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MythsOfProductDevelopment
HBR’s 10mustreadsoninnovation
Stefan Thomke
ProfessorofBusinessAdministration
HarvardBusinessSchool
Donald Reinertsen
PresidentofReinertsen&Associates
T...
Technologycommercializationmanager
ExploitTechnologiesPte Ltd (ETPL)
Agencyfor Science, TechnologyandResearch (A*STAR, Sin...
Many companiestreat
MANUFACTURING
product developmentas itwere
The managers
WANT
✔Detailed and
predictable plans ✗Schedule variations
and waste
It works for factories, but
backfires
with product development
Designing
Products
Manufacturing
Products
Manufacturing is
repetitive and predictable
For productdevelopment
The output(information)
can beanywhere
Requirements
constantly
change
The tasks
are unique
It is important to appreciate the
difference and avoid fallacies
6
There are
that undermine
product development
fallacies
1.
High utilizationof resource will
improve performance
The managersoverlook
variability
Of development work
The variabilitycancause delays
dramaticallyasutilizationincreases
Resource
Utilization
Waiting
Time
50%25% 75%
30x
100%
And, the increased R&D inventory due to delays is
predominantly invisiblebecause they largely
consistof information
Besidesthecommon solutionto providea
capacitybuffer, thereare other viablesolutions
Change the
management
controlsystem
Se...
2.
Processing work inlargebatches
will be more economical
The managers
incorrectly believe that
large batches produce
“economies of scale”
Large batches do reduce the
transaction cost, however, they
increase the holding cost
Transaction Cost
HoldingCost
Batch Size
Cost
Holding Cost
TransactionCost
TotalCost
Optimal BatchSize
The optimal batchsize isthepoint where the combin...
OptimalBatch Sizes
Astonishing
results
3.
Teamsneed tofaithfullyfollow
theirdevelopment plan
The managers believe that
deviations from the plan is
poor management
and execution
However, many events can disapprove the
initial assumptions of the original plan.
Newtesting
results
Unexpected
informatio...
For all those reasons, sticking to the original
plan can be a recipe for
The plan should be treated as an
initial hypothesis that is
constantly revised
4.
The sooner a project isstarted,
the sooner it will be finished
The managersbelieve thatworks startedearly
do not need to be done later
Such thinking usuallyleads to
Moooooooooore
projectsa companycan vigorouslypursue
THAN
bite off more than
you can chew
Don’t
It will causethe dilutionof resource
It will causethe dilutionof resource
DANGEROUS
And, itis
Resource
Insufficient
E F
Slow
Project Progress
Project Duration
Cost andschedule overruns
Increases
Increase Exponentially
When …
CONTROL RESIST
New project
startingrate
Temptationto stealresource
from ongoing projects
We must
5.
The more features aproduct has,
the better customerswill likeit
Product development teams seem tobelieve that
addingfeatures creates valuefor customers
Companies that challenge the belief usuallycreate
products thatareelegant intheir simplicity
To do that, the development
team needs to definethe
problem clearly
problem
Itmakesthe team to
FOCUS onthe few
features that really
matterand determine
what to hide or omit
6.
The project will be more successful,if the
team“get it right the firsttime”
Requiring success on thefirst pass biases
teams towardthe least-risky solutions
To avoid makingmistakes,teams follow a
linear processin which each stageis
carefully monitored
Go/ NoGo
Milestone1
Go/ NoG...
This processcan cause
project overrunsbecause the
feedback ofthe problem is
delayed
Fail early,failoften
Rapid
experimentation
New information
Diverse ideas
Crucial to
innovation projects
i
Summary
6FALLACIES
Highutilization Largebatchsize Followingplanstrictly
Startingprojects
toosoon
Too many
features
The mindsetof t...
Avoid the mistakesand
keep projectson track
More presentations at
www.innodiary.org
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Six Myths of Product Development

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HBR's 10 must reads on innovation. The negative effects of 6 fallacies abour product development are explained, and practical suggestions to overcome them will help companies to avoid the mistakes and keep projects on track.

