2016

This is the third and final article of a three-part monthly series in Machine Design on measuring product development at the CXO level.  The first article addresses productivity and efficiency.  The second article addresses effectiveness and output.  This final article addresses maturity and predictability.

The August article is entitled “Measuring Product Development Productivity.”  [Machine Design – August 2016]  Productivity is an extremely important topic, especially in challenging economic times.  It is absolutely appropriate for today’s corporate leaders and managers to emphasize “Productivity.”  However, productivity measurement is becoming too pervasive across all business functions.  And, productivity measurement is being applied at levels that are too low in many organizations.  Productivity may not be the best #1 metric for business areas that are not yet mature in their execution.

The September article is entitled “Measuring Product Development Effectiveness.”  [Machine Design – September 2016]  This article delves further into the appropriateness of productivity as the primary measure for business areas that have not yet matured, such as R&D and product development.   It makes the case that “Effectiveness” may be a preferable #1 metric for immature functions and disciplines.  Product Management, R&D, and Product Development (among others) all have several decades remaining before maturity is reached.

The October article is entitled “Measuring Product Development Maturity.”  [Machine Design – October 2016]  It would not be right to use “Maturity” as the factor in the first two articles to distinguish between the use of “productivity” versus “effectiveness” as the primary KPI, without also providing a definition of “maturity” for these so-called immature functions.  The ability to accurately predict input needs and output results is the business-level definition of maturity.  The exact components of input and output maturity will differ by business area.   The Carnegie-Mellon Software Engineering Institute “Capability Maturity Model” is also discussed.

 

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Please Don’t Forget

GGI’s 20th Metrics Summit is October 18-20

A quick note to let you know that our 20th R&D-Product Development Metrics Summit is coming up, October 18-20 in Norwood, MA.

Our conference facility is equidistant between the Providence and Boston airports, and a comprehensive renovation has just been completed.

The place is beautiful and the food is great.

Content is stimulating, and our Summit discussions and Workshop are great fun too.

Please join us.

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Recent Twitter Postings on Innovation & Metrics

GGI has become significantly more active on Twitter in 2016.

No chit chat.

GGI Tweets content from our primary and secondary research and publications; and about GGI events and presentations.

There are a number of substantive Tweets that went out October 7-9 regarding our recent work and near term plans.

A quick look.

@GoldenseGroup

 Please consider Following GGI on Twitter.

A quick note to let you know that our 20th R&D-Product Development Metrics Summit is coming up, October 18-20 in Norwood, MA.  Our conference facility is equidistant between the Providence and Boston airports, and a comprehensive renovation has just been completed.  The place is beautiful and the food is great.

New Participants & Alumni Too

Since 2005, when we held our first Metrics Summit, the structure of the Summit has remained the same.  But, now a decade later, near 100% of the content is updated; as are the course books.  Last year, folks that had attended our initial Summits (back when) started returning for an update.  They were not disappointed.  If you participated before 2012, almost 100% will be new material to you.

Latest Updated Content

Just this past year alone, updates include a number of new CXO-level metrics that hit critical mass in 2015.  And, we have a fresh look at the Top 100 Metrics used in industry.  The great recession created significant change in the metrics corporations now use to drive productivity and performance.  This new information is statistically accurate.

Plus, with all that is going on the world, the science of measuring Risk is getting attention.  Most companies, ERM system or not, have little actual knowledge of the business, portfolio, and product risks they face.  We have taken the view of a CFO for the advances in risk science that we will be presenting.

New-To-The-World Internet-of-Things [IoT] Metrics

The Internet of Things is evolving rapidly. The IoT affects the product lines and process environment of just about every company, yet no one is systematically measuring the IoT at this time.  In ten years there will be two types of companies, those adept in IoT and those that will get bought by those that are adept.  To that end, as GGI has done in each decade, we have been developing forward-looking new-to-the-world metrics for critical areas where metrics do not yet exist.

We will be rolling out IoT and IIoT Metrics for the first time at the 20th Metrics Summit.  The new module will be presented during the Workshop along with our more recent modules on Intellectual Property, Advanced Development, and Functional/Technical Competency metrics for product development.

