IMPROVING NEW PRODUCT DEVELOPMENT BAUSCH & LOMB

Bausch & Lomb

B ausch & Lomb is a focused eye care company with approximately $1.8 billion in
annual sales. The company employs 11,600 people with approximately 600 of
those jobs in research, development, and engineering (RD&E) as a composite world-
wide resource pool. Bausch & Lomb has a presence in Australia, Brazil, Canada,
China, Finland, France, Germany, India, Indonesia, Italy, Japan, Mexico, South
America, Sweden, the Netherlands, and the United States.
RD&E is located in Germany, Ireland, and France, along with multiple locations
in the United States. The company is composed of three main business units:
1. Vision care, the mainstay of the company that accounts for 50 percent of
revenue, produces contact lenses and lens care products.
2. Pharmaceutical and over-the-counter drugs (OTC), which represents another
25 percent of revenue, produces antibacterial and anti-inflammatory products.
3. Surgical, which accounts for the remaining 25 percent of revenue, encompasses
laser, lasik, cataract, and refractive product offerings.

Bausch & Lomb is a company that has reinvented itself since the latter half of
the 1990s. The company has sold business units that were unrelated to its increased
focus on eye care in a shift away from being a diversified health care company. Since
1995 Bausch & Lomb has sold Ray-Ban, Bushnell, Dalberg Miracle Ear, Stereos
Dental Products, consumer skin care organizations including Curel and SoftSense, and
Charles River Laboratory. The company has also been acquiring new business units that
are more in line with its goals. Bausch & Lomb has acquired two major surgical
business units (Chiron and Storz), as well as a number of small pharmaceutical
business units primarily based outside the United States.
With respect specifically to new product development at Bausch & Lomb, the
director of NPD reports to the senior vice president of global RD&E, a position that
is equivalent to the chief technology officer. The primary goal of the director of NPD
is to manage and maintain Bausch & Lomb’s processes, systems, and tools that enable

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RD&E employees to do their jobs. He also publishes tracking reports that go directly
to the chairman, CEO, etc. The NPD team members also function as project managers
for various new product projects, which keeps them fresh on the processes used. The
team is able to do more with fewer people because the NPD process is firmly
entrenched in the company, and it is highly Web enabled.

GENERAL BEST PRACTICES

Examining new product development at Bausch & Lomb yields three best practices
concerning the process, online services, and checklists.

New Product Development Process

Bausch & Lomb’s new product development process, called the product
development management process (PDMP) and described later in this case study, is
easy to follow and built on internal and external successes and best practices.
The NPD team has built a process with stages/phases and gates that is practical, but
not restrictive.
Within that process, Bausch & Lomb considers its strategic decision package a
best practice. This document is created at the beginning of a project and updated at the
close of a gate. It defines four things: design goals for the product, the functional
strategy, the risk involved with the project, and how the team will meet the design
goals for the project. It also documents how financial goals for the project will be met.
The strategic decision package contains all approvals and signatures, including senior
management, so that people cannot claim that they didn’t know about it or are not
responsible for a new product project. It fosters accountability on an ongoing basis, not
only during a project review.

Web Enablement
Bausch & Lomb’s entire NPD effort is enabled by the use of the Internet and its
intranet. All project information is available online for the team to access. In 2001
the company began implementing eRoom™, a collaborative online tool that allows
for real-time sharing of project information and collaboration. Prior to the imple-
mentation of eRoom, the system was paper-based. Now, according to the director of
new product development, the auditors appreciate that this system allows for easy
document location and retrieval.

Checklist
To track progress through the course of new product projects, Bausch & Lomb uses
phase-specific checklists that are referenced back to a policy or procedure. The check-
lists are online and accessible via eRoom. Bausch & Lomb will not allow a phase to be
closed and will not conduct the review if the checklist is not complete. However, the
company does realize that not everything is applicable to every procedure, so there is
some flexibility built into the checklists.

