From Factory Floor to Your Cubicle: Management Be Lean? PCS 2013

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1 From Factory Floor to Your Cubicle: Can Product Management Be Lean? PCS 2013

2 Why are we here? One product concept in seven becomes a winner 44% of product development projects fail to achieve their profit targets 49% of product development projects miss their launch date targets (by 35% of their original schedule) 28% of businesses don t measure their new product development results Source: Cooper & Edgett, Lean, Rapid, and Profitable New Product Development, 2005 Pivotal Product Management, LLC 2

3 How do Best in Class companies perform? 77% of product efforts meet profit objectives 80% of product efforts are considered successful 79% launch on schedule, hdl slippage is reduced to 17% Source: Cooper & Edgett, Lean, Rapid, and Profitable New Product Development, 2005 Pivotal Product Management, LLC 3

4 What conditions create sustainable success? Speed: Not necessarily first to market, but best to market, on time Delivers competitive advantage Results in higher profitability Keeps pace with fast changing markets Source: Cooper & Edgett, Lean, Rapid, and Profitable New Product Development, 2005 Pivotal Product Management, LLC 4

5 Bosses want more, faster! Bosses want more, faster! Pivotal Product Management, LLC 5

6 Speed = Lean? Lean s goal: Find theshortest, fastest path to deliver maximum customer value. How can we leverage Lean principles in Product Management to get more value to market, faster? Pivotal Product Management, LLC 6

7 Key Lean Principles and Practices Reduce waste Value stream analysis Right metrics: focus on value Quantifying the cost of delay Pull, not push Kanban & WIP limits Flow Small batch, moving to flow Respect for people Decentralized decisions Continuous improvement Pivotal Product Management, LLC 7

8 Value Stream Analysis Idea Submit to product council Approve Assign PM Opty Analysis Submit business case Approve Assign dev team Vl Value Waste Design, Build Test To verification Validation To Operations Launch Gain value Value Waste Efficiency = Total Value/ (Total Value+Total Waste) Pivotal Product Management, LLC 8

9 Lean ing the Front End Idea Submit to product council Approve Assign PM Opty Analysis b Assign Approve dev team Submit business case Identify value stream Strategic bucketing Portfolio strategy Initial screening and decision criteria Customer Development Lean or Business Canvas WSJF or Cost of Delay Prioritization WIP Limits, Smaller Batch Size Pivotal Product Management, LLC 9

10 Lean ing the Back End Design, Build Test To verification Validation To Operations Launch Gain value Poppendiecks 7 Wastes in Software Development 1. Partially done work: Smaller batch sizes, re prioritize between batches 2. Extra features: MVP, Validated learning 3. Re learning: Dedicate teams to product lines 4. Hand offs: Cross functional teams 5. Task switching: Dedicated teams, stable teams, smaller batchsize 6. Delays: Limit Work In Process 7. Defects: Team closer to customer/po, Test Driven Development, Continuous Integration Pivotal Product Management, LLC 10

11 Lean ing the Back End Design, Build Test To verification Validation To Operations Launch Gain value A/B testing Eliminate though better Customer Development Measurable marketing Pivotal Product Management, LLC 11

12 Top Factors in Product Success Correlation of factors: With time efficiency With profitability and on time launch (NPV, Payback) Unique, superior product No effect Customer focused Cross functional teams Front end loaded Sharp, early product definition Market attractiveness Quality of the launch = perfect 1:1 correlation Source: Cooper & Edgett, Lean, Rapid, and Profitable New Product Development, 2005 Pivotal Product Management, LLC 12

13 References Cooper & Edgett, Lean, Rapid, and Profitable tabenew Product Development Ries, Lean Startup Blank & Dorf, Startup Owner s Manual Reinertsen, The Principles of Product Development Flow Poppendieck, Implementing Lean Software Development Leffingwell, Agile Software Requirements Pivotal Product Management, LLC 13

14 Want more? Learn more about Lean Product Management Upcoming workshops Pivotalpm.com/LeanPMI Onsite Pivotalpm.com/LeanPMI Public Contact me: Pivotal Product Management, LLC 14