MI 815 Management of Technology and Innovation

Session #11: Managing New Product Development• Lecture/discussion on Schilling Chapter and Pixar Reading• IDEO Case discussion

How can we judge NPD success?

Process Within budget and schedule Quick cycle time Efficient use of resources Adaptive to changes Good risk management

Product Product attributes:

Innovative, meets needs, aesthetic, elegant design, user friendly, powerful, efficient, low-cost

Market performance: Sales, profitability, market share, follow-on products, positive spillovers to other products

Assets• People – new knowledge and skills• Reusable project elements (e.g., design objects)• Org. Capabilities – Process knowledge/refinement• Real options (esp. on a “failed” product)

Concurrent Development

Project Champions

Involving Customers/ Suppliers

Metrics

Methods (Schilling Chapter 11)

Linkage Between Methods and Success Measures?(Schilling Chapter 11)

Concurrent Development

Project Champions

Involving Customers/ suppliers

Metrics

Process Within budget and schedule Quick cycle time Efficient use of resources Adaptive to changes Good risk management

Product Product attributes: Innovative, meets

needs, aesthetic, elegant design, user friendly, powerful, efficient, low-cost

Market performance: Sales, profitability, market share, follow-on products, positive spillovers to other products

Assets• People – new knowledge and skills• Reusable project elements (e.g., design

objects)• Org. Capabilities – Process

knowledge/refinement• Real options (esp. on a “failed” product)

Tools (Schilling Chapter 11)

Stage-Gate Process

Quality Function Deployment

Design for manufacturing

CAD/CAM (PLM)

Linkage Between Tools and Success Measures? (Schilling Chapter 11)

Stage-Gate Process

Quality Function Deployment

Design for manufacturing

CAD/CAM (PLM)

Process Within budget and schedule Quick cycle time Efficient use of resources Adaptive to changes Good risk management

Product Product attributes: Innovative, meets

needs, aesthetic, elegant design, user friendly, powerful, efficient, low-cost

Market performance: Sales, profitability, market share, follow-on products, positive spillovers to other products

Assets• People – new knowledge and skills• Reusable project elements (e.g., design

objects)• Org. Capabilities – Process

knowledge/refinement• Real options (esp. on a “failed” product)

Stage-Gate Process

Quality Function Deployment

Conflicts?

Concurrent Development

Project Champions

The Pixar “System”: Beliefs and PrinciplesP2. Create a peer culture. Encourage people throughout your company to help each other produce their best work.

P1. Empower your creatives. Give your creative people control over every stage of idea development.

P4. Get more out of post-mortems. Many people dislike project post-mortems. They’d rather talk about what went right than what went wrong. Structure your post-mortems to stimulate discussion.

P3. Free up communication. The most efficient way to resolve the numerous problems that arise in any complex project is to trust people to address difficulties directly, without having to get permission. So, give everyone the freedom to communicate with anyone.

Basic Beliefs• Good people are more important than good

ideas. Talent is rare. • Management’s job is not to prevent risk but to

build the capability to recover when failures occur.

• It must be safe to tell the truth. • We must constantly challenge all of our

assumptions and search for the flaws that could destroy our culture.

How feasible and/or advisable is it for “regular” NPD organizations to adopt Pixar’s principles?

Stage-Gate Process

Quality Function Deployment

How Compatible is the Pixar “System” withSchilling’s “best practices”?

Concurrent Development

Project Champions

Ideo

Handspring Decision1. Accept project on reduced schedule 2. Ask for more time 3. Decline project

IDEO’s Innovation SystemProcess Organization Culture Management

IDEO Wrap Up IDEO’s unmatched track record of success is due to having a system for developing

breakthrough products in a consistent and predictable way System has evolved through a process of continuous innovation Each project can be regarded as an experiment. Not just revenue generators but

also learning opportunities Similar to prototypes in a design project, some projects will result in failure and little

improvement Key IDEO principles

Organize design for rapid iterations: Experimenting quickly via prototypes provides rapid feedback needed to shape and improve new ideas

Fail early and often but avoid “mistakes”: Embrace failures that occur early in process. Avoid “mistakes” (poorly conceived experiments that add little information)

Leverage the value of early information: Solving problems early is inexpensive and fast. So value of information is highest when it can be generated earlier.

Dennis Boyle accepted Visor project. Two main reasons: Already had great relationship with Jeff Hawkins due to Palm V project. Project viewed as an experiment that would challenge IDEO’s innovation system

and provide new insights as to whether its process can be adapted to short time-to-market projects

Source: Schilling Chp 11