HBR's 10 must reads on innovation. The negative effects of 6 fallacies abour product development are explained, and practical suggestions to overcome them will help companies to avoid the mistakes and keep projects on track.

1. MythsOfProductDevelopment
HBR’s 10mustreadsoninnovation

2. Stefan Thomke
ProfessorofBusinessAdministration
HarvardBusinessSchool
Donald Reinertsen
PresidentofReinertsen&Associates
The authors
The full article is available at Harvard business review

3. Technologycommercializationmanager
ExploitTechnologiesPte Ltd (ETPL)
Agencyfor Science, TechnologyandResearch (A*STAR, Singapore)
B. Eng &Ph.d(Engineering)
NanyangTechnologicalUniversity
Singapore
M.B.A.
INSEAD
Fontainebleau, France
Presentationby
LI Wei

4. Many companiestreat
MANUFACTURING
product developmentas itwere

5. The managers
WANT
✔Detailed and
predictable plans ✗Schedule variations
and waste

6. It works for factories, but
backfires
with product development

7. Designing
Products
Manufacturing
Products

8. Manufacturing is
repetitive and predictable

9. For productdevelopment
The output(information)
can beanywhere
Requirements
constantly
change
The tasks
are unique

10. It is important to appreciate the
difference and avoid fallacies

11. 6
There are
that undermine
product development
fallacies

12. 1.
High utilizationof resource will
improve performance

13. The managersoverlook
variability
Of development work

14. The variabilitycancause delays
dramaticallyasutilizationincreases
Resource
Utilization
Waiting
Time
50%25% 75%
30x
100%

15. And, the increased R&D inventory due to delays is
predominantly invisiblebecause they largely
consistof information

16. Besidesthecommon solutionto providea
capacitybuffer, thereare other viablesolutions
Change the
management
controlsystem
Selectively
addextra
resource
#
Limitthe
numberof
projects
Make R&D
inventory
“visible”

17. 2.
Processing work inlargebatches
will be more economical

18. The managers
incorrectly believe that
large batches produce
“economies of scale”

19. Large batches do reduce the
transaction cost, however, they
increase the holding cost
Transaction Cost
HoldingCost

20. Batch Size
Cost
Holding Cost
TransactionCost
TotalCost
Optimal BatchSize
The optimal batchsize isthepoint where the combined
holding andtransactioncost islowest

21. OptimalBatch Sizes
Astonishing
results

22. 3.
Teamsneed tofaithfullyfollow
theirdevelopment plan

23. The managers believe that
deviations from the plan is
poor management
and execution

24. However, many events can disapprove the
initial assumptions of the original plan.
Newtesting
results
Unexpected
information or ideas
Shift ofcustomers’
preferences

25. For all those reasons, sticking to the original
plan can be a recipe for

26. The plan should be treated as an
initial hypothesis that is
constantly revised

27. 4.
The sooner a project isstarted,
the sooner it will be finished

28. The managersbelieve thatworks startedearly
do not need to be done later

29. Such thinking usuallyleads to
Moooooooooore
projectsa companycan vigorouslypursue
THAN

30. bite off more than
you can chew
Don’t

31. It will causethe dilutionof resource

32. It will causethe dilutionof resource
DANGEROUS
And, itis

33. Resource
Insufficient
E F
Slow
Project Progress

34. Project Duration
Cost andschedule overruns
Increases
Increase Exponentially
When …

35. CONTROL RESIST
New project
startingrate
Temptationto stealresource
from ongoing projects
We must

36. 5.
The more features aproduct has,
the better customerswill likeit

37. Product development teams seem tobelieve that
addingfeatures creates valuefor customers

38. Companies that challenge the belief usuallycreate
products thatareelegant intheir simplicity

39. To do that, the development
team needs to definethe
problem clearly
problem

40. Itmakesthe team to
FOCUS onthe few
features that really
matterand determine
what to hide or omit

41. 6.
The project will be more successful,if the
team“get it right the firsttime”

42. Requiring success on thefirst pass biases
teams towardthe least-risky solutions

43. To avoid makingmistakes,teams follow a
linear processin which each stageis
carefully monitored
Go/ NoGo
Milestone1
Go/ NoGo
Milestone2
Go/ NoGo
Milestone3

44. This processcan cause
project overrunsbecause the
feedback ofthe problem is
delayed

45. Fail early,failoften

46. Rapid
experimentation
New information
Diverse ideas
Crucial to
innovation projects
i

47. Summary

48. 6FALLACIES
Highutilization Largebatchsize Followingplanstrictly
Startingprojects
toosoon
Too many
features
The mindsetof the
firsttime right

49. Avoid the mistakesand
keep projectson track

50. More presentations at
www.innodiary.org