Frequently a client will ask me about how the principles and methods associated with lean and six-sigma apply in the word of innovation and new products. Let me offer a few thoughts.
Lean and six-sigma are excellent tools which, when used properly and in the right situation, provide tremendous benefits. The elimination of the many forms of waste as put forth in lean and the various aspects of DfX and the resultant high quality as put forth in six-sigma are principles to which all organizations should adhere. No question.
The situation gets a bit more complex, however, when we think about innovation and new product development. Keep in mind that both lean and six-sigma (DMAIC) are primarily geared to repetitive operations. When Apple produces an iPhone or when McDonald’s produces a hamburger, there are tremendous benefits to both the firm and the customer when these are produced with no waste and to a consistent, high quality level.
In innovation and new products, however, sometimes you’re in an exploratory mode, often referred to as the Discovery phase or the “Fuzzy Front End”. At this point in the innovation or product development cycle waste is hard to define and variability may be your friend, particularly when searching for breakthroughs. Consider the search for an H1N1 vaccine or Thomas Edison's search for a filament for the light bulb. Success required the pursuit of a vast number of “dead ends” any one of which may have been the winner. Similarly, consider penicillin, which was discovered by Alexander Fleming as a result of an accidental contamination of a Petri dish he was using to cultivate staph bacteria. Sometimes invention needs a bit of “breathing room” that these lean and six-sigma are designed to eliminate.
On the other hand, when designing a new product or service, these principles are essential. As mentioned previously, the iPhone, McDonald hamburgers, and virtually every other product or service will benefit from the use of these tools in their design and the design of the processes that produce them. Product and process designers need to use these tools – in the design (where DMADV can play a role), development, and commercialization phases.
There are, of course, places even in the discovery phase where these tools are useful. Consider a designer submitting a sample to a metrology lab for testing. In this case, a repetitive operation, we would expect everything from the receipt of the sample to the delivery of the data to be carried out in accordance with lean and six-sigma principles. Rapid cycle times in testing, with no compromise in the quality of data, can help a company to introduce a new product more quickly – thereby getting a leg up on the competition and potentially earning greater profits.
Finally, no treatment of this subject can be complete without the consideration of organizational culture. Certain companies, and even certain departments within a company, may be more or less aligned with the use of these tools or the philosophies upon which they are based. Successful implementation will consider and reflect the culture, along with other business factors, when setting goals for rate and completion of adoption.
To summarize, lean and six-sigma are excellent tools which offer tremendous benefit to repeatable processes where consistency is desired and the elimination of waste produces clear benefits. These tools are best not applied in the creative phases of innovation and new product development, often called the discovery phase or the fuzzy front end, because at in these endeavors, variability and “waste” could well be the seeds of breakthroughs. Eliminating variability and “waste” in these areas could well eliminate the innovation and “aha moments” that drive much of the progress in the world.
Now, you might not agree with me.....but that's how it looks from my viewpoint.
Tuesday, February 16, 2010
Friday, January 8, 2010
Lets End This Debate
Technology Push or Customer Pull - what's the best way to create new products? The debate has gone on for years.
If I were to ask my academic friends, most would likely say that success is favored if you start with customer pull. Companies must produce products that customers want and failure to do so leads to disaster. No argument on that. History can provide many examples of products produced in the lab that flopped in the market. New Coke, IBM's PC Jr, and Apple's Lisa come to mind. Start with the customer and you'll make products that they want.
On the other hand, looking back through history, many blockbuster products have had their roots in capabilities (technology push), not in expressed needs. No one ever asked for a microwave oven, a VCR, an iPod (or it's equally breakthrough predecessor the Walkman), Post-it Notes, etc. A lot of companies have made a lot of money selling these products that were never asked for by the customer (I contend that the underlying needs are discernable through ethnographic research, but that's a topic for another post).
Asking customers what they want doesn't usually lead to breakthrough products. Customers usually ask for better, cheaper, or faster versions of current products, and there's certainly nothing wrong with that if that's what's needed in your portfolio. However, as Henry Ford once said, "If I had asked customers what they wanted, I would have built a better horse".
So it's clear that success can come starting point, so what's the secret?
In most cases, success comes about from an iterative approach wherein customer insights are sought, acted upon (in the development of the product), and the solution is then tested with the customer thereby producing greater insights. When the cycle has been completed a number of times - a match between the customer need and the provided solution is made and the product will likely meet with demand in the marketplace. So, as a colleague once stated - "this (iterative cycle of customer/solution) is like a merry-go-round, you need to go round and round a number of times and by time you do, it doesn't really matter where you get on".
So, let's end the debate. We've got far more important things to do.
