Posts Tagged ‘Manufacturing Competitveness’

To improve innovation, use fewer words.

Everyone knows innovation is difficult, but there’s no best way to make it easier. And everyone knows there’s plenty of opportunities to make innovation more effective, but, again, there’s no best way.  Clearly, there are ways to improve the process, and new tools can help, but the right process improvements depend on the existing process and the specific project.  And it’s the same for tools – the next tool depends on the existing toolbox and the new work required by the project.  With regard to tools and processes, the right next steps are not universal.

But with all companies’ innovation processes, there is a common factor – the innovation process is run by people. Regardless of process maturity or completeness, people run the process.  And this fundamental cuts across language, geography and company culture.  And it cuts across products, services, and business models.  Like it or not, innovation is done by people.

At the highest level, innovation converts ideas into something customers value and delivers the value to them for a profit. At the front end, innovation is about ideas, in the middle, it’s about problems and at the back end, it’s about execution. At the front, people have ideas, define them, evaluate them and decide which ones to advance. In the middle, people define the problems and solve them. And at the back end, people define changes to existing business process and run the processes in a new way.

Tools are a specialized infrastructure that helps people run lower-level processes within the innovation framework. At the front, people have ideas about new tools, or how to use them in a new way, define the ideas, evaluate them, and decide which tools to advance. In the middle, people define problems with the tools and solve them. And at the back end, they run the new tools in new ways.

With innovation processes and tools, people choose the best ideas, people solve problems and people implement solutions.

In order to choose the best ideas, people must communicate the ideas to the decision makers in a clear, rich, nuanced way. The better the idea is communicated, the better the decision. But it’s difficult to communicate an idea, even when the idea is not new. For example, try to describe your business model using just words. And it’s more difficult when the idea is new. Try to describe a new (untested) business model using just your words. For me, words are not a good way to communicate new ideas.

Improved communication improves innovation. To improve communication of ideas, use fewer words. Draw a picture, create a cartoon, make a storyboard, or make a video.  Let the decision maker ask questions of your visuals and respond with another cartoon, a modified storyboard or a new sketch.  Repeat the process until the decision maker stops asking questions.  Because communication is improved, the quality of the decision is improved.

Improved problem solving improves innovation. To improve problem-solving, improve problem definition (the understanding of problem definition.) Create a block diagram of the problem – with elements of the system represented by blocks and labeled with nouns, and with actions and information flow represented by arrows labeled with verbs. Or create a sketch of the customer caught in the act of experiencing the problem.  Define the problem in time (when it happens) so it can be solved before, during or after. And in all cases, limit yourself to one page. Continue to modify the visuals until there’s a common definition of the problem (the words stop.)  When the problem is defined and communicated in this way, the problem solves itself. Problem-solving is seven-eighths problem definition.

Improved execution improves innovation. To improve execution, improve clarity of the definition of success.  And again, minimize the words. Draw a picture that defines success using charts or graphs and data. Create the axes and label them (don’t forget the units of measure). Include data from the baseline product (or process) and define the minimum performance criterion in red.  And add the sample size (number of tests.) Use one page for each definition of success and sequence them in order of importance. Start with the work that has never been done before.  And to go deeper, define the test protocol used to create the data.

For a new business model, the one-page picture could be a process diagram with new blocks for new customers or partners or new arrows for new information flows. There could be time requirements (response time) or throughput requirements (units per month). Or it could be a series of sketches of new deliverables provided by the business model, each with clearly defined criteria to judge success. When communicated clearly to the teams, definitions of success are beacons of light that guide the boats as the tide pulls them through the project or when uncharted rocks suddenly appear to starboard.

Innovation demands communication and communication demands mechanisms. In the domain of uncertainty, words are not the best communicators.  Create visual communication mechanisms that distill and converge on a common understanding.

A picture isn’t worth a thousand words, it gets rid of a thousand.

Image credit – Michael Coghlan

Understanding the trajectory of the competitive landscape

Bullseye!If you want to gain ground on your competition you’ve first got to know where things stand.  Where are their advantages? Where are your advantages?  Where is there parity? To quickly understand the situations there are three tricks: stay at a high level, represent the situation in a clear way and, where possible, use public information from their website.

