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Master thesis Henk Elard de VriesPost-Launch reviews
How should they be used to learn and improve NPD performance?
!Abstract
New Product Development projects are usually concluded with an evaluation. There are different names for such evaluations, like Post-Launch reviews, Post-project reviews or post-mortems. This paper shows the results of a research to the Post-Launch review practices within Wavin. The research is divided in three parts: (1) a literature review (2) a study within Wavin and (3) coupling of literature and situation within Wavin.
Keywords
Post-Launch reviews, Post-Project reviews, NPD process, Stage-gate model
Post-Launch reviews
How should they be used to learn and improve NPD performance? ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Author! Henk!Elard!de!Vries! Zoutepoel!33! 8604!CC,!Sneek! Student!#:!s1808850! ! University.of.Groningen. Faculty!of!economics!and!business! MSc!BA!Business!Development! Supervisor:!F.P.J.!Kuijpers! . Wavin.Nederland. Supervisor:!Hans!Mascini! J.C.!Kellerlaan!8! 7772!SG,!Hardenberg!Foreword.
To!finish!my!study!Business!Administration!at!the!University!of!Groningen,!I!had!to!write!a! thesis!about!something!related!to!my!study.!During!my!final!year!I!have!read!many!articles! about! stageXgate! models! and! they! caught! my! special! attention! and! interest.! With! this! in! mind! I! searched! for! a! (production)! company! that! was! eager! to! learn! about! their! NPD! process.! A! few! companies! responded,! but! Wavin! seemed! to! be! the! most! interesting!! company.!! ! I!would!like!to!use!this!chapter!to!thank!everyone!within!Wavin!who!spent!valuable!time!to! answer!my!interview!questions!and!survey.!Furthermore!my!special!thanks!to!Hans!Mascini! for!providing!me!the!opportunity!to!conduct!this!research.!Last!but!not!least!I!would!like!to! thank!my!supervisor!Frans!Kuijpers!for!providing!important!directions!and!advice.! ! October,!2011! ! Henk!Elard!de!Vries!
Management(summary.
This!thesis!was!assigned!by!the!Dutch!marketing!department!because!they!believed!that!not! all!stages!of!the!NPD!process!are!performing!sufficiently.!The!research!therefore!aimed!at! answering! the! question! “how! are! the! NPD! processes! performing! and! how! can! they! be! improved”.! The! marketing! department! especially! wanted! focus! on! one! of! the! stages! they! believe! can! be! improved,! which! is! the! final! evaluation! on! NPD! projects.! In! literature! this! evaluation!is!often!called!the!PostXLaunch!review!(PLR).!!
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In!order!to!answer!the!management!question!a!literature!review!has!been!conducted!which! is! later! compared! with! the! situation! within! Wavin.! In! order! to! gain! insight! in! Wavin’s! situation,!employees!were!interviewed!and!a!survey!was!sent!out.!
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The!research!showed!that!it!could!be!concluded!that!the!Dutch!marketing!department!was! right!on!quite!a!number!of!aspects.!Currently!there!are!formal!processes!in!place!to!learn! from!NPD!projects,!but!they!do!not!contribute!enough!to!organizational!learning.!Although! Wavin! employees! think! they! are! able! to! get! to! rootXcauses! of! project! outcomes,! they! generally!do!not!use!any!tools.!Not!only!the!process!of!capturing!learnings!is!lacking,!but!also! the! communication! of! lessons! learned! can! be! improved.! The! surveys! showed! that! lessons! learned!do!not!move!effectively!beyond!different!project!teams,!departments!and!regions.! Therefore! project! teams! are! often! not! able! to! apply! valuable! lessons! learned! by! other! project!teams.!!
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So! how! should! Wavin! use! PLRs! to! improve! their! NPD! processes?! There! should! be! formal! procedures!to!capture!the!right!learnings!from!projects.!These!procedures!should!not!only! focus! on! the! superficial! symptoms! of! project! outcomes,! but! especially! on! the! underlying! rootXcauses.!In!order!to!find!the!rootXcauses!and!enhance!the!quality!of!PLRs,!Wavin!should! use! existing! tools.! Besides! capturing! learnings,! it! is! important! to! disseminate! them! to! the! right!people!and!at!the!right!moment!in!time.!! ! At!the!end!of!the!current!stageXgate!model!two!more!stages!should!be!added.!A!first!and!a! second!PostXlaunch!review.!The!first!one!should!take!place!4!months!after!product!launch! and!it!should!focus!on!technical!and!internal!aspects.!The!second!should!take!place!after!12! months!and!it!should!focus!on!commercial!and!external!aspects.!The!business!unit!that!is! responsible!for!the!project!should!initiate!both!reviews.!! ! With!regards!to!the!dissemination!of!lessons!learned!it!is!difficult!to!develop!one!standard! procedure.!Not!all!lessons!learned!should!be!communicated!to!everyone!and!not!all!lessons! can! be! communicated! in! the! same! way.! Although! standardizing! the! communication! is! difficult,!almost!everyone!agreed!that!the!best!moment!to!share!knowledge!effectively!to!a! new!project!team,!is!at!the!start!of!a!new!project.! ! The!strong!overall!advice!is!to!implement!formal!PLR!procedures,!adhere!to!these!and!make! use!of!tools!for!finding!rootXcauses.!The!constituating!parts!of!this!advice!are!given!in!the! chapter!conclusions!and!recommendations.! !
Table&of&contents.
1.! INTRODUCTION...10! 1.1! COMPANY!PROFILE!...!10! 1.2! MANAGEMENT!QUESTION!...!10! 1.3! LAYOUT!OF!THIS!STUDY!...!10! 2.! BACKGROUND.LITERATURE...11! 2.1! STAGEXGATE!...!11!2.2! POST!LAUNCH!REVIEW!(PLR)!...!12!
