TRAINING SME’S FOR NEW PRODUCT DEVELOPMENT MANAGEMENT N. Bialis (1), A. Antoniadis (2), K. A. Jones (3) and C. Hall (4) (1) Associate Professor, Dept. of Production Enginnering and management, Technical University of Crete, Greece. bilalis@[email protected] (2) Professor, Tecnological Educational Institute of Crete, Department of Mechanical Engineering, Greece. [email protected] (3) Managing Director, KAJ ISIS Ltd, Bedworth (UK). [email protected] (4) Managing Director, Chalice Projects Ltd (UK). [email protected]

ABSTRACT New products are the focal point of competition and the lifeblood of successful companies. Developing high quality products more efficiently and effectively tops the competitive agenda for senior managers around the world. The rapid evolution of marketable technologies - a key source of competitiveness - is entirely dependent on a company’s ability to effectively manage its product developments. SME’s are rather slow in adopting practices arising from large companies experiences. A toolkit (the PROMISE toolkit), suitable for SME’s has been developed. It contains a series of interlinked tools, which focus on practical and supported ways of creating and customising a phased and controlled process that matches an individual SME’s needs to optimise the management of their product developments. The training support materials that are included as an integral element of the toolkit fall into two areas. Those that are directly concerned with assessing, designing, implementing and refining your customised GateWay process and a range of basic support skills, which are the core skills necessary to optimise usage of the PROMISE process - all with a practical bias towards product development issues. Finally the toolkit is supplement this with material adapted from support training to assist the front-end tasks related to the creativity needs of product development ie. generating creative product concepts ideas and analysis of such concepts in respect of risk and “fit” with the company’s business strategy

1.

INTRODUCTION

New products are the focal point of competition and the lifeblood of successful companies. Developing high quality products more efficiently and effectively tops the competitive agenda for senior managers around the world. The rapid evolution of marketable technologies - a key source of competitiveness - is entirely dependent on a company’s ability to effectively manage its product developments. Shorter lines of communication and relatively informal decision making can give smaller companies an advantage over large corporations, meaning that product innovation is one area in which smaller companies can potentially outperform larger competitors. There is certainly no shortage of product ideas and concepts flowing within SMEs. However, in a large number of cases, there exists an inability to bring successful innovations to the marketplace in a controlled and coordinated way. Vision and drive are not enough for successful on-going product developments. A large number of studies over the past decade have indicated that SMEs frequently suffer in the management of their product innovation process through a lack of structure. Constantly successful innovation requires discipline, good teamwork and the careful assessment of progress at each phase. A number of studies have indicated the urgent need to improve the competitiveness of European companies, and particularly SMEs, through improved product development. These results were also reinforced by findings from the market research survey undertaken within the scope of a number of EEC supported projects. All the marker research indicates that SMEs are ripe for support. A survey of SME’s across 5 Member States indicated similar results[3]:

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Only 17.5% of the sample could define their formal procedures for managing and controlling risk of potential new products, Only 22.5% could define any formal product innovation procedures in-house. 50% were totally dissatisfied with their current procedures for managing product developments and a further 35% were looking to improve same Only 17.5% had undertaken and/or implemented strategic training to support or improve their product innovation process.

However virtually all actions to date have focused on improving the product innovation process in larger companies where the resulting outputs are rarely directly transferable into SMEs, who require a more flexible less bureaucratic approach [5]. By looking at these good practices we have then adapted them specifically for SME usage and tested on a range of SME end-users. 2. THE PRODUCT MANAGEMENT PROCESS The GateWay roadmap breaks the product innovation process into a series of phases between idea and product launch[1], fig.1. Each phase is preceded by a GateWay, which is a formal decision point, a formal event / meeting, a review of project status against pre-determined deliverables/criteria, a provision of authority to proceed to the next GateWay.

Figure 1: The PROMISE GateWay Process. Each phase results in a set of Deliverables and they can be a target, a status, a milestone, a requirement or a measurable object. The performance of each deliverable is classified as Red, Amber or Green. Red means that the deliverable has not been achieved. A recovery plan is not available which provides confidence that the outstanding work can be completed before the next GateWay review. Amber means that the Deliverable has not been fully achieved but there is high confidence of completion based upon an agreed and documented recovery and verification plan. The Project Team has agreed the knock-on effects of delayed completion as containable. Green means that the deliverable has been completed to the required level of satisfaction of the reviewers. There has already been a significant degree of complementarity and information exchange between practices from large companies to SME’s and the results is the development of a complete toolkit (the PROMISE toolkit), suitable for SME’s, which focuses on: • •

Looking at what has proved successful in larger companies to provide the structure for managing the product development life-cycle Examining why and how these processes work

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Selecting those best practice approaches most suitable for adaptation to meet the flexible needs of much smaller organisations Undertaking significant adaptation Testing the findings in a number of smaller companies across Europe Refining outputs into support tools for widespread usage with guidance to process usage and customisation.

