Exploratory product development

Exploratory product development, which often goes by the acronym ExPD, is an emerging approach to developing new products. Rather than going through a set of discrete phases, known as the phase-gate process, exploratory product development allows organizations to adapt to a landscape of shifting market circumstances and uncertainty by using a more flexible and adaptable product development process for both hardware and software. Where ExPD is more suitable for product development in markets that are unstable and less predictable, the traditional phase-gate approach works best in a stable market environment.
Unstable and unpredictable markets cause uncertainty and risk in product development. Uncertainty is defined as having imperfect, or a lack of, knowledge resulting in the potential for surprise or unpredictability in the future. Uncertainty creates the potential for risk, which can be positive or negative.
Many factors contribute to the outcome of a project, and ExPD works on the assumption that the ones that the product team doesn’t know enough about or are unaware of are the factors that create uncertainty and risk. The primary goal of ExPD is to reduce uncertainty and risk by reducing the unknown. When organizations adapt quickly to the changing environment (market, technology, regulations, globalization, etc.), they reduce uncertainty and risk leading to product success.
Consultants Mary Drotar and Kathy Morrissey first introduced ExPD at the 2015 Product Development and Management Association annual meeting and later outlined their approach in the Product Development and Management Association’s magazine Visions. In 2015, their firm received the trademark on the term “Exploratory PD.”
In 2018, Drotar and Morrissey, under their firm Strategy 2 Market, Inc., received a grant from the Polsky Center for Entrepreneurship and Innovation at the University of Chicago, in cooperation with the National Science Foundation’s I-CORE STEM program, to deepen their exploratory product development approach. They developed an accompanying software product called the Product Risk Framework. that helps a product development team identify and manage the most impactful product development uncertainties and risks. In 2019, Drotar and Morrissey published an e-book on Exploratory Product Development, called Exploratory Product Development: Adaptable Product Development in a Changing World.
Process structure
ExPD is described as a two-pronged, integrated systems approach. Drotar and Morrissey state that product development is complex and needs to be managed as a system, integrating essential elements: strategy, portfolio management, organization/teams/culture, metrics, market/customer understanding, and process (See Figure 1).
<div style="text-align: center;">Figure 1. Exploratory product development system</div>
Another way in which exploratory product development’s two-pronged approach differs from the traditional phase-gate process is in its fundamental redesign of the product development process, focusing on the reduction of uncertainty and risk. The ExPD approach has three interrelated segments to its process. (See Figure 2.)
<div style="text-align: center;">Figure 2. The three segments of exploratory product development</div>
1. Strategy
The strategy is an integral part of the ExPD process as it is considered essential to product development success. ExPD integrates a strategic framework that directs strategy in stable, moderately dynamic, or highly dynamic environments. Under this framework, strategy coordinates the enterprise, business unit, and product categories. Strategy guides product idea generation and selection.
2. Idea Generation and Selection
The purpose of idea generation and selection is to generate and prioritize new ideas and then evaluate them through the strategic framework. Once a new product idea is identified as promising (either an internal or external idea), it is prioritized among other competing ideas and slated for resources before being assigned to a product team. Within the ExPD process, the product ideas are prioritized within a prioritization valve to illustrate the turning on and off of ideas based on the resources that are available, as well as adjusting the flow of projects throughout the process.
3. Explore and Create
During Explore and Create, the product enters Investigate, where product uncertainties and risks are identified, evaluated, and prioritized by a cross-functional team. The organization then determines which products will be released into a resolution loop where the product team works on reducing and resolving the prioritized product uncertainties and risks. Once the product enters the resolution loop, the product team pursues a fast iterative/sprint approach to development where they 1. Design, 2. Build, 3. Execute, and 4. Learn. (See Figure 3.) The resolution loop is designed to adapt to learnings and changes in the environment in real-time.
<div style="text-align: center;">Figure 3. The iterative approach to exploratory product development</div>
While the product development team resolves the most impactful uncertainties and risks, the team also works towards a finished product that is released to the market.

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