Metrics Summit
ABSTRACT
The one-day seminar description below is the second day of GGI's three-day Metrics Summit.
Proactive & Predictive R&D-Product Development Innovation Metrics - Overview
This seminar focuses on innovation metrics that are used at the planning, definition, and early development stages of R&D—the beginning of the product development process—prior to the existence of a physical prototype or compiled code or a working sample.
Historically, measurement has focused on “what has happened, after it has happened.” We record the performance of completed events with great zest. Unfortunately, while these measures are both necessary and valuable, they are reactive in nature. One learns from them and then attempts to improve on the next project or activity of a similar nature. There is little opportunity to leverage this information for a project currently at hand or recently completed. Also needed, and perhaps even more valuable and useful, are “measures that tell a person, team, or organization where they are going.” Measures that help to foresee and/or predict potential or probable outcomes enable professionals, as necessary, to adjust or correct current courses of action to avoid less than desired outcomes and hopefully to maximize the probability of achieving the desired outcome.
GGI has been working on the management science associated with these types of early measures since 1999 – across the areas of projects, functions, and overall performance of the organization. While industry as a whole is still in the early stages of establishing statistically correlating data between the final results and activities early in the development cycle, there are certain early measures that are generally agreed to be highly correlated with ultimate success or failure. For example, how many times in your company has a project schedule slipped 30% a third of the way into the project and the project recovered the slip and finished on time? There are numerous other examples.
Proactive & Predictive R&D-Product Development Innovation Metrics - Categories
GGI defines three categories of these early metrics: Planning, Proactive, and Predictive. Planning metrics are perhaps the most elusive and intangible. Planning metrics are used by a company to set strategic priorities across the organization and all projects. Planning measures help to keep everyone focused on the big picture and the things that are generally most important to continuous success for a particular corporation. Proactive measures are used after a product concept is approved for definition and evaluation, prior to the approval of a project for development. Proactive measures help to frame successful projects and their related functional activities to give companies a best chance of success before actually beginning detailed architectural and detailed design on a project or product. Predictive measures are the most intuitive of the three categories of early measures. Predictive, using an almost literal definition from a dictionary, means that an activity has started and there is initial data associated with the partially completed activity. This data is then extrapolated to the anticipated or planned end of an activity or project, or to some point prior to the anticipated ending point. This early data is used to predict final outcomes. If there are large differences between the predicted information and the desired result, corrective action could then be taken with minimal loss of effectiveness or efficiency.
The last category of metrics is the most familiar and most used category by industry, Reactive metrics. Generally speaking, reactive metrics “account for what has happened.” For projects and products, GGI defines the point that metrics become reactive as the “existence of a physical manifestation of the product.” This is the point that product and/or project reviews ask, “does the as-built model meet the requirements and conform to the specification.” If the answer at this point to that question is “no,” then reactive activities are undertaken to bring the non-conforming item(s) into conformance. That said, it is well documented over the past twenty years that product designs begin to freeze fairly early into a development process – actually before a physical manifestation exists. Ours is a practical working definition of reactive metrics. The largest costs and profit losses arise when companies enter the “build and break” part of the development process, successively iterating physical manifestations of a product until it finally conforms to requirements and specifications. In theory, reactivity actually starts earlier than the practical GGI definition.
Finally, certain Reactive measures of historical performance when taken consistently over several transaction and/or business cycles can become powerful predictors. Time will be spent discussing how to get the most forward-focused leverage from systematic historical information, and the types of measures that will be the most useful in this regard.
Proactive & Predictive R&D-Product Development Innovation Metrics - Summary
This seminar will lay out the management framework that categorizes Planning, Proactive, Predictive, and Reactive metrics by tying the transition points between these four categories to commonly accepted milestones of an innovation or product development process. Examples of metrics in each category will be discussed. Participants will be asked to help to think up new measures in the three early categories. Often, especially for the two categories of Proactive and Predictive metrics, these measures are highly company specific. The ability to execute certain functional or core competencies, or the ability to execute on certain mission-critical design or process technologies, are the most predictive opportunities a company has – and these are quite often specific to a given company. Please come prepared to think out of the box.
