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Product Development Page 24

When we think of Systems Thinking, most of us think of Peter Senge and his classic book The Fifth Discipline. But the first instance of Systems Thinking that I’ve seen recorded is by W. Edwards Deming. He used “Systems Thinking” in the model of production he first published in the 1950’s at an international conference at Mt. Hakone in Japan.

Deming serves as a nice point/counterpoint with the standard American management system and it’s founder Frederick Winslow Taylor. Taylor believed in open loop process thinking. E.g. You have a job, you have a series of tasks, execute them step by step. Deming is a proponent of closed loop system thinking. In closed loop system thinking the feedback from the system provides opportunity to learn and improve. It’s been clearly shown that in product development, when managed by Taylor’s system, we see counter productive activities and low productivity. When we have Deming’s, we have nothing but good.

It’s probably not surprising if you think about it. Taylor’s fist hand experience was in a labor machine shop. Deming’s first hand experience was as a researcher in an agriculture department and he had a close working relationship and was mentored by the famous researcher Walter Shewhart of Bell Laboratories.

So, if we’re looking for a management system that is appropriately applied to the knowledge workers in product development, whose do you think would be more appropriate? The one from a man with first hand experience in a machine shop or the one with first hand experience as one of us…as a knowledge worker.

Contact us to learn more about how Systems Thinking and the application of our Product Development Operating System can help your organization become more efficient, productive, innovative, and competitive.

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Knowledge workers think for a living, but in America, with our Taylor based management system, we’re driven by tasks and overburdened. So, when do we find time to think? I often cite Peter Senge’s book the Fifth Discipline. In the opening chapter he cites a conversation with a colleague that talks about the differences between Japan and America’s relationship with time.

In Japan they respect thinking and they see time as a friend. And they use the time constructively. In America, overburdened, we see time counting down as the enemy and we hurry through activities and hurry through our days.

In Japan if someone approaches somebody sitting quietly at their desk they assume they are thinking and they go away so they don’t interrupt the flow of thought. Because they respect time and it’s not an enemy, they move gracefully from desk to meeting place and it’s an appropriate venue to be interrupted and have a conversation in transition.

We scurry from meeting to meeting and deflect conversations in a sense of self-importance, so when people see us quietly sitting at our desk they think “oh good, I’ve caught him or her” and interrupt our thinking.

The Japanese thinking includes a concept called Hansei, which is generally translated as reflection, but is really a critical self analysis — looking at their own behaviors, thoughts, and actions; and determining if any of them should be improved.

For us that’s a foreign concept, no pun intended, because we live in an environment that still uses fear as a management tool. It makes us defensive. And, when we’re defensive it makes us focus on external factors.

The Japanese system is based upon Deming’s theories. It promotes thinking and reflection. Those are the basis of learning. And what is more important in a knowledge worker environment than learning? Think about it…if you can find the time.

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I love basketball. In fact, my three sons all play. Two of my son’s teams have/had completely different cultures. One son’s team looked to win the game, but spend the minimum amount of energy they need to win. The other son’s team goes all out the whole game, fully investing in the game, in an attempt to win.

Product development is an investment. Although it is often managed and viewed as a something that needs expense management. In product development we have the classic tradeoffs. Phillips Corporation has a very nice way of prioritizing these tradeoffs. They call it QTF$. Quality — It’s the first tradeoff, but it’s not really a tradeoff. You have a quality threshold your product needs to meet, and there’s no negotiation about that. The other three, TF$, stand for Time, Functionality, and Cost. Time is the second most important of the tradeoffs. If your product is delivered on time, it positively impacts your entire customer base. If you withhold some Functionality to get the product out on time, it will negatively impact some small section of your market that relies on that functionality. If Costs are overrun; if the cost of the project or the build cost of the project itself fail to hit the target and go over, that effects you internally and doesn’t affect your customer base. So Phillips, from the standpoint of serving the customer, ranked order of the tradeoffs as QTF$.

Time is king and yet we get hung up on costs. We bring our classic business short-term focus to the system, product development, that’s concerned about growing our future. If you’re familiar with the work of product development guru Don Reinertsen, then you’re probably familiar with his theory of the cost of delay. On-time is the greatest lever for optimizing the return of investment in product development. Expense management in projects should be about measuring costs, not about squeezing them.

We recognize the investment nature of product development in our portfolio management where we require predictive ROIs. But how many of your companies follow through and actually check your investment by measuring the S-curve for your return. Very few, at least in my experience, because we are bound by linear process thinking, which ends as the project ends, as opposed to closed-loop systems thinking, which goes back and checks the results of our actions.

So of my two boys…the one who played on the team with a culture to conserve energy, they had a player who now plays in the NBA. None-the-less they lost as many games as they won. The team that goes all-out, they don’t have any NBA caliber players on that team. In fact, the best player on that team will play in Division 2 college ball next year, and yet that team wins five times as many games as they lose and they’re currently ranked #7 in the state.

When you make an investment, fully commit to the investment. The investment in product development is most carefully managed, and gives it’s greatest return, when you focus not on costs and expense, but rather on time.