A side-by-side comparison of the two companies’ products is the way to start.  Create a common set of axes with price running south to north and performance (or output) running west to east.  Make two copies and position them side-by-side on the page – yours on the left and theirs directly opposite on the right.  Go to their website (and yours) and make a list of every product, its price and its output. (For prices of their products you may have to engage your sales team and your customers.) For each of your products place a symbol (the company logo) on your performance-price landscape and do the same for their products on their landscape.  It’s now clear who has the most products, where their portfolio outflanks yours and where you outflank them.  The clarity and simplicity will help everyone see things as they are – there may be angst but there will be no confusion and no disagreement. The picture is clear.  But it’s static.

The areal differences define the gaps to close and the advantages to exploit.  Now it’s time to define the momentum and trajectories of the portfolios to add a dynamic element. For your most recent product launch add a one next to its logo, for the second most recent add a two and for the third add three. These three regions of your portfolio are your most recent focus areas. This is your trajectory and this is where you have momentum.  Extend and arrow in the direction of your trajectory.  If you stay the course, this is where your portfolio will add mass. Do the same for your competitor and compare arrows.  You know have a glimpse into the future. Are your arrows pointing in the same directions as theirs? Are they located in the same regions? How would feel if both companies continued on their trajectories? With this addition you have glimpse into the stay-the-course future.  But will they stay the course? For that you need to look at the patent landscape.

Do a patent search on their patents and applications over the previous year and represent each with its most descriptive figure. Write a short thematic description for each, group like themes and draw a circle around them.  Mark the circle with a one to denote last year’s patents.  Repeat the process for two years ago and three years ago and mark each circle accordingly.  Now you have objective evidence of the future.  You know where they have been working and you know where they want to go. You have more than a glimpse into the future.  You know their preferred trajectories.  Reconcile their preferred trajectories with their price-performance landscapes and arrows 1, 2 and 3.  If their preferred trajectories line up with their product momentum, it’s business as usual for them.  If they contradict, they are playing a different game.  And because it takes several years for patent applications to publish, they’ve been playing a new game for a while now.

Repeat the process for your patent landscape and flop it onto your performance-price landscape.  I’m not sure what you’ll see, but you’ll know it when you see it.  Then, compare yours with theirs and you’ll know what the competitive landscape will look like in three years. You may like what you see, or not.  But, the picture will be clear. There may be discomfort, but there can be no arguments.

This process can also be used in the acquisition process to get a clear picture a company’s future state.  In that way you can get a calibrated view three years into the future and use your crystal ball to adjust your offer price accordingly.

Image credit – Rob Ellis

If you don’t know the critical path, you don’t know very much.

ouija queenOnce you have a project to work on, it’s always a challenge to choose the first task.  And once finished with the first task, the next hardest thing is to figure out the next next task.

Two words to live by: Critical Path.

By definition, the next task to work on is the next task on the critical path.  How do you tell if the task is on the critical path?  When you are late by one day on a critical path task, the project, as a whole, will finish a day late.  If you are late by one day and the project won’t be delayed, the task is not on the critical path and you shouldn’t work on it.

Rule 1: If you can’t work the critical path, don’t work on anything.

Working on a non-critical path task is worse than working on nothing.  Working on a non-critical path task is like waiting with perspiration.  It’s worse than activity without progress.  Resources are consumed on unnecessary tasks and the resulting work creates extra constraints on future work, all in the name of leveraging the work you shouldn’t have done in the first place.

How to spot the critical path? If a similar project has been done before, ask the project manager what the critical path was for that project.  Then listen, because that’s the critical path.  If your project is similar to a previous project except with some incremental newness, the newness is on the critical path.

Rule 2: Newness, by definition, is on the critical path.

But as the level of newness increases, it’s more difficult for project managers to tell the critical path from work that should wait.  If you’re the right project manager, even for projects with significant newness, you are able to feel the critical path in your chest.  When you’re the right project manager, you can walk through the cubicles and your body is drawn to the critical path like a divining rod.   When you’re the right project manager and someone in another building is late on their critical path task, you somehow unknowingly end up getting a haircut at the same time and offering them the resources they need to get back on track.  When you’re the right project manager, the universe notifies you when the critical path has gone critical.

Rule 3: The only way to be the right project manager is to run a lot of projects and read a lot.  (I prefer historical fiction and biographies.)