2.2.1! What(is(a(PLR?(...(12! 2.2.2! Why(is(it(important(to(use(a(good(PLR?(...(12! 3.! RESEARCH.DESIGN...14! 3.1! RESEARCH!QUESTION!...!14! 3.2! DATA!COLLECTION!...!14! 3.3! RESEARCH!METHOD!...!15! 3.4! QUALITY!CRITERIA!...!15! 3.4.1! Controllability(...(15! 3.4.2! Reliability(...(15! 3.4.3! Validity(...(16! 3.4.4! Recognition(of(results(...(16! 4.! LITERATURE.REVIEW...17! 4.1! WHAT!SHOULD!A!PLR!LOOK!LIKE?!...!17! 4.2! WHAT!PERFORMANCE!METRICS!SHOULD!BE!USED?!...!20! 4.3! HOW!REGULAR!AND!WHEN!SHOULD!A!PLR!BE!CONDUCTED?!...!23! 4.4! WHO!SHOULD!CONDUCT!THE!PLR?!...!24! 4.5! ORGANIZATIONAL!STRUCTURE!AND!CULTURE!...!25! 4.5.1! Formalization(...(25! 4.5.2! Create(a(psychologically(safe(environment(and(embrace(failure(...(25! 4.5.3! Overcome(negative(relationships(between(departments(...(26! 4.5.4! Barriers(to(organizational(learning(...(26! 4.6! HOW!SHOULD!THE!PLR!BE!USED!TO!IMPROVE!ORGANIZATIONAL!LEARNING?!...!27! 4.7! HOW!SHOULD!THE!PLR!BE!IMPLEMENTED?!...!30! 5.! WAVIN’S.PLR.PROCESS...31! 5.1! INTRODUCTION!...!31!
5.2! WHEN!DOES!WAVIN!CONDUCT!PLR’S!AND!WHO!IS!INVOLVED?!...!32!
5.3! WHAT!DO!THESE!PLR’S!LOOK!LIKE?!...!34!
5.4! WHAT!PERFORMANCE!METRICS!ARE!USED?!...!36!
5.5! COMMUNICATION!OF!LESSONS!LEARNED!...!36!
5.6! BARRIERS!TO!LEARNING!...!38!
5.7! WAVIN’S!CURRENT!PLR!PERFORMANCE!...!39!
6.! ANALYSIS...40! 6.1! HOW!DOES!WAVIN!LEARN!FROM!PLRS?!...!40! 6.2! RESPONSIBILITIES!AND!PEOPLE!INVOLVED!...!40! 6.3! HOW!REGULAR!AND!WHEN!...!41! 6.4! TOOLS!AND!METRICS!...!41! 6.5! SHARING!OF!KNOWLEDGE!...!42! 6.6! CULTURE,!BARRIERS!TO!LEARNING!AND!PERFORMANCE!OF!CURRENT!PROCESSES!...!42! 7.! CONCLUSIONS.AND.RECOMMENDATIONS...44! 8.! DISCUSSION.AND.LIMITATIONS...47!
9.! REFERENCES...48! APPENDIX.1:.EXAMPLE.OF.A.GOOD.1ST.POST.LAUNCH.REVIEW...51! APPENDIX.2:.EXAMPLE.OF.A.GOOD.2ND..POST.LAUNCH.REVIEW...52! APPENDIX.3:.CURRENT.NPD.PROCESS.AS.USED.WITHIN.T&I...53! APPENDIX.5:.INTERVIEWS.EMPLOYEES.WAVIN...55! APPENDIX.6:.INTERVIEW.GUIDE...56! APPENDIX.7:.SURVEY...57! APPENDIX.8:.CURRENT.EVALUATION.CRITERIA...59! !!
1. Introduction$
This! chapter! is! used! to! give! some! background! information! about! Wavin,! to! describe! the! management!question!they!are!facing!and!finally!to!provide!a!layout!of!this!study.!
1.1 Company*profile*
Wavin!is!a!supplier!of!plastic!pipe!systems!and!solutions!to!customers!such!as!building!and! civil!wholesalers,!plumbing!merchants,!civil!contractors,!housing!developers,!large!installers,! utility!companies!and!municipalities.!Currently!the!company!is!active!in!two!market!segments:! aboveA!and!below!ground.! !The! company! has! offices! in! 26! European! countries! and! manufacturing! plants! in! 16! of! those.! Currently! Wavin! employs! approximately! 6,400! people.! Wavin! is! listed! on! the! Dutch! Stock! Exchange.! Last! year’s! revenue! was! around! 1.2! billion! euro! from! which! nearly! 15%! was! achieved! by! innovations.! (Products! that! are! less! than! 5! years!on!the!market)!
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Currently!Wavin!offers!more!than!20,000!products,!but!a! large! number! of! these! products! are! not! selling! as! expected.!!
1.2 Management*question*
A! number! of! symptoms! of! NPD! performance! issues! are! seen,!but!it!is!unclear!what!causes!them!and!how!the!NPD! process!can!be!improved.!Wavin!expects!there!are!some! problems!in!the!final!stages!of!the!NPD!process,!but!they! are!not!sure.! ! The!management!question!therefore!is:!
$“How$ are$ the$ NPD$ processes$ performing$ and$ how$ can$ they$be$improved?”!
1.3* Layout*of*this*study*
This!study!will!start!with!a!short!introduction!of!the!StageA Gate!model!and!the!PostAlaunch!review.!After!that!there!
will!be!an!explanation!about!the!research!design.!Both!the!results!of!the!literature!research! and! the! research! within! Wavin! are! published! in! the! 4th! chapter.! A! conclusion,! including!
implementation!advice,!and!discussion!and!implications!will!be!at!the!end!of!this!paper.!
Definitions$
In! business! development,! New$ Product$ Development$ (NPD)! is! the! term! used! to! describe!the!whole!process! of! bringing! a! new! product! to!market.!!
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According! to! Cedergren! et! al.! (2010)! and! O’Donnell! &! Duffy,!(2002)!the!term!NPD$ performance$ is! mainly! concerned! with! efficiency! and! effectiveness.! There! are! several! interpretations! of! efficiency! and! effectiveness,! but! these! usually! relate! to! the! development! of! the! right! product! (effectiveness)! and! the! development! of! the! product! in! the! right! way! (efficiency).! It! is! important! that!the!performance!of!the! product! development! function! is! evaluated! with! both! of! these! factors! in! mind.!
Background!literature!|11!
2. Background+literature$
This!chapter!is!written!to!introduce!the!most!important!background!literature!of!this!study! and!to!explain!what!the!postAlaunch!review!is.!
2.1* Stage<Gate*
Facing! increased! competition! from! both! home! and! abroad,! maturing! markets,! and! the! heightened! pace! of! technological! change,! companies! have! to! look! for! new! businesses! and! businesses! for! sustained! growth! and! competitive! advantage! (Cooper,! 1990).! While! most! companies,!including!Wavin,!see!the!need!to!innovate!and!develop!new!products,!not!all!new! products!perform!as!well!as!they!are!supposed!to!do.!In!order!to!get!better!at!developing!new! products,!most!companies!use!formal!product!development!processes.!
