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Learning Based Project Management. Idea. Gate 1. Stage 1. Gate 2. Stage 2. Gate 3. Stage 3. Gate 4. Stage 4. Gate 5. Stage 5. PIR. Stage-Gate New Product Development Process. Pre- Commercialization Business Analysis. Decision on Business Case. Initial Screen.
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Idea Gate 1 Stage 1 Gate 2 Stage 2 Gate 3 Stage 3 Gate 4 Stage 4 Gate 5 Stage 5 PIR Stage-Gate New Product Development Process Pre- Commercialization Business Analysis Decision on Business Case Initial Screen Second Screen Post Implementation Review Post-Development Review Ideation Preliminary Investigation Detailed Investigation (Build Business Case) Development Testing & Validation Full Production & Market Launch Source: Robert G. Cooper, Winning at New Products, Addison-Wesley 1993
Three Dimensions of Project Uncertainty Dimension 1 Organization Categories of Uncertainty Resource Market Technical Unanticipated Dimension 2 Latency Anticipated - Routine Showstopper Criticality Dimension 3
Categories of Uncertainty (T, M, R, O) Technical Uncertainty
Categories of Uncertainty (T, M, R, O) Market Uncertainty
Categories of Uncertainty (T, M, R, O) Resource Uncertainty
Latency and Criticality Dimensions of Uncertainty Criticality Low High High Latency Low
Cell 1: Anticipated and Routine • Can be converted into assumptions at the outset • Incorporate into an assumptions testing plan that guides the project team’s ongoing activity: • From the outset of IBM’s electronic book project, it was understood that dramatic advances in display resolution would be required before consumers would convert from traditional paper books to e-book counterparts. So part of the project effort aimed at implementing a display technology development plan. • GM’s hybrid vehicle team understood that significant advances in battery technology were critical to their success. • Nortel’s Channelware project team realized that they would have to determine which software customers would be willing to rent rather than buy. • Air Products knew that it would need a partnership with a ceramics R&D firm to gain access to materials expertise.
Cell 2: Unanticipated but routine • These uncertainties can be converted into assumptions as they occur and can be incorporated into the periodic revisions to the assumptions testing plan that guides ongoing activity. • In one initial field application of DuPont’s Biomax®, the material degraded too quickly. This flaw was not known in advance but was addressed through routine procedures for modifying the material’s characteristics. • In Nortel’s Channelware project, one of the project team members had to take a leave of absence for health reasons. His departure created an uncertainty, but could be resolved in routine fashion by recruiting a new team member with similar expertise.
Cell 3: Anticipated Showstopper • A critical discontinuity or transition that can be anticipated and is amenable to planning and preparation. Requires the development or acquisition of people, resources, competencies and relationships. • Most of the projects utilized government R&D funding for technology development, and these contracts had clear end dates. Project teams knew in advance that new sources of funding had to be developed if they hoped to carry their projects forward. • Some projects, if successful, were clearly destined to become part of an existing business unit. In these cases, the project teams knew that they would have to accomplish the hand off to the business unit or the project would languish. • In some projects, the retirement date for the project champion was announced and another champion would need to be recruited if the project were to continue. • These kinds of discontinuities can be anticipated. Project teams can make preparations to deal with them.
Cell 4: Unanticipated Showstopper • Discontinuities that inflict major shocks to the project. Project level life or death crises: require rapid, aggressive responses to prevent loss of organizational support. • In one case, project continuation was dependent on enlisting a manufacturing partner. After a thorough search, the best candidate partner was identified and a “courtship” ensued. After a year of negotiation, however, the potential partner abruptly pulled out. The project team headed into its annual evaluation uncertain of continuation of its funding.
Latent and Derivative Assumptions: Example Fact Pattern • DT Corp specializes in communications hardware technologies for the home market. They need a new business platform. • A corporate venture team has been tasked to identify and develop a new platform for release Q1 2009. • Challenge: Leverage our current technologies into the small-medium business market. • The CV team considers an adapted version of the intercom used in large homes, with added features: • Digital Displays • Records communications exchanges • Communications can be blasted or targeted • Can be integrated with video for use on screens in meeting rooms • Limited to within building communications for now, but platform strategy is to develop cross building communications mechanisms • CV team is asking for money to test the idea out and move forward with incubation.
