The Concept Paper for a New Product: The Kickstart

of a Development Project in the LPPD Environment

by José Ferro, Lean Institute Brasil

As more companies engage in the transformation of their product development system and
the whole enterprise using the Lean Product and Process Development (LPPD) approach,
there is a need for better understanding of some of LPPD’s key practices. One important yet
frequently overlooked tool is the concept paper, a fundamental mechanism to kickstart a new
project. This article will present the concept paper, define its purpose, outline its main content
elements, and explain its importance to an LPPD transformation.

The Concept Paper and the Role of the Chief Engineer

The main purpose of the concept paper (CP) is to define customer value and the key product
and project definitions needed to start a new project. It’s the responsibility of the chief engineer
(CE) to draft this essential document and it is a critical support element for their work.

As the person responsible for creating a new value stream, it is essential that the CE create the
concept paper. It is critical for supporting and developing their capabilities and leadership skills.
To bring a new product family to the market in an efficient way, the CE must be able to:
• explain the business case;
• establish the basic technical design definitions and targets;
• define the management of the development process;
• coordinate with other functions such as sales and marketing, manufacturing,
supply chain, quality, finance etc.

The process of writing this guiding document will expand the CE’s thinking and deepen their
understanding of what is important for the customers and the company based on real facts
and data. This work will qualify and empower them to build essential support and alignment
across organizational layers and functions, which are necessary to create and manage a
successful project.
 A strong CE capable of integrating an organization’s different functions, existing knowledge,
and expertise will create a knowledge powerhouse that delivers outstanding products and
results. Typically, the CE leads a small group of people to write the concept paper. This
group should be able to link different activities within multiple functions and organizational
hierarchies, and to break down cross-functional silos, with the knowledge and resources to
manage horizontal value flows.

The CE in the LPPD environment oversees the whole product development process. This
allows for the promotion of a better alignment of the entire organization; reducing typical
handoffs, while minimizing common development wastes (i.e., useless information, knowledge
loss, communication failures between functional silos, wishful thinking, etc.) that frequently
lead to failed projects, excessive costs, delays, quality problems etc.

The development of a new product in the LPPD environment incorporates not only the physical
products and services to be offered and delivered but also the new knowledge creation and
usage. The concept paper is fundamental to supporting this project-management approach
and this new leadership style and focus.

Chief Engineer
The Chief Engineer (CE) is a program or product engineer, with full
responsibility for the development of a product family.

The CE has both a business and a technical responsibility, not just a

focus on design elements.

The CE has to lead as having no authority as most people working in

a project will have no hierarchical linkages with them.

Some companies have similar positions such as product manager or

program manager, but often with a more limited range and scope.

The CE could also be called the Chief Entrepreneur. Allen Ward uses
the term the Entrepreneur Systems Designer (ESD).

2 The Concept Paper

Benefits of Having the CE Write the Concept Paper
In stark contrast to the current situation in most companies, using the LPPD approach and
having a CE writing a concept paper creates the conditions for the emergence of the clear
thinking required to make good products for customers and good processes for the company.
An empowered CE will master knowledge about the market, the product, and the processes, and
use this knowledge to develop both their personal and the organizational capability. Creating
a concept paper goes hand-in-hand with empowering the CE to lead the development of a
new product and ultimately a profitable value stream.

Writing a concept paper represents the social construction of commitment, engagement,

agreement and alignment, providing the opportunity for contradictory voices and multiple
arguments to be presented and considered during the initial stage of the project. This helps
to define the decision-making process, establish the main stakeholders to be involved, and
grasp the knowledge to be generated as well as the business results expected and the timing
of the choices to be made in the upcoming development-process phases.

CP

The Study Phase: Deep Learning and Writing

The process of writing a concept paper is a unique and necessary development activity for the
CE. No matter how knowledgeable they might be about the existing products and processes,
they will always learn more by deeply studying the situation, “going to see” at the source, and
asking the right questions to obtain vital data and facts. This will create a profound knowledge
and understanding around the problem to be solved for the customer and the company.

The Concept Paper 3

 Existing knowledge and previous experience by the
CE may be desirable, but it should be expected and
accepted that they will have some gaps to work on.
Writing a CP will develop and clarify their thinking
around the new value stream, which will enable
them to initiate and conduct a productive dialogue
during the various development stages. It will also
establish important definitions and understandings
of the new product to be tested and defended during
the course of the development journey.

