Improving Product Development Productivity

Does your organization have clear objectives for its NPD improvement efforts?

If we went back a few years, this wouldn’t be much of a question. Almost everyone would reply with the same answer: “We want to improve speed-to-market.”

But speed, by itself, is not sufficient.  Top management and shareholders also want greater gains in the market (read: strategic impact) and notably better use of resources (read: efficiency).

Speed can beat competition and yield better financial returns (strategic impact). Speed can also increase the chances of success and improve resource utilization (efficiency).  But speed is not the sole driver of either strategic impact or resource use efficiency.   In fact, speed, strategic impact and efficiency, when coupled together, are drivers of a higher-level objective: New Product Development Productivity.

Perhaps a better question to ask is:

Can your organization articulate how important speed-to-market, strategic impact and resource use efficiency are in its NPD Productivity improvement efforts?

Knowing the answer to this question, and understanding the rationale behind the answer, can give guidance to management when investing in NPD improvement efforts. Which initiative is best to invest in? For example, is it better to install an enterprise, web-base system or to design and implement a product line road-mapping process?

Pair-wise Comparison

In a previous e-letter, I offered a list of investment options for improving NPD Productivity. (See some options) To judge these options, an organization needs to determine its own relative importance of Speed, Strategic Impact and Efficiency . Expected gains, costs and timeframes of each option should then be evaluated against of the drivers. Prioritizing NPD improvement options is then a matter of allocating the budget (people and money) to maximize the combined affect of Speed, Strategic Impact and Efficiency on overall NPD Productivity. The key to the prioritization is to anchor the relative importance of Speed, Strategic Impact and Efficiency.

Anchoring the relative importance of Speed, Strategic Impact and Efficiency can be done quickly with a survey technique called “pair-wise comparison”, or as some know it, “Analytical Hierarchy Processing”.

Pair-wise comparison is quick and simple. Respondents are asked to make just six comparisons: three for the current state (based on our current improvement investments), and three for the desired state (how the improvement efforts should be focused). For each case, the respondents give the relative importance of:

Adept Group conducts this method with a pre-designed, online survey. Respondents receive an email and click on a URL to go to the survey. To create the comparisons, they simply drag a set of bars to represent relative importance.

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