Three steps to engineering and marketing strategic alignment

In today’s global markets, the need for innovative solutions is greater than ever. Increased product complexity means high cost of fixing or updating products. Increased competition means that products need to satisfy market needs well to succeed. Concurrent engineering across complex supply-chain also necessitates much better alignment between marketing and R&D. A lack of strategic alignment between marketing and engineering leads to many issues:

  1. Difficulty adapting to changing market needs
  2. Limited business/marketing visibility into development
  3. Differing expectations about project objectives/timeline
  4. Disconnected plans and wishful launch dates
  5. Late changes and cost overruns

Here are three steps organizations can take to better align marketing with engineering, product or technology development:Read More


User-centric Design – Volvo Example

Image From Autoblog

An interesting post at Autoblog has some data about product usability:

“Volvo CEO Stefan Jacoby has said his company’s products are “too complicated for the consumer,” according to Automotive News. Jacoby said 75 percent of Volvo customers don’t know “all the possibilities they have with their car.” He contrasted the automaker with Apple’s intuitive products, which make consumers feel in control of a device instead of overwhelmed by its capabilities.

In the past, we have discussed user-centric design and what we can learn from Apple. It is relatively easy to design pure hardware or software user interfaces. It is also relatively easy to manage pure hardware or pure software development efforts. Challenges arise when the product integrates custom hardware with integrated software: As development cycles, design processes and testing methodology tend to be quite different. What is a potential solution?Read More


Need for Structured R&D Roadmaps – Daimler Example

Source Daimler
It takes a long time to develop new technologies and integrate them into products. The wired article How Daimler Built the World’s First Self-Driving Semi has a great example:

Daimler, which owns Mercedes-Benz, has been working on autonomous driving for two decades.

As amazing as this thing is—it’s a fully autonomous 18-wheeler that works—company execs say it won’t can’t change lanes on its own, it won’t be market-ready for a decade, and could never replace human drivers.

Clearly, developing technologies takes a long time. So successful development needs intermediate productization of technologies.

Much of the technology in the Inspiration—the radars and cameras, the computing power and electrical architecture—has a long track record of commercial use in active safety features like lane departure warning and adaptive cruise control.

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Is Concurrent Engineering Beneficial to Complex Systems?

Source Jalopnik

Concurrent Engineering is simultaneous development of different subsystems, technologies and manufacturing process of a product across suppliers. This iterative development process can accelerate time to market and lead to cost/performance optimization at a system level.

As we have discussed in the past, concurrent engineering is absolutely critical to fast-paced high-tech and electronics industries. Global competition means that companies cannot afford to wait for suppliers complete their development to start planning theirs. In fact, this trend is only accelerating.

However, concurrent engineering adds to product development complexity and makes management even more challenging. If leading-edge companies such as Toyota face challenges due to complexity, is it worth applying these methods to low volume products in industries such as Aerospace and Defense or to a lesser extent Medical Devices?

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Developing Product Platforms – Microsoft Example


Recent news suggests that a new version of Microsoft’s critically acclaimed Surface Book is entering mass production. It appears that Microsoft had to make significant changes to the original Surface Book to meet some of its business goals…

The sources believe Microsoft’s decision to lower the price range for its new Surface Book is because the existing Surface Book’s high price level has significantly limited demand, while the detachable design also created conflict with its Surface Pro product line in terms of product position. Because of the two factors, the sources estimate that Microsoft only shipped 500,000 Surface Books in 2016.With the Surface Book to be positioned as a traditional notebook product and feature a friendlier price level, the sources expect related shipments to reach 1.2-1.5 million units in 2017, while the Surface Pro, despite weakening demand for tablets, will enjoy on-year shipment growth of 20% to reach six million units in 2017.

New product platforms that are significantly different from existing product-lines are notoriously hard to develop. It appears that even a very successful product platform such as Surface Book may actually need updates.
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Indirect Benefits of R&D – Chrysler Example


The article Heritage: Prowler was a vehicle ahead of its time. | driveSRT has some interesting data points about R&D portfolio executives. New technologies can have benefit far beyond the product for which they were developed. 

“Magnesium instrument panels, aluminum hoods and aluminum suspensions, vital crash safety design. All are key traits featured on new SRT vehicles that originated on the Prowler.”

