Is Your New Product Process One Giant Speed Bump?

Concepts: new product speed to profit, cost of delay, lean principles, value stream mapping.

You start with the best intentions with every new product project. You declare, “This time will be different!”. Yet, as each project progresses it accumulates delays. Days turn into weeks; weeks turn into months. In some organizations, these delays are normalized. What about your organization?

The Cost of Delay

Have you ever calculated the cost of delay to your product innovation project, portfolio, or business? Delays have many implications. The most popular is productivity. Anytime you take more effort and calendar time than is necessary to get the right result, you are destroying productivity. Another implication is time to profit. Every day your new product is delayed to market, you delay its revenue-earning ability to recuperate the return promised for the investment.  One of my clients, so motivated by this concept, placed posters in meeting rooms as a daily reminder,

“One out the door beats five stuck in stage four”

For some projects, a launch window may be very narrow and if missed, could jeopardize the very opportunity itself rendering the entire effort a waste. And, not to mention the myriad of other negative impacts including opportunity cost, team morale, partner relations, customer satisfaction, and stakeholder confidence. Often, delays that occur mid-process create downstream pressure for Production/Operations/Supply Chain to make up this time. What is most powerful is calculating the total cost of all delays across all projects and portfolios and the realization that you could have funded additional projects without adding additional resources!

If your best leaders experience unwarranted project delays, you have a new product process problem, not a people problem. And, if you have taken the time to design a purpose-built new product process illustrating ‘how’ it should be done, and you still experience delays, then you have an ‘organization-process fit’ problem. In essence, the teams that are using the process to ‘navigate’ new product development in your organization, are running into speed bumps that you are not aware of. Yet.

Value Stream Mapping

As experts in this field, we have developed a large, diverse toolkit that we tap into while working with our clients to improve their new product performance. When it comes to improving speed, one of the most popular and effective tools is Value Stream Mapping (VSM) for New Products. This is typically executed as a 3-day workshop (or kaizen) with a cross-functional team representative of the business and functions that contribute to new products. This is something you can do yourself or you can leverage one of our consultants to lead/facilitate the workshop using our toolkit.

VSM Workshops are effective for a variety of reasons and should be held once every 2-3 years:

• Engaging. All participants arrive with some level of preparedness and readiness to contribute to the workshop discussion (E.g., 5 L’s= Loved, Loathed, Learned, Longed-for and Likely more demand). Whether it be to represent their Function, Region, or Project Role’s point of view. You can increase engagement by ensuring all participants arrive ‘ready’ to contribute (E.g., distribute the current process map or results of a recent PLR).
• Holistic. VSM enables all participants to see the downstream effects of their activity (or lack thereof). This bigger picture view enables trade-off decisions that benefit the company by focusing on value-adding activities while removing non-value add or waste. Solutions tend to be higher impact as they span multiple Functions, departments, as well as the entire process from idea inception to post launch.
• Focused. The workshop brings awareness to anything that adds time to the Process Lead Time. If it is not a value-adding activity, it is added to the Speedbump List and later prioritized for impact using Frequency x Severity. The Workshop is a time-boxed sprint which contains the team. You are not developing a laundry list, you are looking for high impacts.
• Empirical data. The highest priority speedbumps are examined in more detail by the team, for root-cause (E.g., Cause & Effect/Fishbone analysis) and for interdependencies (E.g., Graphical Matrix) using real data or best estimates from real projects. The team starts small by assessing the impact on one project, then estimates impact on the portfolio (several projects of a similar class) and then to the business (each portfolio’s impact on the business). This brings awareness to the full extent of each priority problem detected, making it easier to communicate to others throughout the organization when timing is right.
• Roadmap of Continuous Improvement. Once priority problems are identified and described, you can begin to generate potential solutions that will shape your ‘future process map’. This is where we save clients a lot of time. We have hundreds of solution prototypes in our toolkit, making it easy for the team to find something that resonates with them. Each solution is described and prioritized on an Implementation Priority Matrix (E.g., Impact by Ease of Implementation). By sequencing all potential solutions onto a 1-3 year roadmap, you bring awareness to each problem that exists, and you communicate the priority to resolve.