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Improvements to the Process

Although Bausch & Lomb considers its new product development process to be
successful, it is continuously working on improving it. Improvements that are recently
completed or in progress include:
• dotted line reporting for project managers to the NPD director and department,
who assesses PDMP compliance, but does not conduct formal internal compliance
audits of the process;
• implementation of economic value added, which requires commercial, supply
chain, and RD&E people to document their expectations as a team and ensures
accountability on an ongoing basis, with a plan to convert to net present value
as a tool for measurement of NPD success and for portfolio selection;
• increased focus on project management effectiveness, which is seen by Bausch
& Lomb as one of the most important aspect for organizations to improve
upon; and
• having a global strategy with regional input to allow strategy to define the business
proposition in the front end of product development.

NEW PRODUCT DEVELOPMENT STRATEGY

In addition to an unpublished new product development strategy, Bausch &
Lomb has significant elements of an RD&E strategy in place that focus on building
and maintaining core competencies and leveraging processes and tools to decrease
cycle time. The company is also expanding its new product development strategy and
steering team while balancing new business development, licensing, and partnership
opportunities. The company is reducing the team’s size while increasing its skill sets
and adaptability.
Bausch & Lomb’s CEO has made some major changes to the company’s organi-
zational structure so that strategy, business units, and RD&E all operate at the same
level and with the same objectives. Additionally, a senior-level vice president for each
major line of business unit—surgical, pharmaceutical, and vision care—reports to
the CEO. Three regional presidents—from Europe, Asia, and the Americas—also
report directly to the CEO. Goals are established by business unit, product, and then
project. Input from the business units, the regions, RD&E, and supply chain is all
documented in the strategic decision package, which it is approved and signed by
everyone involved for each new project.
Annual objectives are documented and tracked in the monthly dashboard report
that uses red, yellow, and green indicators to show if a project is meeting its goals for
key deliverables (green), is late or at risk (yellow), or will not make it (red). This report
tracks major new product projects, as well as cost improvement projects. Bonuses are
tied to the report’s metrics, which involve global supply chain, RD&E, strategy, and
other functions. The champions for the dashboard report are portfolio managers and
project managers. It is their job to make sure that goals for deliverables are met.

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NEW PRODUCT DEVELOPMENT PROCESS

Bausch & Lomb’s product development management process (PDMP) is a step-
by-step process with built-in stages (called phases) and gates (go/no-go decision points)
that apply to strategy, marketing, sales, RD&E (including regulatory affairs and
quality), and supply chain for the commercialization of new products. The process is
fairly simple in order to help employees stay on track.

A contact lens project would typically take three years before the PDMP. Today we
are looking at 18 months to two years. The payback is real.
—Paul Loda, director, new product development

Bausch & Lomb limits the process to five phases because it believes that a key to
success is keeping it short and simple. Consequently, the company is able to plan by
phase, define a critical path, optimize resources, and measure performance based on
the tasks and deliverables for each phase. The five phases of Bausch & Lomb’s
process are:
1. idea generation and investigation,
2. feasibility,
3. development or scale-up,
4. design or technology transfer, and
5. production launch and follow through.

An important part of each phase is a risk assessment. As a project progresses, risk

should decrease. Bausch & Lomb looks at risks in three tiers: supply chain opera-
tional risks, research and development and technical risks, and marketing risks. Project
teams are required not only to identify risks, but also to provide mitigation for each risk.
Patent position is currently important when Bausch & Lomb looks at getting into a
proprietary new product. By protecting its products and processes, competition can
be minimized.
Minor improvements do not go through PDMP, and Bausch & Lomb has created
a matrix that identifies when to apply the product development management process
and when not to. Uses for the PMDP include:
• the opportunity or need for product improvement;
• specific idea suggestions from customer, sales, employee, or other key constituency;
• the need to respond to competitive entry;
• new technology in need of a concept (while cautiously ensuring that the new
technology applies to company goals);
• strategic new markets targeted for expansion via new offerings; and
• an unmet customer need where a gap is identified via ongoing customer research.

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Phase One: Idea Generation and Investigation

If you can create the right incentives, you can motivate people to come up with ideas.
But it is what you do with those ideas that determines success or failure.
—Paul Loda, director, new product development

The process begins when an employee submits an idea to the NPD steering team.
An “idea memo” details the idea, the market envisioned for the product, how the
product works, and if it would require internal and/or external resources. The steer-
ing team—composed of senior leadership representatives from marketing, strategy,
RD&E, and supply chain—screens ideas and selects the most promising.
If the steering team determines that an idea is a strategic fit, then it is passed to a
study team that investigates the market for the potential product in order to make a
recommendation to the steering team. Using an outsourced provider for much of the
market research to reduce costs, the study team determines:
• Who are the customers for the product?
• How big is the potential market?
• Are there patents that would prevent the product from entering the market?
• Is it a growing market?
• What core technologies or competencies are applicable? and
• When and where can we initiate phase one investigation?