The study phase can take up to several months, and will require a great deal of research,
data collection, consultation, and reflection. It should allow for frank, objective, productive,
and profound discussions with the key project stakeholders. This includes ongoing dialogue
with senior management to align the new product development with the corporate strategy
and business requirements. The concept paper is a summary of possibly a staggering amount
of data and information that has been collected.

To be successful in the study phase requires certain personal characteristics, behaviors, and
attitudes. The CE’s observation and listening skills have to be acute and perceptive enough to
capture a multitude of inputs from customers and the environment into which the product will
be introduced, as well as from other competing companies and major internal stakeholders,
e.g., senior management, engineering, manufacturing, purchasing, suppliers etc.

This requires an open mind, scientific fact-driven thinking, an eagerness to learn, critical
thinking skills, and a challenging attitude. The CE must also posses the necessary negotiation
skills to reach agreements with the often highly opinionated individuals responsible for areas
in which specific developments and experiments will need to be run.

The Study Phase

The CE, together with a very small team, visits the different gemba to
observe—often with an ethnographic perspective—and listen, gather data,
compare, discuss, debate customer needs, understand the competition,
current product portfolio strengths and weaknesses, identify business
needs, evaluate internal capabilities and knowledge base, identify gaps,
assess disruptive factors etc.

4 The Concept Paper

Why is this approach better? What is the benefit of having one person responsible for this
critical and often complex activity? A typical organization gathers much of the information
required for the new-product development process. Sometimes it is necessary to make budget
definitions as part of the investment decision-making process.

Companies may use many different formats to present a business case for a new product to
get the approval of top management. However, these cases are typically too generic, providing
vague promises or wishes, with some cooked numbers that support an optimistic, with much
wishful thinking, but ill-defined view. Even if they are well-documented—packed with lots of
data and layers of slides—they are often the result of too many different functions and persons
and not well-coordinated and aligned.

As important, this scattered approach dilutes responsibility and knowledge, and creates too
many handoffs. With many people involved and no one clearly responsible, a PD project can
quickly turn into an unmanageable and chaotic development processes. The people that will
execute the resultant plan are not necessarily the people who defined it. The focus can become
the optimization of functions, instead of the horizontal flow improvements and develop-
ments. The results will likely be frustrating.

What is the Concept Paper?

The concept paper is typically a 10–30 page document that translates customer needs into
clear, consistent requirements. It defines the parts and components of the product to be
developed; provides guidance for the selection of concepts; defines key targets and tradeoffs;
and formalizes the main project elements, such as specific objectives, timing, cost, budget,
and knowledge reuse.

It should outline the product vision, the product scope and features, the main targets and
ranges, the project timeline and its key milestones, and the project management roles and
responsibilities. The specific definitions of these elements are as follows:

Product vision
The product vision is the core of the concept paper. It should present the overall concept,
business reasons, and requirements for the product. It should answer the questions: Why
we are developing this new product? What problem for our customers, company, and
society are we trying to solve?

The Concept Paper 5

 It could begin with the product background, such as a brief history of the product in the
market, its relevance for the company, and the main reasons and business justification for
this new product. It should contain all the necessary information, based on real facts and
data, to get started with the new product. Understanding the customers’ needs is the crucial
part of formulating the product vision.

Some specific questions to be asked are:

• How do customers currently use Product vision

existing products?
Definition of value for customers, the
• Who are the potential customers? company, and society, including the
business and technical requirements.
• What are their needs?
• What frustrates them? Vision statement
Simple and crisp, clearly defining the
• What problem are we trying to solve
product vision
for them?
• Could we segment the market? Vision sketch
A simple drawing or image representing
• What are the competing products
the new product
and services?
• What are emerging and possible
disruptive factors?

The best way to truly understand the customers’ requirements is through direct observation
and engagement. Using an ethnographic approach that tries to understand customer needs
from their point of view and perspective can be very useful. This involves the CE going to
the existing customer base, where the potential customers are or could be. They should get
as close as possible to actual customers, using products and concepts, in real conditions and
situations, as much as possible. Qualitative direct observation will frame the definition of the
real product value for the customers, which should derive the quantitative product requirements,
functions, and features.