Follow Bill at http://www.twitter.com/systhinking

Peter Drucker, the recognized management guru of the 21st century, talked about Knowledge Workers in his final work. Specifically he addressed the requirements for increasing productivity among knowledge workers; which ultimately is EAC’s goal – increasing productivity within product development.

To increase product development productivity there needs to be a focus on quality of output. Drucker contends that the quality of output is as important, and perhaps more important, than the quantity of output. If you find a mismatch between informational needs of somebody doing work and the information that arrives with them, then you have a problem. If that’s the case then the thing to do is take this problem, raise a flag, and move into the Continuous Improvement subsystem, which we will discuss separately. It is a critically important one of the three subsystems of The Product Development Operating System.

Also, please reach out to us if you are finding a wide gap between information needs and availability. We offer the tools and services you may need to close that gap and move to a better position.

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In previous videos we talked about a framework we’ve developed for looking at product development as a system. In the last two videos and posts we talked about two of the subsystems, both of them flow systems, one being information flow and one being workflow. The third subsystem of the Product Development Operating System is the system of Continuous Improvement. This subsystem is often missing when we begin to work with an organization, and in organizations that are “committed” to continuous improvement; in many cases the efforts are ad-hoc and underwhelming

If you’re familiar with the works of Stephen Covey, author of The Seven Habits of Highly Effective People, you are probably familiar with his thesis about the tension between our urgent work and important work, and how our urgent work tends to overwhelm our important work. We see this in product development where we see continuous improvement as the important work. Often times it gets pushed aside and overwhelmed by the urgent work of completing projects.

Patrick Lencioni, an author whose work I enjoy reading, talks about the metrics of organizations. He talks about the ultimate metric of an organization as being the health of the organization. In our Product Development Operating System we see the health of your product development system as the ultimate metric of your productivity and effectiveness. It brings to mind the aphorism from Chinese medicine that says, “There is only one disease; congestion. There is only one cure; circulation.” The circulation in product development is the flow systems. The Continuous Improvement subsystem is the system for increasing the overall health of those flows, of the system, and the effectiveness and productivity of the product development system.

The Continuous Improvement subsystem of the product development system has three constituent parts. Each one aligns with a different tier of the organization. There is Strategy. This aligns with the executive tier. The executive tier looks to build a shared vision; a vision of the future of the organization that, collectively, we’re all working to realize. Another element of the continuous improvement subsystem centers on subject mater experts and the increasing their expertise, their development, and the deepening of their expertise and the expansion of competency within the organization. The third element in the continuous improvement subsystem is the importation and development of a root cause problem-solving methodology, specifically one that is appropriate for knowledge workers — the workers that populate product development.

If you bring improvement energies to your product development system, you need to bring a certain threshold of energy just to maintain your current state. If you will, to counter balance the destructive work of entropy. To make significant and continuous improvement you need to invest more energy into the subsystem. You need to invest significant energies into a continuous improvement subsystem that will eventually lead to increased productivity and increased effectiveness of your overall product development operating system.

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Imagine getting a text from your equipment in the field telling you there’s been a problem. Not too far of a stretch, right? Well, let’s take the situation a bit further. What if you get an unsolicited thank-you email from your customer who was excited about how fast their last service call went since the service rep had the right parts for the particular problem on the machine. That’s because the cloud-based machine monitoring system had automated communications between the equipment, the supply chain, the service reps truck inventory and the recent training the rep had completed for just this situation. Even further, once on site, the rep pointed an iPad at the equipment and the video displayed an augmented reality video of the machine with overlaid graphics showing both the internal geometry and streaming sensor data indicating the problem and highlighting failing parts. Here’s the kicker — when the rep clicked on the screen to see the details of the issue, a ‘how-to’ video popped up on the screen to step the rep through the repair. By the way, did I mention that the issue was predicted by a different cloud computer monitoring huge stores of data and ‘learning’ while it’s predicting issues?

Ok, so I’m not much of a science writer, but it doesn’t matter because this isn’t ‘the sci-fi of the future.’ This is today. This is what the Internet of Things looks like, and it’s both growing and accelerating. Last week, I attended LiveWorx ’15 with 2500 other like-minded professionals. This PTC Internet of Things conference had another 5000 in attendance virtually as the Boston venue had sold out locally. It was pretty obvious that the buzz continues to grow around this topic and that we’re all interested in growing and accelerating business and product development leveraging these technologies.

While some of the technology and science behind cloud computing is ground-breaking and game-changing, it’s not just about the technology. That’s why having both a business and product development strategy are just as important as integrating the technology into the products. At EAC, we’ve been developing products and helping others do the same for the last 20 years. We’re especially excited about helping companies build and execute their IoT strategy since the opportunity and impact are only limited by the imagination. We’re talking about deeper engagement with customers, reducing operating and service cost, new revenue streams, even products that tell product managers and engineers what customers want in additional functionality or how they’re using your product today. If you’re considering developing or leveraging smart and connected products as a part of your product development and business strategy, we’d love to hear from you and partner with you along the way. If you’re not planning out an IoT strategy, we should talk.

EAC Product Development Solutions is a Minnesota based company providing engineering and product development software, service and consulting to the discrete manufacturing industry. Rob is currently leading the EAC business effort related to product development for the Internet of Things. You can reach out to us and contact Rob at www.eacpds.com/eacpdtcontact.