The answers to these questions reveal if a product idea is technically feasible and
commercially viable. At the end of their preliminary investigation, the study team
presents its investigational report, a three- to five-page summary, to the steering team.
The study team recommends either investing more time and money on the idea from
a feasibility perspective or dropping the idea.
The investigation team is pulled from a group of about 24 project managers.
Because this investigation phase is considered a minimal amount of work and is an
interim assignment, not a full-time assignment, there may only be two or four people
assigned to the project at this phase.
If the study team recommends pursuing an idea, concept definition is critical to
ensure that the design goals for the product are agreed upon initially. At this point in
phase one, the project also needs an initial budget.
The investigational report created during phase one, which should not take more
than 30 days, will be the springboard for the strategic decision package for phase two,
feasibility. The strategic decision package is updated throughout the life of the project.
As explained earlier in this case study, this document provides detailed information
about the project, the plan to complete the project, and defines deliverables and
accountabilities. It also provides an update on the financial status of the project,
market inputs, and value added.

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Phase Two: Feasibility

When a project enters this phase, it signifies that the NPD steering team has
decided the concept looks promising and the company will move forward with
building a prototype, creating a marketing plan, commissioning a team, and giving
it clear goals. The project team that is commissioned will then undertake the
following activities:
• defining requirements;
• demonstrating technical feasibility and commercial viability;
• forming a cross-functional project team;
• establishing marketing, regulatory, operations, and quality strategies;
• making a risk assessment and management plan;
• creating an early project plan and timeline;
• updating the strategic decision package;
• holding a formal design review;
• gaining management approval; and
• creating a requirements analysis/software architectural design.

Formal Design Review

At the end of each phase, during a formal design review, a project’s progress is
assessed, as well as its status with respect to meeting the design control requirements
of the U.S. Food and Drug Administration (FDA) and International Organization for
Standardization (ISO) 9001.
These reviews are documented in a review summary, and the design history file
contains reference to the documentation, testing that was done, the engineering study
completed, design verification, a risk analysis, and a high-level plan for the project. The
contents of the strategic decision package are updated during phase two to include:
• program name, • risk analyses (commercial,
• scope, technical, quality, and regulatory),
• strategic rationale, • release authorization,
• design goals, • purpose,
• competition, • program idea,
• quality strategy, • product concept,
• environmental strategy, • market potential,
• clinical strategy, • competitive advantage,
• a financial analysis, • regulatory strategy,
• feasibility report, • manufacturing strategy,
• resource requirements, • program structure,
• relationship to other • patent position, and
business units, • project prioritization.

The feasibility phase can last two to 18 months. Therefore, the project plan must
define feasibility, so that only when certain tasks have been performed is feasibility
established; and only then this critical gate is passed.

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Phase Three: Development

In phase three, development, a detailed project plan with timeline, milestones,
and budget is prepared. From this phase forward a launch date is assigned to new
products. Regulatory clinical trials and filings for medical devices and pharmaceuti-
cal products are initiated and completed during this phase, which is important because
regulatory processes and issues often determine the speed at which a product makes it
to market. The more effective the company’s regulatory people are at strategizing, the
more quickly the product goes to launch.
Phase three also involves requesting capital expenditures for pilot and/or
production activities and creating the commercialization package. At this point,
marketing and sales should have established their strategy for selling the product, the
launch quantities, the target markets, and promotional and technical literature.
Marketing and field services also ensure that everyone is trained on their job with
respect to the new product. Optional activities in phase three involve updating the
strategic decision package and holding a formal design review. Finally, there must be
management approval to proceed into phase four, technology transfer.
Because the activities in scale-up and development often overlap to a point where
they cannot be differentiated as distinct phases, Bausch & Lomb is moving scale-up
to phase three, while phase four has become technology transfer. Phase three is
considered the RD&E portion, and supply chain will take full ownership of the
product and convert it into a product that can be manufactured in phase four.