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Wheelwright! and! Clark! (1992)! state! that! a! good! formal! NPD! process! results! in! improved! market! position,! improved! resource! utilization! and! renewal! and! transformation! of! the! organization.!The!ideal!outcome!of!NPD!is!highAperforming!products!that!achieve!stipulated! market!share,!sales!growth,!and!customer!use!and!profit!objectives.!The!most!used!model!in! this!field!is!the!StageAGate®!model!from!Cooper.!! ! ! Figure$1$StageCGate$process$(Cooper$&$Edgett,$2011)$ ! At!this!moment!Wavin!has!a!formal!NPD!process,!which!has!similarities!with!Cooper’s!StageA Gate! model.! Even! though! this! model! is! in! place! (Appendix! 3:! Current! NPD! process! as! used! within!T&I),!employees!from!the!marketing!department!state!that!it!is!often!not!used.!Some! even! argue! that! the! formal! process! is! only! there! to! achieve! an! ISO9001! certification.! The! marketing!department!also!states!that!they!are!never!involved!in!formal!evaluations.!
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The!first!stages!and!gates!are!often!mentioned!in!current!literature,!but!according!to!Cooper! especially! the! postAlaunch! review! has! great! impact! on! NPD! performance! (JurgensAKowal,! 2010;!Hlavacek!et!al,!2009;!Cooper!2004;!Williams,!2003).!Because!of!the!limited!time,!this! research!will!mainly!focus!on!how!a!postAlaunch!review!can!enhance!NPD!performance!and! contribute!to!organizational!learning.!
12!|!Background!literature!
2.2* Post*Launch*Review*(PLR)*
2.2.1$ What$is$a$PLR?$
A!new!Product!Development!project!should!be!concluded!with!a!postAaudit!that!analyses!the! strengths!and!weaknesses!of!the!complete!NPD!process.!(Cooper,!2008)!Here,!actual!project! results! are! compared! to! promised! results,! gaps! are! identified,! and! a! thorough! analysis! of! causes!results!in!corrective!actions.!This!final!evaluation!after!the!launch!of!the!new!product!is! called!the!Post!Launch!Review!(PLR).!There!are!different!names!for!the!Post!Launch!review,! like!for!example!Postmortems!or!After!Action!Reviews!(Martin,!1988;!Gino!and!Pissano,!2011).! !
Regardless! of! which! type! of! StageAGate! or! NPD! process! you! are! using,! every! NPD! process! should!end!with!a!Review!(JurgensAKowal,!2010)!
2.2.2$ Why$is$it$important$to$use$a$good$PLR?$
Although!most!companies!have!formal!NPD!processes!in!place,!only!a!few!conduct!a!formal! postAlaunch! review.! Consequently,! the! mistakes! are! often! repeated,! wasting! millions,! even! billions,! of! R&D! and! marketing! dollars! every! year.! “Projects! are,! by! nature,! temporary! organizations!and!any!learning!that!is!accumulated!in!a!project!will!largely!dissipate!at!the!end! of!the!project!unless!attention!is!paid!to!the!collection!and!dissemination!of!that!knowledge.”! (Williams,! 2007)! Product! development! success! would! thus! be! higher! and! far! less! risky! if! companies! would! regularly! analyze,! widely! share,! and! learn! from! each! unsuccessful! new! venture.!The!positive!effect!of!formal!postAlaunch!reviews!on!the!top!and!bottom!lines!is!often! impressive.!PostAlaunch!reviews!often!improve!the!new!product!success!ratio!from!30!to!50! percent.! (Hlavacek! et! al.! 2009)! Even! though! the! postAlaunch! review! is! the! most! overlooked! review!in!the!NPD!process,!it!is!probably!the!most!valuable.!(JurgensAKowal,!2010;!Schmidt!et! al.,!2009)!!
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Martin!(1988)!states!that!not!only!the!postAmortem!meeting!(or!PLR)!is!an!effective!method!of! avoiding! future! problems,! but! it! also! helps! to! improve! employee! morale.! It! shows! that! management! is! less! concerned! with! blaming,! but! more! with! preventing! it! from! happening! again.!!
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The! PLR! can! enhance! organizational! learning.! According! to! Garvin! (1993),! learning! organizations!meet!the!following!criteria:! A Systematic!problem!solving! A Experimenting!with!new!approaches! A Learning!from!own!experiences!and!past!history! A Learning!from!experiences!and!best!practices!from!others! A Transferring!knowledge!over!the!organization!quickly.! As!is!explained!in!the!following!chapters,!conducting!a!good!PLR!will!result!in!a!higher!level!of! organizational!learning.! !
Next! to! those! arguments,! the! PLR! is! a! good! tool! to! remove! waste! in! the! process,! and! thus! speeding!up!future!developments.!(Bruss,!2007)!
Background!literature!|13! Although,!there!are!companies!that!do!conduct!reviews,!those!firms!often!fail!to!profit!from! the!exercise.!Reviews!are!often!not!disseminated,!reviews!are!often!too!subjective!and!too! shallow!in!problem!diagnosis,!and!reviewers!generally!miss!the!opportunities!to!think!about! how! problems! on! one! project! indicate! generalizable! problems! that! would! affect! other! projects.!(Lily!and!Porter,!2003)! ! ! ! ! * *
14!|!Research!design!
3. Research(design$
This! chapter! is! written! to! explain! the! setup! of! the! research,! the! most! import! research! questions,!the!research!method!and!the!way!the!data!is!collected.!
