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GGI RapidNews R&D Product Development eZine: Volume 5, Issue 1 - January 21, 2004
GGI RapidNews is published approximately once a month.

Due to new legislation regarding appropriateness of email communications that went into effect on January 1, 2004 our ISP has taken the last three weeks to make necessary server and configuration changes to allow legitimate electronic periodicals, such as GGI RapidNews, to continue to flow without interruption. To all of our dedicated readership, the vast majority of whom have received GGI RapidNews for between two and five years, we will be back on schedule at the beginning of next month.

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In This Issue

NEWS & NOTES - Happy New Year, Redesigned Home Page, Complimentary Quotations

2002 METRICS SURVEY RESULTS

2004 METRICS SURVEY

BOOK REVIEW - Radical Innovation

MANAGEMENT PRODUCTIVITY - R&D Metrics: Make the Link

NEW BIENNIAL SURVEY - 2002 RD&E Survey Results available now

NEW WEB CONTENT - Updated GTKs: Calendar

FEATURED iSTORE PRODUCT - Product Development Metrics Portfolios Coursebook

CONFERENCES OF INTEREST - MRT Improving R&D Productivity, Brandworks University

WEBINARS OF INTEREST - Sopheon's Winning Practices for Product Development

TELEVISION EVENTS - Alexander Haig's World Business Review

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NEWS & NOTES

Happy New Year: All of us here at GGI wish you a happy and healthy new year. We send our best wishes for a prosperous and fulfilling 2004 in all of your pursuits.

Redesigned Home Page: Check out our redesigned home page. We have added graphics and have placed key items front and center for easy access. It has been a few years since GGI relaunched our home page.

Complimentary Quotations: GGI has just made ten of our "Quotations," which are reprints of articles where GGI's work has been referenced or cited, available for free download from our web site. These were published prior to 1998 and were previously sold in our iStore. These articles cover a range of topics, including concurrent product development, metrics, rapid time-to-market, and teamwork. To view the list of complimentary Quotations, and to download them, go to http://www.goldensegroupinc.com/comppublist.shtml. For our most recent publications, visit the iStore at http://www.goldensegroupinc.com/cgi/catalog.cgi.


2002 BIENNIAL METRICS SURVEY RESULTS

GGI's 2002 Biennial Product Development Metrics Survey, which focused on resource and capacity management practices and metrics, was published earlier this year. From April through August 2003, GGI shared with RapidNews readers selected results from each section of the survey, with the survey population considered as a whole. We also analyzed the data in "Special Cuts" by segmenting the population into the following five groups: Public vs. Private, Smaller vs. Larger, Process vs. Repetitive/Discrete vs. Job Shop Operations, Higher Technology vs. Lower Technology, and More vs. Fewer Employees. Over five months, we will share selected results from each of these segment analyses. This month, we present the fourth segment, selected findings from the "Higher Technology vs. Lower Technology" segment.

- 86% of Lower Tech companies and 68% of Higher Tech companies had a "2.5-Step" or "2-Step" Product Selection Process.

- All of the Higher Tech firms, versus 72% of the Lower Tech firms, reported having a "Formal Meeting" at Milestone Two, at which the final selection decision is made.

- Development professionals in Higher Tech firms dedicated more of their time to new products (73%) compared with their counterparts in Lower Tech companies (58%).

- 77% of Higher Tech companies had either a stated or derived set of metrics as opposed to 67% of Lower Tech firms that could identify the metrics used to manage.

Next month, look for the fifth and final segment, "More vs. Fewer Employees."

To view selected results of the survey population as a whole, look in the GGI RapidNews archives: http://www.goldensegroupinc.com/GGI_RapidNews/Rnews.shtml

The original survey questionnaire can be downloaded at http://www.goldensegroupinc.com/biennial/surveys/2002MetricsSurvey.pdf. Complete survey results are available for purchase at http://www.goldensegroupinc.com/cgi/catalog.cgi?display_p355.


