Industry Reflections - 10. NPD governance and effective milestone management

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Industry Reflections - 10. NPD governance and effective milestone management

In the 10th instalment of his 'Industry Reflections' series, Lio Grealou elaborates on the purpose and effectiveness of key milestone delivery and associated NPD governance when driving complex engineering product development programmes.

Published 4 Apr 2022

7 min read

by Lio Grealou, senior advisor to QR_ and founder of Xlifecycle Ltd 

Driving complex engineering product development to market requires a holistic and effective way to track progress and ongoing strategic alignment throughout the entire program lifecycle and associated delivery milestones.

As mentioned in a previous post, new product development (NPD) is referred to as the complete process of bringing a new product or service to market — including upfront product line or service platform strategy, business analysis, marketing, and up commercialization, maintenance, and operations. It is a delivery framework to guide and set operational and financial boundaries across a project or program of work, bringing consistency and integrity across quality, schedule, and cost parameters.

The ability to plan, forecast, and measure progress is a critical success factor to assess, course-correct, and realign people, resources, processes, data, and enabling tools, through successive progressive planning iterations. On managing large, long-duration projects, Hass (2008) recommends a particular attention to planning and structuring: from selecting the appropriate management approach, to progressively elaborating the plan, using a systemic, reliable approach to estimating, performing rigorous time and cost management, using stage-gatemanagement, and conducting rigorous thorough risk management.

Per the PRINCE2 project management methodology, “while there is no correct number of milestones or duration between them, they lose value when there are too many or too few [...], there should be enough milestones at major intervals to gauge whether or not the plan is proceeding as expected.”

In this article, I elaborate on the purpose and effectiveness of keymilestone delivery and associated NPD governance when driving complex engineering product development programs.

NPD aims to drive dynamic organizational design, fit-for-purpose, and effective activity management to foster collaboration and innovation, while minimizing cost and shortening development times. The ability to tailor and adapt the delivery framework to the type of project is essential to purposely align the associated delivery, engagement, and commercial models, with business and product development strategies.

Tailored NPD strategy

Tailoring means adapting to a specific context, primarily to ensure effectiveness (doing the right thing) and efficiency (doing it right). According to Wheelwright and Clark (1992), “few development projects fully deliver on their early promises [...] In some instances, poor leadership or the absence of essential skills is to blame. But often problems arise from the way companies approach the development process. They lack what we call an aggregate project plan.” For simplification and to understand specific resource requirement patterns, they divided development projects into 5 types: 1. derivative, 2. breakthrough, 3. platform, 4. research and development (as a precursor to commercial development), and 5. alliance and partnership driven projects.

The ability to manage and implement change covers at least 2 core dimensions: “the degree of change in the product and the degree of change in the manufacturing process” (Wheelwright and Clark, 1992). In addition, this includes the ability to drive new technology development, new infrastructure requirements, new legislation adoption, new sourcing models, new funding models, new market introduction, etc. Clearly, there is no silver bullet in project and program management, a fortiori when it comes to complex initiatives.

In turn, NPD drives new core process definition, continuous improvement, transformational, and incremental change through the implementation of new delivery platforms and tools, coupled with the ability to change the organization and forge its long-term operating culture.

Stage-gate management

Delivery milestones are typically associated to development gates. They combine managerial decisions into a single event, with the objective to assess progress against given performance targets and with regards to project continuity. This framework includes, but is not limited to, elements

of control across the NPD structure and enabling processes — as they are often linked to investment and / or delivery payment milestones with the supply chain.

As highlighted by Varandas et al (2017), it is important to note that “although those NPD structures encompass a graphic representation of linear stages, most of them are cyclical with loops and feedback in the information flow.” Furthermore, they elaborate on the fact that modern NPD frameworks embed the ability to: “enhance management practices, consider the entire product lifecycle, introduce other support tools, align the organization’s strategy with NPD, integrate the supply chain and customers in the NPD process, analyzeanalyse the implications of knowledge management, improve information flow, and define more evident responsibilities and provide support for decision making.”

Each gate links to specific outputs, such as deliverables, decisions, and acceptance criteria, against stakeholders and decision makers. A gate is however not meant to be a functional rigid review process. It is often not linear as cross-functional activities and outputs do not reach a maturity level at the same time. Each combined phase and stage-gate constitute a guiding map to get from point A to point B, with levels of flexibility which are continuously reviewed and acknowledged as part of the associated governance.

Gateway countdown process

The gate and phase sequencing follows the typical product development “V-model”, leveraging model-based systems engineering (MBSE) principles in defining, cascading, and delivering outputs against product attributes and the enterprise architecture (from requirements, to functional, logical, and physical outputs).

In a nutshell, data is released as the product matures. ; tThis is typically reflected in the NPD framework as decision points which triggers other activities (purchasing, corrective actions, change actions, manufacturing, re-engineering, etc.). Data exchange and output verification is ongoing, whereas final validation might be driven through a formal gateway review process.

Approaching a program gate should drive the right behaviours. Gateway countdown processes can be highly ineffective if they are constrained in time and present heavy bureaucratic burden — especially when it does not clearly link to day-to-day activities and governance. Gateway governance and operational governance must be closely integrated to provide ongoing line of sight of the strategic objectives and how they are measured.

Data management experts often appreciate the unfortunate inefficiencies in driving mass data maturation activities as they imply a “hockey stick approach” to releasing — often very prominent when approaching a given gateway. Hence the importance to define:

  • Clear maturity targets and acceptance thresholds throughout the phase, not just at the culminating gate.
  • Clear accountability and people empowerment to drive the above, in a collaborative manner with other delivery functions and suppliers.
  • Robust continuous review governance and data-driven decision criteria, continuously managed and updated accordingly (not static, but allowing flexibility and agility).
  • Clear data visibility and traceability, towards a robust ‘plan for every part’ and associated delivery interdependencies.
  • Fit-for-purpose digital roadmap to select and implement technical automations and tools to support the above complexity management.

In essence, the above points refer to what product lifecycle management (PLM) is about: end-to-end change traceability, accountability, strategic alignment, and continuous delivery improvement — covering not just the enabling tools and processes, but the people, the collaborative structure, and governance driving the relevant data output and organizational maturity alignment.

Combined gate validation and review processes produce essential artefacts to sign-off the overall development efforts, marking the fact that the organization is positively progressing against the right pace, quality, and cost expectations. Business analytics, traffic light status, and management by exception drive ongoing corrections and adjustment towards this goal.

What are your thoughts?

References:

Environmental Issues. Product Management and Development, 15(1): 8-19. 

OGC (2009). Managing Successful Projects with PRINCE2. The Stationary Office Ltd, 5th Edition.

Hass KB (2008). Managing Complex Projects: A New Model. Management Concept Press.

Wheelwright SC, Clark KB (1992). Creating Project Plans to Focus Product Development. HBR.

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