This resulting toolkit contains a series of inter-linked tools. These focus on practical and supported ways of creating and customising a phased and controlled process that matches an individual SME’s needs to optimise the management of their product developments, fig.2.

Figure 2: The PROMISE Toolkit. The Toolkit has been developed to assist users to follow the Integrated PROMISE Approach. This approach is concerned with improving the management of the product innovation process in smaller companies. It has evolved through a process of transferring, adapting, piloting and refining - on an iterative basis - good practice existing in exemplar companies. Use of the toolkit will assist you in: • • • • • • • •

Understanding the holistic process Assessing your company’s level of maturity in respect to product innovation, assessing its capability for a GateWay process, diagnosing basis for initial version of your customised GateWay and all the incorporated functional elements Developing your Action Plan for design and implementation Progressing through a full design and implementation process, with on-going refinement in respect of your GateWay structure, your deliverables, your criteria, your metrics, your customised documentation Developing your individual Training Action Plan and undertaking the necessary training – from introduction to the integrated process to running a gatekeeper review session; from team building to creativity for product development Utilising case study material to benefit from the experiences of previous users Linking to sign-posted tools and techniques – to help identify other processes or proprietary tools that can help you achieve your deliverables more efficiently Using the review workshop process to monitor and refine your in-house processes

The whole intervention process is shown in fig.3.

Figure 3: The whole intervention model for the application of the PROMISE Toolkit. Another important aspect is the product innovation profile (PIP) or 'pip score' process, which is used to position an organisation in terms of its level of product innovation maturity [6]. This is achieved by addressing three inter-related, but separately measurable, aspects of a company’s innovation process the products (or services) developed; the innovation process utilised; the way the product innovation process is project managed. Scoring on these 3 axes is at the heart of creating a replicable innovation register and benchmark, fig.4.

Figure 4: The Product Innovation Profile scoring. The approach itself focuses on using non-intrusive assessment and diagnostics methods and techniques to examine the organisation and determine their level of innovation in respect of product and/or service development. In particular the process utilises a facilitated workshop approach. The diagnostics utilised produce a score, which reflects their position in the three areas, showing the company’s product innovation profile as a PIP Score. The company’s current “position” is then evident together with the capability to set targets whereby the enterprise can improve such a score / profile and benefit from this initiative. Previous experience, piloting such techniques, indicates it is possible to offer a very fast track process - 2-3 days - to determine the register. Designing a framework for improvement of this scoring (ie. the targets) can be

achieved within a single day. An average three months period to implement changes and re-orientate the culture is followed by a re-test of the PIP scoring process to achieve a measure of change against the original register and benchmark. On average, significant changes (for the better) can be achieved within four months; with a climate shift in terms of continuous improvement in approximately 6-9 months.

3.

TRAINING SUPPORT

The toolkit is supplement this with material adapted from support training to assist the front-end tasks related to the creativity needs of product development ie. generating creative product concepts ideas and analysis of such concepts in respect of risk and “fit” with the company’s business strategy [4].

Figure 5: The process for using the PROMISE toolkit. The training support materials that are included as an integral element of the toolkit fall into two areas: 1. Those that are directly concerned with assessing, designing, implementing and refining your customised GateWay process including: • • •

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Introduction to the integrated PROMISE approach, aiming at gaining an understanding to the background to this development and the objectives of the approach. Introduction to the GateWay process. It includes the basic theory of operation of the GateWay process, as explained also in the product management process. Running an assessment & diagnostic (A&D) workshop. The A&D process, which culminates in the A&D workshop, has a core role in defining a company’s level of product innovation maturity. This helps determine the organisation’s capability for adopting a GateWay process and assists acquisition of the data required to design it. It also assists a facilitator gain an understanding of the host organisation’s operating mechanics – historical, present day and forecasted. The A&D Process is organised into three distinct parts: Pre - A&D: Introduction to the organisation, process, data collection and analysis A&D Workshop: practical assessment and diagnostic exercise(s) A&D Review: repeat of the A&D Workshop in a modified form after GateWay process implementation This support package has three distinct parts - advance preparation, facilitators guide and company guide. These parts contain guidance notes, programme agendas, references, work

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sheets, assessment checks and evaluation materials to assist either external intermediary or internal manager effectively facilitate the A&D process. GateWay design and management. A core tool, which assists both the design and implementation of the process within an individual company. The GDT provides the “rules of engagement” that will enable you to develop and fine-tune a working process that is customised to your specific company needs. The GDT enables users to design the phases and gates that best meet their requirements, build up their own checklists of deliverables and criteria, develop their internal guidelines for using the process, create internal forms for gatekeeping sessions and produce associated documentation [2] (fig.6). It also provides support for undertaking process modifications on an on-going, iterative basis. A training programme of 10 workshops are included that provide guidance with the implementation from the A&D (Assessment & Diagnostic) process to the review process where measurements are taken to determine the changes in the PIP (Product Innovation Profile). These are: a) "Where do we go from here" - A&D de-brief and GateWay implementation planning meeting b) "Getting started" - briefing core team c) "The first gate" - GateKeeping exercises d) "Rules of engagement" - optimising and customising principles e) "The nuts and bolts" - metrics & sign-posting f) "Creativity is the key” - idea generation g) "Problem solving" - reducing the risks h) "Keeping all the balls in the air" - project management i) "Reflections" - review of implementation j) "The Safety Net" - corrective actions and procedures