In the years ahead, it will be necessary to measure IoT prowess at the top of the organization.  It will be necessary to measure IoT capabilities added by projects and those delivered in products.  It will be necessary to measure the IoT abilities of professionals as relates to their functional and technical responsibilities.  And, of course, it will be necessary to measure IoT improvement efforts.  We are not sure that everything we have created will become mainstream over the next decade, but we have a track record for the last thirty years of being among the first to anticipate the next great waves of metrics.

Much of our developmental work becomes mainstream.  The most recent example of this is what we did to tie both Advanced Development activities and Intellectual Property into Product Development, and then into Sales and Profits.  We are not allowed to tell you which companies, but they did attend our Summits and you know their names.

Please Join Us In October

Senior executives wishing to put themselves and their colleagues in a better position to direct and drive product creation and commercialization should strongly consider attending. Many participants have said, “this Summit covers everything an officer and senior manager needs to know on the subject of Metrics.”

Please join us. Content is stimulating, and our Summit discussions and Workshop are great fun too.

http://www.goldensegroupinc.com/graphics/Metrics-Summit-20-Icon.png

Most folks that follow my writings know that I’ve been authoring the inside back page article for Machine Design for several years now.  You have probably recognized that my goal is to make each article a stand-alone piece.  On a few occasions there have been a Part 1 and Part 2.  For the months of August, September, and October 2016 there are three articles with separate and unique titles, but whose content is interrelated.  All three start with “Measuring Product Development,” which is then followed by the topic for that month.  This is important because it is possible to legitimately nitpik each article for incompleteness of thought. (Being limited to 600 words every month presents several challenges.)  But, if one takes the three articles as a whole, a clearer picture emerges.  At this time, two of the three have been published.  The third article is due out soon.

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MACHINE DESIGN

AUGUST 2016 ISSUE

The August article is entitled “Measuring Product Development Productivity.”  [Machine Design – August 2016]  Productivity is an extremely important topic, especially in challenging economic times.  It is absolutely appropriate for today’s corporate leaders and managers to emphasize productivity.  However, productivity measurement is becoming too pervasive across all business functions.  And, productivity measurement is being applied at levels that are too low in many organizations.

Too Pervasive

The August article makes the point that not all business and technical functions have achieved comparable levels of maturity.  Let’s discuss logistics, manufacturing, and product development to make the point.  Logistics became mature in the late 1970s.  Barring a force majeure, delivery times could be predicted with near perfect accuracy.  In 1983, FedEx was born.  For the last thirty-plus years, the delivery of goods and packages has been performed with near 100% accuracy.  Today, there are a number of competitors.  Their output (delivery) is equivalent and they are all competing on reducing the input (cost).  Manufacturing was next to become mature.  By the early 2000s, again barring a force majeure, goods were manufactured on time to near perfect quality levels and were made available to the logistics function to ship.  Today, nearly every organization is filled with professionals holding Six Sigma Certifications.  Poor quality, scrap, and rework, that used to be measured as a percentage of cost of goods sold, is now measured in parts per million.  There are no comparable analogies for Product Development.  Product Development is still on the path to maturity.  Productivity may not be the best “top priority” metric for Product Development.

Too Low

The discipline of “operations research” teaches, among other things, that if a system is optimized at too low a level in the system that the system as a whole will not be optimized.  The August article makes the point that each manager at each level of the product development organization hierarchy is now trying to optimize the productivity of their organization.  By definition, this means that the R&D-Product Development organization as a whole is being sub-optimized.

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MACHINE DESIGN

SEPTEMBER 2016 ISSUE

The September article is entitled “Measuring Product Development Effectiveness.”  [Machine Design – September 2016]  This article delves further into the appropriateness of productivity as the primary measure for functions that have not yet matured.   It makes the case that “Effectiveness” may be a preferable primary measure for immature functions and disciplines.  Product Management, R&D, and Product Development (among others) all have several decades remaining before maturity is reached.