2004 BIENNIAL METRICS SURVEY

GGI's next Biennial Product Development Metrics Survey will be conducted in 2004, beginning soon. We are now in the planning stages. Please contact me at ars@goldensegroupinc.com if you wish to participate as part of our early Beta-Test group to proof the survey. If you are receiving this RapidNews issue, you will also receive an invitation to participate in the survey, possibly several invitations. All participants will receive a complimentary copy of the detailed Executive Summary of the Survey results if they submit a completed survey.


BOOK REVIEW

Radical Innovation: How Mature Companies Can Outsmart Upstarts, by Richard Leifer, Christopher M. McDermott, Gina Colarelli O'Connor, Lois S. Peters, Mark P. Rice, and Robert W. Veryzer. Harvard Business School Press. 2000, 1st edition. 261 pages.

Most radical innovations originate from small entrepreneurial firms, but large, established companies can gain competitive advantage by driving radical innovation within their firms using the ideas presented in Radical Innovation. Based on a five-year study of twelve radical innovation projects in ten major corporations (including GE, IBM, Nortel Networks, DuPont and Texas Instruments), the book examines managerial challenges large firms face in creating and sustaining radical innovation, several of which will be summarized here. The authors, all professors at Rensselaer Polytechnic Institute's Lally School of Management and Technology, define radical innovation as "a product, process, or service with either unprecedented performance features, or familiar features that offer potential for significant improvements in performance (500% better) or cost (30% reduction)."

The first managerial challenge to address is capturing radical ideas in the "fuzzy front end." Large companies have huge technical resources but often have difficulty converting that knowledge base into radical innovation projects. Effective companies focus on the key activities of idea generation, opportunity recognition and initial evaluation to bridge the gap. For a radical idea to move forward, the business potential must be recognized. The authors recommend formation of "radical innovation hubs," which act as a home base to link people with ideas, those seeking and gathering ideas, opportunity evaluators and other key people in R&D and the business units. Hubs ensure that ideas have a place to go and there is a structured process for making front-end decisions. Hubs can serve as repositories for the cumulative learning about managing radical innovation and can also allow the company to perform benchmarking.

Radical innovation teams must reduce technical uncertainty as well as market and business model uncertainty -- "how can this innovation make money?" This is an expansion of the traditional role of R&D. R&D folks involved in radical innovation must have more of an entrepreneurial mindset, rather than a strictly technical focus. The innovation team must learn about emerging markets "on the fly" instead of relying on traditional market research. The team must also focus on bringing the product to market using a new business model, which will require senior management support. The radical innovation project competes with other activities for resources and support; team members must be prepared to face resistance and to proactively acquire the needed resources and competencies. Finally, this change process can only succeed with a strong push from the executive team who can act as champions and shapers of a culture that values and promotes radical innovation. "Those firms that excel in developing and implementing a radical innovation capacity will have a tremendous source of long-term competitive advantage."


MANAGEMENT PRODUCTIVITY

R&D Metrics: Make the Link

"Coming Up Short on Nonfinancial Performance Measurement", by Christopher D. Ittner and David F. Larcker. Harvard Business Review, Harvard Business School Publishing Corporation: Volume 81, Issue 11, November 2003, pages 88-95.

R&D metrics as well as other nonfinancial measures are now being tracked by more and more companies in an attempt to chart business progress and overall performance more comprehensively than that reported by strictly financial measures. Many companies, however, are not taking full advantage of nonfinancial measures because they are not identifying, analyzing and acting on the right ones, nor are they linked to corporate strategy. In research of over 60 manufacturing and service companies, the authors found that only 23% of companies developed and validated causal models (also called value driver maps) linking drivers of strategic success and the outcomes. Failure to connect improvement actions to outcomes can result in manipulation of the measures, basing decisions on wrong assumptions, or measuring unimportant things. For example, one company began evaluating managers' performance based on number of patents filed annually, simply because a competitor owned more patents; it might have made more sense to investigate whether the patents were used, or whether they earned back their cost. Other mistakes companies make with nonfinancial measures are not setting the right performance targets, or measuring incorrectly, inefficiently or inconsistently.