Not all newness is created equal.  If the project won’t launch unless the newness is wrestled to the ground, that’s level 5 newness. Stop everything, clear the decks, and get after it until it succumbs to your diligence.  If the product won’t sell without the newness, that’s level 5 and you should behave accordingly.  If the newness causes the product to cost a bit more than expected, but the project will still sell like nobody’s business, that’s level 2.  Launch it and cost reduce it later.  If no one will notice if the newness doesn’t make it into the product, that’s level 0 newness. (Actually, it’s not newness at all, it’s unneeded complexity.)  Don’t put in the product and don’t bother telling anyone.

Rule 4: The newness you’re afraid of isn’t the newness you should be afraid of.

A good project plan starts with a good understanding of the newness.  Then, the right project work is defined to make sure the newness gets the attention it deserves.  The problem isn’t the newness you know, the problem is the unknown consequence of newness as it ripples through the commercialization engine. New product functionality gets engineering attention until it’s run to ground.  But what if the newness ripples into new materials that can’t be made or new assembly methods that don’t exist?  What if the new materials are banned substances?  What if your multi-million dollar test stations don’t have the capability to accommodate the new functionality?  What if the value proposition is new and your sales team doesn’t know how to sell it?  What if the newness requires a new distribution channel you don’t have? What if your service organization doesn’t have the ability to diagnose a failure of the new newness?

Rule 5: The only way to develop the capability to handle newness is to pair a soon-to-be great project manager with an already great project manager. 

It may sound like an inefficient way to solve the problem, but pairing the two project managers is a lot more efficient than letting a soon-to-be great project manager crash and burn.  After an inexperienced project manager runs a project into the ground, what’s the first thing you do?  You bring in a great project manager to get the project back on track and keep them in the saddle until the product launches.  Why not assume the wheels will fall off unless you put a pro alongside the high potential talent?

Rule 6: When your best project managers tell you they need resources, give them what they ask for.

If you want to deliver new value to new customs there’s no better way than to develop good project managers.  A good project manager instinctively knows the critical path; they know how the work is done; they know to unwind situations that needs to be unwound; they have the personal relationships to get things done when no one else can; because they are trusted, they can get people to bend (and sometimes break) the rules and feel good doing it; and they know what they need to successfully launch the product.

If you don’t know your critical path, you don’t know very much.  And if your project managers don’t know the critical path, you should stop what you’re doing, pull hard on the emergency break with both hands and don’t release it until you know they know.

Image credit – Patrick Emerson

Put your success behind you.

leap of faith

The biggest blocker of company growth is your successful business model.  And the more significant it’s historical success, the more it blocks.

Novelty meaningful to the customer is the life force of company growth.  The easiest novelty to understand is novelty of product function.  In a no-to-yes way, the old product couldn’t do it, but the new one can.  And the amount of seconds it takes for the customer to notice (and in the case of meaningful novelty, appreciate) the novelty is in an indication of its significance.  If it takes three months of using the product, rigorous data collection and a t-test, that’s not good.  If the customer turns on the product and the novelty smashes him in the forehead like a sledgehammer, well, that’s better.

It’s difficult to create a product with meaningful novelty.  Engineers know what they know, marketers know what they market, and the salesforce knows how to sell what they sell.  And novelty cuts across their comfort.  The technology is slightly different, the marketing message diverges a bit, and the sales argument must be modified.  The novelty is driven by the product and the people respond accordingly.  And, the new product builds on the old one so there’s familiarity.

Where injecting novelty into the product is a challenge, rubbing novelty on the business model provokes a level 5 pucker.  Nothing has the stopping power of a proposed change to the business model.  Novelty in the product is to novelty in the business model as lightning is to lightning bug – they share a word, but that’s it.

Novelty in the product is novelty of sheet metal, printed circuit boards and software.  Novelty in the business model is novelty in how people do their work and novelty in personal relationships.  Novelty in the product banal, novelty in the business model is personal.

No tools or best practices can loosen the pucker generated by novelty in the business model.  The tired business model has been the backplane of success for longer than anyone can remember.  The long-in-the-tooth model has worn deep ruts of success into the organization.  Even the all-powerful Lean Startup methodology can’t save you.

The healing must start with an open discussion about the impermanence of all things, including the business model.  The most enduring radioactive element has a half-life, and so does the venerable business model, even the most successful.

