March Madness, Wooden, Lincoln and…Product Development?
A little-known fact is that “March Madness” began in Illinois over 100 years ago. It was an annual tournament of high school basketball teams, sponsored by the Illinois High School Association. It grew from a small invitational affair in 1908 to a statewide institution with over 900 schools competing by the late 1930’s. A field of teams known as the “Sweet Sixteen” routinely drew sellout crowds. In a time before today’s media coverage, before the NCAA became popular with the average fan, before professional leagues had established a foothold in the nation’s large cities, basketball fever had already reached epidemic proportions in the Land of Lincoln.
Henry V. Porter, assistant executive secretary of the Illinois High School Association, was so impressed by the phenomenon that he wrote an essay to commemorate it. Entitled “March Madness,” it first appeared in the Illinois Interscholastic, the IHSA’s magazine, in 1939.
An excerpt from the original essay reads: “Homo of the Hardwood Court is a hardy specie. There are millions of him. He exists through summer and fall, shows signs of animation through the winter and lives to the utmost during March when a hundred thousand pairs of rubber soled shoes slap the hardwood in a whirlwind of stops and pivots and dashes on the trail to the state basketball championships. He is a glutton for punishment. When the March madness is on him, midnight jaunts of a hundred miles on successive nights make him even more alert the next day.” Mr. Porter continued, “ A little March madness may complement and contribute to sanity and help keep society on an even keel.”
Today there are even more homo sapiens addicted to the ‘Hardwood Court’. This year, American Gaming Association projects that 40 million Americans will fill out more than 70 million brackets — that’s more brackets completed than ballots cast for President Obama in the 2012 election! ‘Glutton for punishment’ is probably a more accurate description of the present-day phenomenon than ‘sanity’.
As basketball grew in popularity throughout the United States and the world it became increasingly competitive only adding to the frenzy and excitement of basketball playoffs at all levels. College and professional teams emerged to draw millions of fans to watch the best and brightest athletes compete. One of the best coaches of all sports and certainly the game of basketball, was John Wooden. His UCLA team won ten NCAA championships out of twelve years with an unprecedented seven titles in a row.
Author Don Yaeger provides great insight into the methods of Coach Wooden with the following example:
“The first day of practice at UCLA was always a day full of anticipation and excitement as the new recruits awaited the arrival of Coach Wooden, known affectionately as the Wizard of Westwood. As they waited, each wondered what secrets of the game, what strategies for winning would spring forth from the famous coach on Day One.
‘Please take off your shoes and socks,’ Coach announced to the team, seating himself upon a locker room bench. ‘I’m going to show you the proper way to put them back on.’ The new players looked at one another in disbelief – had the old man lost him mind? What on earth did this have to do with basketball? Not wanting to question their leader, they all complied and waited for what would come next.
‘Now, when you pull on your sock,’ he said showing them through example, ‘I want you to make sure that there are no wrinkles or gaps,’ as he put his own socks on. ‘Make sure your heel is full seated in the heel of the sock; run your hand over the toes and make sure to smooth out any bumpy areas.’ Then he showed each player how to properly lace his shoes and tie them snugly so that there was no room for the shoe to rub or the sock to bunch up.
As Coach Wooden got up to leave the locker room for the gym, the players behind him were silent, still wondering what their coach could possibly be doing by starting out the season talking about shoes and socks. Here they were, the best schoolboy players in America, and this legend had just spent 30 minutes teaching them about shoes and socks.
Just then, Coach Wooden would turn around and, with a glint in his eye, say ‘That’s your first lesson. You see, if there are wrinkles in your socks or your shoes aren’t tied properly, you will develop blisters. With blisters, you’ll miss practice. If you miss practice, you don’t play. And if you don’t play, we cannot win. If you want to win Championships, you must take care of the smallest of details.’ Coach then walked away, his first practice complete.”
So, what does the exhilaration or agony (depending on your bracket) of March Madness and John Wooden have to do with product development? A quote from President Abraham Lincoln, a better-known product of Illinois, makes the connection: “If I had six hours to chop down a tree, I’d spend four sharpening my ax.” Both Wooden and Lincoln understood that any worthy endeavor requires preparation, practice and attention to detail.