Elevator Pitch The Interactive Intercom system leverages DT Corp’s technology into a whole new platform for growth: the Business customer. Enabling two way communication and broadcast communications, in sync with data or video on screens across the building’s meeting rooms simultaneously may be beneficial for companies needing to disseminate information broadly or get decisions made based on a broad constituency in the company. The recording feature enables documentation that communications were effectively transmitted and that decisions were, in fact, made. The market potential for these systems is DKK 2.1 billion ($US 350 million), and annual technology upgrades add more promise. If DT Corp were to realize 5% market share, we would enjoy DKK 105 million ($US17.5 million) from this venture in the first year, which would account for a 20% growth spike in our revenue. Given that the technology already exists, costs would be minimized, and our ROI is estimated to be approximately 18% for the first year.
Latent Assumptions???? • Can make this happen by Q1 2009. • Can use same sales force??? • We understand the buying cycle in small-medium businesses. • Technology that’s useful in the home market is readily adaptable to the business environment. • Can divert engineering resources to get this developed.
Derivative Assumptions?? • Accompanying Primary Assumptions???
Derivative Assumptions Market Potential is $350 million 5% market share $17.5million in revenue Costs will be minimized, so can achieve 18% ROI. Accompanying Primary Assumptions # of potential users? Price? What value does the market see in this? Why would even 5% adopt it? What will be the advertising that supports us getting 5%? Based on what price? Howso? Engineering development? Mktg costs?
A Hypothetical Example…… Galactic Travel Corporation
Business Concept We believe we have a way to transport living beings nearly instantaneously from one specific location to any other specific location in the galaxy. This would alleviate traffic congestion, waiting, and the costs associated with other forms of transportation infrastructure. We believe we have the capability to temporarily decompose an individual into his/her unique molecular structure, transport the molecules through space (and perhaps time) using electro-chemical and magnetic fields as our energy source, and recompose them upon their arrival at their destination. We believe this could revolutionize transportation as well as societal infrastructure, enabling gatherings of members from across the globe and, indeed, the galaxy, as well as individuals to go wherever they want instantaneously. We face a number of technical challenges, chief among which is the reassembly upon arrival, but believe this can be overcome. We are asking for a go ahead to take the next steps in exploring this opportunity.
Learning Loop 1 • For each category • List knowns (provide source) • List unknowns/assumptions • Work on latency • Identify Criticality • Devise tests for most critical ACROSS the four categories • Develop time/budget requirements
Technical Issues? • Knowns (+ Evidence) • Our composition is knowable (DNA sequencing is now available) • Living beings can be decomposed using cryogenics technology, like freeze drying. (this has been done with mice..it’s in the literature). • Physical things can be built atom by atom, because of the existence of atomic force microscopes and demonstration of atomic precision manufacturing at the nano-scale level. • Experiments in plasma physics have indicated that techniques exist for directed movement of molecules.
Technical Unknowns • What will the quantum effects of this be? • Assume: Chaotic movement of the decomposed molecules. • How do we transport the molecules while maintaining a blueprint for reformation? • Assume: We can find a way to send information along with the molecules. • How do we keep the molecules together during transport? • Assume: We can develop a boundary. • How fast can we get the molecules to travel? • Assume: At least the speed of light (allows for instantaneous travel). • How far a distance can molecules be transported in a directed manner? • Assume: Infinitely far. Red = Critical Assumptions
Market Knowns: • The cost of individual transportation is escalating (gasoline prices). • There is a strong lobby against applying cryogenic technologies to humans (recent news) Unknowns/assumptions: • Potential application markets that may value this: • CIA, FBI • Major corporations (helps global corporate communications). • NASA (for space exploration) • Who else?? • People will value the time savings. • How manage potential fear of mistakes? • They will be willing to invest in necessary transportation equipment. • They will be willing to pay both a fixed investment component and a usage fee component. Note….this one is way too early. Not necessary for LL1. We have no idea yet.
Resource Known • We have a core team with expertise in transportation methodologies. • We have no capabilities in decomposition or recomposition of living matter. • We have no capabilities in developing blueprints of individuals’ composition. Unknown • Who might be potential partners for #2 and #3 above? • What will be required to engage them in this project?
