Okay, okay, we all know that “jumped the shark” jumped over itself several years ago, but there has not yet arrived an adequate replacement for the tired phrase. But the question remains, has Open Innovation (OI) reached the level of maturity (or maybe “saturation point”) where it starts to become obscured by attempts to apply it outside of it’s original boundaries?
Case in point, I submit the following article: “How Ad Agencies Can Make the Shift to Open Innovation,” which appeared on Bloomberg’s website on March 20. Jumping on the opportunity to piggyback on the mainstream promotional saturation for the upcoming season premiere of the A&E hit TV show, Mad Men, which I am, in turn, doing myself by writing this post, the article examines the crowdsourced Superbowl ad for Doritos as an example of OI in advertising.
While it’s clear that the Internet and social media have forever changed the way companies interact with markets, there really is nothing that revolutionary about what Doritos did. Of course, the same can be said for all of Open Innovation, as many like to point out that all it does is put a new spin on the strategic partnerships and alliances that have been part of the business world forever. Having customers create and vote on marketing campaigns is an age old technique, it’s just that Facebook and Twitter now provide greater reach and efficiency than print ads and broadcast commercials. The methods remain pretty much the same, it’s the tools that change.
The many public successes of Open Innovation will likely keep it as an active term for product development techniques that involve one or more parts of the value chain as an integral player. After all, the attractiveness of OI is what drives it being borrowed to describe other similar activities such as in the ad world.
UPDATE (04/04/13): Since publishing this blog post, we’ve received input from many on how to improve this presentation and will be publishing a revised version in the near future. Please post any additional feedback you may have in the comments section.
Over the years, there have been many different attempts to translate the Toyota Production System (TPS) into the world of product development. Toyota’s recent struggles in the last few years have tempered some of that, but most still agree that TPS’s “Lean” methods are solid and contain a lot of appropriate logic that R&D can take from their shop floor brethren.
As expected, many of the first attempts at lean product development were a bit shallow, merely offering superficial translations of lean methods and often focusing only on the small and simplistic tools of “waste elimination.” Many books have been published ranging from the “orthodox lean” (that which tries to stay as close to Toyota’s specific methods as possible), through “reformed lean” (that which blends lean principles with similar processes such as “Agile” software development) and finally what we call “hybrid lean” (attempts to graft lean tools onto existing methods). What’s clear from examining these trends is that Lean Product Development can mean many different things depending on who you learn from.
Although it is a few years old now, I created the presentation below, “The Genetics of Lean Product Development” to try and clarify the history of all things claiming the “Lean Product Development” label. Starting with a brief history of lean manufacturing, the presentation goes on to flesh out all the steps that took lean out of the shop floor and a listing of all the major players involved. Today we bring you this presentation through the magic of slideshare.
The biggest mistake made in lean product development is made by those who simply try to copy TPS tools into R&D with no consideration that these two entities operate on different clockspeeds and on a completely incompatible set of economics. It is for this reason that we gravitate closely to the work of Don Reinertsen, whose approach to LPD is finely tuned to the engineering and R&D environment and is grounded in what makes the most sense in terms of cycle time and profitability.
While it’s certainly cliche, it bears repeating the hard truth that ideas are a dime a dozen, but the means to execute them successfully is a rare and often missing element in innovation. You can also add that the ability to separate the wheat from an enormous volume of chaff, and to tell the pyrite from the real gold, is equal in importance.
In this webinar featuring Strategyn’s Tony Ulwick, author of What Customers Want, he digs a little deeper into why this is so. With open innovation, Internet punditry, and volumes of customer research science, product developers are awash in idea sources. With the current computerization and connectivity onslaught in technology (cars for example), plotting the next generation of product features can be a daunting task. When’s the right time for your clothing line to add GPS functionality? Should you replace instruction manuals with onboard tutorials? Which side of the coin will equal market growth and fatter bottom line and which one will cause customers to jump ship to the competition? The fine line between success and failure can make a wrong step quite costly.
As Tony points out succinctly, what most lack is a logical, metrics-based method for filtering all your best ideas so that you can have confidence to invest in what will have the greatest return. But this is not as simple as figuring out a customer delighting feature, there are additional strategic considerations where most don’t expand their analysis. For example, does your idea represent a market that you are positioned to excel in? Does it fit your company’s overall strategy? Even the best product ideas may not hold up to important business criteria.
If you play any kind of role in new product development and aren’t familiar with the work and contributions of Preston Smith, then you should seriously question the completeness of your professional education. Co-author with Don Reinertsen of the book, “Developing Products in Half the Time,” I count Preston Smith as one of a handful of people who taught me how to truly judge what makes a difference in being a successful product developer.
You can have all the black belts and certificates you want, but without having a sound fundamental understanding of the total system’s economics, you’ll be like a power tool with no electricity. The work of Preston Smith is that electricity that can turn inanimate knowledge into a productive weapon against failure.
The most important concept that Preston teaches is what’s best known as the “cost of delay.” Ever since cycle time and time-based competition was identified as a critical determinant of market success and failure, Preston was one of the few leading the charge for examining process economics to steer decision making. While most were pursuing speed at all costs, Preston and other like-minded contemporaries were guiding people to express things in dollars and cents. If you knew that every day of delay in development was costing you $20K in lost market revenue, well, it made things much easier to prioritize.
I could fill a blog every day for a year discussing Preston’s contributions to industry and to myself personally, but what I’m actually writing about today is to help spread the word about Preston’s pending retirement and his last gift to all product developers. Preston will soon be closing down his consulting firm, and with it, his website – www.newproductdyamics.com. For many years, Preston has been freely sharing much of his intellectual property, articles, publications, and more, but soon this knowledge will be made more rare.
Preston has asked me to help let people know that this is the last chance to download any material that you may find of use from this site. I also fully endorse picking up his books, and if you can only get one, get DPHTT, mentioned above. Management techniques are trends that come and go, but the sound thinking behind Preston’s work is fundamentally embedded in the NPD process and will continue to stand even long after his website is gone.