The new product development process (NPD) can be represented as a “funnel” or alternatively as a “vortex” as illustrated in the figure below. A funnel implies a more orderly process; a vortex better represents the chaotic nature of new product development. At the top of the vortex is the universe of product ideas that a company could potentially work on. The ideas have to be screened and prioritized as every company has resource limitations and cannot possibly, nor should they, develop every idea into a product. Once a decision is made to develop the product, then a common approach is to use a “phased development process” with its series of phases and gates to guide the product development.
But is the “phased development process” a project management technique? I believe many who have implemented phased development processes mistakenly believe it is a project management technique. They are lulled into a sense of security believing now all projects will progress flawlessly.
The problem is that no two projects are ever the same. They have varying degrees of risk. Sometimes that risk is strictly variation. Maybe it is foreseeable uncertainty that can be planned for. At the other end of the spectrum, there are projects with high levels of complexity and/or unforeseeable uncertainty: the infamous “unknown unknowns”, or “unk unks”. Projects can be an extension of an existing product, or they might involve new technologies to the business and require the development of new skills. They might be new-to-the-world products that break new ground not only from a technology standpoint, but also in terms of the market itself. On top of all that, you have the variation in the personalities and skill sets of project leaders and teams. As a result, what works in managing one project may not work for another project.
A phased development process is a framework for managing a portfolio of projects, but not a project management tool per se. You must tailor your project management technique for each project based on the type of project risk you face. Projects with normal variation and/or foreseeable uncertainty can be managed with the tools most project managers are familiar with. For projects that have high degrees of complexity and/or unforeseeable uncertainty, you must manage them with different techniques.
A related topic is Scrum, a technique for managing software projects. Many in the software industry believe that Scrum replaces a phased development process. Scrum is a project management technique that can be used for highly complex software projects, or for managing the development of the software component on a project that combines both hardware and software. This is the situation today for many companies who develop highly engineered products such as analytical instruments, medical instruments, and other electro-mechanical systems. Scrum is a project management technique that can sit next to other techniques for managing projects, all within the framework of a phased development process.
What do you think? How do you relate a phased development process with project management techniques? Do you agree with how I have described a phased development process and how it relates to managing projects? Is there a better way to think about this subject?
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