Publié dans : Business
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Six Myths of Product Development

  1. 1. MythsOfProductDevelopment HBR’s 10mustreadsoninnovation
  2. 2. Stefan Thomke ProfessorofBusinessAdministration HarvardBusinessSchool Donald Reinertsen PresidentofReinertsen&Associates The authors The full article is available at Harvard business review
  3. 3. Technologycommercializationmanager ExploitTechnologiesPte Ltd (ETPL) Agencyfor Science, TechnologyandResearch (A*STAR, Singapore) B. Eng &Ph.d(Engineering) NanyangTechnologicalUniversity Singapore M.B.A. INSEAD Fontainebleau, France Presentationby LI Wei
  4. 4. Many companiestreat MANUFACTURING product developmentas itwere
  5. 5. The managers WANT ✔Detailed and predictable plans ✗Schedule variations and waste
  6. 6. It works for factories, but backfires with product development
  7. 7. Designing Products Manufacturing Products
  8. 8. Manufacturing is repetitive and predictable
  9. 9. For productdevelopment The output(information) can beanywhere Requirements constantly change The tasks are unique
  10. 10. It is important to appreciate the difference and avoid fallacies
  11. 11. 6 There are that undermine product development fallacies
  12. 12. 1. High utilizationof resource will improve performance
  13. 13. The managersoverlook variability Of development work
  14. 14. The variabilitycancause delays dramaticallyasutilizationincreases Resource Utilization Waiting Time 50%25% 75% 30x 100%
  15. 15. And, the increased R&D inventory due to delays is predominantly invisiblebecause they largely consistof information
  16. 16. Besidesthecommon solutionto providea capacitybuffer, thereare other viablesolutions Change the management controlsystem Selectively addextra resource # Limitthe numberof projects Make R&D inventory “visible”
  17. 17. 2. Processing work inlargebatches will be more economical
  18. 18. The managers incorrectly believe that large batches produce “economies of scale”
  19. 19. Large batches do reduce the transaction cost, however, they increase the holding cost Transaction Cost HoldingCost
  20. 20. Batch Size Cost Holding Cost TransactionCost TotalCost Optimal BatchSize The optimal batchsize isthepoint where the combined holding andtransactioncost islowest
  21. 21. OptimalBatch Sizes Astonishing results
  22. 22. 3. Teamsneed tofaithfullyfollow theirdevelopment plan
  23. 23. The managers believe that deviations from the plan is poor management and execution
  24. 24. However, many events can disapprove the initial assumptions of the original plan. Newtesting results Unexpected information or ideas Shift ofcustomers’ preferences
  25. 25. For all those reasons, sticking to the original plan can be a recipe for
  26. 26. The plan should be treated as an initial hypothesis that is constantly revised
  27. 27. 4. The sooner a project isstarted, the sooner it will be finished
  28. 28. The managersbelieve thatworks startedearly do not need to be done later
  29. 29. Such thinking usuallyleads to Moooooooooore projectsa companycan vigorouslypursue THAN
  30. 30. bite off more than you can chew Don’t
  31. 31. It will causethe dilutionof resource
  32. 32. It will causethe dilutionof resource DANGEROUS And, itis
  33. 33. Resource Insufficient E F Slow Project Progress
  34. 34. Project Duration Cost andschedule overruns Increases Increase Exponentially When …
  35. 35. CONTROL RESIST New project startingrate Temptationto stealresource from ongoing projects We must
  36. 36. 5. The more features aproduct has, the better customerswill likeit
  37. 37. Product development teams seem tobelieve that addingfeatures creates valuefor customers
  38. 38. Companies that challenge the belief usuallycreate products thatareelegant intheir simplicity
  39. 39. To do that, the development team needs to definethe problem clearly problem
  40. 40. Itmakesthe team to FOCUS onthe few features that really matterand determine what to hide or omit
  41. 41. 6. The project will be more successful,if the team“get it right the firsttime”
  42. 42. Requiring success on thefirst pass biases teams towardthe least-risky solutions
  43. 43. To avoid makingmistakes,teams follow a linear processin which each stageis carefully monitored Go/ NoGo Milestone1 Go/ NoGo Milestone2 Go/ NoGo Milestone3
  44. 44. This processcan cause project overrunsbecause the feedback ofthe problem is delayed
  45. 45. Fail early,failoften
  46. 46. Rapid experimentation New information Diverse ideas Crucial to innovation projects i
  47. 47. Summary
  48. 48. 6FALLACIES Highutilization Largebatchsize Followingplanstrictly Startingprojects toosoon Too many features The mindsetof the firsttime right
  49. 49. Avoid the mistakesand keep projectson track
  50. 50. More presentations at www.innodiary.org

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