If I were to ask my academic friends, most would likely say that success is favored if you start with customer pull. Companies must produce products that customers want and failure to do so leads to disaster. No argument on that. History can provide many examples of products produced in the lab that flopped in the market. New Coke, IBM's PC Jr, and Apple's Lisa come to mind. Start with the customer and you'll make products that they want.
On the other hand, looking back through history, many blockbuster products have had their roots in capabilities (technology push), not in expressed needs. No one ever asked for a microwave oven, a VCR, an iPod (or it's equally breakthrough predecessor the Walkman), Post-it Notes, etc. A lot of companies have made a lot of money selling these products that were never asked for by the customer (I contend that the underlying needs are discernable through ethnographic research, but that's a topic for another post).
Asking customers what they want doesn't usually lead to breakthrough products. Customers usually ask for better, cheaper, or faster versions of current products, and there's certainly nothing wrong with that if that's what's needed in your portfolio. However, as Henry Ford once said, "If I had asked customers what they wanted, I would have built a better horse".
So it's clear that success can come starting point, so what's the secret?
In most cases, success comes about from an iterative approach wherein customer insights are sought, acted upon (in the development of the product), and the solution is then tested with the customer thereby producing greater insights. When the cycle has been completed a number of times - a match between the customer need and the provided solution is made and the product will likely meet with demand in the marketplace. So, as a colleague once stated - "this (iterative cycle of customer/solution) is like a merry-go-round, you need to go round and round a number of times and by time you do, it doesn't really matter where you get on".
So, let's end the debate. We've got far more important things to do.
Monday, December 21, 2009
Proving the Experts Wrong
A number of years ago I was in a position where I was providing "seed" investments in new high risk/high reward technologies when an inventor came to me with what I thought was an interesting idea. He was asking for some money to build a prototype.
While I thought his idea might have significant customer appeal if it could be made to work, I was unclear about the probability of technical success, so I asked him what the "experts" said about his idea. He grumbled something about "the experts never 'getting it'" and continued to downplay their counsel. After I insisted that I would not give him any money until he told me what the experts said, he grumbled and left my office.
A few days later he returned and indicated that the experts said his idea would never work. Additional queries on my part produced scientific rationale for why two of the main premises for his idea were "not doable". I proceeded to ask him what he would do if I agreed to fund him for $10,000 (significantly less than his initial request). He said, "I'll prove the experts wrong!"
Well, I'm sure you know where this is going. Some weeks later he invited me to his lab where he showed me breadboard "proof of concept demonstrations" that he indeed had overcome these two hurdles. He went on to make further progress and successful demonstrations of the technology.
I bring this up to point out the fact that sometimes we can and must establish short term milestones and monitor incremental progress on the way to a grander goal. There was no way I was going to agree to his initial funding request since all he had was an idea that experts said was impossible. At the same time, I was willing to fund a more narrow exploration into the technology because of its promise, but only if I had confidence that the researcher was going to use the funds wisely to take on the most critical hurdles first. Sometimes it's far easier to work on the less challenging aspects of a project first only to "hit the wall" on the more difficult aspects after a large amount of money has been spent. Far better to fail early and cheaply than the opposite.
Innovation is and always will be a risky business. We can, however, make the risks more reasonable by the approach we take.
While I thought his idea might have significant customer appeal if it could be made to work, I was unclear about the probability of technical success, so I asked him what the "experts" said about his idea. He grumbled something about "the experts never 'getting it'" and continued to downplay their counsel. After I insisted that I would not give him any money until he told me what the experts said, he grumbled and left my office.
A few days later he returned and indicated that the experts said his idea would never work. Additional queries on my part produced scientific rationale for why two of the main premises for his idea were "not doable". I proceeded to ask him what he would do if I agreed to fund him for $10,000 (significantly less than his initial request). He said, "I'll prove the experts wrong!"
Well, I'm sure you know where this is going. Some weeks later he invited me to his lab where he showed me breadboard "proof of concept demonstrations" that he indeed had overcome these two hurdles. He went on to make further progress and successful demonstrations of the technology.
I bring this up to point out the fact that sometimes we can and must establish short term milestones and monitor incremental progress on the way to a grander goal. There was no way I was going to agree to his initial funding request since all he had was an idea that experts said was impossible. At the same time, I was willing to fund a more narrow exploration into the technology because of its promise, but only if I had confidence that the researcher was going to use the funds wisely to take on the most critical hurdles first. Sometimes it's far easier to work on the less challenging aspects of a project first only to "hit the wall" on the more difficult aspects after a large amount of money has been spent. Far better to fail early and cheaply than the opposite.
Innovation is and always will be a risky business. We can, however, make the risks more reasonable by the approach we take.