Phase Four: Technology Transfer

Activities performed during technology transfer involve:
• validated, robust manufacturing processes/software;
• production and distribution readiness (turn the switch on);
• final product, process, specifications, and procedures;
• qualified/certified packaging material supplier;
• completed clinical evaluations;
• approved regulatory submissions/legal clearance;
• training involving customer service, sales, operations, field service/support,
and others;
• completed commercialization package; and
• updated strategic decision package and formal design review.

Phase Five: Production, Launch, and Follow Through

Phase five involves full-scale production, completing consumer use testing, and
finalizing the production schedule. Phase five does not require a formal design review
or updating the strategic decision package because technology transfer should close out
all development, validation, and similar work that is required. Progression to phase five
indicates that the product can be produced, launched, and shipped.

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Effectiveness of Process
Some of the most effective elements of Bausch & Lomb’s product development
management process are its simplicity, the use of checklists, the strategic decision
package, and the way in which the company applies design control. Areas of improve-
ment include the need for better global strategy definition and collecting better
customer feedback. Customer research is a challenge because Bausch & Lomb has to
solicit feedback from multiple perspectives, including doctors, patients, and mass
distributors for its over-the-counter products. Bausch & Lomb conducts an ongoing
review of its process, mainly through training, to make improvements. Part of the
job for the director and manager of NPD is to continually revisit the process itself.

Streamlining the NPD Process

Bausch & Lomb’s product development management process is not rigid. Phases
can be consolidated or eliminated if the research and knowledge already exists. The
process doesn’t dictate how people do their jobs; it details what outcomes they should
be looking for.

We don’t control the how people do it, we control the what.

—Paul Loda, director, new product development

Annual new product introductions have been accelerated from eight products in
1992 to 18 to 24 products in 2002. In 1992 a large percentage of products were late
and over budget; In 2002 less than 5 percent were. Prior to the implementation of
eRoom, which also provides version control for documents, a typical strategic decision
package might take six weeks to get approved. In 2002 approval could happen within
10 days. The use of templates and existing documents has also helped hasten the
process. Final documents are controlled in Documentum®.
Changes to new product projects are made by the PDMP administration (the
NPD owners) and reviewed by RD&E, supply chain, and the CEO or COO for
approval. Because Bausch & Lomb is FDA-regulated, the strategy from regulatory
affairs often dictates a product’s speed to the market. It is not a hit-or-miss approach,
but an issue of managing the risks and approach.

Anticipating Future Scientific Advances

Bausch & Lomb uses several approaches to anticipate future scientific advances and
integrate them into the process. First, senior RD&E management meets weekly to
identify possible threats to the company and review the research portfolio. The group
looks at what the company is doing and has observed in order to refocus, question, and
examine revelations. Second, for two years, 12 of the 600 research employees have
been given free domain to explore the types of technology that could lead to market
breakthroughs and create unique market opportunities. The researchers are given a
focus for their efforts, and some of their ideas have been looked at in terms of feasibility,
but this free domain hadn’t resulted in significant new products, as of 2002.

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Additionally, the company gathers market intelligence on an ongoing basis from its
outsource provider, its suppliers, and its new business development groups.

Adherence to Process
Adhering to the product development management process is not an option at
Bausch & Lomb because of the need to abide by FDA or ISO regulations. The project
manager is the primary driver for compliance. Team members also include quality
and regulatory affairs, which are secondary drivers for compliance. The new eRoom
environment also enables a more visible means to track performance and compliance.
One of Bausch & Lomb’s challenges is ensuring that there are dedicated resources
early in the process, particularly from the steering team. Although there is typically no
problem securing commitment from supply chain and RD&E functions, commercial
representation and commitment is more difficult to obtain and maintain.

Measuring Success
One way that Bausch & Lomb measures the success of its new products is if they
have met their economic value added and net present value objectives. Also, the
company wants to patent technologies to prevent competitive market entry. A third
indicator is if post-launch performance shows minimal complaints or failures within
a certain acceptable range and that sales targets have been achieved.

