Raising the bar on new product results v2

Raising the Bar on

New Product ResultsNovember 8, 2012

Sharon Rozzi, Ph.D.

Senior Director, Continuous Improvement at Medtronic

Raising the Bar on New Product Results

New product launches are the life blood of technology companies, and yet many leaders believe their organization does not get new products to market fast enough, quality is lacking or profitability was not optimized, or combinations thereof.

In this session we will discuss strategies for accelerating new product results in a highly cross-functional environment.

These strategies include defining top down goals that cover quality, value and innovation speed. These strategies also include creating visibly engaged leaders, simplifying best practices and setting project teams up for success.

WE12 “Raising the Bar on New Product Results” by Sharon Rozzi, Ph.D.2 11/8/2012

About the Speaker

• Senior Director, Continuous Improvement at Medtronic– 2010-Present

– Responsible for driving continuous improvement in product development, manufacturing and supply chain in Medtronic’s Spinal Business to achieve quality, productivity and lead time improvement goals

• Senior R&D Manager and Master Black Belt, Boston Scientific– 2007-2010

– Responsible for driving Lean Six Sigma methodologies into R&D in order to improve product development outcomes (quality, reliability, market share, time to market, etc.)

• Senior R&D Manager, Program Management Office, 3M– 2004-2007

– Managed 3M’s enterprise-wide initiative to improve new product outcomes “3M Acceleration”. Managed the new product portfolio management process, new product development and new technology development processes, and drovecontinuous improvement through identification of best practices, such as DFSS

• Product Development Manager and Engineer, 3M– 1989-2003


4

About Medtronic…

Global Leader in Medical Technology

* Free cash flow is operating cash flow minus capital expenditures

9,000+scientists and engineers

around the world

$16.2BFY12 global sales from continuing

operations which generate $3.9B

in free cash flow*

45,000+employees, making us the largest

global medical technology company

2,060+FY12 patents awarded, bringing our

total worldwide to more than 23,000

~45%sales from international markets,

representing more than 120 countries

Products and Therapies to Address Many Chronic Conditions

Chronic Pain

Nausea and Vomiting associated with Gastroparesis*

Diabetes

Overactive Bladder and Urinary Retention

Fecal Incontinence

Severe Spasticity associated with Multiple

Sclerosis, Cerebral Palsy, Stroke and Spinal

Cord and Brain Injuries

Atrial Fibrillation

Heart Failure

Congenital Heart Disease

Heart Rhythm Disorders

Coronary Artery Disease

Heart Valve Disease

Scoliosis

Spinal Fracture

Lumbar Spinal Stenosis

Degenerative Disc Disease

Pelvic Trauma

Peripheral Vascular DiseaseTibial Fractures

Hydrocephalus

Sinus Diseases

Sinus Augmentation

Sleep Disordered Breathing

Cervical Degenerative Disc Disease

Thyroid Conditions

Aortic Disease

Otologic Disorders

Meniere’s Disease

Parkinson’s Disease

Essential Tremor

Dystonia*

Obsessive-Compulsive Disorder*

Cranial Repair

Brain Tumors

* Humanitarian Device in the United States – the effectiveness

for this use has not been demonstrated

Targeted Drug Delivery

Raw Materials

Power Sources

Miniaturization

Electrical Stimulation

Closed Loop Systems

Sensors

Connected Care

Imaging Navigation

A Broad Platform of Core Technologies

Agenda

• The importance of new product results

• Strategies for accelerating new product results

• Evidence the strategies work

• Summary


Senior Leader Perceptions of Instruments of

Growth Over Next 5–10 Years

11/8/2012WE12 “Raising the Bar on New Product Results” by Sharon Rozzi, Ph.D.9

73%67% 65%

56%49%

New Products New Partnerships New Customers and New Markets

New Geographies New Business Models

N=92

Percentage of Respondents Who Believe Growth Will Come from New Sources

Source: Corporate Executive Board® Senior Leadership Survey, 2011

87% 85%80%

New Offeringsfor ExistingCustomers

Expansion intoNew Customer

Groups

Minor Changesto ExistingOfferings

Executives realize radical innovation is necessary to thrive

in challenging market conditions


64%

72%

2009 2010

Executives’ Top Priorities

“Innovation Is One of Our Top-Three Priorities”

Source: Corporate Executive Board® Senior Leadership Survey, 2011

N=1,600

Executives’ Innovation Priorities%of Respondents Who Said Type of Innovation Is

“Important” or “Very Important” to Their Company’s Future

Success

Radical Incremental

Urgency Drivers for Radical Innovation

Market Trends

Price Competition• SKU proliferation continues

• Customer price sensitivity at all-time high

New (Unmet) Needs • Growth of emerging markets

• More spendthrift consumers

Escape price wars by creating

new categories of offerings

for existing customers.

