Product Development Operating System Archives

Product Development Operating System Page 7

Knowledge workers think for a living, but in America, with our Taylor based management system, we’re driven by tasks and overburdened. So, when do we find time to think? I often cite Peter Senge’s book the Fifth Discipline. In the opening chapter he cites a conversation with a colleague that talks about the differences between Japan and America’s relationship with time.

In Japan they respect thinking and they see time as a friend. And they use the time constructively. In America, overburdened, we see time counting down as the enemy and we hurry through activities and hurry through our days.

In Japan if someone approaches somebody sitting quietly at their desk they assume they are thinking and they go away so they don’t interrupt the flow of thought. Because they respect time and it’s not an enemy, they move gracefully from desk to meeting place and it’s an appropriate venue to be interrupted and have a conversation in transition.

We scurry from meeting to meeting and deflect conversations in a sense of self-importance, so when people see us quietly sitting at our desk they think “oh good, I’ve caught him or her” and interrupt our thinking.

The Japanese thinking includes a concept called Hansei, which is generally translated as reflection, but is really a critical self analysis — looking at their own behaviors, thoughts, and actions; and determining if any of them should be improved.

For us that’s a foreign concept, no pun intended, because we live in an environment that still uses fear as a management tool. It makes us defensive. And, when we’re defensive it makes us focus on external factors.

The Japanese system is based upon Deming’s theories. It promotes thinking and reflection. Those are the basis of learning. And what is more important in a knowledge worker environment than learning? Think about it…if you can find the time.

Contact us to learn more about how Systems Thinking and the application of our Product Development Operating System can help your organization become more efficient, productive, innovative, and competitive.

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I love basketball. In fact, my three sons all play. Two of my son’s teams have/had completely different cultures. One son’s team looked to win the game, but spend the minimum amount of energy they need to win. The other son’s team goes all out the whole game, fully investing in the game, in an attempt to win.

Product development is an investment. Although it is often managed and viewed as a something that needs expense management. In product development we have the classic tradeoffs. Phillips Corporation has a very nice way of prioritizing these tradeoffs. They call it QTF$. Quality — It’s the first tradeoff, but it’s not really a tradeoff. You have a quality threshold your product needs to meet, and there’s no negotiation about that. The other three, TF$, stand for Time, Functionality, and Cost. Time is the second most important of the tradeoffs. If your product is delivered on time, it positively impacts your entire customer base. If you withhold some Functionality to get the product out on time, it will negatively impact some small section of your market that relies on that functionality. If Costs are overrun; if the cost of the project or the build cost of the project itself fail to hit the target and go over, that effects you internally and doesn’t affect your customer base. So Phillips, from the standpoint of serving the customer, ranked order of the tradeoffs as QTF$.

Time is king and yet we get hung up on costs. We bring our classic business short-term focus to the system, product development, that’s concerned about growing our future. If you’re familiar with the work of product development guru Don Reinertsen, then you’re probably familiar with his theory of the cost of delay. On-time is the greatest lever for optimizing the return of investment in product development. Expense management in projects should be about measuring costs, not about squeezing them.

We recognize the investment nature of product development in our portfolio management where we require predictive ROIs. But how many of your companies follow through and actually check your investment by measuring the S-curve for your return. Very few, at least in my experience, because we are bound by linear process thinking, which ends as the project ends, as opposed to closed-loop systems thinking, which goes back and checks the results of our actions.

So of my two boys…the one who played on the team with a culture to conserve energy, they had a player who now plays in the NBA. None-the-less they lost as many games as they won. The team that goes all-out, they don’t have any NBA caliber players on that team. In fact, the best player on that team will play in Division 2 college ball next year, and yet that team wins five times as many games as they lose and they’re currently ranked #7 in the state.

When you make an investment, fully commit to the investment. The investment in product development is most carefully managed, and gives it’s greatest return, when you focus not on costs and expense, but rather on time.

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Peter Drucker, the recognized management guru of the 21st century, talked about Knowledge Workers in his final work. Specifically he addressed the requirements for increasing productivity among knowledge workers; which ultimately is EAC’s goal – increasing productivity within product development.

To increase product development productivity there needs to be a focus on quality of output. Drucker contends that the quality of output is as important, and perhaps more important, than the quantity of output. If you find a mismatch between informational needs of somebody doing work and the information that arrives with them, then you have a problem. If that’s the case then the thing to do is take this problem, raise a flag, and move into the Continuous Improvement subsystem, which we will discuss separately. It is a critically important one of the three subsystems of The Product Development Operating System.

Also, please reach out to us if you are finding a wide gap between information needs and availability. We offer the tools and services you may need to close that gap and move to a better position.

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In previous videos we talked about a framework we’ve developed for looking at product development as a system. In the last two videos and posts we talked about two of the subsystems, both of them flow systems, one being information flow and one being workflow. The third subsystem of the Product Development Operating System is the system of Continuous Improvement. This subsystem is often missing when we begin to work with an organization, and in organizations that are “committed” to continuous improvement; in many cases the efforts are ad-hoc and underwhelming

If you’re familiar with the works of Stephen Covey, author of The Seven Habits of Highly Effective People, you are probably familiar with his thesis about the tension between our urgent work and important work, and how our urgent work tends to overwhelm our important work. We see this in product development where we see continuous improvement as the important work. Often times it gets pushed aside and overwhelmed by the urgent work of completing projects.