3.1 Research*question*
Wavin! wants! to! see! whether! their! NPD! process! should! be! reshaped! to! enhance! NPD! performance.!While!there!is!evidence!that!more!stages!and!gates!of!the!NPD!process!are!not! functioning!as!they!are!supposed!to,!the!PostALaunch!Review!will!be!the!main!subject!of!this! research.!This!is!because!the!research!should!be!focused,!because!there!is!limited!time!and! because!a!good!PLR!will!enhance!the!whole!process.! ! Not!only!the!process!of!the!PLR!will!be!subject,!but!also!related!aspects!like:!culture,!crossA functional!teams,!decisionAmaking!and!cooperation.! ! The!research!question!therefore!is:! $“How$should$the$Post$Launch$Reviews$be$used$to$improve$the$NPD$process?”$ ! To!answer!the!research!question,!the!following!investigative!questions!have!to!be!answered.!! ! Diagnose$of$current$PLR$ • What!does!Wavin’s!PLR!look!like!from!a!process!point!of!view?! • How!does!Wavin!learn!from!its!PLR?!! • What!criteria!does!Wavin!use!in!its!PLR!and!how!often!does!such!a!review!take!place?! • Who!is!responsible!and!who!should!be!responsible!for!the!PLR?! ! Coupling$and$analysis$of$total$NPD$process$ • What!does!the!NPD!process!of!Wavin!look!like?! • What!are!the!differences!with!Coopers’!StageAGate!system?! • What!reasons!does!Wavin!have!for!these!differences! • What!cultural!aspects!enhance!PLR!performance?! • What!kind!of!teams!should!be!formed?!E.g.!crossAfunctional?!
3.2 Data*collection*
Twenty! interviews! are! conducted! among! employees! at! different! departments,! at! different! levels! and! in! different! countries.! To! be! able! to! semiAstructure! the! interviews,! an! interview! guide!(see!Appendix!6:!Interview!Guide)!was!used.!
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Furthermore!a!survey!was!conducted.!This!survey!(see!Appendix!7:!Survey)!was!sent!via!the! intranet!to!a!selection!of!employees!that!are,!or!perhaps!should!be!involved!in!the!PLR.!The! survey!was!sent!out!to!29!employees.!21!employees!filled!in!the!survey,!one!did!not!respond! and! seven! responded! they! were! unable! to! fill! in! the! survey! because! they! have! not! been! involved!in!NPD!projects.!
Research!design!|15!
3.3 Research*method*
This!thesis!is!a!case!study!both!based!on!qualitativeA!and!quantitative!data.!Data!is!collected! by!a!literature!review,!interviews!and!a!survey.!! ! First!there!is!a!literature!review!to!see!what!the!current!literature!suggests!about!Post!Launch! Reviews.!Based!on!the!literature!review!and!exploratory!interviews,!an!interview!guide!and! surveys!are!constructed.!3.4 Quality*criteria**
Van!Aken!et!al.!(2009)!state!that!just!like!a!product,!a!research!loses!much!of!its!value!when!it! does!not!meet!its!quality!criteria.!In!their!book!they!state!that!the!most!important!researchA oriented!quality!criteria!are!controllability,!reliability!and!validity.!Not!only!it!is!important!that! a! research! meets! its! criteria,! the! results! should! also! be! recognized! in! the! organization.! The! quality!criteria!that!are!used!in!this!paragraph!are!therefore!controllability,!reliability,!validity! and!recognition!of!results.!3.4.1 Controllability$
To! be! able! to! evaluate! the! validity! and! reliability! of! the! research,! all! results! should! be! controllable.! The! way! respondents! were! selected,! the! questions! that! were! asked,! the! circumstances,! the! analysis! and! the! conclusions! are! therefore! clearly! stated.! ! A! list! of! respondents,! documents! used! and! interview! questions! is! included! in! the! appendix.! Circumstances!are!included!throughout!this!research.!The!analysis!and!conclusions!will!only! be! drawn! based! on! information,! which! is! included! in! the! former! chapters.! Furthermore! as! much! as! possible,! is! based! on! facts.! A! reference! for! all! important! facts,! observations! and! opinions!is!given.!
3.4.2 Reliability$
Results!are!reliable!when!they!are!independent!of!the!particular!characteristics!of!the!study! and! therefore! they! can! be! replicated! in! other! studies.! The! methodological! literature! recognizes! four! potential! sources! of! bias:! the! researcher,! the! instruments,! the! respondents! and!the!situation.!(Van!Aken!et!al.!2009)!
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Research! results! should! be! independent! of! the! person! who! has! conducted! the! study.! Van! Aken!et!al.!argue!that!standardization!is!one!way!to!make!the!results!independent.!Therefore! all! interviews! are! structured! and! based! on! an! interview! guide.! (see! Appendix! 6:! Interview! Guide)!
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Frequently! there! are! several! instruments! or! techniques! available! for! studying! the! same! phenomenon.! Outcomes! of! different! research! strategies! should! be! in! line.! To! be! able! to! overcome! this! bias,! this! study! is! based! on! literature,! which! is! written! from! several! perspectives,! combined! with! interviews! with! employees! from! all! levels! and! on! different! departments.*
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Different! people! within! a! company! have! different! conceptual! schemes,! different! values,! different! observations! and! draw! different! conclusions.! To! cope! with! these! differences,! the! research! will! include! multiple! people! within! the! same! departments.! Furthermore! both!
16!|!Research!design!
experienced! and! less! experienced! employees! are! interviewed.! Despite! those! attempts! to! eliminate!this!bias,!all!interviewed!employees!work!within!Wavin!and!they!therefore!can!have! a!totally!different!perspective!and!view!on!reality!then!people!within!other!companies.!
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Different! situations! also! lead! to! different! results.! Therefore! interviews! are! conducted! at! different! moments! in! time! (randomly! selected),! interviews! are! repeated! and! with! different! employees.! 3.4.3 Validity$ A!research’s!validity!is!another!important!quality!criterion!for!a!research.!A!research!is!valid! when!it!is!justified!by!the!way!it!is!generated.!(Van!Aken!et!al.!2009)!There!are!three!types!of! validity:!constructA,!internalA!and!external!validity.!! ! Construct!validity!is!the!extent!to!which!a!measuring!instrument!measures!what!it!is!intended! to!measure.!While!the!first!interviews!did!not!measure!everything!that!was!intended!to!be! measured,! the! adjustment! of! questions! and! improvement! of! the! interview! guide! increased! the!construct!validity.!
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Internal! validity! is! concerned! with! the! conclusions! that! are! drawn! about! the! relationships! between!phenomena.!Those!conclusions!should!be!justified,!complete!and!there!should!not! be!competing!explanations.!!
!
The!research!results!should!be!generalizable!to!be!external!valid.!Because!this!study!focuses! on! only! one! company,! results! are! probably! not! generalizable! for! all! companies.! By! using! literature!studies!and!as!many!facts!as!possible,!most!of!this!research!should!be!generalizable.! 3.4.4 Recognition$of$results$
Members!of!the!organization!should!be!able!to!make!sense!of!the!results.!If!they!are!not,!it!is! very!difficult!to!reach!agreement!about!organizational!changes.!Recognition!of!results!in!this! study! has! been! achieved! by! interviewing! people! from! the! departments! involved! and! by! illustrating!this!study!with!real!life!examples.!!Furthermore!a!real!PostAlaunch!review!will!be! organized!based!on!this!thesis.!