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 MACHINE DESIGN

OCTOBER 2016 ISSUE

 

The October article is entitled “Measuring Product Development Maturity.”  [Machine Design – October 2016]  It would not be right to use “maturity” as the factor to distinguish between “productivity” and “effectiveness” without also offering a definition of “maturity” for immature functions.  As it turns out, the definition of maturity will differ by function.  The October article will focus on Product Development maturity.  The Carnegie-Mellon Software Engineering Institute “Capability Maturity Model” is also discussed.

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PS

GGI’s 20th R&D-Product Development Metrics Summit is October 18-20, 2016 in Norwood, MA.

We are sure to positively affect your thinking and capability on the subject of measurement.

New England is beautiful in the fall.

Please consider joining us.

GGI has been a pioneer in product development measurement since the early 1990s.  We’ve been formally researching industry and corporate measurement practices ever since.

For some time, even past when we introduced “proactive” metrics and refined “predictive” metrics for R&D and Product Development in 1997, we continued to defer to the business frameworks that industry was using. We would “fit” our measures into current structures and hierarchies of the companies that hired us.  It was fine. They were happy.  The outcome was better than what preceded it.

But personally, I kept wrestling in my mind that something wasn’t right.  It was like an indicator panel where each light could be recognized but the context was not right.  The frameworks didn’t paint the picture for R&D or Product Development.  It was difficult to determine the actions to take to create improvement.

Along the way, I had the pleasure of introducing Robert Kaplan at the conference where he introduced Balanced Scorecard to the world.  And, I watched it pervade industry.

My masters, hidden under the MBA acronym, was in accounting and operations.  Everything needed for a CPA.  I understand business measurement structure, financial and cost accounting. Balanced Scorecard was definitely an asset to bring additional improvement to corporate management and to many many functions.  However, it still was a force-fit for R&D.  I never met a VP R&D or Product Development that liked it.   They would do what they needed to do and put the necessary metrics into whatever scorecard the CEO told them to use.

A Better Measurement Approach For R&D & Product Development

I kept stewing on this mismatch, which I observed in a couple other corporate functions as well, and it hit me on a summer day in 2002.  While every function needed to align with GAAP no doubt, that the entire system was based on transactions as it was those transactions that collectively generated the business value.  In short, everything was about buy and sell products or services and the myriad of transactions that are needed to execute an order to generate the business value.

R&D and Product Development are different. Yes, there are a myriad of transactions to go from concept to customer; and many just to run the organizations that create products and/or IP.  But, the business value is generated by the completion of a project.  The project produces a product (or service) (and/or IP) and that is where GAAP starts.  Upon further reflection, the other functions that are a mismatch also generate their value from projects and are “pre-product” or “post-product” as well.  This is a whole other discussion that I’ll leave for another day.

On that summer day in 2002, on my porch, the Linked Metrics Portfolio® [LMP] was born.  It is a performance measurement framework uniquely designed for project-based organizations.  We’re on our way to 150 implementations of it at this time in R&D-Product Development.  It is designed to be compatible with any and all CEO/CXO metrics reporting frameworks, including Balanced and other scorecards.

The August Issue of Machine Design

The August 2016 issue of Machine Design, without mentioning the LMP framework itself, addresses the subject of measuring R&D and Product Development “Productivity” in the context of the four groups of “primary metrics” that comprise the LMP.  Each of the four groups is a bold sub-heading in the article.

This blog post also includes the word “Efficiency.” Measuring R&D and Product Development Efficiency means the same thing as measuring Productivity.  Both words equate to Output divided by Input.

Note To Rocket Scientists:  Yes, I am aware that some invoke the capital/physical assets of the company into productivity measures.  And, when capital is weighted as part of the input to the output, that does change productivity to mean something different than pure efficiency.

Measuring Product Development Productivity [Machine Design – August 2016] addresses the subject of productivity measurement in R&D and Product Development by looking through the four lenses that drive performance in project-based organizations:  People/Departments, Projects, Improvement Efforts, and Overall CXO-Level Performance.

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PS: We are proud to add, as a closing note, that our 20th R&D-Product Development Metrics Summit is on the horizon on October 18-20, 2016 in Norwood, MA.  New England is beautiful in the fall. We are sure to positively affect your thinking on measurement.

