Product development is the collective activities, or system, that a company uses to convert its technology and ideas into a stream of products that meet the needs of customers and the strategic goals of the company. - Michael N Kennedy
A company is often organized in functional departments: sales/market, production, finance, etc. We must on the one hand carefully distinguish between functional departments, which are the hierarchical structures people belong to and report within, and on the other hand the processes that those people partake in.
The product development process involves several functional departments: leading, production, sales/market, and not least: engineering design, where responsibility for product development is often located. It is therefore common practice to manage projects by a project leader from the design department, which is often called product development department.
Product development is different from sales, purchase or production because it involves and transcends so many different departments and such a large part of the company. Which is quite natural since product development is about what the company´s business will be in the near future. But it also differs from the rest in other ways.
Product development is a learning process. This may sound banal, but it's about perspective, how you see it, a paradigm. I will try to explain.
Anyone who has ever developed new products from the very first ideas all the way into production has experienced how one "gets to know" the product, how one discovers the products characteristics during product development, for that is how it's felt.
You create concept solutions, mathematical models and prototypes. By using and testing them, you get to know them. This is a learning process, a building up of knowledge. You learn how to design a product with certain characteristics; the design is modified, followed by a new accumulation of knowledge. Each step, each activity, is experimentation with possibilities, an exploration of unknown territory, you draw the map as you go, you learn.
The more variants you develop and get familiar with, the better you will become at creating the product finally chosen, since you have learnt how to design to obtain the wanted characteristics. You have become expert at designing variants of a product not yet in production.
Product development is an intense learning process from zero - to how to design and produce precisely the right product in the best way possible.
The understanding that product development is a learning process leads to a novel view of product development and how it should be organized.
It also explains why people that have no experience of their own from product development become so nervous and insecure when you hint at the fact of how it is done (and that it is the necessary way, if the results are to be any good). They want to be reassured and have guaranties, as if it was possible to develop a new product in a straight line from start to finish, as if you were already familiar with the territory that nobody has ever visited.
So, what skill do we have?
We, who have managed new product development projects, can say that we have never done anything that we've done before. This is what I mean: we have time after time run through a learning process/method that have been by and large the same, but the object of the process have varied. We are good at a certain type of learning.
By knowledge buildup and learning process I do not mean attending class, take a course, or study textbooks. What I mean is exploration that yield knowledge in the sense of potential for meaningful action. By aid of scientific method this becomes research. Take note that a group has learnt first when it has changed.
Understand me right. Surely you can say that learning, adjustment and change is important to every part of the company, but the goal of the activities are not learning. The objective of the non-product development processes and departments are to repeatedly produce as error free work results as possible.
In the production department, when the best production method for a specific product has been found there must be no changes. Learning stops and is exchanged for a meticulous repetition. Every day is exactly like the previous.
Product developers on the other hand, explore consciously the world in their work and two days are never alike, but for the fact that the developers explore, make use of their findings, and adjust to them - they partake of a learning process.