Developing ‘product’ is a fundamental process of many businesses whether it provides software, hardware, or services. Independent of the industry and sector, developing something new or customizing an existing product is a basic element of almost every company. Like March Madness where victory is determined by a few points often in the last seconds of the game, product development processes can be a tremendous differentiator in our increasingly competitive global economy.
There are three ‘details’ in product development that may illicit the same reader response as the new recruits in Coach Wooden’s first practice: “I know how to put my socks on! And no, I didn’t bring my blanket for a mid-practice nap.” In spite of the expected reaction, I’ll continue with the first lesson.
Market Driven
Development Processes must be aligned with market needs. There probably aren’t many principles of product development that are more basic. Before the insanity jokes start flying, consider what it really means to be market driven: The market/customer determines the inputs, outputs, pace and flow of internal processes. In its simplest form, being market driven is aligning processes with unmet needs, industry tempo and market trends. The process must develop a product that solves a problem or satisfies consumer expectations and then delivers it when the customer wants it.
Every industry has a cadence. In the fashion industry, fads come and go within a calendar year and often only last a single season. In the Aerospace market, products take years to receive FAA approval and then stay in production for decades. By design, aerospace processes will struggle to keep up with fashion trends due to the heavily regulated nature of air travel. While this example is an extreme case of industrial differences, there are countless companies with internal processes that simply don’t support the market they serve. They are quite adept at citing constraints and internal conflicts that somehow justify the inability to move at the rate of customer demand.
Markets are becoming more global. Consumer expectations continually require more features, added capability and higher quality; all for less. By structuring processes to meet market trends, companies enable the industry to grow, shift and disrupt legacy business models for enhanced services and products.
Continuous Improvement
President Lincoln worked as a ‘rail splitter’ making fence posts from logs when he was a young man. His appreciation of the labor involved in cutting down a tree was earned over years of back-breaking work. Understanding the importance of a sharp tool and the time required to put a durable edge on metal is apparent in his quote. There are many strategies used in felling a tree to ensure it lands where intended. There is also tremendous time and effort to physically chop a tree down by hand. Yet, Lincoln draws our attention to the basics: more time spent honing the tool will lighten the burden of the task.
If your business is truly market driven, the only constant will be change. Because markets are always in flux, processes cannot be stagnant and maintain effectiveness. Development processes need refinement to ensure both efficiency and market focus. New entrants in your industry bring a hunger for market share requiring vigilance and innovation by the incumbents. Technological disruption can significantly alter the flow of market services demanding new skills to be applied in different ways.
Competition
Business is a competition. Rarely does a company win business uncontested. It almost sounds condescending to bring the topic up; however, have you heard the sales person say, “The customer is only working with us on this proposal!” Or perhaps someone on the leadership team said, “No one else provides this technology or service. We are the only source for this solution today!” While it may be accurate that no one has the identical process or product, consumers have options.
I have past experience in a start-up with a formidable patent portfolio whose offering was truly unique. In fact, the company never competed against the exact same technology; however, they were constantly compared to alternative approaches that were ‘good enough’ for most applications. There is always competition.
Some basketball teams dominate their conference all year. When they get to the big tournament and play toe-to-toe with the best from other regions, competition gets quicker, taller and shoots accurately from farther out. The best opportunities in the market are heatedly contested. Even if you enjoy local or regional dominance today and have no plans of expansion, the competition will come to you: consider Walmart or Amazon and their disruption of small retail businesses. This kind of ‘madness’ is happening in all markets from healthcare (telemedicine) to education (online); in both financial services (bankless transactions) and food services (‘fast casual’). The best part, or worst part, depending on your bracket, is that the business tournament runs all year and not just in March.
Let’s say you are a number one seed coming into the tournament. That is great news and you have unquestionably worked hard to get here. Did you know that in the last 30 years, there has only been one year where all four number one seeds made it to the Final Four (2008)? Even with a favorable position in your bracket (market), there is less than a 45% chance of the top seed making it to the Final Four. Comfort is statistically dangerous. New, improved products and services are the key to competitiveness.
