Low-Cost vs. Value-Added

I was working on a low-cost version of one of our products before I went on maternity leave.  The idea was that we would have access to more and different places to sell this product if it cost less.  My R&D manager and I were discussing the project on my return and he said he would much rather see the project change into a value-added project, encompassing many more beneficial options than just a lower cost.

Then he made the comparison that really grabbed my attention, although it was a little more expanded in actual conversation.

Why should we put time and effort into reducing the cost of a product of which we don’t currently sell much and isn’t even significantly differentiated from its better-known competitor when we can put time and effort into a greener, more effective, significantly new product that would open up even more options for marketing in a direction they’re already headed?

In other words, why are we thinking so small?

Marketing had good reasons for proposing and supporting the low-cost project.  But why not think bigger?  Why not try for something more?  In the process we should be able to make some short-term improvements on the current product as well.  We could even end up with a whole product line.

Last year, when we originally set-up the project, it seemed to make so much sense to focus on a specific and probably achievable goal with predictable results.  We had a cross-functional team meeting to identify what characteristics were important to the customer, and which markets were most available to us, and what technological aspects were most feasible to change.  Then we decided on the scope of the project.  It was a very effective and useful collaborative process.  But I don’t remember anyone ever asking something bigger, such as what would be the best version of this product in five years? 

I think that something along those lines is what my manager must have been asking himself.  This is also what I’m trying to achieve.  I want to be the one who thinks to ask that question, at least about my own projects.  The bigger answer may not always be appropriate, and in this case the idea might not be approved at other levels.  But the question should be asked.  

There are some self-serving aspects to R&D promoting the idea since changing the project’s scope would help our divisional R&D meet some metrics which we report up to the national and international levels.  Although those metrics are there in the first place to stimulate and measure innovation…