Stiernberg Consulting Reports Investment In Design Continues

7/9/2009 11:39:09 AM
By PSN Staff

This is an industry founded by self-proclaimed "tinkerers" whose favorite swag at trade shows is tiny screwdrivers -- or better yet, tiny screwdrivers with bright LED flashlights that make it possible to see tiny screws in dark equipment closets. So it's not entirely surprising that in good times and bad, the innovation continues in our business sector. In fact, in slower times, tinkerers have more time to solve the problems that plague them during the insanely busy times.

"The interesting economic times really separate the forward-thinking companies from the scared-off companies," notes Jeanne Siternberg, principal consultant with Stiernberg Consulting. "We've been busier than ever with the forward-thinking companies."

A business development consultancy serving the entertainment technology, music products, and electronic systems industries, Stiernberg Consulting reports that R&D efforts continue and product development has become more focused in this challenging time. "There's been a stabilization from the point of view of product development and investment on the part of manufacturers," says John Stiernberg, founder and principal of Stiernberg Consulting. "We see investment in talent and creativity continuing in a stong way and scaled to the expectations of what the future market is going to be."

Admittedly, there have been ups and downs over the past 12 months. John Stiernberg notes that last year at this time, all was "full steam ahead". But in the second half of the year, some manufacturers began to re-evalute and put projects on hold. "They didn't kill them off entirely, but they slowed some down," he explains.

However, much dust has settled in these past three months, and with perspectives realigned, some of those slowed projects are off the list, and others are charging forward, with finished products expected in anywhere from six to 36 months. John Stiernberg is quick to point out that those eliminated weren't just nixed because of the economy, "but because maybe they weren't such great ideas in the first place. Manufacturers' evaluation criteria for which projects get invested in are now better articulated."

This wizened approach to R&D comes with the maturation of the commercial audio and video integration industry. While the familiar 'throw it at the wall and see if it sticks' approach will likely still continue both in manufacturing and among consultants and integrators, market research is playing a more significant role behind the scenes.

Yesterday, Stiernberg Consulting released its newest white paper, available free of charge to industry colleagues: "When In Doubt, Find Out: Using Market Intelligence to Manage Risk and Uncertainty”. The report details how a systematic approach to market intelligence can make companies more competitive and agile in a changing marketplace.

In an engineering-driven industry, innovation is often more similar to a lightning strike than a marathon. But even those manufacturers reluctant to operate according to market research metrics "are being more selective about what they're bringing to market," notes John Stiernberg. With R&D budgets cut in half in some cases, manufacturers are seeing the advantages of releasing application-specific products. "They're going for higher market share in a smaller segment of the market, as opposed to putting something one-size-fits-all out there," observes John Stiernberg.

"Manufacturers are doing a little bit more homework to decide not just what the products are going to be and do, but how are they going to be positioned and rolled out," adds Jeanne Stiernberg. "They're looking at the research behind questions like how is it going to impact the market, and how is the market going to impact them."

Stiernberg Consulting previous white paper, "Uncommon Sense," specifically addressed product development, and listed seven areas in which to invest in an uncertain market. "One of them is product development," says John Stiernberg, "and that's whether you're a manufacturer, a design consultant, a contractor, or a systems integrator."

A "product", John Stiernberg emphasizes, "is whatever you get paid for, so if you're a systems designer and selling designs for a fee, there's still a need to invest in product development. That way you can go back to your old client and say you've got a new twist on things. You're expanding and enhancing the product mix as part of dealing with the very volatile market conditions."

Another budget-conscious adjustment that might be made in the area of design is to offer expandable systems. Offer a baseline system now, and add more features and functionality as budgets allow.

"In a way, this is indirectly driving business to design consultants and to those design/build contractors with strong in-house design teams, because what they need to in the context of the economy is anticipate future needs," observes John Stiernberg. "But also be able to deliver something now that the end-user can start using right away, even if it's not 100 percent of all future needs. That's a design challenge. It's not impossible, but it kind of weeds out the people that can't think past the tactic of 'Tell me what you want and I'll deliver it."

This long-term approach to working with a client to meet their needs can also differentiate commercial audio and video integrators from the new players entering the market from the retail and MI channels. "When they were so hard hit with the recession, they started looking toward systems integration channel," notes Jeanne Stiernberg.

We've seen this happen before with other trades entering the market space, but it's usually a foregone conclusion, as Jeanne Stiernberg conclues: "There's more to meeting the needs of this market than you might think."
 

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