Evidence-based Speed Enablers

Applying traditional lean principles to new product development is a tricky business because new products are a value creation process. Simply removing activities because they add to process lead time (cycle time plus calendar time) is flawed. You must look at it from a productivity perspective (i.e. bang for buck). For example, many organizations have streamlined the front-end of their process or removed it entirely, opting for speed by resolving the product definition during development scrums. Many of these teams did improve their development speed, but the failure showed up in the market, after launch, with a poorer than expected return on investment. There is no benefit to speeding up the launch of a poor product. Hence, why value stream mapping is the preferred technique to lean out the new product development process. Keep the value-adding activities, remove the waste.

We have conducted years of research, so you don’t have to. After examining all drivers of speed and productivity, we have narrowed in on these seven so you can preserve value-adding activity without jeopardizing speed.  Focus your VSM Workshop in these areas if you are not starting with your own custom priorities:

1. Market Focus. Developing products that offer a compelling value proposition to the customer is the number one driver to success and profitability. But conceiving such unique differentiation is not easy. It begins with a thorough understanding of customers’ and users’ unmet and often unarticulated needs. This is obtained through voice-of-customer work and is an integral part of early-stage scoping, product definition, development, and validation.
2. Front-end Loading. Due diligence in the early days of a new product project pays off! The right front-end homework is designed to yield just enough of the right information: the market, technical and business assessments to define the product and project sufficiently to confirm viability, enabling an investment Go/Kill decision. This is critical to determining if the product concept is a winner and can be executed to success.
3. Spiral development. During the life of a project, many things can change. Markets shift, competitors launch, the economy changes, and so on. Launching only to learn that one of these shifts has rendered your product ineffective sends you back to the drawing board – a costly delay. We can save a lot of time at the back end (during launch) if we test and validate our designs iteratively during development. That is, several ‘build-test-feedback-revise’ loops that appear like spirals, each building on the learnings of the prior test, obtaining customer/market validation.
4. Cross–functional Collaboration. The key to cycle time reduction and getting to the market on time is an effective, true cross-functional team that knows how to collaborate. This is the most strongly correlated driver of speed in NPD. These teams are comprised of players contributing value from key functions, with a stake in and commitment to the project. The team is led by a carefully selected champion that drives the project in an entrepreneurial manner. How the team is organized, the team composition, roles and authority of the players make all the difference between time-driven projects and those that languish.
5. Rapid Prototyping. The ability to convert market insights and feedback into solution prototypes (e.g. early-stage sketches/drawings, crude mockups, nonfunctioning protocepts, etc.) that a customer can see, hold, or feel, but most importantly react to, accelerates customer engagement, validation, and feedback. The goal is to enable each stakeholder, especially customers/market players, see value as quickly as possible. The sooner this can be validated, the sooner you can initiate development and scaling efforts.
6. Right sizing Process Pathways. Discerning how projects differ from one another and most importantly, right-sizing process rigor so they are not over or under managed is an important determinant of project success and speed. Triaging and routing projects early in the process, at Idea or Concept, offers the biggest impact. Many organizations leverage purpose-built Stage-Gate Pathways which are designed to support the degree of innovativeness and unique context of each project such as VUCA (volatility, uncertainty, complexity, and ambiguity). Right sizing the process pathway is all about matching project needs to the organization’s capability, investment preference, resources, and capacity.
7. Strategic resource allocation. Agility in decision-making also enables speed through effective prioritization so projects are properly resourced based on their merit (i.e. strategic fit, market attractiveness, product/competitive advantage, competencies, technical feasibility, and financial reward for risk). Far too many organizations allocate project resources without much thought at all – often and simply to keep everyone happy. This impedes your speed to profit. Additionally, we have established that the occasional review of your portfolio of projects, to ensure you have not overextended your resources (given the mix of projects underway), a speed enabler. Resource allocation decisions typically occur at Gates (for single project evaluation/resourcing) and at Portfolio Reviews (occasional reviews of the entire set of projects for resource balance).

