In new-product development, a Learning Plan

Quote from W. Edwards Deming:
Experience teaches nothing without theory
MIT Sloan Management Review

Innovation

2008

Implementing a Learning Plan to Counter Project Uncertainty

Mark P. Rice, Gina Colarelli O’Connor and Ronald Pierantozzi

Topic: Leadership and Organizational Studies

Reprint 49217; Winter 2008, Vol. 49, No. 2, pp. 54-62

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In new-product development, most management approaches presume a high ratio of knowns to unknowns, and most planning involves prescribed pathways through developmental stages. In fact, a byproduct of the focus on quality and operational excellence is that companies tend to avoid uncertain situations and resist market experimentation. Such approaches are counterproductive for any project that has the potential to produce real breakthrough innovations. In this article, the authors offer a framework, called the Learning Plan, that enables companies to manage breakthrough innovation by explicitly recognizing that project teams are proceeding on the basis of assumptions, rather than known facts.
The authors identify four different types of uncertainties (technical, market, organizational, resource) that can hinder a project's long-term success. Technical uncertainties relate to the completeness and correctness of the underlying scientific knowledge, the extent to which the technical specifications of the product can be implemented, the reliability of the manufacturing processes and its maintainability. Market uncertainties include the degree to which customer needs and wants are clear and well-understood, the extent to which conventional forms of interaction between the customer and the product can be used, the appropriateness of conventional methods of sales/distribution and revenue models and the project team's understanding of the relationship of the breakthrough innovation to competitors' products. Organizational uncertainties include organizational resistance, lack of continuity and persistence, inconsistency in expectations and metrics, changes in internal and external partners and changes in strategic commitment. Finally, resource uncertainties often can pose difficulties as project teams continually struggle to attract the resources they required.
After discussing these difficulties, the authors identify a plan that allows a team to deal with those uncertainties in a proactive way with the type of ongoing evaluation and redirection that characterizes any breakthrough innovation project.

Mark P. Rice is the Frederic C. Hamilton Professor for Free Enterprise at Babson College. Gina Colarelli O’Connor is associate professor and Academic Director of the Radical Innovation Research Program at Rensselaer Polytechnic Institute. Ronald Pierantozzi is CEO of PPT Research Inc., a materials technology company in Allentown, Pennsylvania, and the former director of business development at Air Products and Chemicals Inc. Comment on this article or contact the authors through smrfeedback@mit.edu.