Scott J. Edgett
Efficient organizations review projects, learn from mistakes and share the knowledge.
In December 2010, the Product Development Institute (PDI) and APQC concluded a product development benchmarking study that revealed important data about what it takes to consistently produce profitable new products. PDI and APQC published an in-depth quantitative report based on extensive survey results from 257 participating organizations.
Measuring the Efficiency of Knowledge Management in Product Development
To avoid reinventing the wheel, it is imperative for organizations to review the results of each new project, whether it’s a success, a failure, or simply killed. It is also critical that organizations document the lessons learned and use this information to improve their product innovation processes. As one executive noted “we have already paid for the lessons learned. It would be a shame to not utilize this knowledge going forward”. To address this need many organizations have built into their process a post launch review step where project teams are debriefed as to what worked well and what could be improved. By conducting this type of debrief, the process owner is able to identify patterns that could help future project teams to be more successfully and help the organization to be more effective at product innovation. The typical types of topics explored with the teams are process related activities – did we do the right activities at the right time in the process flow; and people related themes – did we have the right skills, resources, decisions and team dynamics to be as effective as possible. Hence, this type of retrospective analysis is conducted to assess the project’s strengths and weaknesses, and to identify what can be learned from the project. This provides valuable input for continuous process improvement.
This step is often overlooked in a company's process as teams wind down one project and quickly move on to the next. They are too busy to learn from their past! Better performing companies, however, have learned that this is a valuable step and do take the time to ensure it occurs.
In this project's survey, we measured a company's efficiency in reviewing projects, learning from mistakes and sharing the resulting knowledge on a ten point scale that ranged from zero to ten. Organizations were asked to describe their level of efficiency in the process of reviewing, learning, and sharing knowledge. Zero is considered not efficient: knowledge is only available through the human network. Five is somewhat efficient: explicit knowledge sources exist, but they are not yet easy to use. Ten represents extremely efficient: explicit knowledge sources exist and they are easy to locate and use.
Top performers in this product innovation survey data exhibit significantly greater efficiency at reviewing projects, learning from mistakes and sharing the resulting knowledge with others in the organization than middle or bottom performers (Figure 1). Even so, top performers still have plenty of room for growth. On a zero-to-ten scale, the average top performers only reached 6.2, showing significant opportunity for improvement. However they still score three times higher than bottom performing companies. The better performers are learning from the past and using this knowledge to continue getting better.
Most Companies are “Somewhat Efficient”As Figure 2 shows, the greatest number of companies, 21.9 percent, consider themselves somewhat efficient at reviewing, learning, and capturing the knowledge from product development projects. Nearly two-thirds of the companies surveyed placed themselves below middle performance. While the top performers consider themselves significantly more efficient than the bottom or middle performers, only 25 percent view themselves above 60 percent, and barely 3 percent characterized their performance as extremely efficient.
Improvements Make A Difference
The overwhelming majority of participating organizations acknowledged that opportunities exist to bolster their efficiency in assessing product development lessons learned and sharing what they’ve gleaned. The following section includes suggestions for closing this gap and for examples of how some best-practice organizations have done so.
Three Tips for Reviewing, Learning, and Sharing
Organizations can take specific actions to increase their efficiency in reviewing, learning, and knowledge-sharing from product development projects.
- Conduct a post launch review of projects within two months of the launch while the information is still fresh for the project team members.
- Periodically analyze the learnings from these project reviews to identify patterns or lessons that can then be incorporated into your new product process – perhaps two or three times a year.
- Conduct these post launch reviews in a safe and non-threatening environment for the teams. You want to learn what happened and what could be improved upon without placing blame.
Post Launch Reviews
Becton, Dickinson and Company’s post launch reviews for projects (called post-mortem
reviews) are held approximately three to six months after launch and are facilitated by the
core team leader. A second post-mortem review is conducted by the portfolio decision team
for a business review of the project 12 to 18 months after launch.
At EXFO three key themes are explored for innovation projects:
- Team dynamics (how the team worked together and coordinated the project)
- Process (how processes were adhered to, any changes made or suggested)
- Management (how well the vision for the project was defined, how decisions were made, and any recommendations for more effective management or special issues).
Credit Suisse is a financial services company that employs approximately 47,800 employees across 100 nations. The organization’s lessons learned knowledge process is administered through a shared services center with oversight by the chief information officer, and managed by a Knowledge Management Competence Center.
A typical project review designed to capture lessons learned:
- includes 10 to 12 project team members,
- takes up to three-and-a-half hours, and
- is conducted by trained facilitators.
Because facilitators are trained in the lessons capture methodology, this approach yields consistent results. Credit Suisse doesn’t try to capture everything, but instead focuses on lessons that are particularly significant and/or conducive to potential reuse.
Although Credit Suisse’s lessons learned knowledge process was initially designed to support two particular project-oriented departments, the process can be leveraged by anyone in the organization. As of May 2009, Credit Suisse had generated 224 lessons learned reports and more than 4,000 documented recommendations for improvement. The 224 lessons learned reports contain over 700 individual lessons, and the 40 percent reuse rate has resulted in an average savings of three person days per project.
This article is the second in a series of articles that offer valuable data on the strategic steps organizations are taking to improve product development. A full analysis of the research study, with full case studies of the organizations described above, is available in the research report New Product Development: Process Benchmarks and Performance Metrics.
About Stage-Gate International
Stage-Gate International’s highly knowledgeable and experienced team of advisors have guided hundreds of organizations to successfully implement a best-practice Stage-Gate Idea-to-Launch process in as little as 4-8 weeks. We accelerate time-to-benefit with an extremely attractive return on investment by:
- Crafting a balanced Idea-to-Launch Process Solution of expertise, advice, facilitation and best practices that fits your company’s situation, sense of urgency, and budget.
- Collaborating with you so that your Idea-to-Launch process is implemented rapidly and your organization is equipped to ‘own’ and manage the process as quickly as possible.
- Leveraging our market-leading accelerators, Benchmarker™ and SG Navigator™, to not only deliver all of the foundational elements straightaway, and ‘clear the path’ for rapid achievement of a best-practice Idea-to-Launch process.
Dr. Scott J. EdgettScott J. Edgett is Chief Executive Officer at Stage-Gate International and is internationally recognized as one of the world's top experts in product innovation. A high-profile speaker, sought-after consultant, and executive advisor, he is the pioneer of the critical practice of new product portfolio management, and principally focuses on issues affecting innovation performance, capability and leadership. Consulting and advising some of the world's best innovators and companies among the Fortune 1000, he has extensive experience working with large multi-national clients in a variety of industries. He is credited with helping business executives and product innovation professionals successfully implement world-class product innovation programs that have generated outstanding performance results.
A co-author of eight books, including the popular 'Product Innovation & Technology Strategy', and a published author of 70+ academic articles, Dr. Edgett is a former professor at the DeGroote School of Business, McMaster University.