Where novelty in the product is technical, novelty in the business model is emotional. And that’s what makes it so powerful.  Sprinkling the business model with novelty is scary at a deeply personal level – career jeopardy, mortgage insecurity and family volatility are primal drivers.  But if you can push through, the rewards are magical.

Your business model has shaped you into an organization that’s optimized to do what it does. You can’t create new markets and sell to new products to new customers without changing your business model.  Your business model may have been your secret sauce, but the world’s tastes have changed.  It’s time to put your success behind you.

Image credit — MandaRose

The Chief Do-the-Right-Thing Officer – a new role to protect your brand.

Myanmar monks and novicesOur unhealthy fascination with ever-increasing shareholder value has officially gone too far.  In some companies dishonesty is now more culturally acceptable than missing the numbers. (Unless, of course, you get caught. Then, it’s time for apologies.)  The sacrosanct mission statement can’t save us.  Even the most noble can be stomped dead by the dirty boots of profitability.

Though, legally, companies can self-regulate, practically, they cannot.  There’s nothing to balance the one-sided, hedonistic pursuit of profitability.  What’s needed is a counterbalancing mechanism of equal and opposite force.  What’s needed is a new role that is missing from today’s org chart and does not have a name.

Ombudsman isn’t the right word, but part of it is right – the part that investigates.  But the tense is wrong – the ombudsman has after-the-fact responsibility.  The ombudsman gets to work after the bad deed is done.  And another weakness – ombudsman don’t have equal-and-opposite power of the C-suite profitability monsters. But most important, and what can be built on, is the independent nature of the ombudsman.

Maybe it’s a proactive ombudsman with authority on par with the Board of Directors.  And maybe their independence should be similar to a Supreme Court justice.  But that’s not enough.  This role requires hulk-like strength to smash through the organizational obfuscation fueled by incentive compensation and x-ray vision to see through the magical cloaking power of financial shenanigans.  But there’s more. The role requires a deep understanding of complex adaptive systems (people systems), technology, patents and regulatory compliance; the nose of an experienced bloodhound to sniff out the foul; and the jaws of a pit bull that clamp down and don’t let go.

Ombudsman is more wrong than right.  I think liability is better. Liability, as a word, has teeth.  It sounds like it could jeopardize profitability, which gives it importance.  And everyone knows liability is supposed to be avoided, so they’d expect the work to be proactive.  And since liability can mean just about anything, it could provide the much needed latitude to follow the scent wherever it takes.  Chief Liability Officer (CLO) has a nice ring to it.

[The Chief Do-The-Right-Thing Officer is probably the best name, but its acronym is too long.]

But the Chief Liability Officer (CLO) must be different than the Chief Innovation Officer (CIO), who has all the responsibility to do innovation with none of the authority to get it done.  The CLO must have a gavel as loud as the Chief Justice’s, but the CLO does not wear the glasses of a lawyer.  The CLO wears the saffron robes of morality and ethics.

Is Chief Liability Officer the right name?  I don’t know. Does the CLO report to the CEO or the Board of Directors?  Don’t know.  How does the CLO become a natural part of how we do business?  I don’t know that either.

But what I do know, it’s time to have those discussions.

Image credit – Dietmar Temps

Recalibrating Your Fear

time to recalibrate the targeting systemEveryone is looking for that new thing, that differentiator, that edge.  The important filtering question is: Has it been done before?  If it has been done before it cannot be a new thing (that’s a rule), so it’s important to limit yourself to things that have not been done.  Sounds silly to say, but with today’s hectic pace sometimes that distinction is overlooked.

Once your eyeballs are calibrated, it pretty easy to see the vital yet-to-be-done work.  But calibration is definitely needed because things don’t look as they seem.  Here are a few examples to help you calibrate.

“It can’t be done.”   This really means is it was tried some time ago by someone who doesn’t work here anymore and we’ve forgotten why, but the one experiment that was run did not work.  This a good indication of fertile ground.   Someone a long time ago thought it was important enough to try and it still has not been done successfully.  And, new materials and manufacturing processes have been created and opened up new design space. Give it a try.

“That will never work.” See above.

“You can’t do that.”  This means you (and, likely your industry) have a policy that has blocks this new idea.  It may not be the best idea, but since policy prohibits it, you have the design space all to yourself if you want it.  (That is, of course, if you want to compete with no one.) Likely there are no physical constraints, just the emotional constraints you created with your policy.  It’s all yours, if you try it.

