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Dynamic business planning


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Dynamic Business Planning

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Dynamic business planning

  1. 1. Dynamic Business Planning John Satta Product Planning Manager Boston SPIN 16 May 2000
  2. 2. QSS’ business <ul><li>We help companies meet their business objectives through integrated planning, building and buying of strategic products, systems and software </li></ul>
  3. 3. What are the challenges? <ul><li>Rapidly changing markets demand quick response </li></ul><ul><li>More stakeholders participate in strategic decisions </li></ul><ul><li>Increased need for customer focus </li></ul><ul><li>Complex demands on internal resources </li></ul><ul><li>Quickly evolving technologies </li></ul>Survival demands visibility
  4. 4. Responses <ul><li>The planning process must be continual, not periodic </li></ul><ul><li>Use dynamic planning to communicate across the organization </li></ul><ul><li>Get (and keep) stakeholders involved </li></ul><ul><li>Plan for change in the face of uncertainty </li></ul><ul><li>Practical considerations and pitfalls to avoid </li></ul>
  5. 5. Planning must be continual <ul><li>Most planning efforts are fantastic </li></ul><ul><ul><li>not based on reality </li></ul></ul><ul><ul><li>wishful thinking </li></ul></ul><ul><ul><li>ignore the fact of changing environments </li></ul></ul><ul><li>Example: the annual budgeting process </li></ul><ul><ul><li>an annual “game” </li></ul></ul><ul><ul><li>wastes resources </li></ul></ul><ul><ul><li>justify foregone conclusions </li></ul></ul><ul><ul><li>Reference: Gartner Group Insider Article Sept 1999 </li></ul></ul>Rapidly changing conditions demand frequent course corrections
  6. 6. Traditional strategic management Business Objectives Cross-functional Strategic Initiative Team e-mail, informal discussions, meetings, documents, presentations, etc. <ul><li>Business objectives not clearly linked to strategic initiatives </li></ul><ul><li>Islands of information </li></ul>Document Management Corporate Communications Presentation Development Project Management <ul><li>Isolated teams using independent tools </li></ul><ul><li>Management team has limited visibility into results </li></ul><ul><li>Teams are forced to work with limited navigation </li></ul>
  7. 7. All efforts are global and interrelated Project 1 Project 2 Research Competitor 1 Competitor 2 Supplier 1 Supplier 2 Technology 1 Technology 2 Project 3 Opportunity 1 Opportunity 3 Opportunity 2
  8. 8. Planning as communication <ul><li>Vision and direction should be </li></ul><ul><ul><li>set at the top </li></ul></ul><ul><ul><li>based on reality </li></ul></ul><ul><li>Changing conditions are an opportunity: </li></ul><ul><ul><li>to reassure that we are aware of reality </li></ul></ul><ul><ul><li>to communicate how we are responding </li></ul></ul><ul><ul><li>to solicit input and feedback </li></ul></ul>Everyone should know the plan and their contribution to it
  9. 9. Top down meets bottom up Vision Wisdom Knowledge Information Data Reality Direction
  10. 10. Characteristics of Outstanding Leaders <ul><li>Establish an encompassing, articulated direction for the organization </li></ul><ul><li>Set the working agenda and focus the organization’s attention and effort </li></ul><ul><li>Personal commitment to leading the change </li></ul><ul><li>Teach knowledge and skills throughout the ranks </li></ul><ul><li>Wholesale empowerment of their people </li></ul>Portfolio Management for New Products Cooper & Edgett