CUSTOMER RESEARCH AND MARKET ORIENTATION

Bausch & Lomb’s most important ongoing activities for assessing customer needs,
problems, and market opportunities prior to idea generation and concept development
are market research, industry associations, and sales/technical field services. To collect
market research, the company facilitates doctor and patient discussions, focus groups
with targeted audiences, one-on-one interaction, panels, and small group sessions.
Some industry associations that it finds the best to collect customer input from include
the American Association of Optometrists and Ophthalmologists and the American
Society of Cataract and Refractive Surgery because the experts speak about and
present research and market data. Additionally, sales and technical field services
employees can tap into useful customer information. The technical field services
people are the ones in the doctors’ offices who bring back valuable information on
what equipment doctors are using. Sales people may even watch surgery be performed
and develop a relationship with doctors who then tell them freely what they want or
would like to see from Bausch & Lomb.
During the product development management process, Bausch & Lomb’s most
effective methods to gain customer feedback are supervised and unsupervised clinical
trails, as well as doctor and patient panels. During a supervised clinical trail, doctors
coordinate the activities. These clinical tests provide the company with valuable infor-
mation such as how effective the product was, what customers liked and did not like,
if there are clinical implications (e.g., an eye drop stings when you put it in your eye),
and if there are any adverse reactions. Customer input is then documented in reports

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and internal databases. There is no absolute answer to what works best for
customer research because the organization has to manage the risks and factor
multiple elements into its decision making.

Competitive Advantage
Bausch & Lomb focuses on patenting its technology and being cost-driven as
part of its marketing strategy to find opportunities to challenge its competition.
The company also partners with insurance providers to supply approved reimburse-
ments for its products and services. Its goal is to show customers that if they use a
Bausch & Lomb product or service, in the long term it will save them money. Bausch
& Lomb tries to focus on meeting the needs of consumers without gimmicks and
relying instead on science and engineering.
The value proposition and the quality of its products and services is also something
that Bausch & Lomb examines. The word quality is an important one with potential
for misunderstanding in Bausch & Lomb’s business. Is it quality of the product that
is being measured, or is it the quality of the person who applied it or used it? When
looking at surgical procedures, for example, there is a lot of research and develop-
ment that goes into creating the equipment, and the doctor also has to undergo a lot
of training to understand how to effectively use it so as to create a predictable out-
come. Therefore, there is a lot of relevance in the word quality and whether a new
product is a quality product.

Stable Product Definition

To achieve stable product definition so that product specifications do not change
during development, both the project team and management who signed off on the
project strategic decision package initially have to approve new or altered design goals
that are measurable. Also, the FDA and ISO require any new changes to undergo an
approval process, so the goal is to get the product to be as good as possible after
completing the feasibility phase. When the steering team looks at a potential change,
it exercises design change control by documenting the change in the strategic decision
package, looking at the impact on development, and examining the impact on finances
and the timeline. The team has to decide if the change is warranted, and if so, if it
can be incorporated into the current project or if a new project needs to be initiated.

PORTFOLIO MANAGEMENT AND RESOURCE ALLOCATION

In Bausch & Lomb’s portfolio management approach, economic value added and
net present value are critical for rating, ranking, and prioritizing projects. The urgency
of getting to market with a patent before someone else has a way of prioritizing pro-
jects and resources within the company. The level of innovation also seems to play a
role in the desire to be first to market; more innovative ideas and projects tend to
have priority.
Rating, ranking, and prioritizing NPD projects and resources is negotiated by
project and functional management by phase. The limiting factor is often human

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resources, with 600 people spread over 40 projects throughout the world. Bausch &
Lomb doesn’t only look at internal resources, though. The company has external
resources that it can call upon on a temporary basis, such as qualified outside labora-
tories that can do testing. The final decision on prioritizing NPD projects is done by
the new product strategy and steering team, as well as the global RD&E manage-
ment team. Previously, RD&E was the driver, but now there is better collaboration
between the two groups.
Bausch & Lomb believes the future has to be balanced by having short-term,
medium-term, and longer-term projects in its portfolio. It currently has about
50 projects in its portfolio, with about one-third expected to launch within the next
two years, half in the next three or four years, and the remainder farther out.