Additional requirements to enhance and improve customer experience could be explored as well.
Traditional ways to assess the market, i.e., market research, analysis of data based on internal
quality surveys, specific customer complains, data from external sources, etc., can be used to
further understand the customer and existing products. But they should never be utilized as
part of any blaming game for incorrect data and analysis as the CE is ultimately responsible.

6 The Concept Paper

 Product Sketch

The product vision should also be informed by an understanding of different macroeconomic

scenarios, a study of competitors’ products, competing products already offered by the company,
and other possible disruptive alternatives and factors. These may be presented in this vision
part of the paper, along with specific business objectives, e.g., increase market share, enter new
market segments, protect an existing position, provide a better customer experience, increase
margins, improve quality, diversify customers, etc.

A clear hoshin objective could inform the product vision. If a company does not have a clear
definition of priorities, alignment, and communication around its True North, the process of
writing the concept paper will expose this weakness, and therefore should stimulate an effort
to clarify it. A clear and concise vision statement for the product should make the vision easily
understood by all people involved. A simple and short phrase should capture the imagination of
both the company and the team involved in the development effort.

A conceptual sketch or simple drawing here is often very helpful. Not of the final product, but
as a visual representation of what the product might look like, to drive the team’s focus and
attention and to engage others in the discussion. With these elements in place, the product-
specific characteristics—its main features around the product scope—can now be thought out.

Product scope
The concept paper should define the potential product scope, including the main components
and features, e.g., product content, the component’s architecture, the list of possible options,
how much product variation and standardization there will be, whether it is part of a common
platform with other products, etc. The new product could be an improvement of a current
product, a major change in some key product elements, or a completely new, innovative, or
even disruptive product. Or it could even have the pretension to create a new market or an
entirely new business model.

The Concept Paper 7

 The scope should include the must-have, nice-to-have,
and must-not-touch features of the new product. Product Scope
“Must-haves” are the new essential requirements, Platform, modules
elements and features for the new upcoming product. Models, versions, options
They could embody the new knowledge developed Components, subsystems
during the development stages. “Nice-to-haves” are Reusable knowledge
new features that could be incorporated into the Must haves
product depending on the various factors that interfere Nice-to-haves
in the development, e.g., new knowledge generation, Must-not-touch
timing, and costs. Existing knowledge from previous Is/is not list
projects could be very useful here. Finally, “must-not-
touch” elements describe those features that will be
maintained in the new product architecture.

A clarification of what the new product “is” and what it “is not” and “doesn’t intend to be”
could be helpful to avoid the constant loopbacks, rework, divergent and conflicting ideas,
chaos, scattering, and dispersion that tend to occur during the development process. These
definitions help to frame the cooperation and engagement with different functions where the
deep pockets of knowledge are often available that would have to pulled during the development
process. It is a way to guarantee the alignment and focus throughout the project. At the same
time it clearly defines the requirements and the areas in which the CE will need assistance
and support.

Product Targets
Once the customer needs and product vision
are translated into specific product features
and scope, the next step should be the
definition of specific quantitative product
requirements around targets and ranges.

Specific targets for the economic side might

include such indicators as expected volumes,
costs, margins, sales forecasts, technical
performance features, lifecycle expectancy,
etc. A typical description of product targets
as compared with competitors’ existing
products could be laid out in a simple
matrix as follows (see right).

8 The Concept Paper

 Main New Product Targets (illustrative)

The definition of targets should frame the process in order to quickly search and explore
different alternatives and ways to test them (as well as multiple solutions if possible). This
will allow for progressively deselecting the weaker perspectives and continuously working
on the better ones (set-based concurrent engineering).

Key trade-offs could then be defined to generate the necessary, validated learning and knowledge
throughout the development process. This knowledge can be represented in simple trade-off
curves that show the understanding of the behavior, how to solve specific problems, and whether
the solutions envisioned are worth pursuing.

The definition of ranges instead of specific targets can be equally useful as the project should
be focused on system optimization rather than searching for specific punctual improvements.
The definition of those minimum- and maximum-accepted values establishes what is sufficient
and helps to avoid excessive efforts in time and resources to reach targets that sometimes are
hard to attain.

Trade-off Curves

D/d
D/d

D/d

The Concept Paper 9

 Project Timeline and Milestones
An excellent product idea will not succeed if it is poorly executed. It’s important for the CP
to define the project cadence with key delivery dates of specific elements, plus methods and
tools to evaluate progress. The project timeline should also be well defined. The fundamental
PD decisions and definitions should be laid out, as well as when they should happen. The
project success depends upon assessing deliveries expected for the time assessed. If they’re
not achieved, some decisions will have to be made to allow the project to continue.