Literature!review!|17!
4. Literature!review$
This! chapter! explains! what! the! PLR! is,! how! often! and! when! it! should! be! conducted,! how! it! should!be!conducted!and!who!should!be!involved.!Furthermore!it!will!be!about!which!metrics! should!be!used,!how!the!PLR!can!be!used!to!learn!and!what!culture!should!be!created.!
4.1 What*should*a*PLR*look*like?*
The! Post! Launch! Review! should! be! a! formal! process! in! which! the! development! process! is! reviewed!and!the!results!are!documented!and!used!to!learn!from.!The!review!should!not!be! disciplinary! in! nature,! but! its! primary! purpose! is! to! learn! and! enhance! performance! in! the! future.! PLR’s! should! encourage! rational,! logical! interaction! between! the! participants! in! an! organizations!project!or!function.!!
!
According!to!Hlavacek!et!al.!(2009)!a!PLR!should!be!straightforward!and!simple!and!it!should! not! exceed! one! page.! Cooper! (2009)! more! or! less! confirms! this! advice! by! saying:! “Most! companies’!product!development!processes!have!become!too!bulky!and!democratic!”!
!
Even! though! Cooper! (2009)! states! that! in! many! companies!the!processes!have!become!too!bulky!and! bureaucratic,! Lily! and! Porter! (2003)! found! out! that! formalized!reviews!are!much!more!effective!than!less! formalized!reviews.!They!state!that!informal!reviews! and!less!bureaucratic!reviews!seem!to!lead!to!overly! simplistic! explanations! for! complex! situations.! Formalized!reviews!are!more!effective!at!generating! lists! of! action! items! needed! to! overcome! identified! problems!and!retain!breakthroughs.!
!
So! although! the! PLR! should! be! straightforward! and! simple,!the!process!of!conducting!the!review!should! be!formalized.!Hlavacek!et!al.!(2009)!came!up!with!a! format! that! meets! these! criteria.! (See! Figure! 2! Format!for!a!New!Product!Postmortem!(Hlavacek!et! al.!2009)!
!
The! US! military! holds! ‘afterAactionAreviews! (AARs)’! which! are! more! or! less! the! equivalent! for! PLR! in! business.! (Gino! and! Pisano,! 2011)! AAR! participants!
meet!after!an!important!event!and!discuss!the!following!key!questions:! A What!did!we!set!out!to!do?! A What!actually!happened?! A Why!did!it!happen?! A What!are!we!going!to!do!next!time?! !
The! critical! task! of! an! after! action! review! is! the! writeAup! of! the! lessons! learned! and! action! points.! This! lessonsAlearned! document! should! be! send! out! to! all! participants,! who! will! comment!on!it!and!send!it!back.!These!lessons!learned!should!be!communicated!to!everyone!
Figure$ 2$ Format$ for$ a$ New$ Product$ Postmortem$(Hlavacek$et$al.$2009)$
18!|!Literature!review!
who! can! learn! something! from! it.! One! way! to! communicate! this! is! to! organize! a! seminar! where!involved!and!interested!employees!are!invited.!Because!not!everyone!who!needs!this! information!is!involved!in!the!seminar,!the!lessons!learned!should!also!be!documented!and! stored!in!an!accessible!place.!(Bruss,!2007)!
!
Despite!those!arguments!and!examples,!developing!a!PLR!is!not!that!straightforward.!“PostA project! reviews! should! be! tailored! to! the! specific! companies’! conditions.! Experience! shows! that! postAproject! review! practices! differ! across! companies,! due! to! specific! projectA! and! industryA! related! factors,! as! well! as! different! organizational! cultures! and! review! motives.”! (Von!Zedtwitz,!2003)!
!
Identifying*root<causes*
An!important!aspect!of!a!PLR!is!that!it!should!not!only!be!used!to!measure!and!correct!merely! superficial! symptoms.! The! goal! of! the! PLR! is! to! find! the! root! causes! from! things! that! went! wrong!or!that!caused!delays!and!learn!from!it.!There!are!several!tools!to!find!root!causes.!One! way! to! do! this! is! by! using! Fishbone! diagrams.! Figure! 3! shows! an! example! of! a! fishbone! diagram.!(Bruss,!2007)!
*
The!root!cause!analysis,!or!fishbone!diagram!method,!needs!a!facilitator!who!takes!control!of! the!whiteboard.!The!group!selects!a!(positive!or!negative)!experience!they!want!to!analyze! the!cause!of!and!the!facilitator!writes!the!name!on!a!whiteboard!and!draws!an!arrow!to!it.! The! group! then! discusses! what! the! cause! of! the! experience! might! have! been! and! as! more! causes!are!identified,!the!facilitator!draws!arrows!into!the!large!arrow,!writing!in!the!causes.!If! a!cause!has!several!sub!causes!they!are!drawn!as!arrows!into!the!minor!arrows.!(Bjørnson!et! al.!2009)! ! ! Figure$3$Example$fishbone$diagram$ !
Literature!review!|19! Another!way!to!identify!rootAcauses!is!Toyoda’s!five!“why’s”.!(Bulsok,!2009)!The!concept!of!5A why!is!simple:!! 1. Identify!the!problem.! 2. Ask!yourself:!why!did!this!happen?!Come!up!with!all!the!causes!you!can!think!of.! 3. For!each!of!the!causes!you!just!identified,!ask!“why!did!this!happen?”!again.! 4. Repeat!until!you’ve!done!steps!2!and!3!for!five!times.!You!should!have!identified!the!root! cause!by!this!stage.! 5. Find!solutions!and!countermeasures!to!fix!the!root!cause.! !
There! are! two! primary! techniques! to! perform! the! five! why’s:! the! Fishbone! diagram! and! a! tabular!format.!The!first!one!is!the!same!model!as!mentioned!before,!but!then!for!every!line,! the!question!“why”!is!asked!for!five!times.!The!following!figure!illustrates!the!five!“why’s”!in! fishbone!format.!! ! Figure$4$Five$"why's"$in$Fishbone$format$ The!other!method!of!using!the!five!why’s!is!in!tabular!format.!This!could!for!example!be!done! in!excel.!Figure!5!shows!an!example!made!in!excel.! ! Figure$5$Five$"why's"$in$tabular$format$
20!|!Literature!review!
