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The product development newsletter no 1 |
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| How do you find out the best way to do it? |
| There don’t seem to be any concise manuals that collect world experience
together that you can apply practically. A lot of the most useful
information is not written up. In many cases, research results have been
reported to sponsors then filed; few know it exists. |
| I discovered this when I took a sabbatical from running companies. I was
able to set a group of economists to research what the most financially
successful firms do (not just manufacturers) that others don’t. How could
what they do be applied to other companies? For example, was it way-out
inspiration, innovation or just sound business process? And, for example,
was service industry inherently more able to generate wealth for its
shareholders? |
| The result was unexpected. The subject had been researched many times
before and most of the results archived. We found that the firms that create
the most wealth are the manufacturers that use excellent product development
methodology. They create continuous organic growth. The least successful
were preoccupied with achieving growth through mergers and acquisitions, and
paid scant attention to how they operated internally. And we found most of
service industry orders of magnitude less effective than manufacturers. |
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| How do we know what state of the art
is? |
| We found that most firms over-run their product development budgets and
time scales. Or, worse, they compromise the product’s specification to be
able to launch it at all. And a surprisingly high proportion don’t use
cross-function working because of internal turf wars or embedded culture. |
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So how many manufacturers are world-class product developers? We found
that only a small handful worldwide do it really well. And even they don’t
do everything well. Companies that score 75% become leaders. Most firms
barely make 25%. |
| When the less successful see how the leaders do it, their reaction is
interesting. They usually conclude that they’re doing most of what the
leaders do. They can’t take lessons away because they don’t understand the
significance of what they see. Or they feel that their firm can’t operate
like that because of culture or personality - just too difficult to try to
change things. By contrast, the most successful glean something from almost
any firm, successful or not and use the lessons because they have the
culture to be able to. |
| It’s ironic that many of the less successful see themselves as world
class; whereas the world class still think they aren’t there yet. There’s a
moral there somewhere. |
| So why are the best companies so much more successful? From examining
how many really good companies do it, the answer appears to lie in a
combination of two key factors. I’ll develop the theme month by month. |
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So where do we learn about product
development? |
| In product development, from Director to new practitioner, we mainly
learn our skills through by every-day work experience because our initial
training is usually simplistic. Academic courses tend to idealise the
process. They omit the detail that makes the difference. There is plenty
external training on “techie” detail but virtually none on how to organise,
run and manage the entire process (which is what generates the wealth). |
| Why so little useful training? Maybe it’s because fewer than 15,000 or
so UK manufacturers develop their own products (our research). The rest
produce to others’ designs - no doubt you have numerous sub-contractors. For
commercially run training courses, 15,000 is a small market compared, for
example, to hundreds of thousands of firms that want to improve their sales
and marketing capabilities (some poor products really need it, too!). |
| And I believe that because of the fragmented nature of the product
development activity - spread across thousands of companies, all of us doing
our own thing in semi-isolation - there is a lack of good analysis to
contrast and compare how the best do it. Just looking at one or two
exemplars does not provide the whole picture. |
| So how do we learn, not just how we should do it ‘the best way’, but how
we can learn from others’ mistakes? The second is as important as the first,
because learning about other firms’ errors helps us to understand how we
should do it. |
| We need to define ‘doing it the best way’ - it’s a set of aims. It
should mean developing a product that exceeds its sales targets, is
manufactured and sold at a really good margin, and one that newly
industrialised or low labour cost countries don’t have the know-how to
compete with (or develop). In other words, product development utopia (no
use aiming low). |
| So first, what lessons can we use from books? There are hundreds of
books on ‘product development’ - just consult any search engine. Some
contain a pearl of wisdom or two. Many contain none at all and feed you
motherhood and apple pie. Some are all about ‘leadership’, without
explaining how you know where you should be being led (a current vogue). And
far too many are written by theoreticians or consultants. A tedious research
task (I’ve been there and done it). But a few do stand out. To save space
here I’ve put a list on my website (www.Mynott.com).
But even so, I find that none gives a concise account of what to do, in what
order, how and why. And with good examples of others’ mistakes to reinforce
the lessons. Please let me know if you’ve found one that does. |
| Second, training courses. I’ve tried a few over the years, and they
seemed to me to suffer the same problem as the books. And too many were run
by theoreticians who hadn’t actually done it. Maybe they’d done a bit of it;
or maybe they’d advised someone who did it. But that’s not the same as
having the responsibility for the outcome (“the buck stops with me”). I
never really felt they were worth the time. Anyone come across good ones
that cover the whole business process from A to Z and how to do it? |
| Third, learning from the lessons of others. I don’t know why, but there
just don’t seem to be any journals that regularly present a really well
analysed case study with good learning points. If any of you can recommend
some, do share it with us. And ‘Inside UK’, or similar company visit
programmes, rarely do either. For some years, I’ve been organising annual
half-day seminars to put 3 well-researched case studies in front of you, but
the backing for that has temporarily (or permanently - don’t yet know) dried
up. |
| Fourth, get some help from a consultancy. I don’t know whether I’m
qualified to comment since 30 years ago I had a 5-year spell being one. I
never found one I’d care to consult - I found it a relief to get back to a
proper job! (Sorry, I’m sure there must be some brilliant ones - I’ve just
never come across anyone who recommended one.) |
| Is this a bit of a bleak outlook? |
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So where do we go from here? |
| It will take time to cover most of what I found we should all be doing.
I hope it gives you ideas you can use (otherwise I’m wasting your time). So
please have patience. |
| But for the less patient of you (or if you have urgent need) who would
like to short cut my monthly comment, if you have the time and (small)
budget to take 3 days out (a fortnight apart), in a couple of months time
I’m going to start a set of three workshops that will cover the subject in
its total totality - far more that I can do in these newsletters. Or you
might want to get your colleagues up to speed, maybe from other company
areas that you think need the exposure. I’ll shortly mail you details with a
synopsis of what we’ll cover. |
| If you’re curious to know what your peers think of them, e-mail me and
I’ll refer you to people who came to the prototype sessions I ran to
discover whether you would find them helpful (I was gratified by the great
enthusiasm - some are making interesting changes as a result). My mailer
should be with you by the end of w/e 28 March before you receive my next
newsletter; if the post loses it (uncommonly frequent), e-mail me and I’ll
send you another. And I can do it in-house if you have a group (10+) who
would like the exposure. |
| Next month I shall start discussing some interesting findings in areas
that could help us all generate more wealth (margin, profit or whatever -
it’s all the same - money). And do please comment; we all have related
problems. So first, it would be interesting to have you e-mail me to define
your key problems. It would be interesting to confirm what they are and to
define the most pressing ones. |
| For example, Chris Mitchell of Barden e-mailed me: “ I believe all of us
in manufacturing face difficult times ahead. UK plc manufacturing output is
dwindling; few UK owned companies remain - we are clearly no longer
competitive with labour costs; the global mall has removed most of the trade
barriers; so what remains (for us to develop) has to be output of ‘world
beating innovations’ and ‘world class’ product development.” |
| And Simon High of SPP Pumps: “Product development is one area where
companies do not seem to apply lean efforts. There is plenty written about
implementing lean techniques in the manufacturing operation but little on
the benefits of applying similar techniques to the product development
process.” (Interesting comment that I’ll deal with later - I believe there’s
a good reason why.) |