As you will see in the August MD article above, our LMP stays in the background for the Summit as well. We focus on the metrics and sets of measures that best align with a company’s chosen R&D strategy; and get at subjects that are hard to measure. Please consider joining us.

There are lots of trends and new ideas when it comes to the science of managing R&D. Some got started when a technological advance changed the best way to manage or make decisions. Others arose from new thinking in management science in the light of macro changes taking place in business and political structures, practices, and economics.

Twelve trends were addressed in this two part series that ran in January and February 2016 in Machine Design magazine.

At the Editor’s request, we have added a capstone article in the March 2016 issue entitled “Perspectives.” In this third and final piece, additional thoughts are offered on each trend and some of the interplay between trends is discussed.

As you consider each trend, keep “Big Data” in mind. It is a “macro trend” that will affect every industry and segment of the globe. It underlies more than half of the trends discussed, and, to a lesser extent, it will affect all 12. As an exercise, give some thought as to whether each trend is technology-driven or thinking-driven. In some cases, it’s both.

The 12 trends relating to the science of managing R&D are in the following twelve business and/or functional areas.

Trend 1. Rapid Prototyping (aka 3D printing)

Trend 2. Strategy

Trend 3. Product Definition

Trend 4. Organic Innovation and Growth

Trend 5. Search and Synthesis

Trend 6. Core and Functional Competencies

Trend 7. Engineering and Development Automation

Trend 8. Micro-Nano Effects

Trend 9. Physical vs. Virtual Work

Trend 10. Measurement and Correlation

Trend 11. Open Innovation

Trend 12. Intellectual Property

Here are the previously published Part I and Part II articles covering the 12 trends.

Top 12 Trends in the Science of Managing R&D and Product Development: Part 1 [Machine Design – January 2016] discusses the first six of the trends.

Top 12 Trends in the Science of Managing R&D and Product Development: Part 2 [Machine Design – February 2016] discusses the remaining six trends.

This is the capstone “Perspectives” article that is the subject of this blog post.

Top 12 Trends in the Science of Managing R&D and Product Development: Perspectives [Machine Design – March 2016] discusses the trends as a whole and comments on selected interrelationships between trends.

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If the opportunity to interactively discuss these trends with colleagues sounds appealing, please consider joining us at GGI’s 14th R&D-Product Development Innovation Summit being held March 29-31, 2016 in Norwood, Massachusetts.  Or, join us at the 2nd Annual TechBrainers R&D Club Summit being held April 14, 2016 in Warsaw, Poland.

NEEDHAM, Mass. — (PRJ) — February 11, 2016 — The corporate quest to master innovation began in the 1990s. Prahalad, Hamel, Moore, Utterback, and Christensen’s writings seeded the field. In 2004, Business Week published its first ranking of the “The World’s Most Innovative Companies” and the innovation race was on.

For two decades now, the innovation body of knowledge has been both growing and refining. Models and frameworks by esteemed companies, consultancies and research firms have come and gone; as have about half of the initial providers of enabling techniques and software. Of course, what worked has remained.

Most companies are quite lean these days and only a few markets are growing rapidly. Future growth and profit will largely result from having a better product portfolio than one’s competitors. There is little fat left to cut. The mastery of innovation is essential to gain competitive advantage in the years ahead. Today’s ability to monetize and trade intellectual property (IP) assets now makes both products and their IP transactable commodities, furthering the importance of innovation.

GGI held our first Innovation Summit in January 2006. Each year we take a fresh snap shot of the state-of-practice across strategies, tactics, techniques, tools, software, and metrics. Our program focuses on the needs of CXOs, managers, and thought leaders to direct and enable innovation in their companies. Some five hundred companies have participated. Many initial participants rejoined us five and seven years later for a fresh update. You will meet some of them if you decide to register.

GGI’s 14th R&D-Product Development Innovation Summit will be held March 29-31, 2016 in Norwood, Massachusetts. Norwood is half way between Boston and Providence, providing participants with two airport choices to best their travel expenses. Group rates are available at our Four Points Sheraton Inn & Conference Center.