4.2 What*performance*metrics*should*be*used?*
The!evaluation!process!should!be!guided!by!some!formal!metrics.!This!paragraph!is!aimed!at! finding! out! which! metrics! should! be! used! during! the! process.! According! to! Hauser! &! Katz! (1998)!many!metrics!seem!right!and!are!easy!to!measure,!but!have!subtle,!counterproductive! consequences.!Other!metrics!are!more!difficult!to!measure,!but!focus!the!enterprise!on!those! decisions!and!actions!that!are!critical!to!success.!It!is!thus!very!important!to!critically!look!at! all!the!metrics.!!
!
Hauser! and! Katz! (1998)! mention! that! to! create! good! metrics,! you! must! listen! to! your! customers! and! your! employees,! understand! their! work! processes! and! interrelationships.! These! metrics! should! be! tested,! managers! and! employees! should! be! enlisted! and! it! is! important!to!be!creative.!Furthermore!these!metrics!should!not!only!capture!the!things!that! went!wrong,!but!all!learnings.!(JurgensAKowal,!2010;!Gino!and!Pisano,!2011)!!
!
The! usual! suspects! for! metrics! include,! cycle! time,! cost,! and! quality.! More! insightful! companies! focus! additionally! on! design! reuse,! staffing,! knowledge! management,! waste! reduction,! and! risk! mitigation.! Different! industries! also! have! different! needs! in! metrics.! For! example! in! consumer! industries,! time! to! market! and! cost! play! a! bigger! role,! with! many! companies!additionally!driven!by!trade!show!deadlines.!(Mackey,!2007)!
!
Arleth!(2010)!argues!that!a!typical!PLR!includes:! - Financial$and$operational$results:!actual!
versus! budgeted! sales,! market! shares! and! profits! compared! to! the! business! case! that! formed! the! basis! for! starting! the! development! project! in! the! first! place;!!
- Organizational$ learning:! identifying! the! lessons! learned! from! this! project! and! how!to!improve!next!time.!
!
According! to! Lettice! et! al.! (2006),! most! companies! focus! on! financial! metrics,! which! are! usually!short!term.!Companies!however!more!and!more!desire!to!focus!on!the!longerAterm.! ! Griffin!and!Page!(1993;!1996)!came!up!with!a!categorization!of!metrics!for!success!or!failure!of! a!new!product!development!project.!They!categorized!these!metrics!as:! - Customer!acceptance!measures! - Financial!performance! - ProductAlevel!measures! - FirmAlevel!measures! ! Furthermore!they!came!up!with!a!list!with!metrics,!that!they!derived!from!the!1996!PDMA! members’!survey.!Manion!and!Cherion!(2009)!used!their!metrics!and!added!two!more!metrics! that!are!generally!accepted!in!literature.!These!metrics!are:!‘customer!service’!and!‘customer! value’.! !
A! big! company! recently! compared! the!results!of!15!of!its!projects!with! the!business!plan.!In!that!company! it! turned! out! that! the! average! difference! in! sales! budgeted! and! actual! sales! was! more! than! 300%.! (Arleth,!2010)!
Literature!review!|21!
Metric Definition
Mark et-based
Customer acceptance Level of customer's acceptance of the product Y Y Y Y N Customer satisfaction Level of customer's satisfaction with the product Y Y Y Y N Sales objectives Degree to which the product meets revenue goals Y Y Y Y Y Sales growth Degree to which the product meets revenue growth goals Y Y Y Y N Market share Degree to which the product meets market share goals Y Y Y Y N
Sales in units Units sold Y Y Y Y N
# of customers Number of customers that bought the product N N Y N N Customer service Degree to which the product improves customer service N Y N N N Promotion costs The promotion costs necessary to meet revenue goals N N N N Y Customer value Degree to which the product provides more value to customersN Y N N N
Financial based
Break-Even time Length until breakeven of the product Y Y Y Y Y
Profit objectives Degree to which the product meets profit objectives Y Y Y Y Y
IRR/ROI Level of ROI on the product Y Y Y Y Y
Margin Degree to which the product meets margin goals Y Y Y Y Y
Product-based
Product performance Degree to which the product meets performance specificationsY Y Y Y Y Quality Degree to which the product meets quality specifications Y Y Y Y Y Product Innovativeness Customer's perception of product's innovativeness Y Y Y Y N Competitive advantage Degree to which the product provides us with a competitive advantageY Y Y Y N
Process-based
Resource cost Total cost of resources used to develop the product Y Y Y Y Y
Introduced in time Introduced at intended time N N Y Y N
Intangible assets Degree to which intellectual capital has grown N N N N N Time-to-market Time required for developing and launching the new product Y Y Y Y Y
Intuition-based Marketing chance N N N Y N Intuition N N N Y N Br ad fo rd ( 20 01 ) 1996 P D M A m em ber s' s ur vey Ma ni on a nd C he rio n (2 00 9) Gr iff in a nd P ag e (1 99 6) Tz ok as ( 20 01 ) Author In!a!knowledge!driven!economy,!it!is!necessary!to!be!able!to!measure!knowledge!assets.!The! increasing! interest! in! accounting! for! intangibles! on! balance! sheets! has! been! the! result! of! growing! concern! that! not! accounting! for! them! on! balance! sheets! is! producing! misleading! information.!(Lettice!et!al.!2006)!!
!
Based!on!these!articles,!Figure!6!was!composed.!!
*
22!|!Literature!review!
Although!Figure!6!shows!the!most!used!metrics,!recent!literature!also!focuses!on!making!the! NPD! processes! leaner.! According! to! Cooper! (2009),! smart! companies! have! borrowed! the! concept!of!value!stream!analysis!from!lean!manufacturing,!and!have!applied!it!to!their!new! product!development!process!in!order!to!remove!waste!and!inefficiency.!The!value!stream!is! used!to!portray!the!value!stream!or!product!development!process,!and!helps!to!identify!both! valueAadded! and! nonAvalue! added! activities.! A! task! force! maps! the! value! stream! and! all! processes,!activities!and!tasks,!required!deliverables,!documents!and!templates,!committees! and! decision! processes! are! examined,! looking! for! problems,! timeAwasters! and! nonAvalue! added!activities.!Once!these!are!spotted,!the!task!force!works!to!remove!them.!! ! Manion!and!Cherion!(2009)!found!that!the!strategic!type!of!a!firm!affects!the!importance!of! project!performance!measures!and!that!not!all!firms!should!use!the!same!success!measures.! Firms!should!contextualize!their!success!in!NPD!projects!based!on!their!strategic!type.!They! researched!three!out!of!four!strategic!types!as!defined!by!Miles!and!Snow!(1978)!and!rank! ordered!the!most!important!success!factors.!! !
