Ever wonder why some companies are always out in front of their competitors? Chances are good they have an organization designed for speed. So what does this mean? The key to moving fast is making good decisions quickly. There are multiple ways to help the decision making process. The first way is to have completed the project “up-front homework” well. This means getting good data on the market or customers unmet needs, the market timing or window of opportunity, and being able to leverage your platform development work. A new product is created when an unmet need is combined with a technical solution. For solid decision making, more than just R&D needs to be involved. A common mistake is to rely too heavily on R&D alone and not involve the entire organization. Effective product development involves the entire organization and that’s what makes innovation so hard. NPD requires the coordinated efforts of a lot of people working together.
So let’s look at some elements that help improve product development cycle time. Previously we talked about platforms and how applied research should be market driven (customer pull versus technology push) resulting in having the right technology available when needed. Another key element is to have a standard product development process that all your projects follow consistently. Having well-defined milestones, checkpoints, or gates help facilitate good decision making. These regular checkpoints should have well-defined success criteria so that the requisite data can be collected and analyzed prior to the checkpoint. Following a flexible but consistent process eliminates errors and provides some quality control in an otherwise messy activity. Your NPD process should be customized to your business. In my last three companies, we designed a NPD process that was essentially a stage and gate system, but each one was very different due to differences in each of the businesses, size of the projects, and the team structure.
One critical aspect of getting more velocity in your NPD efforts is to have the right type of team structure. In all cases where speed is a differentiator, multifunctional teams are the norm. The best way to accomplish this is to have dedicated resources on entrepreneurial teams. So what the heck does this mean? In one company we had integrated business teams which were responsible for their own market segment. The team was lead by a full-time team leader who essentially had “mini P&L” responsibility for their business segment. Let me be very clear here. The only job the team leader had was being the team leader. Each team also had full-time marketing, R&D, Applications Engineering, Process Engineering, Quality Engineering, and close ties to key salespeople in the field. Again, to make this work, the only job each of the team members had was working on the NPD efforts. The primary goal of each of these teams was to grow their business segment. Each business team had a portfolio of new product development projects (incremental product improvements, line extensions, new products, and breakthrough products). The NPD process was driven by the integrated business teams and not by functional heads (such as marketing or R&D). This structure eliminated functional silos allowing rapid decision making and fluid resource allocations. The integrated business teams were supported by a steering team consisting of senior staff members (Business unit VP’s and Directors).
Another key aspect of getting speed into the organization is to have accountability at both the executive and team levels. This means senior management and the teams work together to set NPD priorities (consistent with the company strategy) and commit to executing the projects well. The executives need to understand that they are making significant resource commitments (people and investment dollars) while the teams need to understand they need to deliver on the NPD deliverables.
The bottom line is that in order to have a high velocity product development organization, teams are the key to making good, fast decisions. With senior leaders and multifunctional teams working to achieve the same goals, i.e. grow revenues and profits as fast as prudent, using a well-defined, flexible but repeatable process, then the organization will be built for speed.
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