Friday, October 29, 2010

Seven Signs of Trouble in New Product Execution

What makes you crazy about NPD (New Product Development) projects? This is easy because there is rarely loss in ability to identify frustrations of dealing with product development. The struggle comes in enabling in an action plan to eliminate key issues, a battle that must overcome a perception that the situation is acceptable for now. It's discouraging for me to hear organizations chanting "we are doing OK " while the team in the trenches is continually bombarded with barriers to getting their job done.

The reasons a circuit is not working properly receives a whole lot more attention and focus than why a new product does not meet the businesses expectations. This attention to the technical details at the expense the operational aspects are natural to the engineering profession. Natural, yes; OK, absolutely not! New product team members are saddled with operational roadblocks every day, some subtle and some highly visible. The impact of these obstructions is typically dismissed under the pretense of an acceptable level of NPD execution, therefore NO immediate need for addressing them.

Reality check - There is a significant difference in execution perceptions between management and team members for NPD. A failure to communicate properly perpetuates an ongoing management illusion of being OK or at least good enough for now. How often do negative surprises crop up in projects? These bombshells are actually signs of execution trouble, an indicator that should bring more reality to any illusions of OKness. To help distinguish illusion from reality, I will share seven signs of trouble in NPD execution.

1) The Team says it's not OK -
In many cases the team is either not being heard, or the input they provide is written off as whining. The gang in the trenches has valuable input and if there is something that they say is a setback for project execution, it's essential to pay attention. Lean principals work in manufacturing because those in the trenches drive change; the same goes for new product development. The illusion is that management knows best.

2) Execution issues are never expressed as a cost -
This is my hot button. Everyone talks about the fact that they can't afford to fix an issue. Interestingly, most have no idea what it costs to NOT fix something. If impact can't be expressed in terms of cost, there is no way to know if things are OK or not, is there? The illusion that ongoing problems have minimal cost is a dangerous one.

3) Timeline slips to production revenue are routinely greater than 6 weeks -
If commitments are not being met, how can things possibly be OK, or even good enough? The source of slips is generally NOT due to the team's lack of motivation to get it done; most teams consistently burn the midnight oil to meet objectives. There is more to this issue than pure motivation. The illusion is that the team is just not giving it their all and that's why products are slipping.

4) Revenue targets are missed on greater than 20% of products -
Things are not OK if too many products fail at producing revenue. The costs associated with an unsuccessful full product development effort must command a full audit. Any findings should be fed back into improving the product approval process. The illusion is that risk is important to winning market; therefore no further action is necessary. The truth is there is always much to be learned from a failed project.

5) Discussions and meetings about a suspected problem for over a year -
When operational problems are not settled within a year it is a clear indicator of indecisiveness. Either it's a problem and it will be fixed, or it's an issue with no plan for resolution. The illusion here is a belief that there is actually action going on to solve it! Identify the cost associated with leaving it alone and the cost of fixing it. Create an ROI, build a case, make a decision and be done with it. Dragging issues out for an extended period of time confirms a problem exists, however sidesteps any real solution.

6) Everything is urgent, except driving change so that everything is no longer urgent -
Does it feel like the people in your organization mimic pinballs, jumping from urgent matter to urgent matter throughout the day? Unchecked urgency is a sign of poor structure and process, not a sign of a team's enthusiasm. Here the illusion is that pinball like activity shows team member engagement.

7) There is a belief that formal project management inherently takes care of execution issues -
Project management is a tactical approach to getting things done and is not inherently a fixer of all things wrong. Assuming everything is OK under the project management umbrella is a trip down fantasy lane, the illusion should be obvious here.

"You don't drown by falling in the water; you drown by staying there."
- Edwin Louis Cole

Monday, October 04, 2010

8 Habits of a Highly Successful New Product Organization

Our personal habits, both good and bad, often occur without thought, almost at the unconscious level. An organization also has both positive and negative habits, many of which are performed instinctively due to the routine nature of project activities. A highly efficient organization has done a good job of replacing any bad habits with good.

What you are about to read is an ideal view of a new product development organization, one that produces at a level that is easily envied by others. The fact that it's ideal should not immediately allow it to be dismissed as unattainable, although that is likely the initial instinct due to an anti-change predisposition. The attributes of a high efficiency organization described here is very much a possibility, but only where the knee jerk reaction to dismiss it is suppressed long enough to learn from these habits.

Highly successful NPD business have the capacity to learn from previous product development efforts and apply that learning, knowing that this is crucial for the organizations long-term health. As a learning organization they realize knowledge growth has not occurred simply because they held a lessons learned or post mortem session. They know the learning process is about proactively discovering barriers and then creating and tracking actions to remove those obstacles. If learning was successful they recognize that something must change.

The people doing the work on the frontline have much to offer in terms of execution efficiency and a successful new product development machine will leverage this fact; they promote continuous listening for core issues. People clearly know they have a voice and solutions will percolate up from the bottom, not be legislated from the top down. Listening is the culture, and everyone believes this.

Change is the mantra and perfection is the target. Lean concepts permeate the organization and everyone is energized to make product development efforts better today than they were yesterday. Ego related stances are non-existent; personally being right is far less important than doing the right thing for the business. Cross-functional collaboration is routinely practiced as the primary means of improving new product execution. Change is expected.

Objectives are clear and everyone knows exactly how they will contribute to the success of the product. A process is in place to manage all levels of requirements, minimizing any waiting for decisions and/or answers while supporting the essential agile component in meeting the customer changing needs. Specific requirements items are phased in a way that allows the team to move forward with what is known, while longer lead items have the appropriate focus to reach solid closure. A proper level of clarity within the development team is displayed through a lack of unnecessary rework.

People enjoy their jobs and have a passion for making things better. They have a mechanism in place that allows them the freedom to speak and be heard. Management views their inputs as an essential ingredient to producing a more efficient organization. Lean concepts are the lifeblood of the culture.

Decisions are well informed, quick, crisp and well communicated. No one is left wondering how to proceed. Where additional information is needed, actions are put into place to drive and track timely data gathering activities. Unsatisfactory decisions are viewed as learning opportunities and are analyzed for future improvements to the development process.

Planning is thorough, involving everyone who will be contributing to the project. Milestones are communicated to the degree that anyone randomly selected will be able to properly provide target dates when asked. Owners of tasks also have the information immediately available to them for completion timing and specific deliverable expectations. Projects are successfully meeting ALL milestones at a 90% level.

Product Launches
The product roadmap is an evolving plan based on current trends, customers, technology development and market intelligence. A product launch commitment is based on solid resource availability, solid revenue projections, sales force engagement, customer engagement and NPD team commitment. New products are meeting business case revenue and margin projections at the 90% level.

Development of these eight habits in your organization is well within reach, given a willingness to invest in change. However, do not be fooled into believing it's a part time effort. It is work, it will cost and the payoff will far exceed any expense when implemented properly. Go forth and change!