Nonfinancial metrics can have powerful effects on long-term performance, if set up and used correctly. First develop a causal model that links performance to strategic success. Next pull the data together, whether existing data already being collected or new data needed. Using the data and statistical tools such as correlation and regression analyses, test the model for statistical validity and reliability. Continue to reassess and refine the model as conditions change. The data analysis, not assumptions, should be the basis for decisions that can drive financial performance. Finally assess whether the action plans actually produced the desired results through post-audits.

Note: For more information and a powerful technique to develop a linked set of R&D metrics, consider our recent technical papers, T40 - "Linked Metrics Portfolio(TM) Method ... A Primer" or T39 - "Linked Metrics Portfolio(TM) Method ... Applied to Four R&D Strategies." These can be found in our iStore at http://www.goldensegroupinc.com/cgi/catalog.cgi.


NEW BIENNIAL SURVEY

2002 RD&E Survey - Resource & Capacity Management: Complete results from our 2002 Product Development Metrics Survey are now available, including our most detailed "RESULTS" report.

The survey focused this year on the following 5 areas of resource and capacity management:
- Loading the RD&E capacity pipeline,
- Providing capacity for RD&E activities,
- Balancing cross-functional resources (staffing ratios),
- Using systems, tools, & metrics to manage capacity, and
- RD&E metrics used in industry.

The 3 versions of the survey results reports that we offer for sale to the public are

1. 2002 SURVEY HIGHLIGHTS: A text-only report (65 pages),including the full text of all the results and analysis of the survey population analyzed as a whole,
2. 2002 SURVEY SUMMARY: A report of composite results, where the survey respondents are analyzed as a whole (116 pages, including a full set of graphics), and
3. 2002 SURVEY RESULTS: The most detailed report, complete with the composite results and "special cuts," where the survey population is segmented and analyzed in the following groups: Public vs. Private, Smaller vs. Larger, Process vs. Repetitive/Discrete vs. Job Shop, Higher Technology vs. Lower Technology, and More vs. Fewer Employees (223 pages).


These reports are available in the Market Research section of GGI's iStore (http://www.goldensegroupinc.com/iStore/store.html). The original survey questionnaire as well as a description of the survey (including survey focus and demographics, tables of contents for the 3 reports, and examples of key findings) can be found at the Market Research Reading Room at http://www.goldensegroupinc.com/readmarket.shtml.


NEW WEB CONTENT

Redesigned Home Page: Check out our redesigned home page. We have added graphics and have placed key items front and center for easy access. It has been a few years since GGI relaunched our home page.

GTK-Gateways To Knowledge: Your resource for industry and product development related information and contacts offers thousands of links to providers of technologies and services for line management functions. The main entrance to GTK can be found at:

http://www.goldensegroupinc.com/gateway/index.shtml

One of our top 3 MEGA Gateways is the Calendar of Industry Events MEGA Gateway, a listing of links to Conferences, Seminars, Distance Learning Centers, Webinars, Colleges & Universities, Executive Education, and Corporate-Sponsored Universities. The calendar has just been updated with approximately a dozen new seminars and conferences. If you are planning the coming year's training, check out the Calendar first. This free service for our readers will soon be front and center on GGI's Home Page. For the next few months, please find the Calendar of Industry Events MEGA Gateway at:

http://www.goldensegroupinc.com/gateway/calendar3.shtml


FEATURED GGI iSTORE PRODUCTS

Featured Item: GGI's iStore features one deeply discounted offering, which changes periodically. The current Featured Item is the "Product Development Metrics Portfolios Coursebook" (S4).

The Product Development Metrics Portfolios (PDMP) Coursebook is your detailed guide to understanding and creating linked portfolios of metrics for managing the R&D organization overall as well as the projects, functions and improvement initiatives within R&D. The coursebook accompanies the intensive seminar of the same name, and is useful on its own. The coursebook (and seminar) guide you through the Linked Metrics Portfolio (TM) Method, a powerful, step-by-step methodology to create a linked set of metrics portfolios. The coursebook includes perspectives on goal setting; and descriptions of infrastructures for corporate vs. project metrics and proactive vs. predictive metrics. Examples are provided for a dozen different metrics structures, such as corporate metrics, capacity management metrics, project team metrics and functional metrics. Details on sizing, assembling and implementing a metrics portfolio are also provided. With the help of the PDMP Coursebook, you can develop a comprehensive set of metrics using the Linked Metrics Portfolio (TM) Method that accurately reflects the current performance of your R&D efforts and can guide future performance.