More projects aren’t better, but fewer projects that have more market impact are.
—Paul Loda, director, new product development

The allocation of development funds or resources to different project types,

business units, market sectors, or product lines boils down to timing and EVA. The
company wants to introduce something new every quarter, and it tries to balance the
annual picture. In 2002 one project will consume 25 percent of the RD&E budget,
which was a strategic decision. Bausch & Lomb has a keen desire to have new products
in each of its major categories (pharmaceutical, surgical, and vision care).
The NPD steering team meets once a month to review ideas, evaluate the portfolio,
and continually assess if Bausch & Lomb has the right products with the right goals
to get to market. To select specific NPD projects to work on, the team analyzes the
portfolio by segment and by the economic value added or net present value of each
opportunity. Increasingly, the company is looking outside for faster ways to acquire new
products, including paper ideas or concepts; new development; and license, partner-
ship, or acquisition opportunities.
To ensure sufficient resources, Bausch & Lomb also conducts quarterly and annual
reviews. Quarterly reviews tend to focus more on where the company is in terms of
spending and the number of people employed. Annual reviews examine if the company
has the right people, how the company can get the right people, and how is it going
to limit the company if it doesn’t have the right people. Portfolio planning and func-
tional time tracking (time by project) also help ensure sufficient resources. Employees
are required on a monthly basis to document how much time they put into a
project. Although this task might seem tedious, it provides a good cost structure.
Bausch & Lomb also looks at competency utilization to ensure that is has sufficient staff
in various areas, such as software engineers in an business where software has become
a major driver.

Dedicated NPD Group

Bausch & Lomb has two full-time employees engaged in PDMP administration,
as well as 12 full-time researchers, six full-time portfolio managers, and 22 project

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managers. The two administrators are dedicated resources for PDMP projects. And in
addition to shepherding the process, they also function as project managers periodi-
cally to remain current in their skills and evaluation of PDMP principles and practices.
They also validate the data collected from all the project managers to ensure consistency
in reporting format and to ensure the data published for the team is consistent with
what is communicated to senior management. The team tries to counteract the
tendency that exists in most organizations to tell senior management the good news
while avoiding the bad news.
The role of the director of new product development is not to dictate how to do
the job, but to tell employees what the outcome needs to be. He shows them some of
the approaches that they might choose for themselves. Although he doesn’t dictate, he
has to facilitate. Then he watches the teams’ progress and provides feedback.

ORGANIZATIONAL APPROACH AND PROJECT TEAMS

Project Managers
Project management is one of the most important elements in the NPD process
at Bausch & Lomb. The most important characteristic Bausch & Lomb looks for in
its project managers is adaptability. The company continues to standardize the process
to show project managers and teams how to be consistent and to build on the successes
and failures of previous projects.
Bausch & Lomb project managers are now fully empowered for the project
budget, plan, and people. In the past there was accountability with no authority, but
now project managers are given full authority and accept full accountability. Project
managers lead the preparation and management of the SDP, design history, design
reviews, budgets, and the plan. The project manager ensures that projects are in
compliance with the product development management process.
A project manager is also in charge of project team selection, training, and
management. Once a project has been initiated, the project manager negotiates with
functional management to get the appropriate team members. The project manager
is also responsible for making sure the team members are trained. Bausch & Lomb is
working on rewarding people not only for their role in their functional groups, but also
for their product development team responsibilities. Project managers also evaluate
their team members’ performance during and after a project launch.

Project Team Members

Project team members are responsible for providing functional input into the
strategic decision package, translating customer input into functional requirements,
and participating in the development of the project plan. When establishing a project
team, the members are taken off-site for two days at the close of phase two or
beginning of phase three in order to flesh out the project plan and the budget.
The composition of a typical NPD project team includes:
• a project manager,
• a PDMP representative,

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• a quality representative,
• a regulatory affairs representative (if the project is global, there may be a
representative for Asia, Europe, and North America),
• a clinical affairs representative,
• a chemistry representative,
• a microbiology representative,
• a toxicology representative,
• an engineering representative (e.g., material, process, automation, and molding),
• a supply chain representative (includes procurement, planning, and plant), and
• a commercial representative (includes marketing, strategy, region, and product).

