One of the most important aspects of new product development (NPD) success is management involvement. New product development is one of, if not the most important business process. While R&D is largely responsible for execution, senior management must be engaged and support a culture of innovation.
A recent article in Harvard Business Review entitled “Your Company’s History as a Leadership Tool” discusses the importance of considering history when contemplating organizational change. The author provides his seven (7) tips for “getting history on your side”. Two in particular relate well to NPD.
Tip #5 states: “Conduct postmortems on major projects and initiatives-successful or otherwise. Recognize that you can learn as much from failure as from success.” New product development is unlike other business processes that tend to be driven to the state of an “algorithm”. In other words, the processes are codified and run over and over again. Efficiency is the name of the game. NPD is different as every project is different. Projects 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”. For these and many other reasons, failure is a part of developing new products. Many organizations fear failure and end up with all incremental projects. Some companies never want to face up to the real reasons for project “failure”, instead insisting that R&D “just needs to work a little harder”. The point is management must accept that failure will be part of developing new products and must be willing to discuss the issues openly and honestly, learn from failure and resist the automatic reflex to punish failure.
Tip #6 states: “Seek historical perspective before every major decision, whether it involves a new strategy, a major acquisition or investment, or a new marketing campaign or communications initiative.” This also applies to NPD. For example, many companies have the stated goal to reduce project cycle time. Improving time-to-market no doubt has some big advantages (though not a panacea in all cases). When attempting to speed up projects, history is important as that provides a clue to the NPD culture. For instance, if average cycle time on most major projects is (4) years, and management announces that from this point forward all projects will take no more than (3) years, that may sound great on paper but will the organization really be able to change the NPD culture instantly? It may in fact be related to other factors such as how projects are being defined, or feature creep. It may be a function of management’s lack of involvement or slow decision making. Again, looking at historical precedent and why things are the way they are can help guide organizational change.
Do you have examples of how the use of historical precedent at your company or organization has aided organizational change? What about examples where history has been ignored and led to failed organization change? I would welcome your comments!
New Product Visions is a consulting company that helps organizations improve the effectiveness of their new product development processes. We specialize in small to mid-sized companies that manufacture highly engineered products. Contact us today about how we might help you!