Matrix Organizations Fail at Fixing Broad Systemic Execution Issues

A matrix approach for sourcing projects has been in use for years and is a common practice that is given little thought these days. In concert with formal project management it has been proven to be both an effective and efficient approach for tactical project execution. However, utilizing this same approach in a strategic improvement setting frequently leads organizations down an extended path of disappointing results. This is essentially a "solution by committee" approach that lacks focus on solutions. There is a more effective means for creating solutions to systemic New Product Execution (NPE) issues.

Dealing with issues that are completely self-contained within a single organizational silo is a fairly straightforward activity. All the inputs and outputs, the receivables and deliverables are totally within the grasp of the functional unit. The silo leadership can successfully manage these localized improvement activities without the need for information and/or decisions from outside their area of direct influence. This is the easy stuff!

Taking on systemic issues that are of a broader functional area scope is where many organizations stumble, latch-up or fail miserably. They meet, they discuss, they add tools and they attempt to persuade for what seems like an eternity. These broad based issues often evolve into something that is deemed unfixable, although admission of such a defeat is never uttered, only displayed by a quiet pullback of focus on a real solution. New Product Execution (NPE) paralysis results from a culture that blindly promotes solution by committee, an approach directly enabled as a byproduct of the matrix methods used for product development.

While ideal for tactical management of project activities these same matrix approaches fail at developing solutions to broad scope systemic execution barriers, primarily due to a lack of specific accountability. If a particular problem does not have an explicit name associated with developing a solution for it, advancement towards a solution lacks focus. Review your most painful issues with NPE. How long has resolution been sought for this? Is there a singular owner identified and is this owner aware of this responsibility and it's objectives? Without an owner of these systemic barriers in place, solutions will remain elusive; it's really that simple!

What's that, there are not enough resources available to assign a specific individual? That's nothing more than an excuse to keep things as they are, a somewhat unconscious means for inhibiting change. Estimate the recurring cost of the most glaring barrier to NPE and the rationalization for finding and assigning an ideal resource will present itself. Failure to do so will strengthen the "work harder, not smarter" philosophy that drives a misused sense of urgency, further eroding efficiency in new product development.

Pause, take a deep breath and assign resources to fix issues that feed the insatiable new product frenzy that focuses more on quantity than quality. Reliance on a matrix approach for solving systemic issues will continue the quantity frenzy while individual accountability will enable competitive new product strength through quality, efficiency and working on the right things. It is absolutely a choice, one that many organizations fail to make.

GM --> Focus on new product quantity, Apple --> Focus on new product quality. Where is your new product organization? Think about it!

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

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.


Learning
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.


Listening
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.


Evolving
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.


Clarity
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.


Personal
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.


Decisiveness
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
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!

Delivering Lean and Mean New Product Development

Most are familiar with Lean Manufacturing today, a concept brought into the limelight through the Toyota Production System (TPS). Henry Ford was actually one of the earliest "Lean thinkers" with the notion of an assembly line. In it's early form this waste elimination concept was considered only applicable to manufacturing. Today it has expanded into areas that include healthcare, government, construction and services to name a few. The application in New Product Development (NPD) is a relatively new area that has significant opportunity for improving development time, quality and predictability while reducing developments costs. It is easy to say Lean cannot apply to the non-repetitive engineering and invention aspects of NPD; that's not right, it's just easy to say.

Let's start off with defining what lean is; put simply, it is about improving efficiency by eliminating waste. The inefficiencies can be in the form of the use of people's time, inadequate tools, rework, overdone requirements, non-value steps/activities/meetings and so on. Waste can be found in many areas, mostly buried and out of sight. Consider Lean as nothing more than creating a culture to drive higher levels of efficiency on a continuing basis.

There is plenty of opportunity for leaning up in new product efforts. The scope of any Lean effort must cover the entire development process from initial customer contact to a volume revenue stream with that customer. A localized view of any subset of the total NPD process is actually anti-lean due to an obvious disconnection from the value stream, an error for many improvement initiatives. Lean must be a big picture view that includes all functional areas, both deliverers and receivers of a common value stream.

The diagram to the right represents the typical components of a lean approach. The cycle is one of continuous learning and an ever-evolving process based on that learning. It never ends; an organization is never done. As soon as there is a belief of doneness, the lean train is derailed. Begin a Lean journey by looking for areas where the principals can be applied to NPD.

Value
The focus of any new product must always be on the customer value. For any new product you must be able to clearly identify where the customer value is. That is what matters, in fact that's all that matters. Be in the customers shoes, feel the problem to be solved. Think beyond requirements to include interactions, information exchanges, trust, communication and the needs for development of their product. You must be absolutely certain of what the customer values in a relationship with you on new product. Delivering all aspects of customer value is a distinct competitive advantage.

Identify Value Stream
Anything that does not add to the customer value is a waste; it is outside the value stream. This is a tough one for those that believe everything they do is important, essentially the majority of organizations today. Meetings, documentation, decision processes, procedures, reviews, sign-offs; they are all suspect of being off the value stream in their current form! The value stream is only the activities, information and deliverables that clearly promote the customer value. Can you identify the value stream for new products in your organization?

Create Value Flow
Now, knowing what the value stream is, build a NPD flow that supports that value stream. Get rid if the wasted activities, meetings and deliverables that do not directly enhance the customer value for new products. What are you doing because you have always done it? This is a great place to engage some good solid discovery, beginning at the bottom and working up. Creation of the value flow will not be for the faint of heart; every activity today is already assumed to be valuable and there are people and bruised ego's to deal with. The output of this phase should be a development flow that is highly efficient in bringing value to the customer at the quickest pace and the lowest cost.

Establish Pull
This one is a little tricky for NPD. Establishing pull means that deliverables are completed at the latest time possible, where the greatest amount of information is available. Today most are focused on getting everything done ASAP and queued up before it's needed, essentially creating inventory and a push forward. A pull is more like JIT (Just in Time), where tasks and deliverables are completed as needed, at the maximum point of knowledge for the task. Think of pull as tasks that are demand driven. For NPD a pull mindset will have a significant impact on quality and rework. How much is being redone because of not knowing what was needed the first time? Pushing tasks creates rework!

Seek perfection
To seek perfection is a course of continuous improvement. The lean process is never done and ever evolving, always improving upon knowledge from previous projects. Perfection does not just happen; it is asymptotically being approached with every new project. Lean NPD is a journey, not a destination.