Listen to the podcast (about 5 minutes). [audio:https://0a11b2.p3cdn1.secureserver.net/wp-content/uploads/2012/06/7-June-2012-Idea-Incubator-podcast.mp3|titles=7 June 2012 Idea Incubator podcast]
Trevor was recently promoted from a staff engineering position to the lead machinery engineer on a project team. The project includes building a new factory that will produce 100 million units a year.
Glenda was also recently promoted at her company after serving five years as a brand manager to the lead marking advisor for a project team. The project includes enlarging an existing production line to add innovative features to a popular product.
At first glance, Trevor and Glenda’s fates seem similar. Both have been given great opportunities to work on exciting, and challenging, projects that are important to the long-term success of their firms. Yet, the project outcomes turn out dramatically different based upon the team structure and management goals for these two projects. Let’s check in again with Trevor and Glenda.
As Trevor begins reviewing the documentation in place for the one-year old project, he notices that his predecessor in the lead machinery role had highlighted the word “cost” numerous times. Weekly budget review meetings are scheduled with all of the team members, including sub-teams, lab technicians, and the field construction workers. Design reviews include the functions and lead technical team members, like Trevor, but are also attended by at least one of the eight cost engineers assigned to the project.
Meanwhile, Glenda’s team has undertaken a concept evaluation study utilizing a prototype that includes 80% of the new product features. Weekly team meetings are attended by plant operations, the R&D staff, marketing team members (led by Glenda), the brand and product manager, and facilitated by the project manager. A typical meeting might include a discussion of how the new manufacturing equipment will be integrated with the existing equipment to deliver a quality product that customers will continue to purchase. Other meetings are spent reviewing comments from potential customers that participated in focus groups on the overall experience of using the new product.
Time marches on, as it does, and Trevor’s team finds itself on schedule to attend the ribbon-cutting ceremony at the new factory. Unfortunately, the project has run 21.7% over the original budget, according to the consensus opinion of the eight cost engineers and their newly appointed budget manager. There was a significant amount of rework in the project. The team members are painfully aware of equipment that was sized too small to produce 100 million units, but had provided an initially lower cost to purchase. Additional costs arose due to last-minute rush orders because the project had delayed decisions by the senior executive assigned to monitor the project. More expenses have been incurred as the firm spends money on expensive television ads and a huge media blitz to counter a competitor’s launch of a nearly identical product just three months earlier.
Today we find poor Trevor and his few buddies from the machinery department staring into half-empty beers at the neighborhood pub, bemoaning their misery.
At two large tables in the same pub, Glenda and her project team are laughing and toasting their new product’s grand success. They had been hoping for a
3% market share increase but early sales reports were showing as much as 6% gain in some regions. The company was even written up in the New City Times newspaper and praised across the blogosphere for delivering an innovative, quality product to a ready and buying public.
What’s the moral of the story? Trevor’s work group was focused on only one element of the profitability equation: Cost. Glenda’s team, on the other hand, dug deep to understand customer needs and valued the consumer’s positive experience toward generating profits.
Success in new product development depends on cross-functional teams with an external focus on the customer requirements.
To learn more about cross-functional teams for new product development, you might be interested in these additional resources.
- Proper Project Staffing,
- How to Play Well with Others, and
- Three Ways Organizational Culture Influences Innovation.
Image of factory courtesy of Anna Audette.
Image of people laughing courtesy of Visual Photos.
© 2012 Global NP Solutions, LLC
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