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Achieving Balance in Innovation Stephen Uban, PE, NPDP, ISCP PDMA Research Foundation 8/14/2015 Performance Excellence Network - Duluth 1
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Performance Excellence Network - Duluth 1
Achieving Balance in Innovation
Stephen Uban, PE, NPDP, ISCPPDMA Research Foundation
8/14/2015
Performance Excellence Network - Duluth 2
Is Innovation Important?
APQC Webinar July 23rd 2015
8/14/2015
Performance Excellence Network - Duluth 3
Self Assessment of Innovation Process
APQC Webinar July 23rd 2015
8/14/2015
Performance Excellence Network - Duluth 4
Level of Satisfaction
APQC Webinar July 23rd 20158/14/2015
Performance Excellence Network - Duluth 5
PDMA Research Foundation• Product Development and Management Association (PDMA)
is an association made up of New Product Development professionals through out the world.
• The PDMA Research Foundation is a 501 c3 whose mission is to provide actionable knowledge in the NPD discipline through academic level research.
• CPAS Research – Since 1985 – looked at best practices in NPD. Last survey had over 580 questions with input from over 500 companies in 19 countries.
• Compare the practices of the Best performing companies with the Rest of the companies.
8/14/2015
Performance Excellence Network - Duluth 6
Why Focus on New Product Development Process?
Best
Rest
53% Increase
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Why Focus on NPD Process?
The Best The Rest
% Successes 82.5% 53.8%
% Successes-Profits 78.2% 49%
% Sales from NP’s 47.1% 25%
% Profits from NP’s 47.3% 24.7%
# Ideas for 1 Success 4.5 11.3
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Performance Excellence Network - Duluth 8
Improvement Balancing Act
• Innovate or Iterate• Speed Up or Slow Down• Learning or Doing• High Risk or Low Risk• Great Ideas or Customer Needs• Rigorous Structured Process or Whatever
Feels Right Today.
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Starts with Culture and Strategy
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0
10
20
30
40
50
60
70
Open to theconstructive
conflict
Effectivecommunication
internally
Effectivecommunication
externally
Both innovationand risk- taking
are valued
Objectives areused in the
performancereview process
Managersestablishobjectives
Failure isunderstood
per
cent
The Best The Rest
Innovation Culture: Values
*p <.05, The Best vs. The Rest8/14/2015
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Star Tribune July 22, 2015
8/14/2015
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Miles and Snow Strategy Type
First to Market
Fast Fol-lower
Niche Strategy
Reactive0
10
20
30
40
50
The Best The Rest
pe
rce
nt
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Innovate Or Iterate
*p=0.049, the Best vs. the Rest8/14/2015
Performance Excellence Network - Duluth 14
2012 2004 1995
Radical Innovation 85 104 181
More Innovative 59 62 78
Incremental Innovation 34 29 33
Speed up or Slow down
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# weeks
2012 2004
Radical More Innovative Incremental Radical More
Innovative Incremental
Product Line Planning 7 6 4 7 6 4
Project Strategy Development 8 6 4 7 5 3
Idea/Concept Generation 7 5 4 9 6 3
Idea Screening 4 4 3 5 4 2
Business Analysis 6 5 4 7 5 3
Design & Development 28 19 11 45 27 13
Test and Validation 15 11 7 21 15 8
Manufacturing Development 16 11 8 21 14 8
Commercialization 15 11 8 23 17 9
How?
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Performance Excellence Network - Duluth 16
The Best also Spend More Time per Project . . .
Radical innovation More innovative Incremental0
20
40
60
80
100
The Best The Rest
wee
k
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Performance Excellence Network - Duluth 17
. . . but on Fewer Projects
idea generation
idea screening
business analysis
development
test and validation
comm
ercialization
success
0
2
4
6
8
10
12
The Best The Rest
Num
ber o
f Ide
as
Expe
nditu
res
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Mortality Curve
idea gener-ation
idea screen-ing
business analysis
business develop-
ment
test and val-idation
commecial-ization
success0
20
40
60
80
100
120
1982 1995 2004 2012 Example
perc
en
t
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Ideas verses Needs
• The Best track technology trends more• The Best have balanced control between
Market Driven and Technology driven projects• The Best balance the two
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Overlapping Gates Conditional Decisions Skip Stages
+45% +33% +30%
X
Process Flexibility
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Balance all this… but how?
• Innovate and Iterate• Speed Up some Slow Down others• More time Learning less time Doing• High Risk and Low Risk Mix• Balance Technology Push with Market Pull• Flexible Structured NPD Process
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PDMA and TIM Foundation
• Almost 2 years ago PDMA adopted the Innovation Management Standard from TIM Foundation
• Built a Maturity Model for Innovation Management
• Created a Certification Process
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Quite an Extensive Standard
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PIM Maturity ModelSelf
AssessmentLevel 2
ImplementingLevel 3
CapableLevel 4
EffectiveLevel 5
Excellence
Culture
Leadership
Processes
People & Resources
Monitoring
Improvement
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PIM Maturity ModelSelf Assessment Sample
CultureDoes your organization have an environment that fosters innovation?
Is innovation recognized as an important activity?
LeadershipDoes senior management understand, support and participate in innovation activities?
Are measurable innovation goals set by management and communicated to all management?
Processes
Doe the organization have all its processes defined, developed and implemented in order to innovate?
Do processes include , the beginning, middle and end of the innovation cycle and do they include all six elements of the matrix?
People & Resources
Are there enough resources to perform innovation activities?
Are individuals and teams recognized for their participation in innovation activities?
MonitoringDoes the organization measure and systematically monitor innovation capability and capacity?
Are your measures in enough detail to generate insights?
ImprovementDoes the organization analyze performance and conduct improvements in the innovation process?
Does the organization frequently change its innovation process based on performance?
8/14/2015
Performance Excellence Network - Duluth 26
Thank You!
The Product Development and Management Association
WWW.PDMA.ORG
8/14/2015
