The EAC Product Development Operating System is a framework that is based on three attributes of the product development system: that it is a competitive system; that its operation requires team-based participation from a broad range of contributors across the organization; and that it changes, evolves or decays, over time.
Many product developers have limited direct contact with their customers or their marketplace and lose sight of the competitive nature of their work. The rows of the PDOS matrix represent the three elements of a competitive system in the context of Product Development. Companies that look to capture the benefit of a competitive advantage from their product development competency cannot do so, without also addressing the needs and requirements of competitive systems.
The concept of teamwork in Product Development is well recognized and valued as a key to effective and efficient operation. Many will immediately think of the cross functional team that executes a project in adherence to an organization’s product development process. But as our model takes a systems view of which the process is a constituent element, our conception of the system team is higher level with the project team just one element of it. Product development system excellence is dependent upon individuals and teams in each hierarchical tier of the organization. These are responsible for supplying input to other subsystem elements of the model essential to these other subsystems’ effective operation. Our model represents this system team element as the columns of the PDOS matrix. These pillars of the system are labeled both with their functional role within the PDOS and with the tier of the organization responsible for that role.
The third attribute of our operating system is that it is dynamic. Without the investment of maintenance or improvement energy, entropy will degrade its structure and operation. On the other hand, a commitment to ongoing improvement will facilitate maturing of the system and carry it through the four levels of our maturity model. Our maturity model includes a system improvement tool that not only accelerates the rate of maturing but also damps the organizational turbulence often characteristic of transitions to a new level of maturity.
The subsystem elements of our model exist in the cells of our matrix. The relative strengths of these elements vary during progress to full maturity; at full maturity the seven elements interact in harmonic balance.
Three elements of a competitive system:
Our most visible competitive systems are sports franchises, and the keys to their success are instructive for business operation:
- Successful teams start with getting on the same page, literally. The team’s knowledge is captured in carefully guarded Playbooks and Game Plans. Everyone understanding the common goal and their role in it is a key to success. Successful, systematic businesses operate with shared goals that are captured in long term strategies, shorter term initiatives, and near term tactical plans.
- Teams invest time and energy in becoming more capable of competing well. The clearest example of this is practice, time spent working on improving the individual and collective skills that are brought to the competition. But the improvement to competence also includes improved infrastructure, equipment, anything that better positions the team to compete. Do businesses generally make this investment in planful improvement to their product development competency with the mind’s eye on the competitive nature of product development?
- And finally there is the competition itself. For teams the competition is head to head, and the metric is clear and clearly displayed on a scoreboard. In product development, the competing occurs in the execution of a program or project. The ultimate metric for product development is its productivity, total value created against the total investment made in creating this value. Execution of a project is the game, execution of the portfolio’s roadmap is the season. The ultimate competitive nature of product development is frequently lost in the common check-box nature of administrative project management.
The rows of the PDOS matrix:
In the EAC Product Development Operating System model, the rows represent the three elements of a competitive system. The Information row establishes the knowledge that must be shared – strategy, initiatives, tactics, process workflows – among all product development team members to create common goals and unify efforts. The Preparation row focuses on the improvement efforts that raise the level of corporate competence. And the Project row is where it all comes together, where we execute the game plan and compete.
Pillars of the System:
The columns of our system represent the pillars of the PDOS. Each pillar has two identifiers; the Product Development sub-team associated with that pillar and the focus of the contributing work done by that sub-team within that pillar.
Knowledge Base:
Knowledge is the Value currency of Product Development, and the PD Knowledge Base supports and glues together the other PD operational subsystems. The PD Information System, beyond housing data and information that serve as the building blocks of PD knowledge, also holds standards, transactional processes’ workflow, and functional tacit knowledge shared between project teammates. PLM has emerged as the critical PDIS tool.
Strategic Planning:
The work that culminates with a successful new product being delivered to market initiates with the development of a Strategic Plan. The compass heading provided by the plan informs decision making throughout the organization, including within the other PDOS subsystems. Critical decisions regarding the investments in the development of core and other competencies, as well as of new products align to the strategy.
Innovation (New Knowledge):
The Innovation subsystem elevates the competitive capability of the organization, its competences. It creates new knowledge in the form of disruptive technologies and novel methods of applying current technologies. It focuses on challenging all existing organizational standards, looking to continuously improve how it operates, and to compete in the marketplace from a position of greater strength and competitive advantage.
Expert Workforce Development:
In any competitive venue, it is understood that success ultimately relies on having great players. The competitive performance of your players is developed outside of the bounds of the competition itself. The intention of, commitment to and execution of investing in all of your product-development-critical subject matter experts – your assets –not only directly results in a more competitive team, but facilitates the recruitment of additional skilled players.
Investment Strategy:
The actual marketplace competition fulfilled by product development begins with strategic decisions about how to execute the product roadmap and elaborate the product portfolio. The informed decisions that lead to the significant investments incurred by product development create both the range and limits on profitability and corporate growth over the mid-range future. This late maturing subsystem determines the level at which you’ll compete.
Knowledge Based Decision Making:
The Knowledge Based Decision Making subsystem is the Product Development sibling to the executive function’s Fact Based Decision Making. While KBDM permeates successful Product Development organizations, in the actual competitive venue of development projects, the critical decisions that are captured as the product Concept are informed by pre-existing and newly generated knowledge of the marketplace and of corporate capabilities.
Project Execution:
The Project Execution subsystem is the part of the Product Development System that in the most narrow of views is seen as Product Development. The realization of the expanded view of the Product Development System does not diminish the critical importance of execution. Supported by new execution paradigms and product development specific information technology tools, longed for improvements in project predictability and reliability are now being achieved.
Tiers of the Organization:
Each of the three tiers in the organizational hierarchy – the executive, the managerial, and the individual functional specialist tiers – makes critical contributions to the effective functioning of a fully developed product development system.
Functional Roles within the PDOS:
The Product Development System Team comprises members in the executive, managerial, and individual subject matter layers of the organization. Each tier of the organization contributes to the effectivity of the system:
Executives set strategic direction, including the investment strategy for product development.
Directors and managers are guardians of critical product development knowledge and responsible for seeing that the right knowledge is available to the right individuals at the right time.
The functional specialists, subject matter experts generate new knowledge and use this and pre-existing knowledge in the execution of product development projects.
Maturity Model:
The EAC Maturity Model is a four level model that distinguishes the degree of structure and organization in the product development system at different periods in the evolution of the competency. The four maturity levels are:
- Tribal & Heroic
- Silo’ed
- Systematic
- Intelligent (self-managing)
System Improvement Tool:
EAC recognizes the value to both the rate of maturing and the ultimate level of maturity that is provided by a well ingrained root-cause problem solving system. The best of these are based on the PDCA cycle, also known as the Deming Cycle. Developed at Bell Labs in the early 20thcentury, and introduced to Japan in the wake of World War II, PDCA played a significant role in the rapid recovery and rise of Japanese industry. A particular version of PDCA was developed by Allen Ward, modeled on the way PDCA is executed at Toyota, and tailored by Ward to suit the way Americans prefer to work.