Prospector$ Analyzer$ Defender$
1.!Customer!satisfaction! 1.!Product!Return!on!Investment! 1.!Profit!goals! 2.!Customer!number! 2.!Breakeven!time! 2.!Customer!service! 3.!Customer!acceptance! 3.!Profit!goals! 3.!Revenue!growth! 4.!Revenue!goals! 4.!Customer!satisfaction! 4.!Margin!goals! 5.!Product!Return!on!Investment! 5.!Margin!goals! ! 6.!Breakeven!time! 6.!Customer!acceptance! ! Figure$7$Rank$Order$of$the$Most$Important$Success$Measures$by$Strategic$Type$(Manion$and$Cherion,$2009)$ As!will!be!explained!in!the!next!paragraph,!there!should!be!at!least!two!PLR’s.!Tzokas!et!al.! (2001)!conducted!a!research!to!the!criteria!that!companies!use!to!evaluate!at!certain!times!in! the!NPD!process.!The!following!table!shows!which!percentage!of!companies!uses!what!criteria! during!the!PostALaunch!Review.! ! ! Figure$8$most$used$evaluation$criteria$(Tzokas$et$al,$2001)$
Their! conclusions! with! regards! to! the! PLR! are! as! follows:! “Evaluation! in! the! short! term! is! critical!for!allowing!the!detection!of!any!problems!before!they!adversely!affect!the!product! line!or!the!corporate!image!as!a!whole.!In!the!long!term!there!is!a!shift!in!attention!from!the! technical! performance! of! the! product! to! profits! and! sales.”! So,! according! to! Tzokas! et! al.! (2001)!the!first!PLR!should!focus!on!technical!performance!of!the!product!and!the!second!on! profits!and!sales.!!! ! Evaluation*gate Cust ome r)a cc ep ta nc e Cu st ome r)s at isf ac tio n Sa le s)o bj ec tiv es Sa le s)g ro w th Ma rke t)s ha re Sa le s)i n) uni ts Ma rke t)p ot en tia l Br ea k; Ev en )ti me Pr of it) ob je ct iv es IR R/ ROI Ma rg in Pr od uc t)p er fo rma nc e Qu al ity Pr od uc t)u ni qu en es s Te ch ni ca l)f ea sa bi lit y St ay )w ithi n) budg et In tr od uc ed )in )ti me Ti me ;t o; ma rk et Ma rke tin g) ch an ce In tu iti on Post;Launch,)short)term 60 62 49 41 38 62 34 21 46 22 53 45 42 27 8 12 34 20 22 15 Post;Launch,)long)term 37 56 44 49 48 55 27 14 47 27 52 36 34 18 4 7 9 4 13 10 Percentage)of)companies)that)makes)use)of)this)criteria Intuition Evaluation*criteria
Literature!review!|23!
4.3 How*regular*and*when*should*a*PLR*be*conducted?*
Although!there!is!only!one!Post!Launch!Review!mentioned!in!the!original!stageAgate!model,!a! number!of!recent!researches!show!there!is!a!need!for!at!least!a!shortA!and!a!long!term!PLR.! Bradford!et!al.!(2001)!did!research!to!the!measurement!of!NPD!processes!and!they!found!out! that!the!average!number!of!PLR’s,!per!project!is!2.45.!Based!on!several!articles!(Bradford!et!al,! 2001;!Tzokas,!2001,!JurgensAKowal,!2010;!Arleth,!2010)!it!can!be!concluded!that!there!should! be!at!least!2!PLR’s!and!perhaps,!depending!on!the!situation,!more.!! ! With!regards!to!the!moment!the!PLR!should!be!conducted,!there!are!also!different!views!from! authors.! Tzokas! (2001)! states! that! the! first! review! should! be! conducted! after! 25%! of! the! product!lifecycle.!Authors!like!Cooper!(1990)!and!JurgensAKowal!(2010)!state!that!a!good!point! to! review! the! project! and! product's! performance! is! at! some! point! after! commercialization,! when!the!product!becomes!a!"regular!product"!in!the!company's!product!portfolio.!JurgensA Kowal!(2010)!also!adds!that!there!is!only!a!small!time!interval!before!resources!and!people!are! moved!to!another!project.!As!soon!as!they!are!moved!to!another!project,!the!learnings!from! the!former!project!are!not!in!the!forefront!of!the!team’s!memories!anymore.!So,!a!first!review! should!be!conducted!before!people!and!resources!move!to!another!project.! !About! the! second! review! there! are! also! different! views.! While! Tzokas! (2001)! states! that! it! should! be! after! 75%! of! the! product! lifecycle,! other! authors! mention! that! is! should! be! conducted!somewhere!between!6!and!12!months.!(Arleth,!2010)!
!
JurgensAKowal! (2010)! says! it! also! depends! on! the! nature! of! the! industry! and! the! expected! lifecycle.!In!some!industries!the!second!review!should!take!place!after!3A6!months,!while!in! others!this!review!should!be!later!because!there!is!not!sufficient!data!regarding!marketplace! acceptance! available.! To! see! whether! there! is! enough! marketplace! acceptance,! a! company! should! look! at! historical! information! and! the! time! after! which! it! has! sold! 10A15%! of! a! new! product.!
!
A!third!review!can!also!be!conducted!in!case!of!an!unplanned!event.!For!example!when!errors! or!insufficient!quality!of!a!product!become!visible!after!the!2nd!review.!
!
Review$ When$ Author$
1st!review! Point!that!the!product!becomes!‘regular’! Cooper!(1990);!JurgensAKowal!(2010)! After!25%!of!the!product!lifecycle! Tzokas!(2001)!
6A12!months!after!launch! Arleth!(2010)! 2nd!review! 3A6!months!after!launch! JurgensAKowal!(2010)!
After!75%!product!lifecycle! Tzokas!(2001)! 3rd!review! In!case!of!an!unplanned!event!or!quality!issues! !
Figure$9$Moment$that$PLRs$should$be$conducted$ $
24!|!Literature!review!