Once into the feasibility phase, the project manager should stay the same through
the post-launch activities, as opposed to idea investigation when the team may be ad
hoc. Although it is not necessary to have an expert on the team at the idea investiga-
tion phase, it is helpful to find the people who might transition into a full-time role
later. By the feasibility phase, there needs to be a full team assigned. Being on an NPD
team is approached as an assignment, and it will show up in employees’ written
objectives and annual reviews.

Accountability
Having the team, as well as senior management, sign off on the strategic decision
package that specifies the project’s goals, strategy, risks, financials, and critical path
fosters accountability for a project’s results. The company’s chairman is setting a higher
standard for accountability with a quarterly review of the entire portfolio conducted
by the chief executive officer, chief financial office, chief technology officer, portfolio
managers, and project managers.
For changes to products, Bausch & Lomb complies with design change control.
For all proposed product changes, there must be a documented report or addendum
to the strategic design package that defines the change, impact, risk, metric, and
required team and management approvals. For other changes—including financial,
timing, and resource changes—there is a portfolio-level review done on an ad hoc
basis, where the change is documented in meeting minutes, in addition to quarterly
PDMP reviews.
Overall performance reviews for NPD team members generally include
assessments of their NPD work and deliverables. In performance reviews, reports
are used that track the critical information by which employee performance is measured
(i.e., budgets, timing, performance, and patentability).

Effective Teams
To manage geographically dispersed project teams, Bausch & Lomb has project
managers report to program vice presidents, of which there is one for each major line
of business (surgical, pharmaceutical, and vision care). Team meetings are conducted
by videoconference or telephone, and eRoom Web-based collaborative tools are used

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as well. The company has also eliminated redundant roles, such as having microbiol-
ogy in different locations; now one group has an exclusive charter for a given area
and is held accountable for it. By keeping resources singular in their focus, the
company tries to prevent people and regions from feeling competitive or performing
redundant work.
To bridge cultural barriers, Bausch & Lomb has found that training alone doesn’t
get people to constructively work together. It often requires face-to-face interaction.
To make teams more effective, eRoom links all locations, and a real-time server allows
for online synchronous meetings. An external server links Bausch & Lomb with its
external RD&E partners to keep them in the loop as well. The company is spending
more on project management training, and it holds weekly project and portfolio
reviews at the staff level so everyone is informed.

CULTURE AND COMMITMENT

Innovative Climate
The company has learned that it needs to focus on maintaining a stable, non-
threatening culture in order to have an innovative and collaborative climate. Instability
and reductions in work force can lead to a decline in productivity and new products
generated. A company needs to effectively communicate to its employees its current
status. According to Bausch & Lomb, with reduced resources, organizations have to
find more efficient ways of operating, but it is important to allow people time to work
and be creative and not just fight fires, manage problems, and deal with time pressure.
Another way to foster innovation is to hire employees with diverse backgrounds to
bring different philosophies and skill sets into the company.
Specific tools to foster creativity at Bausch & Lomb include a new idea form to
document an idea and its owner, as well as the new product steering team that reviews,
assesses, and selects new ideas to work on.

Rewards and Recognition

Bausch & Lomb tries to reward and recognize creativity. Employees who are at
the manager level and above, such as directors and vice presidents, are eligible for
bonuses, which are tied into economic value added. All RD&E managers own the
fiscal deliverables for bonus eligibility. A new initiative for Bausch & Lomb is an
intranet site where employees can receive virtual pats on the back from colleagues for
outstanding work, including new product project work. Also, there are monthly com-
pany newsletters with a space to acknowledge people. Some project teams give team
members rewards, money, time off, or other recognition under the company’s
“Focus on Excellence” program. As an additional incentive, when an employee is
issued a patent, he or she receives a financial reward.
Employees are encouraged to contribute innovative new product ideas via the
new idea reward and recognition program. All employees are invited to complete a new
idea form at any time. The new idea form is online and can also be obtained in hard
copy through human resources. In theory, the plan is to provide incentives for

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employees with money for new ideas. Depending on how far the idea made it in the
NPD process, the employee could get anywhere from $5 to $5,000. In actuality, the
program got as far as giving two $500 checks, as of 2002. Initially, there was a fairly
good number of contributed ideas. However, few of the ideas make it past the
steering team screening.

