The Organizational Mistake That Can Stall New Product Success

Forbes

5 hours ago

Ryan Gray is Co-Founder and CEO of SGW Designworks, a product engineering and design firm featured in The Lean Startup.
Should your engineering department be doing product development?
Two decades ago, when I was employed by a fortune 500 company within their new product development group, I was immersed in big-budget projects with massive cross-functional teams. Those projects often focused on developing a new product, as well as the technology to manufacture it—in parallel. In that setting, the business made a clear distinction between staff focused on engineering versus those focused on Product Development.
Today, I've got sixteen years of experience working with smaller and mid-sized businesses to develop new products. The businesses we work with are typically not running multiple new product development projects with eight-figure budgets in parallel like a Fortune 500 might. Instead, they are trying to get the most out of each talented team member. In these businesses, we often see leaders intentionally conflate engineering departments with new product development teams.
Why does this happen? There are a few drivers:
• Businesses hire engineers to provide field support, incrementally improve the product line and get the most out of manufacturing processes. On paper, these engineers have the skills to develop new products as well.
• SMBs are resource-constrained: sometimes by cash, sometimes by talent pool limitations. It becomes the norm for team members to wear multiple hats.
• Leadership recognizes that the engineering team that supports the product line is probably the group most knowledgeable about the product, how it's made, and its weaknesses. It would seem that this positions them well to create the next generation of product.
These drivers lead to organizational structures that ignore the important differences in the skills required to support a product line versus the work required to create new tech, features and products. Let's dig deeper:
Characteristics Of A High-Performing Engineering Team
The most effective engineering teams I've worked with focus on solving product or manufacturing problems to help enable sales growth. This means supporting users, making product changes (and related manufacturing changes) to address product shortcomings, and cost-optimizing at the product and process level. This type of team thrives in situations with defined constraints, where the problems to solve are measurable.
Characteristics Of A High-Performing Product Development Team
Product development teams with a high rate of success (meaning launched, profitable products) focus on understanding use cases, challenging assumptions about feature sets, figuring out what's possible with today's tech (and what will be possible with tomorrow's), running disciplined regimens of experiments, navigating product feature pivots and aligning the product manufacturing path to business goals. This team runs with less defined, more exploratory work. And while engineers often play a key role in executing it, effective new product development requires a different mindset: one that balances creativity, technical experimentation and business acumen.
The Risk Of Combining Roles
Is there overlap between engineering and product development? Certainly. But people who excel in one area are often less effective—and less satisfied—in the other. Engineering tends to reward precision and predictability. Product development, on the other hand, demands comfort with failure, iteration and shifting targets.
When one team is responsible for both supporting existing products and creating new ones, it creates organizational drag. Prioritization becomes murky. People gravitate toward what's familiar. Sales support requests, field issues and manufacturing challenges will almost always displace exploratory design and prototyping. The end result? New product efforts can stall.
Building The Right Structure
Successful new product development in SMBs requires explicit role clarity, even if the teams are small. That doesn't always mean building two separate departments—but it does mean being deliberate about expectations, timelines and resource allocation between engineering and new product development efforts.
Some practices that help:
• Define clear responsibilities for roles in engineering and NPD separately, especially if the same people contribute to both.
• Set aside focused time and resources for product development efforts that's protected from daily operational noise.
• Ensure leadership understands the trade-offs involved in dual-role assignments.
• Consider using an outside team for your new product development efforts, keeping the internal engineering team focused on their critical responsibilities.
Good new products don't typically emerge from your engineering department. In fact, assuming they will—without providing the time, tools and team structure to support true product development—can quietly sabotage your growth strategy.
Ask yourself this: Are you expecting your engineers to innovate while they're busy keeping the existing product alive? If the answer is yes, it may be time to rethink your structure and resourcing plan. Product development deserves its own space. Without it, even the best ideas may never make it off the whiteboard.
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