Thursday, December 10, 2009
Getting the Prototype “Right”
Once, during a conversation with a young entrepreneur I had just agreed to coach, I asked him to tell me a bit about the status of his embryonic "software as service" business. Proudly, he replied, “We’re putting the final touches on our 7th prototype!” Wanting to be impressed with what he and his team had done, I asked, “What did you learn from the customer on the earlier ones?” He replied, “Well, we haven’t been to the customer yet. First we need to get the prototype ‘right’.” Instantaneously, I firmly queried, “How will you know?”
In my work with companies – new and established – I continue to see a reluctance to engage the customer, the final arbiter of product success or failure. The reasons why people avoid engagement are numerous and include: “No time”, “No money”, “We already know what the customer wants”, and my favorite, “The customer doesn’t know what they want”. All of these can be true in certain circumstances, but history would suggest that we generally know less about the customer and her needs than we need to, and our product development efforts suffer as a result.
My mantra is to engage customers early and often, and I’ve found that, with a defined objective for the engagement, this approach always results produces benefits. What we ask will differ depending on where we are in the development of the product or the business – but we can almost always learn from talking with the customer in the appropriate way.
Instead of accepting the reasons why we’re unable or don’t need to engage the customer, let’s come up with ways that we can and should!
See the October 22 entry for stories of low cost customer engagements that paid huge dividends. More to come.
In my work with companies – new and established – I continue to see a reluctance to engage the customer, the final arbiter of product success or failure. The reasons why people avoid engagement are numerous and include: “No time”, “No money”, “We already know what the customer wants”, and my favorite, “The customer doesn’t know what they want”. All of these can be true in certain circumstances, but history would suggest that we generally know less about the customer and her needs than we need to, and our product development efforts suffer as a result.
My mantra is to engage customers early and often, and I’ve found that, with a defined objective for the engagement, this approach always results produces benefits. What we ask will differ depending on where we are in the development of the product or the business – but we can almost always learn from talking with the customer in the appropriate way.
Instead of accepting the reasons why we’re unable or don’t need to engage the customer, let’s come up with ways that we can and should!
See the October 22 entry for stories of low cost customer engagements that paid huge dividends. More to come.
Wednesday, November 18, 2009
Innovation is Global!
A couple of weeks ago I had the pleasure of attending the 33rd Annual International Conference presented by the Product Development and Management Association. In addition, as Chairman and President of the group, I also participated in a number of PDMA business meetings including a Board of Directors meeting, our annual Research Forum, our first Global Leadership Forum, the US Chapter President's meeting, and more. An outstanding week, showcasing the work of a lot of dedicated, passionate experts in the field of innovation and new product development!
If I had to choose a theme for the week it is that "Innovation is Global". Hopefully, this isn't a surprise for you, as it wasn't one for me, however this time I saw up close a new depth of commitment to innovation and new products from people all over the world. I saw this in the Research Forum where many of the presentations were made by people from Europe and Asia, again at the General Conference where one of the winners of PDMA's Outstanding Corporate Innovator Award was DSM, a Netherlands based company, focused on life sciences and materials sciences, which won for their development of a culture of innovation across their company, and in our Global Leadership Forum which brought together PDMA leaders from six continents in an intense discussion around how PDMA can satisfy the growing global demand for "Connecting Innovators Worldwide" and all that implies.
This week's issue of Newsweek features a story on global innovation, providing data and examples that support what many of us already knew - that innovation knows no geographic borders and that the world has truly discovered that innovation is the path to a better life for all.
And it is on that note that I close. I'm happy and excited to see the world embrace innovation. Yes, as an American, I am concerned that this has implications with respect to our competitiveness and requires us to strengthen our commitment to innovation, yet, as a citizen of the world, I see promise of better days for everyone and perhaps a common theme that can unite all of us on this small planet to work together for a better world with greater prosperity and less conflict for all.
What a great time to be in innovation!
If I had to choose a theme for the week it is that "Innovation is Global". Hopefully, this isn't a surprise for you, as it wasn't one for me, however this time I saw up close a new depth of commitment to innovation and new products from people all over the world. I saw this in the Research Forum where many of the presentations were made by people from Europe and Asia, again at the General Conference where one of the winners of PDMA's Outstanding Corporate Innovator Award was DSM, a Netherlands based company, focused on life sciences and materials sciences, which won for their development of a culture of innovation across their company, and in our Global Leadership Forum which brought together PDMA leaders from six continents in an intense discussion around how PDMA can satisfy the growing global demand for "Connecting Innovators Worldwide" and all that implies.
This week's issue of Newsweek features a story on global innovation, providing data and examples that support what many of us already knew - that innovation knows no geographic borders and that the world has truly discovered that innovation is the path to a better life for all.