“No one will buy that.”  This means no one offers a product like that. It means your industry doesn’t understand it because you or your competitors don’t sell anything like it.  Though Marketing knows the inherent uncertainty, they don’t know the market potential.  But you know you’re onto something. Try it.

“That’s just a niche market.”  This means there’s a market that’s buying your product even though you’ve spent no time or energy to develop that market.  It’s an accidental market. It’s small because it’s young and because you (and your competition) haven’t invested in it nor have developed an unique new product for it.  The growth is all yours if you try.

Organizations create blocking mechanisms and tricky language to protect themselves from the new-and-different because the new-and-different are scary. But organizations desperately need new-and-different. And for that they desperately need to do things that haven’t been done.

The first step is to recognize the fertile design space and untilled markets your fear has created for you.

Image credit — Jordan Oram 

All Your Mental Models are Obsolete

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Even after playing lots of tricks to reduce its energy consumption, our brains still consume a large portion of the calories we eat.  Like today’s smartphones it’s computing power is too big for it’s battery so its algorithms conserve every chance they get.  One of its go-to conservation strategies is to make mental models.  The models capture the essence of a system’s behavior without the overhead of retaining all the details of the system.

And as the brain goes about its day it tries to fit what it sees to its portfolio of mental models.  Because mental models are so efficient, to save juice the brain is pretty loose with how it decides if a model fits the situation.  In fact the brain doesn’t do a best fit, it does a first fit. Once a model is close enough, the model is applied, even if there’s a better one in the archives.

Overall, the brain does a good job.  It looks at a system and matches it with a model of a similar system it experienced in the past.  But behind it all the brain is making a dangerous assumption.  The brain assumes all systems are static.  And that makes for mental models that are static.  And because all systems change over time (the only thing we can argue about is the rate of change) the brain’s mental models are always out of date.

Over the years your brain as made a mental model of how your business works – customers do this, competitors do that, and markets do the other.  But by definition that mental model is outdated.  There needs to be a forcing function that causes us to refute our mental models so we can continually refine them. [A good mantra could be – all mental models are out of fashion until proven otherwise.]  But worse than not having a mechanism to refute them, we have a formal business process the demands we converge on our tired mental models year-on-year.  And the name of that wicked process – strategic planning.

It goes something like this. Take a little time from your regular job (though you still have to do all that regular work) and figure out how you’re going to grow your business by a large (and arbitrary) percentage. The plan must be achievable (no pie in the sky stuff), it should be tightly defined (even though everyone knows things are dynamic and the plan will change throughout the year), you must do everything you did last year and more and you have fewer resources than last year.  Any brain in it’s right will fit the old models to the new normal and put the plan together in the (insufficient) time allotted. The planning process reinforces the re-use of old models.

Because the brain believes everything is static, it’s thinking goes like this – a plan based on anything other than the tried-and-true mental models cannot have certainty or predictability in time or resources.  And it’s thinking is right, in part.  But because all mental models are out of date, even plans based on existing models don’t have certainty and predictability.  And that’s where the wheels fall off.

To inject a bit more reality into strategic planning, ignore the tired old information streams that reinforce existing thinking and find new ones that provide information that contradicts existing mental models.  Dig deeply into the mismatch between the new information and the old mental models.  What is behind the difference?  Is the difference limited to a specific region or product line? Is the mismatch new or has it always been there?  The intent of this knee-deep dissection is not to invalidate the old models but to test and refine.

There is infinite detail in the world.  Take a look at a tree and there’s a trunk and canopy. Look at the canopy and see the leaves. Look deeper to see a leaf and its veins.  In order to effectively handle all this detail our brains create patterns and abstractions to reduce the amount of information needed to make it through the day.

In the case of the tree, the word “tree” is used to capture the whole thing – roots and all.  And at a higher level, “tree” can represent almost any type of tree at almost any stage in its life.  The abstraction is powerful because it reduces the complexity, as long as everyone’s clear which tree is which.

The message is this. Our brain takes shortcuts with its chunking of the world into mental models that go out style. And our brain uses different levels of abstraction for the same word to mean different things. Care must be taken to overtly question our mental models and overtly question the level of abstraction used when statements of facts are made.

Knowing what isn’t said is almost important as what is said. To maintain this level of clarity requires calm, centered awareness which today’s pace makes difficult.