The price for the Coursebook has been dropped from $695.00 to $417.00, a deep discount of 40%. For more information or to purchase this valuable report, go to

http://www.goldensegroupinc.com/cgi/catalog.cgi?display_promo.


CONFERENCES OF INTEREST

MRT Improving R&D Productivity Conference: Management Roundtable will hold its conference, "Improving R&D Productivity: How to Link Resource Management to Portfolio Process," on March 29-31, 2004 in Atlanta, GA. The conference focuses on how to leverage increasingly limited resources and ensure that priority projects are properly resourced. The conference features a full day of pre-conference workshops plus two days of presentations and case studies aimed at providing you with strategies and tools to assess and allocate resource capacity to boost productivity.

Brad Goldense will be giving a featured presentation, "Key Pipeline Practices Drive Effective Capacity" on Tuesday, March 30, 2004. The presentation focuses on seven practical best practices for pipeline management that improve capacity utilization and improve yield.

More information can be found at MRT's web site: http://www.managementroundtable.com/Event_Center/PPM04/PPM04.html

Brandworks University: Lindsay, Stone & Briggs will hold "Brandworks University" on May 25-26, 2004 in Madison, Wisconsin. Brandworks University is considered "the world's premier conference on branding." The conference theme is "How to have smarter, more successful new product launches." Attendance at the conference is by invitation only, and limited to 300 top U.S. marketing leaders.

Brad Goldense has been invited to speak at this year's Brandworks University. Details are still being finalized. We will provide more information next month.

For more information, go to Lindsay, Stone & Briggs' web site: http://www.lsb.com.


WEBINARS OF INTEREST

Winning Practices for Product Development: This free, online seminar series is co-sponsored by Sopheon and the Society of Concurrent Product Development [SCPD]. These one-hour, online events feature experts and leading practitioners who will share process knowledge and practical advice about ways to improve your product development performance and results.

There are currently no scheduled webinars, but more are under development. Check back here next month for more information.

Past Webinars have been archived and are available online at http://www.sopheon.com/events_onlineseminars.asp.


TELEVISION EVENTS

Alexander Haig's World Business Review: Brad Goldense has made several appearances on Alexander Haig's World Business Review in the past year. Streaming video is available for all shows, which aired on August 4, September 29 and December 15, 2002 and on May 20, 2003. See below for details.

May 20, 2003 Broadcast of September 29th In-Studio with Alexander Haig (22.5 minutes): Streaming video for this segment is available at: http://www.goldensegroupinc.com/ggiontv.shtml#wbr5

December 15, 2002 In-Studio with Alexander Haig (7.5 minutes) on CNBC paid programming: Streaming video for this segment is available at: http://www.goldensegroupinc.com/ggiontv.shtml#wbr3

September 29, 2002 In-Studio with Alexander Haig (22.5 minutes): Streaming video for this segment (as well as the entire 30-minute show) is available at: http://www.goldensegroupinc.com/ggiontv.shtml#wbr2

August 4, 2002 On-Location at GGI (3.5 minutes): This On-Location field report is available in streaming video on GGI's website. To see the program, go to: http://www.goldensegroupinc.com/ggiontv.shtml#wbr1

The web page includes links to download a streaming video player, if you do not currently have one installed on your computer.

For more information on any of Brad's appearances on television, go to:

http://www.goldensegroupinc.com/ggiontv.shtml.

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GGI RapidNews is an e-mail publication from Goldense Group, Inc (GGI). Its subject matter includes survey findings, company news, book and article reviews, key industry conferences and R&D information of interest to clients and associates. Please send communications to rn(at)goldensegroupinc.com. Thank you.
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