To guarantee the cadence and flow you need to define the main project milestones. A project
milestone is a special event that represents a point in time that marks the expected conclusion
of certain activities and tasks, and more importantly, the expected deliveries. They work like
“pulling events” when many activities have to performed in order to make some critical decision
to move the process forward. They can also be seen as decision points based on some specific
learnings achieved.

Milestones are integrated events (3 to 10 in a typical project) that make the knowledge progress
visible and represent the conclusion of a learning cycle. They pull the required development
work and knowledge. The definition of objectives and dates of these integrative events will
help to synchronize the work of different functions and areas. This creates clarity around the
work to be done and delivered.

April May June July Aug. Sept. Oct. Nov. Dec.

1–15 15–30 1–15 15–30 1–15 15–30 1–15 15–30 1–15 15–30 1–15 15–30 1–15 15–30 1–15 15–30 1–15 15–30

Target

Select 5 Build 3 Build beta Product

concepts prototypes prototype confirmed
Choose Deselect Learning
3 concepts 2 prototypes evaluated

Milestones are key integrating events when knowledge progress is made visible,
and represent the conclusion of a learning cycle.

10 The Concept Paper

Milestones should define the key project engineering, purchasing, and manufacturing decisions,
all placed in a time frame. An emphasis on physical and tangible elements is often useful.
Examples include:
• concepts definitions
• concept de-selection
• prototype definitions
• evaluation of tests/knowledge generated
• start of production

Another mechanism to evaluate progress and to advance the project are design reviews,
which are used to evaluate the current stage of the design against the previously defined
requirements. These design reviews should involve the project sponsors and, if possible,
external experienced people.

And finally, a daily routine could be established to guarantee the discipline and the problem
solving arena where emerging issues are dealt with as they appear to allow the necessary time
to fix them to mitigate its consequences. The project critical path would also be defined in
this part of the concept paper.

Project Management
Methods and Techniques, Roles and Responsibilities
It is important that the concept paper details how the project is going to be managed, including
team composition and definitions, and the roles and responsibilities of each person. Content
should include senior-management sponsors, key A3s for the project, visual management and
daily management schemes, designated problem solving tools, the project support scheme,
and the help chain. The contributions of the right people, at the right time, and the expected
learning and how it will be validated should also be captured and displayed clearly.

This part of the concept paper should frame some resource allocation definitions, such as the
size of the team, global or local team composition for complex projects in global companies,
co-location strategies, how the dedicated functions will be allocated, the key project personnel
around the CE, etc.

The Concept Paper 11

 Many people might be involved in multiple projects, which will require synchronization
across different functional groups. There should be a generic timeline for the whole project
and more short-term timelines, e.g., “allow two weeks for a more detailed approach.”
Design reviews in the scheduled time, such as who is going to be involved and how they will
be engaged, should be included. The obeya room project-management architecture could be
the place for making this work visible, allowing for exposed problems to be solved by an
engaged and committed team.

The project obeya should make the real project conditions visible and expose problems and
challenges. And it should be an exciting and dynamic work area that shows everyone where
they are in terms of the development work, generate and expose new ideas, elicit learning and
reflection, engage team members, and stimulate thinking. Some of the main targets and visual
aids (e.g., pictures of existing products, concept sketches, early-phase product prototypes, A3s
of key project elements, etc.) should be publicly displayed in this space. The main elements of
the CP should be clearly displayed.

Companies in the transition process of using visual systems but in parallel having a traditional
planning and control may have a difficult time managing two parallel and often antagonistic
practices. A definition towards using the visual management entirely in at least one project
could be an useful decision.

Additional key elements defined in the concept paper could include: major challenges and
risks, connections with other company projects, specific assumptions and definitions about
the business implications, critical factors and risks, support-function requirements etc.

Two Views of a Product Obeya

12 The Concept Paper

The Concept Paper Enhances and Transforms Product Development
The effort of writing the concept paper often represents a major turning point for many
companies in their LPPD journey. In addition to developing deep product knowledge, it
creates alignment and commitment from the major organizational functions at the start of
the project. This provides clarity and focus for the development and execution of the project.

