Recently, I ran across an interesting blog, by Robert I. Sutton, called “The Conversation”. Sutton blogs about skills that managers need to master for top performance as a leader. His post of 27 August 2010 is titled “If You’re the Boss, Start Killing More Good Ideas.” You can read the post by clicking here.
Sutton offers great advice for New Product Development (NPD) programs, as well as “bosses,” to kill a few good ideas along with the “bad” ones.
Obviously, we can all agree that culling “bad” ideas will enhance and enrich the New Product Portfolio. With a healthy idea pipeline, the number of “good” ideas will still outweigh the available resources. Best Practice firms studied by the Product Development and Management Association (PDMA) demonstrate one successful new product commercialized for every four ideas generated vs. one per nine ideas in the rest of companies (Reference: Barczak, et al., JPIM 2009, 26:3-23). Over-simplifying the situation, if just one employee is assigned to work on just one idea through Stage 1 (Opportunity Identification), a firm can save over $230,000 by eliminating these five so-called “good” ideas. (Assumptions: one development engineer costs the average company $300,000 per year all-in and one idea takes eight weeks to progress to Gate 1.)
Portfolio Management (PM) is the preferred tool for real-time planning and ranking of NPD projects. PM is a first and foremost a decision-making tool to help managers prioritize ideas for New Product Development and for driving success at commercialization. No matter how large or how small your firm, you can use PM to evaluate new products via financial metrics and non-financial scorecards (preferred) to ensure alignment with key innovation strategy elements. Ensuring that ideas align with strategy will force both “bad” ideas and the marginally “good” ideas to be killed, thus improving the overall value and efficiency of the NPD portfolio.
So, as Sutton details in his blog, good bosses, and might we add good team leaders and good NPD project teams, should start killing some of the good ideas, too.
Image of bosses courtesy of Return on Reputation
originally posted 2 September 2010
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