the business's need for new products (as described in the business's vision of itself into the future)
with:
the constraints determined by the business's ability to invest.
internal and external information.
"Knowledge is information that changes something or somebody --- either by becoming grounds for actions, or by making an individual (or an institution) capable of different or more effective action." (Peter Drucker)
Drucker's statement provides the basis for our approach: Information is converted to knowledge, becoming the basis for action in defining and developing a product - as the result of motivated, led, communication across the team responsible for defining and developing the product.
Potential knowledge is distributed throughout the business, as information in people's heads and in disparate systems focused on local functions. Each individual's information can be catalyzed into the business's knowledge as the result of motivated, led communication - communication with individuals in the team, with the business's leaders as business vision transfer or with the outside world during customer, competitor, technology or business environment information acquisition.
We have broad experience of practical knowledge development, leadership and management in areas bridging business and technical activities in high tech businesses - such areas as new product definition, technology prediction, technology development, technology acquisition, project management and development methodology. We use this experience to provide systematic solutions based on creative interpersonal and intergroup communication.
A new product family is to be defined for newly identified, attractive though volatile market. Each previous new family required significantly increased R&D resources. A further increase will require major additions of people and restructuring. You suspect that by tightly focusing the new product specification and compromising some aspects of it, it may be possible to significantly limit R&D growth and shorten the product development time - thereby keeping investment levels consistent with nature of the new market. Clearly the product definition process will require close management. Yet all management resources are busy for the foreseeable future on prime objectives. Where can you find the leadership resources ?
With second generation, increased complexity products you believe your your business must become more team-based, with less dependence
on the role of the founding technical leaders. What are the new roles for all the people, how is the transition to be made and what are the new internal communication and knowledge management
systems ?
Product development times have to be further reduced as more complex products are developed. A possible solution is the development of a new, formal product definition system. Could new product definition and new product development happen concurrently, instead of the current serial approach ? What would the impacts be on the project management system and on schedule-performance-cost risks ?
Even the most junior person seems capable of generating significant, unexpected, performance or schedule glitches. You feel threatened by your dependency upon your people. You need a systematic approach to reducing these unexpected threats whilst preserving critical elements of your business's culture.
As President you integrate into a top-level picture the businesses knowledge of its customers. In parallel you maintain an ongoing involvement in all the important technologies in your product. You are aware that within the business nobody else maintains a coherent customer, product and technology knowledge view.
As the business grows you feel tension between these historical knowledge management roles and your increasing business relationship, vision development-evangelization and leadership roles.
How do you confidently hand-off these historical 'coherent knowledge' roles in such a way they are developed into an effective knowledge management system that continues to drive the businesses success ?
We use the same basic techniques whether we are leading the development of a single New Product Definition or developing a Knowledge Leadership and Management Process for new product definition for application into the future.
Our key assumption is that the process of new product definition has to achieve two objectives:
(1) The creation of the best new product definition possible for the business
(2) The simultaneous motivation of everybody in the business to support the products
Both interests are best served if the widest possible discussions occur during the process; achieving this discussion objective is a key Pateo objective.
Every business has a somewhat different approach to new product identification and creation. In the following we assume that in parallel with the New Product Definition a "Business Case" (i.e. New Product Investment Plan) is being developed, itself within the constraints of the business's overall business development plan. The overall business development plan is likely to include a plan for evolving the business's product marketing strategy within which the new product has to fit.
Product definition is usually a process involving multiple individuals and hence multiple meetings. We use a carefully designed document set to provide focus to the meetings. We believe a successful product definition flows from delaying a detailed focus until the 'space' within which the new product has to be defined has been bounded loosely as possible. This gives maximum room for subsequent creativity in definition and design.
The process of developing a product definition is seen as one of circling around series of issues until critical points become evident and a balance of risk, schedule, product cost and other factors starts to emerge. The whole process is extremely communication dependant; the documents are vehicles for communication.
Pateo's role is to ensure that cross-function communication occurs during key meetings, that key technical and business inputs are identified and stimulated from every level in the business, and that critical points emerge as quickly as possible.
The process we follow includes the following steps:
(1) Identification of key players for a product definition team. This is a working group whose purpose is to produce the document set outlined below. The team should include working participants from each area of the business, with a managed transfer of focus from business objectives to detailed definition as the documents come to a focus. "Working" means individuals who have the time as well the knowledge to put effort into research during the time between meetings.