Now that you know where to focus your efforts to find the best speed enablers, you can plan your Value Stream Mapping Workshop. Be sure to cover all 7 speed enablers, and additionally, any speedbumps unique to your organization.

We take a 3-step approach:

1. Preparation.
This step involves selecting a leader and the cross-functional team to participate and contribute during the VSM workshop. It may be wise to leverage a 3^rd party expert to guide and facilitate your VSM, especially if their credibility will improve team buy-in.You will also want to define the scope of the workshop. Are you examining one Business Unit, one Region, one Portfolio, or one Project Classification? Is your current state new product process already mapped out or will you need to set time aside during the workshop for the team to map the ‘current state’? If you have process performance information or metrics, this should be shared with the team. This might include PLRs (post launch review learnings and recommendations), Process Metrics like Attrition Curve (Kill rate), Cycle Time, Baseline Timelines for each Stage, Red Flags (frequency and severity of reasons for contract deviations).Hold a Kickoff meeting to clarify what your objectives are, your expectations of the team and the workshop agenda, especially if this is your organization’s first time leading VSM.

2. Value Stream Mapping Workshop.
This step involves facilitating the team through the Value Stream Mapping Workshop. There are a series of activities to engage the team. Most activities involve the team interacting with a visual of the current state process mapped out on a large roll of paper posted on the wall.

• • Examine the current state process map from project initiation to launch. Allow sufficient time for each participant to place post-it notes on the map to identify a high priority speed bump they have observed. Each post-it note should include (the 5 W’s): what the speed bump is, when it occurs, who is typically involved, quantify the delay/waste, where it occurs, and why it happens (SIPOC – supplier, input, process, output, customer). Allow time for every participant to post every problem their representative area/function/role has submitted.
  • Prioritize the problems. Instruct the team group similar problems. Identify the Frequency x Severity of each problem to prioritize the problems.
  • Quantify priority problems. Organize the participants into smaller teams to conduct a more detailed examination of the problem, looking for the root cause, the value stream lead time (cycle time plus waiting time), and to quantify the impact of the problem (in time, money, quality) on a typical project (and reference Frequency x Severity). The team is encouraged to use any of the lean six sigma methods they may be familiar with to visualize the problem in more detail.

3. Roadmap.
This step brings closure to the Value Stream Workshop by generating solution ideas, bringing form to the future state process, analyzing impact by ease of implementation and recommending a sequence.

• • Brainstorm solutions. For each problem, engage the team to identify potential solutions. Develop visual sketches or use benchmark prototypes to accelerate understanding and assessment. Draw on our extensive toolkit that contains hundreds of process solutions for speed and productivity.
  • Future State. Bring form to the future state map using solution sketches and prototypes to illustrate what could be.
  • Prioritize each solution by Impact and Ease of Implementation. Group into themes and determine interdependencies.
  • Recommend solution implementation sequence by organizing solutions into a multi-year Continuous Improvement Roadmap.

Taking a new product from inception to launch is one of the most complex endeavors an organization can undertake. An enabling process proves to be essential in showing cross-functional teams the proven pathway(s) to success, when and how to execute different value-added activities and how to navigate the organization for support, resources, and approvals especially when speed is of utmost importance. Once you have improved your new product process using Value Stream Mapping, you must remain diligent in protecting its design. Resist the many pressures for bureaucracy to creep in, little by little, or you will no longer recognize the process or benefit from its speed.

For more resources, read our best-selling business book Lean, Rapid and Profitable New Product Development by Dr. Robert G. Cooper and Dr. Scott J. Edgett of Stage-Gate International (available on Amazon).

Thinking of bringing a Value Stream Mapping Workshop to your organization? Give Michelle a call.