The formula for success? It's quite simple, really. Double your rate of failure.
Fast Fail strategies work by rapidly clearing the development pipeline of marginal products releasing development resources to focus on more promising products (Lendrem, 1995).
The Quick-KillTMmodel demonstrates that Fast Fail strategies will:
- shorten the expected time to market, even as the cycle time for successful projects increases (the Development Speed Paradox)
- increase throughput, even as development speed decreases (the M25 Effect)
- reduce development costs, even as the burn rate in early development increases (see R&D Savings)
- do all this, even as the rate of false negatives - killing projects that would have been successful - increases (see Quick-Kill Rides Again)
Fast Fail thinking was originally developed in the context of high risk enterprises such as pharmaceutical development where the probability of each molecule screened making it to the market place is low. However, the thinking is generalizable to a range of products and services.
The probability of success in the Quick-KillTMmodel can be re-defined, say, as the probability of recovering the development costs; or the probability of securing a given return on development investment; or the probability of securing a given return within a given timeframe.
80% of all new products or services fail within six months, or fall significantly short of forecasted profits.
- Gerald Zaltman
Sadly, since the majority of new products or services fail to deliver then the model can be extended easily - from software development to fine teas, from financial products to confectionery.
The Quick-Kill model was first developed in the context of pharmaceuticals. Only recently have the wider implications for business been appreciated.
ReferencesLendrem, Dennis. 1995 A Clear Case of More Haste Less Development Speed, Scrip Magazine (December 1 1995): 22-23.
Zaltman, Gerald. 2003 How Customers Think: Essential Insights into the Mind of the Markets. Boston: Harvard Business School Press.
© Dennis Lendrem, 2011