And it is on that note that I close. I'm happy and excited to see the world embrace innovation. Yes, as an American, I am concerned that this has implications with respect to our competitiveness and requires us to strengthen our commitment to innovation, yet, as a citizen of the world, I see promise of better days for everyone and perhaps a common theme that can unite all of us on this small planet to work together for a better world with greater prosperity and less conflict for all.
What a great time to be in innovation!
Thursday, October 22, 2009
More on the Customer
Clearly, the idea of marketing research "on the cheap" has its limitations. You can't go that path when you're looking to get volumetrics, price elasticity, or information that's projectable to the broad population - but that's not what I'm talking about. I'm talking about the early steps, the "indications" that your product meets a need.
Two decades ago I was managing a product line for which our understanding of the customer was less than we needed it to be. Unable to access funds for a major research project (which would have been premature anyway) I looked for ways to access my customer cheaply. As it turned out, my target, advanced amateur photographers, could often be found at weekend camera club events and competitions. For the price of breakfast (for 20 people) and a plane ticket or gasoline, a colleague and I were able to hold focus groups at these events and gather a wealth of information about our customer that we were able to use to improve our product and gain market share.
In another case, a group I was working with was able to find a sample of their customers within a five hour drive. Within a week they were able to get enough customer insight to significantly redirect their program (the customer pointed them to a key benefit of their concept that they had dismissed as having little value) and put the project on track. All for under $2000 out of pocket!
Again, let me be clear - this is not for when you really need to zero in on things like volumes, price, etc., and it's clearly not "the last word" in customer needs. It is, however, a great way to inform the early stages of product development with the voice of the customer so that you can head toward a set of benefits that customer will value. It can be a good way of learning about the customer's world - what's lacking, and what they need.
And sometimes, that's a lot more than you might otherwise have.
More to come...
Two decades ago I was managing a product line for which our understanding of the customer was less than we needed it to be. Unable to access funds for a major research project (which would have been premature anyway) I looked for ways to access my customer cheaply. As it turned out, my target, advanced amateur photographers, could often be found at weekend camera club events and competitions. For the price of breakfast (for 20 people) and a plane ticket or gasoline, a colleague and I were able to hold focus groups at these events and gather a wealth of information about our customer that we were able to use to improve our product and gain market share.
In another case, a group I was working with was able to find a sample of their customers within a five hour drive. Within a week they were able to get enough customer insight to significantly redirect their program (the customer pointed them to a key benefit of their concept that they had dismissed as having little value) and put the project on track. All for under $2000 out of pocket!
Again, let me be clear - this is not for when you really need to zero in on things like volumes, price, etc., and it's clearly not "the last word" in customer needs. It is, however, a great way to inform the early stages of product development with the voice of the customer so that you can head toward a set of benefits that customer will value. It can be a good way of learning about the customer's world - what's lacking, and what they need.
And sometimes, that's a lot more than you might otherwise have.
More to come...
Tuesday, October 20, 2009
What Customer?
As I have been working with companies - startups and larger firms, I continue to be amazed at how often the company lacks a decent understanding of its customers and/or its competition. It's hard for me to imagine that companies elect to operate in this way, particularly when "first order" information is relatively easy to gather.
Recently, I was discussing the need for customer understanding with people from a firm that supplies the construction industry. As I often hear, tight budgets and the consequent lack of funds available for market research was cited as the reason why the company was "guessing" about what its customers' needed and wanted. My reaction was swift. "Are there construction sites that fit your target market within a short drive? How about driving up to one, introducing yourself, and asking "Can I watch you work?""
Now clearly, there are many potential issues with such an approach and a bit more may be involved if, for example, your product was used in the surgical theater of large hospitals, but that misses the point. The point is - in the absence of significant funds or the ability to make a large commitment to market research, what can we do to advance our understanding of the customer?
Sometimes it seems like we only consider the 100% solution, where often, as Pareto stated, we can get 80% of what we need through the 20% solution.
More on customers and competition in future postings...
Recently, I was discussing the need for customer understanding with people from a firm that supplies the construction industry. As I often hear, tight budgets and the consequent lack of funds available for market research was cited as the reason why the company was "guessing" about what its customers' needed and wanted. My reaction was swift. "Are there construction sites that fit your target market within a short drive? How about driving up to one, introducing yourself, and asking "Can I watch you work?""
Now clearly, there are many potential issues with such an approach and a bit more may be involved if, for example, your product was used in the surgical theater of large hospitals, but that misses the point. The point is - in the absence of significant funds or the ability to make a large commitment to market research, what can we do to advance our understanding of the customer?
Sometimes it seems like we only consider the 100% solution, where often, as Pareto stated, we can get 80% of what we need through the 20% solution.
More on customers and competition in future postings...
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