PDMA 2006 - Track 2 - What Good is Good Growth?

Speaker: David Merritt, Sr. New Business Development Manager for Mellon Financial

The New Product Development challenges at Mellon Bank were:

• No consistent method for preparing the business case
• Ideas could not be killed
• Ideas were driven more by passion than by business reasons
• The was little process, and no checklists
• "Everything comes to me" -- everything was being deferred to the business head

The redesign of Mellon's innovation approach rested on these principles:

• Have the right people working on the best projects
• Work on customer-focused ideas, not competitive copycat ideas or as reaction to competitive products
• Top-down-driven management

He mentioned a book from Cooper and Edgett called Product Development for the Service Sector. It provided a lot of ideas on how best to accomplish this. He also bought E-Guide from Stage Gate Inc.

The problems, again, that they were facing were:

• NBD (new business development, what Mellon called their innovation) was handled by an independent and isolated team
• There was an unwillingness to kill ideas
• NBD lacked credibility within the organization
• They were a highly matrixed organization

The key elements of their newly-redesigned program were:

• Innovation was integrated into each employee's peformance plan... they must generate at least one idea
• Innovators were recognized publicly via posters and in company meetings
• Innovators were given rewards via a point system, with the winners receiving crystal trophies

Some of the processes they put in place were:

• They implemented Stage-Gate for Financial Services, which was different from standard Stage-Gate.
• They did not focus on cost reduction or process improvement.
• For small enhancements, projects were reassigned to the line managers rather than kept by the innovation team.
• They created a new "Gate Zero" for pre-assessments of ideas.
• They conducted an "executive sniff test" at Stage 1, to get top management feedback.

He presented info on their portfolio of projects:

• 134 Kills
• 131 Reassigned projects
• 34 On Hold
• 23 Active projects
• 18 Launched products

A new product he described which came out of this renovated innovation process was Mellon's Liquidity Management Service, which is a product providing money market funds to corporate treasurers as to way for them to invest cash-on-hand in their accounts.