Time-Based Competition Is Not Enough

Companies willing to embrace complexity are screening managers for a different, bigger set of personal attributes. OVERVIEW: Heads of RD developing new products versus developing people and new technology are, in part, conflicting priorities. They compete for resources. Strong, autonomous new product teams may be fast, but it can be tough to coordinate across teams to ensure component commonality. Strong functional organizations usually promote new technology and expertise development, but can slow down new product teams. Even the right measures of performance are not the same. For example, net present value and time-to-payback are useful measures for new products, but are not very helpful in assessing new technology choices in a research portfolio. Some companies have been experimenting with new ways to manage these conflicting priorities. These are companies that have been leaders in reducing time-to-market in new products, and at the same time, inventive in managing the rest of the R&D portfolio. They have no magic solutions, but their experiments center around these approaches: * Asking managers to create new leadership and management roles. * Encouraging managers to see their responsibilities more broadly. * Creating unusual organizational shapes. * Physically arranging their engineers and technical staff in new ways. * Selecting different, non-obvious people for senior jobs in R&D. Each of the following examples is oversimplified somewhat. But clearly, each company is doing something unconventional and effective. Toyota's Solution Toyota was a pioneer in fast new product development in the 1980s: A shusa, or strong project manager, took a team of functional specialists and developed distinctive, high-quality cars fast. But in the 1990s, several stresses began to cause problems elsewhere in the Toyota system. The number of auto platforms went from 8 to 18, and volume per model declined. The number of separate engineering specialties (product and process) went from 23 to 48. So there were more inexperienced shusas and many more specialist heads in the system for senior product line executives to coordinate, and each shusa and specialist head had less time to talk with each other. …