  11. 11. Involve stakeholders <ul><li>Publish the plans </li></ul><ul><ul><li>piques curiosity </li></ul></ul><ul><li>Keep them up to date </li></ul><ul><ul><li>inspires confidence </li></ul></ul><ul><li>Actively solicit feedback </li></ul><ul><ul><li>generates interest </li></ul></ul><ul><li>Listen to the feedback </li></ul><ul><ul><li>that’s how you inject REALITY </li></ul></ul><ul><li>Quickly respond to the feedback </li></ul><ul><ul><li>increases confidence, engenders more feedback </li></ul></ul>Given enough eyeballs, almost every problem will be characterized quickly and the fix obvious to someone The Cathedral and the Bazaar Eric S. Raymond
  12. 12. For each product, initiative and project <ul><li>Development and availability timelines </li></ul><ul><li>Business objectives </li></ul><ul><li>Opportunities </li></ul><ul><li>Current status </li></ul><ul><li>Future projections </li></ul><ul><li>Competitive situation </li></ul><ul><li>Internal dependencies </li></ul><ul><li>Supplier dependencies </li></ul>
  13. 13. Planning in the face of uncertainty <ul><li>How does one really “expect the unexpected”? </li></ul><ul><ul><li>If you don’t consider the possibilities, you’re relying on luck </li></ul></ul><ul><li>Compare alternate scenarios </li></ul><ul><ul><li>status quo </li></ul></ul><ul><ul><li>conditions get worse </li></ul></ul><ul><ul><li>conditions improve </li></ul></ul>The end result is not a picture of tomorrow, but better decisions about the future The Art of the Long View Peter Schwartz
  14. 14. We must plan for changing conditions Technology Newer Technology Project Project
  15. 15. <ul><li>Conventional Ideal </li></ul><ul><ul><li>ready, aim, fire </li></ul></ul><ul><li>Guesswork </li></ul><ul><ul><li>ready, fire, aim </li></ul></ul><ul><li>Analysis paralysis </li></ul><ul><ul><li>ready, aim, aim, aim, aim... </li></ul></ul><ul><li>Successive approximation </li></ul><ul><ul><li>ready, aim, fire, aim, fire, aim, fire... </li></ul></ul><ul><li>Rapid reaction </li></ul><ul><ul><li>ready, fire, aim, fire, aim, fire, aim, fire... </li></ul></ul>Balance planning and action Consider the unthinkable to be able to react rapidly
  16. 16. Practical considerations <ul><li>Consistent terminology </li></ul><ul><li>Start small </li></ul><ul><ul><li>nothing succeeds like success, even modest success </li></ul></ul><ul><li>Get buy-in </li></ul><ul><ul><li>Be prepared to sell and re-sell and sell again </li></ul></ul><ul><li>Have plans </li></ul><ul><ul><li>start-up, roll-out, maintenance </li></ul></ul><ul><ul><li>gathering the information is no small feat </li></ul></ul><ul><li>Develop processes </li></ul><ul><li>Don’t under-estimate the effort </li></ul>It is a lot of work, but consider the alternative
  17. 17. Pitfalls to avoid <ul><li>Aversion to change </li></ul><ul><li>“Not invented here” </li></ul><ul><li>Intellectual honesty is in short supply </li></ul><ul><li>No Excuses Management </li></ul><ul><li>by TJ Rodgers et al </li></ul><ul><ul><li>No Secrets </li></ul></ul><ul><ul><li>No Surprises </li></ul></ul><ul><ul><li>No Politics </li></ul></ul><ul><ul><li>No Distractions </li></ul></ul><ul><ul><li>No Confusion </li></ul></ul><ul><ul><li>No Waste </li></ul></ul><ul><ul><li>No Illusions </li></ul></ul>
  18. 18. PDMA-reported portfolio problems <ul><li>Pipeline overload </li></ul><ul><li>Resource allocation </li></ul><ul><li>No priorities </li></ul><ul><li>Indecision </li></ul><ul><li>Slow development </li></ul><ul><li>Changing direction </li></ul>
