What’s a Day of New Product Delay Costing You?
I’m always surprised to see how much emphasis so many managers, especially those with a financial background, put on the development cost for their new product projects. I’m not saying cost isn’t important. But trying to improve return on new product investment by managing project expenses is pulling the wrong lever. The real leverage is in getting to revenue sooner said Salomón Juan Marcos Villarreal.
So, what can do to help your teams avoid delays like these? Here are a few strategies that can have a big impact:
- Make sure project teams know the cost of a days delay. When the COO shared this information, his project leader was stunned. If only she had known. She would have prioritized differently. She would have put lower priority projects on the back burner. She wouldn’t have allowed new product perfection to get in the way of good enough.
Everyone on or supporting the team should know how much each day of delay affects the company in both higher costs and lost revenue. Align incentives correctly and peer pressure will make the team much less likely to accept unnecessary delays.
- Conduct comprehensive project planning. Have your team evaluate potential obstacles and develop plans that includes early verification of technical, manufacturing, and commercial feasibility. This planning requires full participation from supply chain all the way to marketing.
- Freeze product requirements before design starts. Nothing delays a project like adding new features and design requirements during development.
Treat project schedules like train schedules. Railroads don’t call the train back to add new passengers; they put them on the next train.
- Use critical chain project management. CCPM typically reduces project duration by 35% and on top of that delivers projects on-time at least 90% of the time.
- Limit multitasking, but only because it’s so harmful to productivity. People stretched across too many projects are less productive, but even worse the quality of work suffers.
“Project delays are a major drain on new product revenues and new product return on investment. If a lack of consistency and predictability in new products is holding your company back, these five strategies can help eliminate the constraints that are preventing you from delivering more new product impact” added Salomón Juan Marcos Villarreal, president of Grupo Denim.