Create relevant offerings for

new customers

Radical

innovation

to break out of

competitive wars

Achieving New Product Success is

a Challenge


76%54%

The Best The Rest

New Product Success Rates

The Best Versus the Rest

2011 Survey

N=399

Definition

The Best: Respondents who self-reported

high effectiveness at innovation and also

reported higher profits from new products

Survey Sources: Corporate Executive Board®

Reasons for Failure Varied

More than 80%, 10%

61-80%, 20%

41-60%, 22%

20-40%, 22%

Less than 20%, 21%

Don't Know, 5%

Frequency of Meeting Product Launch Dates

2007 Survey Data

N=237

• Slow to Market

• Product Quality Issues

• Price does not match value proposition

• Manufacturing Cost too high

• …

Agenda




• Summary


4 Cornerstones for Accelerating

New Product Results


1. Top Down

Goals

3. Visibly

Engaged

Leaders

2. Simplified

Best

Practices

4. Project

Teams

Set-up for

Success

1. Top Down Goals

• They create dissatisfaction with the current state

• These define what success looks like so we know when we have

“arrived”

• They give us a target to shoot for that catalyzes the desire to do

things differently

• They drive leader engagement when targets are part of their

objectives


1. Top Down

Goals

Developing Top Down Goals is

harder than it looks

Common Pitfalls

• Measuring what’s easy, and not what’s most relevant

• What is measured does not inspire the need for change

• Measuring only one dimension

• Too many measures

• Measures that are easily gamed


What are you

ultimately trying to

achieve?

Faster?

Cheaper or Greater

Value?

Better?

What levers can we

pull to meet each

objective?

What are the next-

level levers?

How do we

operationally define

each metric?

Are there any

measurement

system issues?

Can the results be

gamed?

Is the data readily

available?

In consideration of

everything we

could measure,

what are the critical

few we must

monitor to ensure

we achieve our

objectives?

What is our current

performance?

What does world-

class look like?

What level of

performance is

needed to meet the

ultimate objective?

A Roadmap to Establishing

Top Down Goals

WE12 “Raising the Bar on New Product Results” by Sharon Rozzi, Ph.D.16

Define your ultimate objective(s)

Identify the drivers of

each objective

Assess the “quality” of

each proposed metric?

Pair down the metrics to the

critical few

Define the targets

Defining your ultimate objective

- Example

• At Medtronic, our ultimate objective is

communicated in our Quality Vision

17

Medtronic Quality Vision:

To be the company most trusted to deliver excellence in

products, processes, services and relationships

11/8/2012WE12 “Raising the Bar on New Product Results” by Sharon Rozzi, Ph.D.

Identify the drivers of each objective

- Example

18 11/8/2012WE12 “Raising the Bar on New Product Results” by Sharon Rozzi, Ph.D.

Assessing the “Quality” of each proposed metric and

Pairing them down to the critical few

19 11/8/2012WE12 “Raising the Bar on New Product Results” by Sharon Rozzi, Ph.D.

Criteria for Assessing Metric Quality

Source: Pande, Neuman &

Cavanagh,

The Six Sigma Way

Value/ Usefulness Feasibility

Link to high-priority

customer requirements

Availability of data

Accuracy of data Lead time required

Area of concern or

potential opportunity

Cost of getting data

Can be benchmarked to

other organizations

Complexity

Can be helpful on-going

measure

Likely resistance or “fear

factor”

Pair-wise comparison tool to pairing

them down to the critical few

The importance of pairing down the

goals to the critical few

Consequences of failing to identify the 2-4 critical few

goals:

• Loss of focus on what matters most resulting in little to no change

• Administrative burden

Parting words of advise on goals…

• Pick at least two from these three categories: Faster, Cheaper (or

better Value), Better

• Pick robust metrics even if they are lagging

• Leave it to the local organizations to identify the leading or next-

level levers


What is our current

performance?

What does world-

class look like?

What level of

performance is

needed to meet the

ultimate objective?

Last but not least,

defining the targets

WE12 “Raising the Bar on New Product Results” by Sharon Rozzi, Ph.D.21

Define your ultimate objective(s)

Identify the drivers of

each objective

Assess the “quality” of

each proposed metric?

Pair down the metrics to the

critical few

Define the targets


New Product Results


1. Top Down

Goals

3. Visibly

Engaged

Leaders

2. Simplified

Best

Practices

4. Project

Teams

Set-up for

Success

2. Simplified Best Practices

• These are then means by which employees can help achieve the

ultimate objective

• By virtue of being simple, they are easy to understand and adopt to

become the standard practice

• By being simple, they are not overly bureaucratic and leave room to

innovate


2. Simplified

Best

Practices

Simplifying Best Practices is

harder than it looks

• There are a plethora of books on product development best

practices… much of them difficult to decipher without considerable

effort

• Training on best practices is often left in the hands of subject matter

experts who lack experience is good instructional design

• Most companies operate at either end of the spectrum:

– No training on best practices

– Many classroom days of training

• Simplifying the complex is hard!