There’s no pure cure for the syndrome. The best we can do is to be well-rested and aware. And to do that requires professional confidence and personal disciple.

Slowing down just a bit can be faster, and testing the assumptions behind our business models can be even faster.  Last year’s mental models and business models should be thought of as guilty until proven relevant.  And for that you need to make the time to think.

In today’s world we confuse activity with progress. But really, in today’s dynamic world thinking is progress.

Image credit – eyeliam.

Can It Grow?

Retired SunflowerIf you’re working in a company you like, and you want it to be around in the future, you want to know if it will grow.  If you’re looking to move to a new company, you want to know if it has legs – you want to know if it will grow. If you own stock, you want to know if the company will grow, and it’s the same if you want to buy stock.  And it’s certainly the case if you want to buy the whole company – if it can grow, it’s worth more.

To grow, a company has to differentiate itself from its competitors.  In the past, continuous improvement (CI) was a differentiator, but today CI is the minimum expectation, the cost of doing business.  The differentiator for growth is discontinuous improvement (DI).

With DI, there’s an unhealthy fascination with idea generation.  While idea generation is important, companies aren’t short on ideas, they’re short on execution.  But the one DI differentiator is the flavor of the ideas.  To do DI a company needs ideas that are radically different than the ones they’re selling now.  If the ideas are slightly twisted variants of today’s products and business models, that’s a sure sign continuous improvement has infiltrated and polluted the growth engine. The gears of the DI engine are gummed up and there’s no way the company can sustain growth.  For objective evidence the company has the chops to generate the right ideas, look for a process that forces their thinking from the familiar, something like Jeffrey Baumgartner’s Anticonventional Thinking (ACT).

For DI-driven growth, the ability to execute is most important.  With execution, the first differentiator is how the company investigates radically new ideas.  There are three differentiators – a focus on speed, a “market first” approach, and the use of minimum viable tests (MVTs).  With new ideas, it’s all about how fast you can learn, so speed should come through loud and clear.  Without a market, the best idea is worthless, so look for “market first” thinking.  Idea evaluation starts with a hypothesis that a specific market exists (the market is clearly defined in the hypothesis) which is evaluated with a minimum viable test (MVT) to prove or disprove the market’s existence.  MVTs should error on the side of speed – small, localized testing.  The more familiar minimum viable product (MVP) is often an important part of the market evaluation work.  It’s all about learning about the market as fast as possible.

Now, with a validated market, the differentiator is how fast company can rally around the radically new idea and start the technology and product work.  The companies that can’t execute slot the new project at the end of their queue and get to it when they get to it.  The ones that can execute stop an existing (lower value) project and start the new project yesterday.  This stop-to-start behavior is a huge differentiator.

The company’s that can’t execute take a ready-fire-aim approach – they just start.  The companies that differentiate themselves use systems thinking to identify gaps in resources and capabilities and close them. They do the tough work of prioritizing one project over another and fully staff the important ones at the expense of the lesser projects.  Rather than starting three projects and finishing none, the companies that know how to do DI start one, finish one, and repeat.  They know with DI, there’s no partial credit for a project that’s half done.

All companies have growth plans, and at the highest level they all hang together, but some growth plans are better than others.  To judge the goodness of the growth plan takes a deeper look, a look into the work itself.  And once you know about the work, the real differentiator is whether the company has the chops to execute it.

Image credit – John Leach.

The Safest Bet Is Far Too Risky

Playing It SafeIt’s harder than ever to innovate, and getting harder.

The focus on growth can be empowering, but when coupled with signed-in-blood accountability, empowering turns to puckering.  It’s an unfair double-bind. Damned if you try something new and it doesn’t work, and damned if you stay the course and don’t hit the numbers.  The most popular approach seems to be to do more of what worked.  A good approach, but not as good as it’s made out to be.

Doing more of what worked is good, and it works.  But it can’t stand on its own.  With today’s unreasonable workloads, every resource is fully booked and before doing more of anything, you’ve got to do less of something else.  ‘More of what worked’ must walk hand-in-hand with ‘Stop what didn’t work.’  Without stopping, without freeing up resources, ‘more of what worked’ is insufficient and unsustainable.

But even the two together are insufficient, and there’s a much needed third leg to stabilize the stool – ‘starting new work.’  Resources freed by stopping are allocated to starting new work, and this work, also known as innovation, is the major source of growth.