Introspection
Now that we’ve learned how to put on our product development socks and sharpened our process design ax, there are a few question for consideration. To avoid blisters at the most inopportune time, it is essential to be brutally honest in responding to these questions.
1. How often do your customers ask for shorter development lead times? Are they asking for higher levels of integration or service than exist today? Have you reacted with, “There is no way we can do that!”? These requests are early indicators that the market wants something different or better. Is your process driven by the market or limited by internal constraints?
2. How long has it been since your last measurable product development process improvement? Days…months…years? Is ‘continuous’ an accurate description of your process improvement? Does it feel like you are working with a dull ax: expending great effort with little progress? As a percentage of total work time, what is the proportion of hours spent on process improvement?
3. Are you comfortable with your position in the market? When was the last time your team was confident of victory only to be upset by a relatively unknown 12th seed? Has your team been outmaneuvered or outpaced recently? Are you winning?
If this introspective exercise touched any nerves, the article served its purpose. Recognition and a desire to change are the first steps for any process improvement. Mastering the basics of product development is essential to “…keep society (and your business) on an even keel.” If seemingly insignificant details were key to winning multiple national basketball championships, consider the processes critical for growing your business.
Andy Finch is President of RMI, a management consulting company specializing in growth generating processes.
A Lean System’s Approach to Growth
The pressure to grow top line sales and bottom-line margins is incessant. This stress is necessary in a free-market economy because demand for improved products and lower cost services is equally insatiable. Consumers typically have options in who they buy from, and the process of natural selection is as unbiased in business as it is in nature. All too often business leaders sub-optimize growth initiatives without applying a system’s approach to solving market problems: like pairing a supercharged V-8 engine with a single speed transmission. This post will present a broader perspective on front-end growth processes that include dynamic, interrelated parts of the business.
Looking back over the past several decades, businesses have aggressively applied Lean manufacturing and Six Sigma methodologies to improve quality and reduce cost. If you have participated in these efforts, it was quickly evident that addressing immediate bottlenecks or high failure rate items is a best practice to begin the journey. It should also have been equally clear that optimizing a specific process or product design may not actually get the final goods delivered faster or with better quality. In a manufacturing setting it becomes painfully obvious that if you reduce the process time of the final assembly cell by 90% (sounds impressive) nothing ships if you don’t get quality parts from your supplier to build with. This would be akin to the big block V-8 shackled by a mono-gear transmission.
To address this in a physical plant, successful companies focus on lineback logistics, Sales and Operations Planning (S&OP), and supply chain management to connect demand with supply from mining the ore to delivering finished product. This is because most businesses are made up of numerous interdependent departments, functional processes, suppliers, distributors and consumers. Refining a single part in the system rarely moves the needle on company-wide metrics or customer satisfaction. This realization should be prevalent today in the manufacturing sector.
Reducing costs and improving quality by eliminating waste in all forms is an imperative for today’s global economy. Perhaps less obvious is the need for a similar systems approach to the pre-sales, revenue generating activities in a business. It is the experience of the author that delivering value to consumers requires much more than cutting costs. After all, calculating margin of any type involves both income and expenses. This article will focus on the processes that drive the first half of the equation.
There are four general categories of growth-creating processes: Market Research, Strategic Planning, Product Management/Marketing and Product Development. Depending on the business, one or more of the functions may be part of the same department. For example, market research may be a subset of the strategic planning group; or product management may report into product development. Irrespective of the organizational structure, the role of each process is unique. If we learn anything from Lean manufacturing, it is that optimizing a single element of the business will likely not produce the desired results. A definition for each area of expertise will be described in some detail to better appreciate how they interrelate.
Market research is both a science and an art. In the age of information, there is much more data available than ever before; however, armed with this same information, the competition in a global economy can be fierce. This important role is to gain better insights into what is happening outside the company: What are consumers willing to pay for, what products and services do they choose from, how many customers share the same need, is demand trending up or down and in what regions of the world is there growth or attrition, how are products/services delivered to the end-user, and what are the unresolved problems? Analytics are a large part of market research as it drives so many downstream processes; however, the value of intuition cannot be underestimated. Business is dynamic and what was true last week is no longer valid. Today’s solutions will likely not satisfy tomorrow’s requirements. Market research is only valuable when it provides insight into the future.
