In today’s fast-paced, fiercely competitive world of commercial new product development, speed and flexibility are essential. Companies are increasingly realizing that the old, sequential approach to developing new products simply won’t get the job done. Instead, modern companies are using a holistic method—as in rugby, the ball gets passed within the team as it moves as a unit up the field.
This holistic approach has six characteristics: built-in instability, self-organizing project teams, overlapping development phases, “multi-learning,” subtle control, and organizational transfer of learning. The six pieces fit together like a jigsaw puzzle, forming a fast and flexible process for new product development. The new approach can also act as a change agent: it is a vehicle for introducing creative, market-driven ideas and processes into an old, rigid organization
Under the old approach, a product development process moved like a relay race, with one group of functional specialists passing the baton to the next group. The project went sequentially from phase to phase: concept development, feasibility testing, product design, development process, pilot production, and final production. Under this method, functions were specialized and segmented: the marketing people examined customer needs and perceptions in developing product concepts; the R&D engineers selected the appropriate design; the production engineers put it into shape; and other functional specialists carried the baton at different stages of the race.
Rugby approach
Under the rugby approach, the product development process emerges from the constant interaction of a hand-picked, multidisciplinary team whose members work together from start to finish. Rather than moving in defined, highly structured stages, the process is bon out of the team members’ interplay. A group of engineers, for example, may start to design the product (phase three) before all the results of the feasibility tests (phase two) are in. Or, the team may be forced to reconsider a decision as a result of later information. The team does not stop then, but engages in iterative experimentation.
One of the charms of the Rugby game is the infinite variety of its possible tactics. Whatever tactics a team aims to adopt, the first essential is a strong and skilful pack of forwards capable of winning initial possession from the set pieces. For, with the ball in its hands, a team is in a position to dictate tactics which will make the best use of its own particular talents, at the same time probing for and exposing weaknesses in the opposing team.
Let us take an example. Years ago, Fuji’s top management asked for a radically different copier and gave the project team two years to come up with a machine that could be produced at half the cost of its high-end line and still perform as well. Let us see the process worked.
1. Built-in instability
Top management kicked off the development process by signaling a broad goal or a general strategic direction. It did not hand out a clear- cut new product concept or a specific work plan. But it both offers a project team a wide measure of freedom and also establishes extremely challenging goals.
Top management created an element of tension in the project team by giving it great freedom to carry out a project of strategic importance to the company and by setting very challenging requirements.
2. Self-organizing project teams
A project team took on a self-organizing character as it was driven to a state of zero information”—where prior knowledge did not apply. Left to stew, the process began to create its own dynamic order. The project team began to operate like a start-up company—it took initiatives and competing through New Product Development risks, developed an independent agenda. The group possessed a self-organizing capability when it exhibited three conditions: autonomy, sell-transcendence, and cross-fertilization.
Autonomy. Top management’s involvement was limited to providing guidance, money and moral support at the outset. In a way, top management acted as a venture capitalist. Or, as one top executive said, “We open up our purse but keep our mouth closed.”
Self-transcendence. Starting with the guidelines set forth by top management, the project team began to establish their own goals and kept on elevating themselves throughout the development process. By pursuing what appeared at first to be contradictory goals, they devised ways to override the status quo.
The project team consisted of members with varying functional specializations, thought processes, and behavior patterns. But they carried out new product development in unison.
3. Overlapping development phases
The self-organizing character of the team produced a unique dynamic or rhythm. Although the team members started the project with different time horizons—with R&D people having the longest time horizon and production people the shortest—they all worked toward synchronizing their pace to meet deadlines. Also, while the project team started from “zero information,” each member soon began to share knowledge about the marketplace and the technical community. As a result, the team began to work as a single unit.
4. Multi-learning
Because members of the project team stayed in close touch with outside sources of information, they responded quickly to changing market conditions. Team members engaged in a continual process of trial and error to narrow down the number of alternatives that they needed to consider. They also acquired broad knowledge and diverse skills, which helped them create a versatile team capable of solving an array of problems fast.
5. Subtle control
Although project teams were largely on their own, they were not uncontrolled. Management established enough checkpoints to prevent instability, ambiguity, and tension from turning into chaos. At the same time, management avoided the kind of rigid control that impairs creativity and spontaneity. Instead, the emphasis was on “self-control,” “control through peer pressure,” and “control by love,” which collectively we call “subtle control.”
Subtle control is generally exercised in the new product development process in seven ways:
1. Selecting the right people for the project team while monitoring shifts in group dynamics and adding or dropping members when necessary. The different personalities are analyzed to see if they would get along.
2. Creating an open work environment.
3. Encouraging all members to go out into the field and listen to what customers and dealers have to say.
4. Establishing an evaluation and reward system based on group performance.
5. Managing the differences in rhythm throughout the development process. As mentioned earlier, the rhythm is most vigorous in the early phases and tapers off toward the end.
6. Tolerating and anticipating mistakes.
7. Encouraging suppliers to become self-organizing. Involving them early during design is a step in the right direction. But the project team should refrain from telling suppliers what to do.
6. Transfer of learning
Transfer of learning to subsequent new product development projects or to other divisions in the organization takes place regularly. The transfer took place through “osmosis”—by assigning key individuals to subsequent projects. The knowledge was also transmitted in the organization by converting project activities to standard practice. As the state-of-the-art in product development is turning its attention from efficiency to capability building and organizational learning, operations management needs to shift its focus from static efficiency to dynamic capability building. In light of the evidence that rugby approach is closely connected with how organizations solve problems and spread knowledge, there is reason to believe that this paradigm shift will open up many opportunities for further research on this holistic approach for years to come.
Some limitations
Some words of caution are in order. The holistic approach to product development may not work in all situations. It has some built-in limitations.
It requires extraordinary effort on the part of all project members throughout the span of the development process. Sometimes, team members record monthly overtime of 100 hours during the peak and 60 hours during the rest of the project.
It may not apply to breakthrough projects that require a revolutionary innovation. This limitation may be particularly true in biotechnology or chemistry.
It may not apply to mammoth projects like those in the aerospace business, where the sheer project scale limits extensive face-to-face discussions.
It may not apply to organizations where product development is masterminded by a genius who makes the invention and hands down a well-defined set of specifications for people below to follow.
Why should you take rugby?
One of the charms of the Rugby game is the infinite variety of its possible tactics. Whatever tactics a team aims to adopt, the first essential is a strong and skillful pack of forwards capable of winning initial possession from the set pieces.
For, with the ball in its hands, a team is in a position to dictate tactics which will make the best use of its own particular talents, at the same time probing for and exposing weaknesses in the opposing team.
The ideal team has fast and clever half-backs and three-quarters who, with running, passing, and shrewd kicking, will make sure that the possession won by the forwards is employed to the maximum embarrassment of the opposing team.
(Lionel Wijesiri is a retired company director with over 30 years’ experience in senior business management. Presently he is a freelance newspaper business and feature writer.)
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