This "patience deficit" steers most developers away from the iterative processes that have been proven to create products and businesses that are "built to last." In the past year, Management Roundtable has taken a focus on development strategies that incorporate things like "fast failure" and "smart prototyping," which attempt to accelerate the front-end process for learning about what level of value will enable you to capture or grow market share. Much of what we have learned supports the argument for experiment-driven development approaches.

On June 10th, MRT conducted an audioconference on "Smart Prototyping" facilitated by Preston Smith, renowned co-author of Developing Products in Half the Time. During this session it was noted that in most organizations prototyping is used primarily as an engineering tool to manage technical risks and test design feasibilities. While this is an important facet of prototyping, many who restrict it to this use may be missing out on the tool's role in managing market risks, which can also hold tremendous monetary paybacks.

Presenting internal and external customers as early as possible with a series of potential product models for fast feedback can not only guide you to producing a much better product, but also steer you away from bad design parameters that are much more costly to change downstream in the process, such as the "ECO Hell" that sometimes happens after a design is released for manufacturing. For many, it's the initial time and dollar investments associated with producing the early prototypes that can blind them to these potential savings and profits.

For a moment, let's consider the development of value under the guise of Darwinian evolution. The science of evolution has three environmental requirements for it to occur:

1. Replication - subject must be reproduced repeatedly
2. Variability (or mutation) - like bugs that develop camouflage
3. Competition for Resources - the food chain

All three of these exist in product development as well. Most products are produced (or born) in volume as well as replicate from generation to generation. Likewise, the process that develops them is replicated from project to project. Variability occurs as new features are added, removed or changed. In terms of competition, every project usually competes for resources -- human, material and facility-wise, and every product has competition in the market.

In evolution, the organism that takes environmental feedback and responds with the proper changed variable wins it's fair share of the survival market. So too, in product development, the company that takes customer feedback and responds with the proper changed variables wins. The advantage that product developers have over mother nature is that our environment is not geological in scope, it is infinitely more controllable and our products do not have the lifecycles of complex biological organisms - we can do this stuff much faster and also less randomly.

The main problem, again, is the "patience deficit." While we have the ability for warp speed evolution, many don't use this advantage. Projects that freeze requirements early in the process halt the product's evolution and create costly barriers to change downstream. Similarly, those without the tolerance for failure will release a poorly executed product, and give up without using the lessons of failure and adaptation in the next generation.

Sony is the extreme example of a patient company. The notorious Walkman example may be tired, but it's a perfect illustration of value evolution. With hundreds of variations of its design and feature-set in the market, Sony tolerates the numerous and necessary inevitable failures of some percentage of the product, learns from them, and uses this knowledge to continue to dominate the market in future iterations. It has done this for years and years. With this method, Sony is also able to manage the problem that occurs when markets mature and the inevitable niches proliferate - chances are one of their design mutations will fit the niche.

As you think about the evolution of value within your own company, two types of tolerances need to expand. The first is a tolerance within a project to accelerate customer feedback loops and consider using prototypes beyond functional testing. The second is a tolerance across projects to consider individual projects as a segment of a series rather than a discrete whole unto itself. Companies that can successfully dial-in the evolution equation for their individual industry and market may have the best chance to make it when the next meteor hits Wall Street.

1. Ten Inventions That Will Change Your World
This Newsweek article hopes to discover the next velcro or post-it note that will come our way. The offerings include a way to manipulate the taste of food and fabric for high-tech clothing.

2. Honda's "Cog" Ad
You may have heard about this really neat little commercial for the Honda Accord that features a domino-like motion sculpture made of car parts. This website has links to an online version of the ad and related info.

3. Iraqi 404 Error
Read this webpage carefully, you may easily mistake it for a normal "file not found message," but look again. Warning: last visit to this url prompted a pop-up ad.

MRT NewsBriefs

Lean PD Workshop - Repeat Session Scheduled
We've gotten a lot of interest in our recent 2-day workshop on "Lean Product Development" led by Don Reinertsen and have been able to quickly schedule a repeat session in August for those who couldn't make it in the first run. The new dates are August 26-27 and will be held in a new location - Chicago, IL. The last session sold out very quickly, so if you are interested in attending, you should sign up quickly. For more info and to register online: http://www.roundtable.com/Event_Center/LPD/LPD.html

We've also posted a selection of comments made by participants at the July workshop, so you can see what your colleagues thought about the course:
http://www.roundtable.com/Event_Center/LPD/LPD_testimonials.html

Calendar of Events

• NEW DATES & LOCATION ! - Achieving Lean Product Development: Techniques, Economics and Implementation - Instructor: Don Reinertsen - August 26-27, 2003 - Chicago - Strictly limited to 35 participants

• Successful Portfolio and Resource Management Practices - Part of MRT's Cross-Functional Performance Series for the Pharmaceutical and Biopharmaceutical Industries - September 30 - Oct 1, 2003 - Boston

• Fast and Flexible Product Development - October 8-10, 2003 - Chicago

• NPD Project Innovation '03 - October 20-22, 2003 - Dallas - $300 Early Bird Discount Expires July 30

• 8th Annual Product Development and R&D Metrics: Quantifying Innovation, Portfolio Value and Resource Capacity - November 3-6, 2003 - Chicago - - $200 Early Bird Discount Expires July 31

To inquire about exhibit and sponsorship opportunities at MRT events, please contact Beth Schrager at schrager@rcn.com or by phone at 978-263-9931.

Administrivia

Gregg Tong
Management Roundtable, Inc.
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Gregg@roundtable.com

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