Focusing solely or primarily on NPV for financial metrics to prioritize portfolios will lead us away from long-term discriminators. It is possible to compute financial return on sustaining product development or on products that are close to getting to market. However, it is difficult, if not impossible to accurately compute the return on investment for technologies that apply to multiple products (it requires estimating the part of the products NPV is generated by the technology). In fact, focusing solely on financial metrics will likely scuttle innovation.

What are some solutions:

  • Use financial metrics as one of many criteria for prioritization.
  • Set aside a fraction of the overall R&D budget for innovation and do not use financial metrics for innovation projects.
  • Demonstrate R&D value by tracking insertion of technologies across product lines (InspiRD can help)
  • Design off-ramps and integration of technologies along the path to full productization. This is what Chrysler SRT appears to have done successfully in case of Prowler.

What is Research, Development and Engineering (RD&E) Management?

As we have discussed in the past, different organizations include different processes and disciplines in Research and Development. We at InspiRD have started using Research, Development and Engineering (RD&E) as a generic term that includes technology development, product development and sustaining engineering.

Integrated management of RD&E can provide immense benefits to organizations…
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Steve Jobs: Innovation is the only way to succeed

INSEAD Knowledge has published an interview with Steve Jobs from 1996 which has a few very important points for R&D managers:  Innovation is the only way to succeed – you can not cut costs to get out of problems.

“All I can say is I think it was true back when we built Apple and I think it is just as true today which is innovation is the only way to succeed in these businesses. You can’t stand still.
You can’t cut expenses and get out of your problems. You can’t cut expenses and get out of your problems. You’ve got to innovate your way out of your problems.

image from Insead Knowledge

So, lets dig in…
We have discussed many of these points in the past, but this interview provides a few more details.  First is the recurring theme of user-centric design – products should not require customers to learn underlying technology:

Well, one of the reasons I’m so interested in graphics is that it makes things accessible to people without them having to know how it works. So as an example, the Macintosh was really that – we used graphics to make it easy to use; it was the computer for the rest of us. And you didn’t really have to know all this computerese to use it because of the great graphics and user interface.

Even more interesting is the fact that Jobs took the same approach with Pixar: Movie goers should be able to enjoy the experience without worrying about 10 years of R&D that went into creating the movie. We have discussed this in detail in the post about focus on your niche.

And it’s the same way with Toy Story at a much higher level. An audience between 80 and 100 million people will hopefully see Toy Story by the time it rolls out throughout the world, and yet none of them had to read a manual before they saw the movie to appreciate it. None of them had to understand the technology and the ten years of R&D and investment that went in to be able to create that movie to enjoy it, and that’s what’s so wonderful.

Another foundation of successful R&D management is a long-term vision. Steve Jobs again demonstrates his ability to think long-term.  He was working towards removing keyboard input back in the mid 90s:

And I see more and more of that infusing society where you have a tremendous technology but it has a face which is very approachable and you don’t have to understand the technology to interact or use the product….

You know I think that’s the potential of the Internet. We’re certainly not there today. Typing an H-T-T-P slash slash colon w-w-w, you know, is arcane. I mean, you shouldn’t even need a keyboard to use the Internet but we still do. And I think we’ll get to where it really is very simple, but we have a few years to go.

The next lesson for us R&D managers is that of hands-on involvement.  An engaged leader is critical to motivating teams and delivering innovation (by overcoming problems such as valley of death).  Jobs was not had the vision of where products need to go, he was involved in detailed technology development and the business models that need to be developed to support the new technology.  In this case, he was developing a vision about iTunes in mid-90s…

We look at the internet and it looks very exciting to us, but we don’t see how to make any money from it. We haven’t seen any business models emerge where we can put content on the Internet and end up being rewarded for that. And since our talented people always have opportunities to work on things where we do get financially rewarded, we’re not about to take them off that and put them on the Internet until we see a business model that makes sense. And I think we will, you know, in the next one to two years.

 We have a lot of interesting posts about innovation management


Beliefs + Experimentation = Success

Another interesting article from MIT Sloan Review discusses how to develop unique strategies and plans.  The article points out that many organizations follow strategic frameworks taught in business schools to formulate their strategies.

…many deploy frameworks and models from the strategist’s toolbox — industry analysis, market segmentation, benchmarking and outsourcing. By jumping straight to generic game plans (such as cost leadership, total quality or product innovation), companies short-circuit the real work of strategy and miss out on finding new insights into the preferences or behaviors of current or potential customers.