Patrick Lencioni, an author whose work I enjoy reading, talks about the metrics of organizations. He talks about the ultimate metric of an organization as being the health of the organization. In our Product Development Operating System we see the health of your product development system as the ultimate metric of your productivity and effectiveness. It brings to mind the aphorism from Chinese medicine that says, “There is only one disease; congestion. There is only one cure; circulation.” The circulation in product development is the flow systems. The Continuous Improvement subsystem is the system for increasing the overall health of those flows, of the system, and the effectiveness and productivity of the product development system.

The Continuous Improvement subsystem of the product development system has three constituent parts. Each one aligns with a different tier of the organization. There is Strategy. This aligns with the executive tier. The executive tier looks to build a shared vision; a vision of the future of the organization that, collectively, we’re all working to realize. Another element of the continuous improvement subsystem centers on subject mater experts and the increasing their expertise, their development, and the deepening of their expertise and the expansion of competency within the organization. The third element in the continuous improvement subsystem is the importation and development of a root cause problem-solving methodology, specifically one that is appropriate for knowledge workers — the workers that populate product development.

If you bring improvement energies to your product development system, you need to bring a certain threshold of energy just to maintain your current state. If you will, to counter balance the destructive work of entropy. To make significant and continuous improvement you need to invest more energy into the subsystem. You need to invest significant energies into a continuous improvement subsystem that will eventually lead to increased productivity and increased effectiveness of your overall product development operating system.

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Recent posts have talked about Systems thinking and introduced the concept of The Product Development Operating System framework.

I’d like to present one subsystem of The Product Development Operating System, that being the Workflow subsystem. In a previous video in this series we talked about how companies evolve into The Product Development Operating System. I’d like to use the workflow subsystem to demonstrate that.

When a company is founded an entrepreneur will have an idea that fills a market need. He or she will hire some engineers to work on this idea. The engineers will develop the design and work directly with the entrepreneur to bring the product to market. This exercise of product development is raw innovation — just bringing a new idea to market through the innovation that is usually done within the product development process.

If the organization is successful and survives, it will grow. As it grows in size and complexity there becomes a need to organize the members of product development into functional groups. Simultaneously there arises a need to provide coherent management and leadership for the engineers. This is the second element of the workflow subsystem – Leadership. As it evolves, you now have a Workflow subsystem for Innovation and a subsystem for Leadership.

As an organization is more successful it will have more opportunity for market penetration, but it will have limited resources. So, it needs to make careful investment decisions about which projects it will develop and which opportunities it will forego. These Investment Decisions are the third step in the evolution in the workflow of product development.

When all three Workflow subsystems have been created, you will have a part of the organization making Investment Decisions, which then triggers work to be done by the Leadership of product development to organize efforts that will generate Innovation within a project that will deliver a product to the market.

Investment Decisions, Leadership, and Innovation. Those are the three parts of the Workflow of The Product Development Operating System.

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Today we’re going to talk about the Information Flow subsystem of EAC’s Product Development Operating System.

Pre-1980 there were no IT groups and there were no great numbers of knowledge workers. With the emergence of the computer and the dawning of the information age there was an explosion of IT tools that transformed business systems. In the product development business system these tools initially focused on helping the individual. We had CAD and CAM tools for helping mechanical and electrical engineers. We had tools that applied synthetic annealing to optimize optic design. And we had tools that helped simulate or analyze the designs that came forward.

More recently there’s been an emergence of more complex tools that facilitate product development — Product Data Management, tools for collecting and archiving project information, and a variety of tools that help support decision making in product development.

Product development is a knowledge centric function of the organization, but the topic of knowledge management itself is one that spreads in a lot of directions. If we look at the IT backbone that supports knowledge management; that topic converges on a small number of complex, connectable, but functionally focused IT systems.

We’re all interested in making informed decisions. That being decisions that are supported and influenced by accurate real-time information. This requires the ability to get the appropriate information to the decision maker at the right place, at the right time. This is the goal of the Information Flow subsystem.

This Information Flow subsystem is also a subsystem of your IT system. In both of these systems there are two critical jobs for the subsystem. The first is to support the goals of that system itself. The second is to look at the interaction between this subsystem and the other subsystems within its parent system; those being the IT System and The Product Development Operating System.

Here at EAC we’ve been devising a visual model to help you remember The Product Development Operating System. In this model the Information Flow subsystem is the foundation. It’s so critical that it supports the rest of the system. In knowledge centric product development a strong information flow is critical to inform the decisions that are made in both the Workflow subsystem and the Continuous Improvement subsystem. Without it, we have nothing.

Contact EAC to learn more about how Systems Thinking and the application of our Product Development Operating System can help your organization become more efficient, productive, innovative, and competitive.