Senior Management
Bausch & Lomb looks at accountability and responsibilities at different levels.
Senior management (presidents or vice presidents) are responsible for the functions.
Along with the functions, they also help with:
• the screening and selection process for new product projects,
• project prioritization,
• phase approval,
• the strategic and operational plan,
• team and individual performance assessment (by providing status input and
creating a pattern of criteria),
• project funding (prompted by the steering team convincing senior management
to investigate during monthly reviews and fund the project.),
• test market and launch authorization (involving approval and ownership), and
• resource allocation and approval.

The current chairman has an external focus and believes in open, candid dialogue;
disciplined, data-based decision making; and personal accountability with rewards
for achievement and consequences for failures.
From the perspective of new product development staff, senior management is
now asking the right questions such as: What is the financial benefit? What is the
timing? And what is our competition? Now that senior management has been brought
into the system and sees the value of the strategic decision package, they are asking for
it by name. Because of the challenge of getting senior leadership at meetings every
month as is currently required, the company is considering moving to quarterly
meetings and streamlining the process to make it more effective.

FINAL COMMENTS AND THOUGHTS

The NPD tools, techniques, and methods of which Bausch & Lomb is proudest
include its refined product development management process that has been
repeatedly benchmarked externally; its eRoom installation with real-time and
external servers that allow for global project collaboration; its movement toward
having project managers certified by the Project Management Institute in project
management and the product development management process; dashboard
reporting, metrics, and economic value added and net present value utilization; and
pay for performance.

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Lessons Learned
Bausch & Lomb had two projects that did not follow its established process and
ended shortly after launch, which resulted in a $40 million loss to the company. The
projects focused on new products that were similar to the competition’s product. In
spite of the fact that market research said the company would never achieve the sales
it wanted, one particular senior-level leader insisted on moving forward with the new
product. The product failed within six months, even though every goal that was
documented was met. The lessons learned was that having a product exactly like the
competition will not enhance revenue, and adherence to the process is vital.
One other recent misstep that resulted in a lesson learned by Bausch & Lomb
was putting together an early timeline when beginning the feasibility phase and letting
that timeline become the launch date for the new product, instead of allowing for
more flexibility and refinement along the way.
Other lessons learned follow.
• Process is everything. Use it. Follow it.
• New product development is not a set of random activities.
• Have an owner and champion for NPD at the highest level (e.g., CEO or COO).
• Learn early that one person can’t do and be everything.
• Good performance follows effective leadership.
• Every design goal must be clear and measurable before acted upon.
• Effective project management has the greatest impact and payback. Establish
responsibility and authority.
• It’s the customer, not the scientist, who determines a product’s success.
• Growth will be proportionate to the willingness to change processes, beliefs,
and attitudes.
• Seconds count when you want to be first.
• Nothing will change if you continue to do the same thing, ask the same questions,
take the same approach, and utilize the same people.

When building its product development management process, Bausch & Lomb
kept some key concepts in mind.
• The voice of the customer, not scientists or technology, must drive design goals.
There must be a market for the product. New product idea screening must be
thorough in order to avoid working on products that will never be accepted by the
customer or achieve desired results.
• Roles and responsibilities must be clearly defined. If not, there could be daily
battles among team members.
• Don’t assume that a brilliant engineer or scientist will make a brilliant project
manager.
• Good project management is vital to the success of a project. (Bausch & Lomb has
a project management organization.)

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• Cross-functional teams are imperative; one function cannot speak for another.
Each function has knowledge of that function and understands how to apply that
knowledge specifically and relevantly to each project.
• Within 30 days of a product launch, the team has to discuss how well the project
was managed and capture lessons learned during a post-launch learning and
surveillance session. After 180 days from launch, a sales and marketing review
has to look at how the product is being treated in the market place. Are sales
objectives being met? Are there performance issues in the market that need to be
addressed quickly? Are there additional issues that need to be looked at in terms
of market penetration globally?
• It is critical that all team members have all of the project information available
online all the time.
• The process must ensure design control compliance.

Because of its product development management process, Bausch & Lomb now
has a road map for projects, a common NPD vocabulary in a global organization,
and a path of accountability. The process has forced the definition of roles and
responsibilities, while also supporting FDA and ISO quality system requirements for
design control. Using the product development management process has led to
cross-functional teams and helped to identify redundant tasks.

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