(2) Create a series of meetings involving senior management and the product definition development team. These meetings are designed to 'sell' the product definition team on the purpose behind the new product development and provide an opportunity for extensive discussion.
(3) A key issue is establishing the critical schedule for the new product - principally the introduction-to-market date. This date is usually the critical driving factor in determining the technology to be used, the general form of the product development etc.
(4) The product definition team then starts creation of the document set outlined below, excluding the New Product Definition itself. Usually the R&D people will become actively involved part way through the creation of the initial document set; usually their arrival will cause the documents to recycle until there is a rough consistency between business objectives, technical possibilities and market driven specification requirements
(5) At some point a consensus will emerge; often Executive Management will already have been required to take a number of key 'positions' as unexpected limitations and opportunities emerge in the discussion. At this consensus point development of the (detailed) New Product Definition document can commence.
We focus around the same document set that may be developed specifically for a single product or be already partially or completely available within the business:
- a Business Vision document - a short inspirational document
- a Practical Business Vision document - a clear statement of the business's general objectives over, typically, the next 2-5 years. This is a statement of what 'success' means for the business
- a Business Objectives Statement - a concise and specific statement of overall sales targets, market share, investment, headcounts, profits etc over, typically, the next 3 years, particularly showing the contributions made required of the new product. This document reflects what has to happen for the Practical Business Vision to be achieved. It includes key business factors - for example how the product is to be marketed if the product fits existing distribution channels and the consequent assumptions about the level of market development investment needed. If new channels are to be used then these have to be separately identified and justified within the 'Business Case' for the new product.
- a New Product Necessity Statement - a document defining, within the widest possible bounds, a sandbox within which the New Product Definition (and subsequent Product Development) can occur. This is an inspirational, challenging, mixed technical and business document intended to create significant creative excitement within the product development team. It is a document inspired by the concept that 'necessity is the mother of invention' - the idea that rational limitations positively stimulate creativity.
Sometimes more than one Product Necessity Statement will be developed to reflect different levels of investment and return needed for different types of product (e.g. a short development time evolutionary development vs. a longer development time revolutionary development. Alternatively there may be a number of competing developments for a finite R&D resource (people and/or dollars) leading to alternative strategies depending on choices made between different products.
(Each of the preceding documents is, ideally, the responsibility of people outside of the new product development team within R&D.)
- The New Product Definition document, produced by people from R&D. This is a very wide ranging document that includes the following basic elements:
- a project description and schedule
- a risk evaluation
- a risk management plan
- a description of what the product will, and will not do, including possible simulation models
- a detailed description of the project deliverables
- a resource estimate
- a product evolution plan
- a summary of alternate technical and project plan approaches considered
- a technical architectural statement for internal critique
We learn the unique style of the business - nature of the culture, connection to market and
technology, internal communications methods, the reward system, changing market demands, speed of response, peoples key views, historical responses to change, competitive pressures, the manner that information and
knowledge is developed et al - to build a communication 'backdrop' description.
We identify the characteristics of the existing internal human communication network - the formal and the informal, the
spoken and unspoken, the discussed and the un-discussed, the technical environment.
We then consider the nature of the change demanded by the businesses leaders against the 'backdrop' description and the
communication network.
We formulate a design for the new process, design and sell it concurrently, by encouraging the people who will use the new
process to shape it. We primarily focus on (i) the sources and nature of the information to be captured and the means of its communication, (ii) the creation of the circumstances and forums in which
the information is processed into the businesses knowledge and (iii) on persuading the people involved to see the value of the approach chosen.
We not immediately concerned with the technical (IT or software) aspects of Knowledge Management, since the development of Knowledge is primarily an inter-personal and inter-group communication issue. Once an understanding of the business's information repositories and knowledge development needs is established a technical support solution can be identified, if needed.
Our basic thrusts are:
(1) To reveal and harvest existing in-house information, and to identify and fill key information gaps.
(2) To identify and understand existing informal knowledge leadership and product definition systems.
(3) To design and establish systems for creating and identifying information and turning it into knowledge as the basis for defining and developing better products
Examples:
Development of internal information capture and transfer networks and systems
Strategic product direction development facilitation and management
Technical ideation/creativity development programs for new products
Development of project/program risk assessment and management measurement methods
Development of project and design methodology development methods
Introduction of innovative project definition and project management approaches, including concurrent approaches that depend
upon systematic communication management
Development of team horizontal and vertical communication development methods
Team horizontal and vertical communication development
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Pateo also facilitates meetings and develops custom workshops on these topics.