This information intensive event draws on our thirty years in business consulting to Fortune 1000 companies, findings from over fifty secondary research sources, and fifteen years of our own primary research on product development, innovation, IP, and metrics. Our six hundred-page color course book cites all references and enables participants to follow-up on their specific interests when they return to their offices.

Our Summit delivers the goods to update executives and professionals on the state-of-practice, and provides the empowering knowledge that is needed to increase corporate product portfolio and brand value from innovation and IP improvements in their companies. Many participants have said, “GGI’s Summit is the equivalent of an Executive MBA on Innovation in three days.”

Media Contact:
Company Name:   Goldense Group, Inc. [GGI]
Name:   Brad Goldense
Phone (optional):   781-444-5400
Email Address:   blg@ggisummits.com
Website:   http://www.goldensegroupinc.com

There are lots of trends and new ideas when it comes to the science of managing R&D. Some got started when a technological advance changed the best way to manage or make decisions. Others arose from new thinking in management science in the light of macro changes taking place in business and political structures, practices, and economics.

Twelve trends are addressed in this two part series in Machine Design magazine. As you read through the trends, keep “Big Data” in mind. It is a “macro trend” that will affect every industry and segment of the globe. It underlies more than half of the trends discussed, and, to a lesser extent, it will affect all 12. As an exercise, give some thought as to whether each trend is technology-driven or thinking-driven. In some cases, it’s both.

The 12 trends relating to the science of managing R&D are in the following twelve business and/or functional areas.

Trend 1.   Rapid Prototyping (aka 3D printing)
Trend 2.   Strategy
Trend 3.   Product Definition
Trend 4.   Organic Innovation and Growth
Trend 5.   Search and Synthesis
Trend 6.   Core and Functional Competencies
Trend 7.   Engineering and Development Automation
Trend 8.   Micro-Nano Effects
Trend 9.   Physical vs. Virtual Work
Trend 10. Measurement and Correlation
Trend 11.  Open Innovation
Trend 12.  Intellectual Property

Top 12 Trends in the Science of Managing R&D and Product Development: Part 1 [Machine Design – January 2016] discusses the first six of the trends.

Top 12 Trends in the Science of Managing R&D and Product Development: Part 2 [Machine Design – February 2016] discusses the remaining six trends.

The upcoming March 2016 issue of Machine Design will offer “Perspectives” across these twelve trends.

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If the opportunity to discuss these trends in person sounds appealing, please consider joining us at GGI’s 14th R&D-Product Development Innovation Summit on March 29-31, 2016 in Norwood, Massachusetts.  We will also be featuring new industry research on the emerging specific types of Disruptive Innovation.

There are lots of trends and new ideas when it comes to the science of managing R&D. Some got started when a technological advance changed the best way to manage or make decisions. Others arose from new thinking in management science in the light of macro changes taking place in business and political structures, practices, and economics.

Twelve trends are addressed in this two part series in Machine Design magazine. As you read through the trends, keep “Big Data” in mind. It is a “macro trend” that will affect every industry and segment of the globe. It underlies more than half of the trends discussed, and, to a lesser extent, it will affect all 12. As an exercise, give some thought as to whether each trend is technology-driven or thinking-driven. In some cases, it’s both.

The 12 trends relating to the science of managing R&D are in the following twelve business and/or functional areas.

Trend 1.   Rapid Prototyping (aka 3D printing)
Trend 2.   Strategy
Trend 3.   Product Definition
Trend 4.   Organic Innovation and Growth
Trend 5.   Search and Synthesis
Trend 6.   Core and Functional Competencies
Trend 7.   Engineering and Development Automation
Trend 8.   Micro-Nano Effects
Trend 9.   Physical vs. Virtual Work
Trend 10. Measurement and Correlation
Trend 11. Open Innovation
Trend 12. Intellectual Property

Top 12 Trends in the Science of Managing R&D and Product Development: Part 1 [Machine Design – January 2016] discusses the first six of the trends. The February 2016 issue of Machine Design will discuss the remaining six trends.