In this era of “right-sizing”, lean product development (LPD) represents a critical opportunity to re-organize product development on a sounder basis. Development and product costs can be reduced, product quality and performance improved, and time-to-market reduced with an aggressive, purposeful approach to LPD. This requires a formal, structured approach to implementing LPD practices. This must be based on a comprehensive and complete understanding of what LPD involves.
If executive management of a company has a limited view of what lean product development represents, the implementation of LPD practices will be limited and incomplete, or the implementation will be viewed as a minor activity that does not require a formal implementation effort with active executive management involvement. Without an aggressive, structured program, the rate of improvement in developing new products will be much slower.
With any type of improvement program including LPD, executive management commitment is frequently cited as key to the success of that initiative. Commitment is more than a verbal statement or providing the necessary resources to make it happen. Effective implementation of LPD requires active executive management involvement and direction.
Leadership is required to communicate a vision of how products need to be developed and to define the desired development process objectives under this new paradigm. Is the focus on time-to market, on product performance and technology, or on product or life cycle costs? Each of these objectives will result in a different orientation for the development process. Specific goals should be established and communicated – “we will cut our development cycle by 40% over the next three years”. Priorities need to be established – “we will focus on establishing an effective team-based approach to development before we invest in upgrading our CAD systems”. Resources and funding mechanisms for this effort need to be committed including time for personnel working on the LPD initiative, training, process improvement, and tools implementation. Will these efforts be funded by a separate budget, by departmental budgets or by development program budgets? Explicit guidance is required on objectives, goals, priorities, resources and funding mechanisms. Once a plan of action is developed by the key people in the organization, it must be reviewed, approved and actively supported by executive management.
A positive culture must created. This culture must be oriented toward continuous improvement and team-oriented approaches. Cultural changes need to be supported with compatible policies related to performance measurement, compensation, career advancement and training. These cultural changes may require five to ten years to achieve in larger organizations. Treating LPD as this month’s fad with three of six months of executive management attention will not see this type of initiative through to fruition. Motorola, a Malcom Baldrige award winner, was successful with their Six Sigma program because their CEO, Bob Galvin spoke of this initiative frequently to groups within Motorola over the years.
One of the first steps to demonstrate commitment is to communicate what is to be achieved with LPD and why. A written statement of intent should be published that very clearly describes the objectives of a IPD initiative, what is to be done, why it is important, and what resources will be devoted to achieving its goals. This needs to be followed by periodic public statements evidencing continuing executive management interest in IPD and the progress that has been made.
Executive management should act as a cheerleader during this implementation process and exhort personnel to continue with their efforts to improve product and process design on an on-going basis.
Executive management action is required to overcome impediments and insure cooperation among the functional disciplines. They must tackle policy issues related to career paths, empowerment, middle management roles, performance appraisal, promotions, rewards, and training. Business strategy and business results should be regularly communicated so that development personnel can align their development objectives to the “big picture”.
To avoid a LPD initiative being viewed as another of a long list of fads or confused with many initiatives that an organization is undertaking at a point in time, a framework should be developed to show how LPD relates to other initiatives and the overall company strategy. However, it is important not to over commit and undertake too many separate initiatives with a fragmented approach and inadequate resources.
This executive management leadership can be channeled through an executive sponsor or a executive steering committee/management team. The executive sponsor or steering committee establishes overall lean product development objectives, identifies resources to support LPD, communicates the need for this change, provides leadership, establishes and revises policies, and overcomes impediments. The executive sponsor approach can be effective in a smaller organization or business unit or where the sponsor is the CEO, President or General Manager. This approach provides a clear focus and direction to the initiative. As the organization grows in size, a steering committee is the recommended mechanism to channel and focus management’s involvement. The steering committee will take longer to organize and to develop a common vision, but the broader functional involvement on this committee will give it greater clout and provide a better mechanism for addressing cross-functional issues.
Unsuccessful or disappointing efforts to implement LPD can be traced to one or more of the following pitfalls:
Once executive management understands these pitfalls and lessons learned from other organizations, they can develop strategies and tactics to counter them within their own organization and improve the success of their lean product development initiative.
The LPD implementation effort should be planned and lead from the top down, but implemented from the bottom up to develop ownership. Employee involvement must be based on communicating the proper goals and providing necessary training in the concepts and skills. When executive management makes continuous improvement a high priority and is actively involved in leading this effort, improved product development practices can be readily implemented and results rapidly achieved.