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Jeff Liker

Dan Jones: Lean in Product Development

By Jeff Liker, - Last updated: Monday, March 11, 2013 - Save & Share - Leave a comment

There is more to more to this question than meets the eye. I remember mapping the product development process for ready meals at Tesco fifteen years ago. We uncovered an enormous variation in lead times from concept to launch and eventually tracked the source of this variation to a bottleneck in the legal department several floors above the action. Nothing could progress until legal approved the proposed text on the packaging of the product, and they did this at unpredictable intervals to fit in with their other work. Balancing the workload and creating a regular cadence allowed us to compress lead times and make it very predictable. This was an important starting point that led us to many other challenges.

In this case, and for many consumer goods, the new product development process itself is not as complicated as developing a new car. But it does get complicated and more difficult problems emerge as you look upstream at the processes for sensing customer and business needs in defining the product requirements and downstream at the whole product launch process, including things like planning advertising, promotion management, production and supply chain planning. In most cases this also has to fit in with the priorities and processes of the retailers who will actually sell the product. This taught me five key lessons in tackling these issues.

First work to clarify the business objectives and critical performance gaps these new products are designed to close. Is this about me-too product churn (like most new consumer products) or about taking market share from competitors or about creating new market segments, in which case which products, through which channels and in which markets? If the business objectives are not clear enough then push back and ask awkward questions until they are. These business priorities should be clear from a good Hoshin strategy deployment process. At the same time a stable and predictable new product development process provides a sound basis for agreeing the workload and the necessary resources and later for tracking the success in meeting these business needs.

Second deepen your understanding of how these new products will help consumers create value in their lives. Reach beyond traditional market research to understand the circumstances in which consumers use your products, not just how they buy them, and processes they go through to obtain them and how these are changing over time. In Lean Solutions we show how you can use the same lean mapping tools to understand how different consumers combine products, services and knowledge to meet their needs and the many ways in which you could help them to do so. The former CEO of Tesco Sir Terry Leahy describes an impressive range of customer sensing activities they use to really understand how the customers’ lives are changing in his brilliant book Management in Ten Words. Tesco were one of the first to figure out how to use what is now called “big data” to analyse what customers bought and where combined with what they actually wanted to buy from home shopping orders. This also allowed them to go beyond “one best way” to serve the 16 different lifestyle clusters they identified with different products through multiple channels. In the web era our key customers are no longer strangers – we can create a dialogue with them and try experiments with them as we turn them into partners.

Third study the possible mix of new products to plan the workload. Obviously the more ambitious the leap the more work is involved. Introducing a new product category is one thing, exploiting new capabilities from rapid response supply chains to sell freshness is another and developing a completely new domestic service like Nespresso coffee machines is another. One process does not fit all. Indeed it does not make sense for complicated products to interrupt the flow of simpler products. A stable and predictable process with few interruptions will get more products to market and will also free up time to complete more of the complicated products. Only starting each product when the specifications are clear will also avoid the temptations or need to change specifications later in the project.

Fourth cross functional projects ought to be co-located if possible but certainly managed visually using an Oobeya room, not hidden away in project management software. Someone has to be the product champion and lead the process of getting agreement on the necessary resources and reviewing progress against plan on a very frequent basis (daily or weekly). Deviations from plan need to be addressed at once and escalated if necessary. Initial skepticism that other departments will not deliver will give way to more productive team working when problems are visible and addressed instead of being hidden and leading to a pointless blame game between departments.

Fifth, work on improving the process of reviewing past new product launches to learn how consumers reacted, whether it met the business objectives and how well the new product development process itself worked. It is quite possible to capture the deviations from plan and what was done to address them during the project itself. It is amazing how quickly we like to forget and move on rather than taking time to collect and codify the learning. Toyota goes one step further in tracking the “ah ha” moments indicating steps in building the capabilities of project team members. We all learn most from things that did not work according to plan, if we stop and reflect on the reasons why. If we do not do this why are we surprised when we make the same mistakes time and time again.

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