Keys to Simplifying Best Practices

• Focus on the best practices that address the organization’s ails

• Distill the Best Practice into 3-5 High-Level Steps and lead with

simple action verbs

• Leverage the help of an Instructional Designer in addition to your

Subject Matter Expert

• Develop simple means of communicating these high-level steps

– Website as a “self-help” resource

– One-page “job aids”

– A3 Reports

– Written Procedures that lead with the 3-5

High-Level Steps

– Ensure your classroom training is organized

around the 3-5 High-Level Steps


Simplified Best Practices

- Examples at Medtronic


Nine Design, Reliability and

Manufacturability Best Practices

identified to help us where we have

tripped-up in the past

Each Practice distilled into 3-5 High-Level

Steps which are then reinforced in job

aides, A3 reports and classroom training… all

of which is accessible from a central website

Example Practice: Design for Manufacturing &

Assembly

Assess Functional Complexity

Innovate to reduce design

complexity

Assess Process

Complexity

Innovate to Reduce Process

Complexity


New Product Results


1. Top Down

Goals

3. Visibly

Engaged

Leaders

2. Simplified

Best

Practices

4. Project

Teams

Set-up for

Success

3. Visibly Engaged Leaders

• These are champions whose support for the initiative is apparent

through their words and their actions

• On a weekly basis they are asking project teams tough questions to

gauge whether they are applying best practices and driving to the

intended results.

• They commit to the initiative goals in their personal objectives


3. Visibly

Engaged

Leaders

Why cultivating Visibly Engaged

Leaders is a Challenge

• Product development is a fast changing environment

• Global competition has place unprecedented pressure on

innovation speed, product cost and meaningful differentiation

• Best practices are evolving fast

• Managers need to mentor on practices they have not personally

used, and quite simply, they don’t want to appear incompetent


3. Visibly

Engaged

Leaders

Key to cultivating Visibly Engaged

Leaders

• Simplify best practices

• Equip leaders to know the questions to ask and to recognize what

success looks like

– They don’t need to know the details of how to apply the practice

• Put leaders at the center of projects reviews,

not on the side lines

• Create ownership of the goals,

making them their personal

objectives



New Product Results


1. Top Down

Goals

3. Visibly

Engaged

Leaders

2. Simplified

Best

Practices

4. Project

Teams

Set-up for

Success

4. Project Teams Set-up

for Success

• You have set the bar high for new product results with your top

down goals. Now it time to set teams up for success in meeting

those goals.

• There may be a lot of new concepts to learn and new behaviors

asked

• Invest in tactics that support rapid organizational learning


4. Project

Teams

Set-up for

Success

Strategies for Setting Project

Teams up for success

• Well-designed Website that put tools and other useful resources at their finger tips

• World class training developed in partnership between SME and Instructional Designer

– Job aides

– Brief instructional videos

– eLearning

– Classroom

• Communities of Practice

• Mentor Networks

• Social Networks

• Knowledge capture mechanisms that facilitate “sharing information side-ways”

• Availability of cross-functional resources


Setting Project Teams up for Success

- Examples at Medtronic


Design, Reliability & Manufacturability

Website communicates the goals and

put resources at users finger tips

Virtual Community of Practice formed through

a Social Networking site specific to sharing

product development best practices

A3 Reports simplify the nine best practices

and provide a mechanism for application

sharing

Agenda




• Wrap-up


Evidence the Strategies Work

• At Medtronic, dramatic reduction in field corrective actions (Better)

• At 3M, 45% reduction in time to market (Faster)

• At Boston Scientific, greater R&D productivity (Greater Value)


1. Top Down

Goals

4. Visibly

Engaged

Leaders

2. Simplified

Best

Practices

3. Project

Teams

Set-up for

Success

Getting Started applying

the 4 Cornerstones

Plan

Establish Top Down Goals

Identify best practices that address the organization’s ails

Simplify those best practices

Create a solid communication plan that includes a web presence

Do

Prepare leaders to lead

Develop the most basic of training material beginning with web-self service and job aids

Grow a community of practice with early adopters

Check

How are leaders fairing?

Are behaviors changing?

Are there good project examples to show case and celebrate?

Is the community growing?

Is our rate of learning accelerating?

Adjust

Revisit the 4 Cornerstones… where can we improve?


Summary

New product launches are the life blood of technology companies, and yet many leaders believe their organization does not get new products to market fast enough, quality is lacking or profitability was not optimized, or combinations thereof.

To accelerate new product results in a highly cross-functional environment:

1. Define top down goals that cover quality, value and innovation speed

2. Simplify best practices

3. Cultivate visibly engaged leaders

4. Set project teams up for success by investing in tactics that support rapid organizational learning


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