More importantly, it helps the CE to build credibility and understanding around the crucial
elements of the new product and forms the foundation for leading without authority, thanks
to the knowledge and support gained, and the alignment achieved for the entire company.

Development processes tend be chaotic, with high levels of uncertainty. Many projects fail
because they start too loosely with some vague ideas about the future products. What sounds
like an initial good idea, often doesn’t survive a very simple check and critique. Conversely,
you can start with an idea or concept that proves to be inadequate only in the advanced phases
of the project, resulting in much rework and long lead times.

Writing a concept paper allows the CE to navigate flexibly but firmly in frequently turbulent
waters. It may take a long time to research and write it, and can be very time-consuming. But
it engages almost the whole organization and facilitates the teamwork required to develop a
successful value stream for a new product. Drafting the concept paper is a key part of the
nemawashi process (planting the seeds for the harvest) by getting organizational alignment
and agreement prior to starting the project.

The concept paper should not be a frozen document. It will and should become a living
document throughout the entire development process, changing and improving based on
facts and learnings—not just new opinions—as new factors emerge. Reviewing its content
around major significant milestones can be seen as reflection moments.

It is not necessary to define all elements of the new product before beginning to write a
concept paper. But having a formalized document helps to prevent scope changes—even
vision changes—from happening too quickly and erratically. Having the CE act as the sole
guardian of the concept paper avoids the common situation where many people contribute
interesting ideas despite none of them having a knowledgeable and systemic point of view.

Communication and Engagement

Communicating and engaging with everyone is fundamental in any successful project. To
support this, an A3 based on the concept paper should be written to easily and visually
communicate its main elements. As the development process unfolds, additional teams may

The Concept Paper 13

 get involved and a quick engagement will be
A3
needed. An A3 can be a useful and efficient
way to explain the main elements and the Vision Timeline
overall project story to them.
Scope
Once finalized, the concept paper can be
Targets Management
signed by key people involved to formalize
the agreement and presented to a company- Analysis
wide audience at a product “kickoff” event.
This will energize the company and engage
the teams in the construction of a successful
future for the organization.

It can also be used to “celebrate” the agreement achieved so far, and engage the team and
the supporting functions to gain the commitment required to move the project forward. If
written and presented properly, it should be able to engage people emotionally and drive
passion around the new product.

Product “Kickoff” Event

D/d
D/d

D/d

A public ceremony where the concept paper is presented and discussed to communicate
and validate product ideas, create alignment around the product vision, and explain the
benefits for the company.

14 The Concept Paper

Conclusion
A good concept paper should be clear, compelling, concise, and time oriented. How detailed
it should be and how deep it goes depends on the maturity of the company, the nature of the
project, the current project development processes, and the knowledge and capability of the
CE. The CE’s ability to tell a compelling story and present a winning argument about the
new product is a key success factor for engaging and gaining support.

By defining the product’s vision, features, and targets, as well as the project’s timeline and the
management processes, the concept paper establishes a common project language, a standard
framework for thinking, and the flow needed to get a new project started. It engages the deep
thinking of the CE and enhances their capabilities and skill. It creates commitment around
the new product from the perspective of the customer, and transforms an organization’s
ideas into concrete technical and business realities around new products that better satisfy
their customers. It is a great way to kickstart a development project and create outstanding
and successful product.

Notes
Thanks to John Shook, Jim Morgan, Eric Ethington, John Drogosz, and Katrina Appell for
providing the LPPD learning environment. Eric and Katrina made very useful specific contri-
butions to the content of this paper. Thanks to Thomas Skehan for editorial and art support
and Cameron Ford for editorial assistance.

A first version of this article was presented at the LPPD Co-Learning Partners meeting at
FMC Shilling Robotics in Davis, Ca in November 2016. And thanks to FMC Technologies
Rio Tech Center for providing the testing ground for some of those ideas and concepts.

The LEI-LPPD web site (www.lppd.org) has multiple learning resources that further support
this article. Some of the issues mentioned, such as set based concurrent engineering (SBCE)
obeya, and visual management, milestones, etc., are discussed in greater detail on the site.

References
Liker, Jeff & James Morgan. The Toyota Product Development System: Integrating People,
Process And Technology. Productivity Press, 2006.
Sobek, Durward and Allen Ward. Lean Product and Process Development. Lean Enterprise
Institute, 2007.
Hino, Satoshi. Inside the Toyota Mind. Productivity Press. 2006.

The Concept Paper 15

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