Teams that develop new products are challenged to produce a high-quality, valuable solutions in as short a time as possible and within a tight budget. We all know that slippage in time-to-market; decreased functionality, or increased cost can have major negative consequences for the business, and may even determine the success or failure of a new product launch.
One major cause of such slippage is confusion within the team around roles and responsibilities. If nobody on the team knows who is empowered to make a certain decision, the decision can go unmade, wasting valuable time, or be made by the wrong person – the person who does not have the knowledge to make such decisions.
Many new product development (NPD) teams try to prevent this kind of “wheel spinning” by writing extensive Role Descriptions for each member of the team, attempting to make it clear who is “in charge” of each type of decision. Or they may use more generic corporate job descriptions for the same purpose. The problem is that most NPD projects are fluid and dynamic and problems may arise for which there is no clear owner. A common example occurs in deciding the feature set of a product or solution at its launch date. Who can decide? Is it the Project Manager? The Product Manager? The funding Business Leader? A major customer? Indecision in the feature set, or “creeping featurism” is one of the leading causes of project slippage and it’s almost always due to confusion about who can make the call.asd
Tenet #4: Apply uncertainty.
In last week’s blog, the critical need to agree on one unit of measure, money, was addressed. Even the toughest qualitative concerns about a project can be reduced to an estimate of the financial impact on that project. And any estimate is better than none, since it will force the discussions the team needs to have. Without this discipline, advocacy for a given project can degenerate into debates where the winners are not necessarily the best projects. Insist on one common unit of measure, and that measure should be money.
In Tenet #2, I admonished you to insist on being presented with alternatives when offered an opportunity. An effective PPM process must have options from which to choose. In some cases, these options may be modifications of the scale of the project being considered. But Tenet #2 should not be confused with this tenet, Tenet #4, “Apply uncertainty”. In this new tenet, we have picked a project baseline from the alternatives presented. We plan an “expected outcome” in all of the project measures. Uncertainty analysis is then applied by looking at each major variable (project scope, project schedule, project cost, market acceptance and market share taken, etc.) in the project and stating a range of probable inputs. In the end, it is possible to show how the primary financial measures (like NPV of cash flows) change over the range from worst case, to expected value to best case. Note that this uncertainty analysis is not just done once during the proposal phase and then forgotten. It must be carried with the project throughout the execution phase, updated as necessary and used at any time to compare to other potential projects.
There are at least 3 reasons to apply uncertainty: