Manage Pipeline as a Lateral System

Causing projects to finish on time, or even making them faster is the “back-end” of the new product execution system.

Deciding what projects to do, and then aligning them with business strategy and available resources is the “front-end.”

The effectiveness of the front-end of an integrated “lateral system” drives the chances of success at the back-end in terms of Fast-Time-To-Market (FTTM) performance. In other words, you can’t solve the FTTM cycle-time problem unless you also deal with the system that feeds it with new projects.

It is critical to deal with this horizontal work flow as one integrated system. Often ownership is parsed out to various functions, with no overall owner managing the portfolio of products from end to end. The classic functional silos of Marketing, R&D, and Operations point fingers when projects fail to be delivered on time.

When these systems work well, organizations have decision mechanisms to assess the impact of new projects on the capacity of the execution organization’s ability to deliver. They manage it the way one would manage a factory operations problem; by carefully balancing demand and capacity.

When capacity is not aligned, projects take longer to execute and in turn miss optimal market windows where their ASP and Margins are the highest. Growth is impacted. The chain reaction is to reduce resources across the board to lower burn rates, which exacerbates the capacity problems even further. We’ve also seen a resource and budget constraint placed at the back-end, while not simultaneously reducing the flow at the front end. Rather, the most effective new product development engines we’ve seen run it like one integrated system.