‘More of what worked’ is all about productivity – doing more with the same resources; and so is ‘stopping what didn’t work’ – reclaiming and reallocating ineffective resources. Both are important, but more importantly – they’re not innovation.

As you’re well aware, the rules are changing faster than ever, and at some point what worked last year won’t work this year. The only way to stay ahead of a catastrophe is to make small bets in unproven areas.  If the bets are successful, they turn into profitable innovation and growth. But the real value is the resiliency that comes from the ritualistic testing/learning cycles.

Going all-in on what worked last year is one of the riskiest bets you can make.

The Threshold Of Uncertainty

Limbo under the threshold of uncertaintyOur threshold for uncertainty is too low.

Early in projects, even before the first prototype is up and running, you know what the product must do, what it will cost, and, most problematic, when you’ll be done. Independent of work content, level of newness, and workloads, there’s no uncertainty in your launch date. It’s etched in stone and the consequences are devastating.

A zero tolerance policy on uncertainty forces irrational behavior. As soon as possible, engineering gets something running in the lab, and then doesn’t want to change it because there’s no time. The prototype is almost impossible to build and is hypersensitive to normal process variation, but these issues are not addressed because there’s no time.  Everyone agrees it’s important to fix it, and agrees to fix it after launch, but that never happens because the next project is already late before it starts. And the death cycle repeats project after project.

The root cause of this mess is the mistaken porting of manufacturing’s zero uncertainly mindset into design. The thinking goes like this – lean and Six Sigma have achieved magical success in manufacturing by eliminating uncertainty, so let’s do it in product design and achieve similar results. This is a fundamental mistake as the domains are fundamentally different.

In manufacturing the same product is made day-in and day-out – no uncertainty; in product design no two product development efforts are the same and there’s lots of stuff that’s done for the first time – uncertainty by definition. In manufacturing there’s a revision controlled engineering drawing that defines the right answer (the geometry and the material) – make it like the picture and it’s all good; in product design the material is chosen from many candidates and the geometry is created from scratch – the picture is created from nothing. By definition there’s more inherent uncertainty in product design, and to tighten the screws and fix the launch date at the start is inappropriate.

Design engineers must feel like there’s enough time to try new things because new products that provide new functionality require new technologies, new materials, and new geometries. With new comes inherent uncertainty, but there are ways to manage it.

To hold the timeline, give on the specification and cost. Design as fast as you can until you run out of time then launch. The product won’t work as well as you’d like and it will cost more than you’d like, but you’ll hit the schedule. A good way to do this is to de-feature a subassembly to reduce design time, and possibly reduce cost. Or, reuse a proven subassembly to reduce design time – take a hit in cost, but hit the timeline. The general idea – hold schedule but flex on performance and cost.

It feels like sacrilege to admit that something’s got to give, but it’s the truth. You’ve seen how it goes when you edict (in no uncertain terms) that the timeline will be met and there’ll be no give on performance and cost. It hasn’t worked, and it won’t – the inherent uncertainty of product design won’t let it.

Accept the uncertainty; be one with it; and manage it. It’s the only way.

Accomplishments in 2013 (Year Four)

PRODUCT PROCESS PEOPLE

Accomplishments in 2013

  • Fourth year of weekly blog posts without missing a beat or repeating a post. (251 posts in total.)
  • Third year of daily tweets – 2,170 in all. (@mikeshipulski)
  • Second year as Top 40 Innovation Bloggers (#12) – Innovation Excellence, the web’s top innovation site.
  • Seventh consecutive year as Keynote Speaker at International Forum on DFMA.
  • Fourth year of LinkedIn working group – Systematic DFMA Deployment.
  • Third year writing a column for Assembly Magazine (6 more columns this year).
  • Wrote a book — PRODUCT PROCESS PEOPLE – Designing for Change (Which my subscribers can download for free.)

 

Top 5 Posts

  1. What They Didn’t Teach Me In Engineering School — a reflection on my learning after my learning.
  2. Guided Divergence — balancing act of letting go and shaping the future.
  3. Innovation in 26 words — literally.
  4. Lasting Behavioral Change — easy to say, tough to do.
  5. Prototype The Unfamiliar — test early and often.

 

I look forward to a great year 5.

Mike Shipulski Mike Shipulski
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