MRD versus the Product Development Plan

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A Market Requirements Document (MRD) is not a Product Development Plan (PDP).  The MRD represents what needs to be done to achieve your business objectives from a market perspective. An MRD seeks to answer the question, ‘Should we do it?” On the other hand, a PDP is a response to an MRD that seeks to answer the question, “Can we do it?”

You must keep MRDs and PDPs separate. If you don’t, you could end up making product-investment decisions based on internal capability, without the context of what customers will buy.  You could end up building the product right, but not necessarily the right product. See the key differences between an MRD and a PDP in the table below.

Decision Should we do it? Can we do it?
Contents Assessment of:
Market needs
– Competition Potential for advantage
– Profit opportunity

Presented as:
– Business case
– Product requirements
Details of:
– Development approach
– Product specification
– Schedule
– Resource plan
– Financial plan

Developed from:
– Requirements analysis
– Resource assessment
– Concept selection

MRD and PDP Do Not have to Match

The back and forth goes something like this. Marketing completes the MRD and reviews it with engineering. Engineering responds with a PDP. The PDP inevitably will show product capability, cost, and release timing targets that don’t perfectly line up with those in the MRD. But it’s a reasonable plan and substantially satisfies the business case. So, the PDP is approved.

Then comes the order to update the MRD to match the PDP. This is folly. The “M” in MRD stands for “Market.’  Unfortunately, the market doesn’t change to match the capability of the supplier. If you change the MRD to match the product plan, you no longer have an MRD. You have another copy of the PDP.

It’s OK if the PDP deviates from the MRD if everyone agrees that the PDP still represents a worthy commercial endeavor.

Caution product managers – your signature on the PDP indicates that you agree that it is an acceptable plan of record. If the program runs into trouble, it’s foul play to point back to the MRD and say, “But that’s what I really wanted.”

Both MRDs and PDPs Can Change

You can’t help but have sympathy for the new product development side of the house. The last thing they want is for the goalposts to keep moving. Unfortunately, that desire is unrealistic.

Markets and competitors will move in ways that were not anticipated when the original MRD was conceived. This is especially true because new capital equipment development projects often take more than a year to complete. These changes must be accounted for in the development program, or you run the risk of bringing the wrong product to market.

Instead of resisting changes in the MRD, insist that MRDs are re-validated at key product development milestones. That way, if the environment has changed, you can adjust before it’s too late.

The PDP can change when either the MRD changes or the execution outlook changes. As explained earlier, the MRD and PDP do not have to match. Therefore, changes to the PDP do not precipitate changes to the MRD.

MRD and PDP Approval

MRD approval should be a major and formal decision in any product-lifecycle-management process.  That approval should be based on the MRD’s ability to produce a “yes” to each of the questions below.

Regarding the business case:

  • Is the opportunity real?
  • Can we win?
  • Is it worth it?

Regarding the product requirements:

  • If the product was introduced as described, would it satisfy the business case?
  • Are product requirements described with enough completeness and clarity to develop a PDP?

The measure of success for an MRD is not necessarily whether it gets approved; it’s how well you’ve connected the dots to ensure that an organization can make informed, high-quality decisions about the opportunity and the product.

If the MRD is approved, you’re ready to move on to the next step; creating and approving a PDP that addresses the product requirements in the MRD. It’s important to emphasize that approving an MRD does not commit to developing a new product. It simply approves the organization to spend the time and resources necessary to develop a PDP. The organization is not approved to begin developing a new product until the PDP has been approved.

Typically, the MRD and PDP approval processes secure signatures from product management, the product development team, and the business owner.  See the meaning of stakeholder signatures on MRDs and PDPs in the table below.

Signature MRD MeaningPDP Meaning
Product management This is our recommendation. PDP satisfies an acceptable business case.
Product Development Team We have received and understand the product requirements. We commit to execute per the PDP.
Business Owner OK to proceed with developing the PDP.OK to proceed with product development.