14 November 2009

Running a Successful Product Development Project

In my discussions with executives, innovation, or product development projects, are often given as examples of internal projects that are not successful. When questioned in more detail, usually the "failure" that is being mentioned can be divided into two separate types. The first type of failure is probably the most damaging and frustrating. These failures are usually products that fail in the market place or result in enormous costs and complexity in the production and supply chain process. The second type of failure is less damaging, but probably more frustrating, as it happens more often. This type of failure involves products which are not launched or launched too late.

In my experience, these two types of failures are caused by two different types of problems. The first type (market failure) is typically caused by the product development project having been structured in the wrong way (hand-overs between departments, wrong type of team, etc). The second type of failure (delay) is typically caused by the team being set up, managed, and run in the wrong way. Given this, how can the success rate for product development projects be improved?

The most crucial response is to ensure that the project is set up and staffed in the right way. Product development projects should avoid hand-overs between departments, and therefore need to include a representative of all key departments involved in the process. This will typically include marketing, production, logistics, account management, etc. The chosen project team then needs to be given the end-to-end responsibility for the successful product launch. This responsibility needs to be collective for the whole team, to ensure that they continue to work together across the whole process. In situations where this methodology leads to teams that are too large, careful thinking should be given to working with core and extended teams, and carefully expanding and changing the team composition across time. An excellent explanation of this is given by Deborah Ancona and Henrik Bresman is their book "x-teams: how to build teams that lead, innovate, and succeed".

Once the right team has been put in place to carry out the end-to-end innovation process, the next challenge is to make sure that the project is successful. A product development / innovation project will typically score highly on both internal and external complexity, and a very high number of the problems that this type of projects face are likely across all three phases of the typical project. However, these problems can be avoided or minimized by ensuring that key pitfalls are avoided.

In the initiation phase of the product development project, great care should be given to ensuring that the team has a clear understanding of the project goals and the deliverables expected from the project. As mentioned earlier, this should be to deliver everything that will be required for the successful launch of the new product. This will entail that the team must come up with the product itself, the production process, the supply chain process, the marketing process, pricing, etc, etc. Naturally, the team will need to get specialist input on a number of these issues, but the total responsibility must be clearly placed with the innovation team.

The team will typically consist of people who have never worked together and who probably do not know each other. This means that the team should be given help in forming themselves into a team. They need to understand what is required to become a successful team, how it is to work as a team, how they can best make use of each other's skills and capabilities, etc. Finally, the team should be helped / forced to develop a realistic plan for how they are going to achieve their goals and deliverables. They should be made to understand that they will be held accountable for this plan (especially the overall timing and milestones).

In the work phase key focus areas should include avoiding scope creep, sticking to the agreed milestones, carrying out the required analytics, and communicating with the sponsors and stakeholder. Scope creep is a common problem is this type of projects, as the team is asked to look into related issues, or dives into too much detail on specific issues. To avoid this, a clear process (involving the sponsor) should be put in place to control this. One of the main challenges the team will need to solve (on a continuous basis) is the optimal split between the activities carried out within the team and the use of external experts. When using external experts timing and milestones can become a major problem, as the external experts will not have the same dedication and focus on meeting deadlines. The team should therefore always have a "plan b" for use if the external expert does not deliver (on time).

In the finalization phase the team will need to develop its overall conclusions and the final deliverables. This will typically include the total plan for launching the new product covering all the issues mentioned earlier. In addition, the team will need to develop and carry out a communication process. In my experience, this is something that innovation teams often overlook. Their implicit assumption is that the rest of the organization will automatically accept their conclusions and recommendations. Unfortunately, this is often not the case. Therefore the team must carefully consider who the stakeholders are, what their "hot buttons" are, and how they can be convinced to accept the team's conclusions.

It is in the nature of the process that not all innovation projects are successful. However, it is my experience that companies that make use of a structured process as described in this article, have a much higher success rate than other organizations.

Follow the links if you are interested in more information on project planning or project management training.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.