Figure 6: The position of the Gates in the Product Development Process. 2. A range of basic support skills. These are the core skills necessary to optimise usage of the PROMISE process - all with a practical bias towards product development issues. The innovation process needs to be managed in a creative and systematic manner. Project management is an

important component of the innovation process. Fig.7 shows the simplified hierarchy of this process.

Figure 7: The management of the product innovation process. The training included contains: • Basic project management, which contains the following elements: a) What is a project and how does it relate to the innovation process. b) The five elements of the project planning, c) The five elements of project execution, d) Case studies and exercises to reinforce above 10 elements. e) Integration of project management skills and techniques to the GateWay process. f) Sign post to the most relevant tools and resources. g) Specific application of the most relevant techniques • Creativity skills Creativity is a very broad area. Within the confines of innovation and product development, creativity is relevant in two principal areas: 1. The Idea Generation stage 2. The resolution of problems and the identification of opportunities within the product development process. A crucial consideration is the use of teams throughout the process, including management teams at the idea review and portfolio management stages and operational project teams for individual development efforts. The purpose of training in this area is to deliver a broad overview of creativity to participants, to help individuals to step ‘outside the box’ when looking at problems or resolutions and to learn a number of techniques which can be applied immediately within the organisation. • Team building (identifying skills, motivation, cross-functional, communications, etc). This module aims at defining professional development support for the human resources involved in the management of product innovation in companies. The team building session is used before the steps specifically related to the technical and organisational competencies necessary for the design and implementation of GateWay within an individual company. Team building is specifically recommended as a preliminary module because, creating a team - a flexible, effective, well functioning team that involves and exploits the different creativities and professional abilities of the core group involved - is one of the essential conditions for effectively preparing to launch a new product on the market. Team building courses are generally used as training sessions aimed at generating team working, irrespective of the specific task or objective involved. A main feature of this module therefore addresses the different kinds of team working. However this training is also directly related to the PROMISE focus of improving product innovation management. This is particularly the case in the latter stages of the programme, where specific exercises are provided to support the team in starting activities in a real working environment related to new product development. The material for the training modules incorporates a mix of: guidance notes, programme agendas, exercises, case studies, overhead transparencies, references, work sheets, assessment checks and evaluation materials.

4.

CONCLUSSIONS

From the application of the methodology to a number of end-users/intermediaries feedbacks it is clear that the principles of the process are similar and can be utilised by a majority of smaller companies. However the operating and maintenance procedures will, and should, vary according to size of investment, sectors and organisational processes. For end-users new to this type of approach it is clear that, because of the learning curve, the process slows things down initially. But fairly quickly results in a considerably improved situation on company-wide basis. Certainly all have reported that the process has provided a brake on too much work being taken on and has meant that discussions and decisions occur at the right time. Some of the benefits gained from end users of the methodology are summarised as follows: • • • • • • • • •

Shift to a Team "stakeholder" approach from a 'product champion' Enforced market and profitability considerations prior to prototyping Key question "can we sell this idea?" at product concept gate More 'rounded' market ready product innovations emanating from the GateWay process Significant reduction in lead time from product concept to commercialisation Improved multiple project management Improved finishing of projects – with controlled handoff between R&D and other departments and clearly established ‘ownership’ of tasks Improved control of project establishment, helping guarantee that resources will be available and deployed and defining when projects move between ‘proposal investigation’ stages into full development Improved control of ‘non-project’ tasks

The training module helps considerably the SME’s in appreciating the methodology and accelerating the application of the methodology to their work.

5.

REFERENCES

[1] Robert G. Cooper, "Product Leadership - Creating and Launching Superior New Products", Perseus Books, 1998. [2] Karl T. Ulrich and Steven D. Eppinger, "Product Design and Development", Irwin-McGraw Hill, 2000, 2nd. edition. [3] PROMISE web site. http://www.promise.org.uk. [4] TRIUMPH web site: http://www.triumph4u.com [5] Ν. Μπιλάλης, Α. Αντωνιάδης, Α. Βοσινάκη, και Γ. Κοντολιός “Ανάπτυξη και διαχείριση νέων προιόντων - Ο ρόλος των εργαλείων σχεδιοµελέτης”, ∆ελτίο Μηχ. Μηχανικών, 2001. [6] K.A. Jones, C. Hall and N. Bilalis, “Product Innovation Profiling for European SMEs - Utilising the PIP SCORE approach to enhance product innovation through supported training”, 31st ECBS, Dublin, Sept.2001.