understanding early in development that a product cannot succeed due to inherent economics or its value proposition allows companies to reallocate resources to those opportunities with the most potential. Equally important, a quick loss can lead to valuable insights, intellectual property, and design components, which can be captured for potential re-use.

Slow Win
This is okay and often is simply the cost of doing business. The market may not be ready for an innovation, may be slow to adopt, or may require a capital investment that needs to be timed and budgeted accordingly before committing. A Slow "Win" is not the best outcome, but it is still a win. If the scale or profit is big enough, the customer or the opportunity strategic, it can be tolerated.

Slow Loss
This is the worst-case scenario. It drains resources and takes people away from focusing on other high-potential opportunities. Moreover, it kills the overall climate for innovation in an organization and makes leadership detrimentally risk-averse over time. To the extent that manufacturers can do so, slow losses should be avoided in favor of quick losses.

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