Organizational Issues Knowns: • We are a transportation company. (Annual report). • Senior leadership is committed to white space opportunities. (Recent podcast) • Sr VP of largest division (personal transport) has resisted previous innovations that will cannibalize his current businesses (trains, plane rental) • We are committed to service based business models. (per recent strategy statements) • We have never successfully co-developed anything with a partner. (Experience review). Unknowns: • How do we manage the issue of cannibalization? • Assume that recent commitment from the top (#2 above) means actions will be taken to protect this project from #3 problem above. • Do we want to sell equipment? Or service? Or both? • Assume service only. • Are we prepared to partner? Or are we going to try to vertically integrate into decomposition, re-composition and blueprinting? • Prepared to partner. • Is senior leadership prepared to move into this particular strategic domain of transportation? • Assume yes.
Technical Tests and Learning • How do we transport the molecules while maintaining a blueprint for reformation? • Assume: We can find a way to send information along with the molecules. As of 5/29/08: Got 2 partners. One developed a blueprint based on DNA sequencing (biology), and the other from a fingerprint scan. DNA sequencing more accurate….Fingerprint scan more cost effective. Next steps: What is the potential for cost reduction with partner #1 and what is the potential for increasing accuracy with partner #2? (Are these the most Critical on the list of technical uncertainties? Do these impact the other dimensions of uncertainty?) • How do we keep the molecules together during transport? • Assume: We can develop a boundary. As of 5/29/08: Ran two tests: a. Control existing forces in a manner that would allow cohesive transport (Vanderwall’s forces, Electron density forces) b. Apply something physical to the decomposed cryogenized matter, e.g. a nano-coating sealant. Both test failed. Next steps: Rather than taking a cryogenic approach to decomposition, convert the matter to energy using plasma physics. Explore properties of Debye Spheres. Emergent Uncertainty: Can we do this while maintaining the blueprint to enable re-composition?
Market Tests and Learning • Potential application markets that may value this: • CIA, FBI • Major corporations (helps global corporate communications). • NASA (for space exploration) • Who else?? As of 5/29/08: A presentation at a technical conference by one of our scientists regarding the potential for plasma physics to play a role in transportation, along with presentation of initial data demonstrating plasma as a medium for carrying cryogenic material drew attention from an Air Purification company. They believe this can have major applications in moving specific types of particles that occur naturally in some geographies to other, locations that need such particles. New Uncertainty (Organizational)…Is this a business we want to get into? Two major corporations (Pepsico and Google) have expressed interest in a demonstration device. New Uncertainties… • When will we have a demo device? (T). • How structure the arrangments with these two companies? (R)?
Resource Tests and Learning • Who might be potential partners for #2 and #3 above? (re-composition and blueprints?) • What will be required to engage them in this project? As of 5/29/08: Have identified a potential partner for #2 above, but cannot convince them to engage with us. Continuing to look for others. Have found university center working on #3. Have joined that center. New Uncertainty: What will be our IP position given our work with the university? Assume we will want exclusive ownership (R, O)
Organizational Tests and Learning • Are we prepared to partner? Or are we going to try to vertically integrate into decomposition, re-composition and blueprinting? Assume we’re prepared to partner. As of 5/29/08.. Yes, permission to partner on decomposition and re-composition, but not on blueprinting. Keep that as a new domain and build competency. (Note interaction with IP issue raised above). Emergent Uncertainty: How get access to necessary talent for blueprinting: Assume: Hire from the university whose center we just joined. 2. Is senior leadership prepared to move into this particular strategic domain of transportation? Assume yes. As of 5/29/08.. Discussion with senior leadership indicates enthusiasm about the military applications for now. (Impacts M).
Process • Team works from a business concept. • With coaching, initiates first learning loop. • Flipcharts, markers, and concentrated time. • End of session: critical uncertainties and tests. Timeline and budget request to complete tests. • At test completion…project review/work session. • Update on learning • News on redirection. • New uncertainties that emerged. • Next critical uncertainties, tests and budget requirements. • The team drives the project direction. No pre-determined Gates. • Three to four learning loops…can tell if you’re gaining traction and should continue. • Conduct a learning plan for each application and Discovery Driven plan for each one that appears interesting. • Outcome: Business Proposal.
Project Management Tools Throughout DIA Opportunity Articulation (Opp Rec Framework) Business Concept Learning Plan BusinessProposal Discovery Driven Plan Tested Business Proposal Implement Biz Proposal Business Plan Discovery Stage Gate Incubation Acceleration Operations