  19. 19. Obstacles to success <ul><li>Ignorance </li></ul><ul><li>Lack of skills </li></ul><ul><li>Faulty or mis-applied processes </li></ul><ul><li>Over confidence </li></ul><ul><li>A lack of discipline and/or leadership </li></ul><ul><li>Big hurry </li></ul><ul><ul><li>we’re in a rush, so we cut corners. </li></ul></ul><ul><li>Gridlock </li></ul><ul><ul><li>too many projects </li></ul></ul><ul><ul><li>not enough resources to get the job done right </li></ul></ul><ul><li>Absence of clarity regarding roles and responsibilities </li></ul>
  20. 20. Case study: Motorola Communications Enterprise <ul><li>Adopting enterprise-wide planning to: </li></ul><ul><ul><li>Accelerate time to market </li></ul></ul><ul><ul><li>Ensure quality of products and services through increased attention to customer needs </li></ul></ul><ul><ul><li>Sharpen focus on technology developments and competition </li></ul></ul><ul><ul><li>Optimize use of resources </li></ul></ul><ul><li>Users </li></ul><ul><ul><li>Strategic planners </li></ul></ul><ul><ul><li>Facilitators </li></ul></ul><ul><ul><li>Product planners </li></ul></ul>“ Provides the enterprise with 10x-100x improvement in operational efficiency” <ul><ul><li>Brand managers </li></ul></ul><ul><ul><li>Forecasters </li></ul></ul><ul><ul><li>Developers and engineers </li></ul></ul>
  21. 21. Case study: Motorola Communications Enterprise 10 20 30 40 50 1999 2000 2001 2002 Motorola’s Forecasted Adoption Rate of Enterprise-wide planning Thousands of users 1,000 users 32,000 users
  22. 22. Multi-enterprise collaboration Customer of B Supplier to B enables precision responses Visibility into others’ plans... Enterprise A Enterprise B Enterprise C
  23. 23. Interesting Statistics <ul><li>50% of all new product development projects fail </li></ul><ul><li>99% of all ‘corner office’ initiated new product development projects fail </li></ul><ul><li>30-50% of largest companies make revenues on products developed in the last 3-5 years </li></ul>Portfolio Management for New Products Cooper & Edgett
  24. 24. Make the Success Factors More Visible <ul><li>Leaders must lead </li></ul><ul><li>Review and overhaul your processes </li></ul><ul><li>Define standards of performance expected </li></ul><ul><li>Build in tough go/kill decision points with defined criteria </li></ul><ul><li>Use true cross functional teams </li></ul><ul><li>Train continually </li></ul><ul><li>Reduce cycle times, but don’t become a speed freak </li></ul><ul><li>Reduce the number of projects underway </li></ul>
  25. 25. References <ul><li>Mentioned </li></ul><ul><ul><li>[email_address] </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Inside Gartner Group newsletter </li></ul></ul><ul><ul><li>The Art of the Long View - Peter Schwartz </li></ul></ul><ul><ul><li>The Cathedral and the Bazaar - Eric S. Raymond </li></ul></ul><ul><ul><li>No Excuses Management - TJ Rodgers et al </li></ul></ul><ul><ul><li>Product Development & Management Association </li></ul></ul><ul><ul><li>Portfolio Management for New Products - Cooper & Edgett </li></ul></ul><ul><li>Others </li></ul><ul><ul><li>Built to Last - Collins and Porras </li></ul></ul><ul><ul><li>Competing for the Future - Hamel and Prahalad </li></ul></ul>
  26. 26. The results... <ul><li>Improved business information: Understand where to invest: </li></ul><ul><ul><li>What are our key technologies? </li></ul></ul><ul><ul><li>What are our major dependencies? </li></ul></ul><ul><ul><li>What are our core strengths? </li></ul></ul><ul><ul><li>What are our critical weaknesses? </li></ul></ul><ul><li>Integrated planning: Think globally </li></ul><ul><ul><li>Are we researching the technologies we are going to need? </li></ul></ul><ul><ul><li>Are we co-ordinating with our suppliers? </li></ul></ul><ul><ul><li>Are we co-ordinating with our customers? </li></ul></ul><ul><ul><li>Proactively plan for all conditions </li></ul></ul>
  27. 27. Questions...?