If all we do is follow a standard process for developing a strategic plan, we would probably not be able to build a distinct, differentiated business:

In a world of fierce competition and rapid imitation, companies that dare to be different capture our attention and our admiration. Some are globally recognized, such as Apple, Google, Tata, Virgin and Zara; others are less well known, or are niche or local players.

The article points out that a good strategic plan starts from determining what are the organizations fundamental beliefs (or culture, values, points of view, differentiators, etc) that set it apart:

Good strategies start from a distinctive point of view: for example, an insight into evolving customer needs or about how the world is changing. 

However, what are our unique beliefs or viewpoints? It is not easy to figure out what are an organizations true cultural traits that lead to success and what are just approaches that we have developed along the way.
The article gives a good example of Ikea trying to figure out the root causes of its success:

Consider the case of Ikea, the Swedish furniture retailer that continues to be highly distinctive almost five decades after its founding in 1963. Built on Ingvar Kamprad’s belief that he could “create a better everyday life for the many people” by providing affordable, good-quality furniture, the company grew internationally in the late 1960s and early 1970s by replicating what worked in Sweden.7 However, Kamprad and his colleagues didn’t fully understand which parts of their offering people actually cared about: Was it the expansive and customer-friendly showrooms? Was it the low prices and the products requiring relatively easy assembly? Was it the quirky Swedish product names and blue-and-yellow branding? Ikea’s repeated success in new markets it entered made executives wary of changing any part of the original formula.

Differentiators are even harder to figure out in case of R&D.  Many organizations make strategic decisions based on gut feelings without really having an approach to guide decision making. As we have discussed many times, most companies tend to develop product strategies without careful thought or experimentation.

However, few companies manage to develop original strategies by formulating hypotheses and then testing them out in a competitive setting. 

In case of Ikea, market realities in United States and Japan forced them to understand what are their true core values.  :

It was only when the company experienced problems in Japan and the United States that executives undertook to sort out the truths and falsehoods and create a more flexible business approach. 

The article provides a new approach for discovering an organization’s discriminators by focusing on beliefs.

Our perspective is built on two core premises: 1) that companies need a unique set of beliefs to stand out from the crowd, and 2) that some beliefs ring truer with customers and employees than others.

As such the article focuses on three types of beliefs: 1) about the market, 2) about the internal culture, and 3) vision of the future:

Beliefs can take many forms, but the three most important ones are: 1) those that predict how the market will respond to the company’s strategic choices, such as a new technology or service offering; 2) those that predict how employees will respond to organizational and managerial choices, such as a more flexible or empowered working environment; and 3) those that predict how the future will be different, for example in terms of emerging consumer needs, new technological possibilities or shifts in the geopolitical system.

 The idea is that companies in any market segment will share some common beliefs.  However, each organization will also have some unique differentiators or uncommon beliefs.  Some of these beliefs are true  and others are false.  The true uncommon beliefs (uncommon sense) are key drivers of success.

However, no one really knows the whole truth, so the article provides a unique perspective on how to use all beliefs to gain a strategic edge. The article suggest we could discover our uncommon true beliefs and focus on them.  Or we could discard our uncommon false beliefs and again gain more strategic focus. We could also change the industry landscape by neutralizing commonly held beliefs.  Or finally, we can exploit commonly held false beliefs to maroon competitors and gaining market share.

So how does one actually find these beliefs in the first place? Once found, how does one evaluate whether beliefs are common or uncommon, true or false? It is very hard to do.  I guess by constantly challenging the status quo, being entrepreneurial and encouraging questioning.  May be we could focus on some innovation in management processes?

Finding a distinctive place in a competitive marketplace can be extremely challenging. Studying and working with dozens of companies across a range of industries, we have found that it frequently requires willingness on the part of top management to examine and re-examine the prevailing industry norms — and from a variety of perspectives.

 Once you have found your beliefs, the only path to success is experimentation:

So how do companies put ideas they develop through our process into action? Based on our experience, successful companies don’t just talk about their novel beliefs or make risky bets on unproven ideas. Instead, they rely on a deliberate process of experimentation. They turn one of their novel beliefs into an operational hypothesis and then test it in as low-risk a way as possible. The feedback they get from the market informs their further testing, ultimately shaping the company’s decision to make a tangible change.