Before the next topic is discussed in sincerity, it must be said that “strategy” is one of the most inflated and overused terms in business. In fact, if career advancement is desired, just add the word “strategic” to any title: “Strategic” project manager, “Strategic” procurement engineer, or “Strategic” custodian and it sounds like the person is too smart to actually work. Possessors of such coveted positions are paid to sit in an office and …well…think stuff up, full time…while someone feeds them grapes and fans them with palm boughs to keep the flies off. Now back to the subject.
Strategic planning is primarily an internally focused process. It has three components in its simplest form: an idea, a plan and execution. The idea is a response to market intelligence and describes what the company will do to differentiate from the competition while addressing unmet needs. The planning phase is necessary to understand the investment, resource priorities and timing of development. It uses market data to estimate revenues and compares this to expected costs to complete a business case. An essential facet of strategic planning is to ensure the idea is aligned with the objectives of the company. It is also an opportunity to confirm that the company direction accounts for the available market research. Finally, execution (yes, doing work) is part of any successful strategic initiative. Hopefully the connection between market research and strategic planning is becoming evident.
Product management is the intersection of a Venn diagram comprised of three circles: technology, business and consumers. It is a challenging overlap of often conflicting needs that must somehow be satisfied simultaneously. The role is a bridge function between market requirements, internal business needs and development capabilities. Product management is part of the execution team discussed in strategic planning and must distill the output from market research into concise, actionable conclusions. It also has the responsibility to articulate the go-to-market strategy: How will consumers know the product exists, why they will prefer it over competing options, how much they will pay for it, and who they will get the product from?
Although some use the terms interchangeably, product development is actually the internal customer of product management. Product development’s function is to use internal resources and processes to design, integrate, test and transition product to production. Research and Development (R&D) is often on the leading edge of product development creating technologies that solve market problems identified by market research and thoroughly described by product management. Product development receives requirements and delivers validated product.
This all seems pretty strait forward, so why is the topic worth 1500 words on a blog? Unfortunately, there are readers of this article that can recall examples of an executive team that spent months refining the most incredible idea in their strategic planning process only to realize there is no market for it. Worse yet, some companies have already invested in product development without factoring in distribution costs, rep margins or total cost of production and when completely understood reverse the financial conclusion of the business case. How many companies have great ideas and plans, but take too long getting product to market never to reach payback on their investment? Are there businesses that are unable to finalize product requirements and meander perpetually in an otherwise efficient product development process guessing what the customer will pay for? The answer to both questions is, Yes! Situations like these happen every day in small and large organizations.
Reading these definitions may have felt like going back to third grade for a lesson in arithmetic (please stop yawing!). The fact is growth-creating processes are similar to manufacturing: Everyone understands Lean concepts, yet few implement them well. One fundamental reason companies struggle with creating growth is because they treat the system of highly interdependent functions as loosely connected, or altogether disconnected processes. Conducting the most insightful market research, or worse paying for it, just to have product development flounder in overruns is another V8/transmission mismatch. Likewise, when the “ideas” from strategic planning lack a prioritized resource plan to pull it off it probably explains overruns in the aforementioned product development. The processes are as inextricably interrelated as the valves and crank shaft in an internal combustion engine.
So what do you do about it? The first step is to recognize that the current process isn’t working as well as it should. The second step is to begin thinking of all pre-sales and pre-production processes as a single critical subsystem of the business. This subsystem must also be tightly coupled with sales and manufacturing to be successful. Like Lean manufacturing or Six Sigma, you start with the biggest bottlenecks and worst quality issues; however, process improvement must be made only after system constraints and interactions are well understood. Growth is a process, not an event. All roles of growth generation must be present and work together to be successful – even if all roles are fulfilled by the founder of a start-up. Help is available for companies that want to begin their journey to system-wide growth.