4.4 Who*should*conduct*the*PLR?*
According! to! Hlavacek! et! al.! (2009)! an! objective! investigative! team! of! two! to! three! people! must!be!selected!for!each!project.!Members!of!each!investigative!team!include!the!principal! investigator!and!the!appropriate!technical!expert(s).!The!seven!essential!requirements!of!the! technical! experts! and! especially! the! independent! principal! investigator! conducting! a! new! product!postAmortem!review!are:! 1. Relevant!experience! 2. Objectivity! 3. CustomerAcentric! 4. Interviewing!skills! 5. Persistence! 6. RootAcause!analysis! 7. Organizational!and!communicational!skills! ! Martin!(1988)!states!that!a!diplomatic!chairman!should!lead!the!PLR.!The!chair!function!is!to! moderate!the!meeting,!motivate!discussion,!and!suppress!personal!attacks!on!individuals.!He! or!she!sets!the!agenda,!notifies!the!participants!and!impresses!upon!them!that!the!meeting!is! not! disciplinary! in! nature.! Von! Zedtwitz! (2003)! adds,! having! a! trained! and! independent! facilitator!(or!chairman)!allows!the!key!project!members!to!focus!on!the!review!results!while! the!facilitator!adds!neutrality,!process!experience!and!review!techniques.! ! The!critical!task!of!a!PLR!is!the!writeAup.!This!could!be!done!by!the!chairman,!but!unless!the! chairman!is!trained!in!it,!it!is!recommended!that!a!scribe!is!recruited!for!the!writeAup.!(Bruss,! 2007)!! !
Not! every! author! agrees! on! the! number! of! participants! in! an! evaluation.! Martin! (1988)! for! example!states!the!ideal!number!of!participants!is!5,!but!that!it!really!depends!on!how!many! people!were!directly!involved!in!an!unsuccessful!event.!
!
The! marketing! and! R&D! department! should! be! integrated! in! all! phases! of! the! innovation! process.!In!the!post!commercialization!phase!this!integration!may!be!required!for!evaluating,! appraising,!and!refining!the!innovation.!(Gupta,!1985;!Griffin!and!Hauser,!1996)! ! So!ideally!the!team!that!conducts!the!PLR!should!include!at!least:! 1. (Independent)!chairman! 2. One!person!who!writes!down!what!is!said.!(Scribe)! 3. One!person!from!R&D! 4. One!person!from!Marketing! 5. Depending!on!the!project,!and!the!number!of!people!directly!involved,!one!more.! ! ! ! ! *
Literature!review!|25!
4.5 Organizational*structure*and*culture*
Although! formal! processes! seem! to! assist,! the! culture! and! structure! of! the! organization! are! key! factors!inhibiting!or!facilitating!the!process!of!PostA Project! Reviews! (Williams,! 2007)! Therefore! the! coming! paragraphs! will! focus! on! organizational! structure!and!culture.!
4.5.1 Formalization$
Lily!and!Porter!(2003)!found!that!formal!reviews!tend!to!be!successful!in!terms!of!reaching! shared! conclusions.! Less! formal! conducted! reviews! tend! to! result! in! less! consensus! and! a! more!narrow!search!for!causes!of!project!related!problems.!Furthermore!less!formal!reviews! often! result! in! conclusions! that! NPD! problems! stemmed! from! poor! performance! by! departments!not!represented!in!the!review!teams.!Another!argument!they!gave!is!that!formal! reviews!are!more!effective!at!generating!a!list!of!action!items.!Lily!and!Porter!thus!concluded! that! informal! reviews! seem! to! encourage! participants! to! hindsight! biases! and! to! overly! simplify!explanations!for!complex!situations.!!
4.5.2 Create$a$psychologically$safe$environment$and$embrace$failure$ A! culture! should! be! created! that! celebrates!
intelligent! failure.! Failures! in! this! category! can! be! considered! “good”! because! they! provide! valuable! new!knowledge!that!can!help!an!organization!leap!
ahead!of!the!competition!and!ensure!its!future!growth.!(Edmondson,!2011)!! !
Most!organizations!are!profoundly!biased!against!failure!and!they!make!no!systematic!effort! to! study! it.! Executives! hide! mistakes! or! pretend! they! were! always! part! of! the! master! plan.! Failures!become!undiscussable,!and!people!grow!so!afraid!of!hurting!their!career!prospects! that!they!eventually!stop!taking!risks.!(McGrath,!2011)!It!is!thus!important!to!create!a!culture! that!turns!failures!into!learning!so!that!it!leads!to!continual!improvement.!(Dillon,!2011)$ !
Edmondson! (2011)! came! up! with! an! approach! about! how! leaders! should! build! a! psychologically! safe! environment! in! which! employees! feel! safe! to! speak! up.! The! following! steps!have!to!be!taken:!
A! Employees!should!have!a!shared!understanding!about!what!failures!can!be!expected!to! occur!in!a!given!work!context!and!why!openness!and!collaboration!are!important!for! surfacing!and!learning!from!them.!!
A! Messengers!of!bad!news,!questions,!concerns,!or!mistakes!should!be!rewarded!rather! than! shot.! The! value! of! the! news! should! be! celebrated! first! and! then! it! should! be! figured!out!how!the!fix!the!failure!and!learn!from!it.!
A! Leaders!should!be!open!about!what!they!don’t!know,!mistakes!they!have!made!and! what!they!can’t!get!done!alone.!This!will!allow!others!to!do!the!same.!
A! Employees!should!be!invited!to!share!their!observations!and!ideas.!Inviting!them!helps! defuse!resistance!and!defensiveness.!
A! Boundaries! should! be! set! and! people! should! be! held! accountable.! Paradoxically,! people!feel!safer!when!leaders!are!clear!about!what!acts!are!blameworthy.!If!someone! “Failure!is!a!gold!mine!for!a!great! company”!(Tata,!2011)$ “It’s!Darwin’s!theory.!When!you!stop! learning,!you!stop!developing!and! you!stop!growing”!! (Dillon,!2011)!
26!|!Literature!review! gets!punished!or!fired,!tell!those!directly!and!indirectly!affected!what!happened!and! why!it!warranted!blame.! ! Another!way!to!foster!learning,!spark!innovation!and!keep!the!organization!away!from!risk!is! to!start!an!annual!competition!with!a!prize!for!the!best!failed!idea.!This!idea!has!just!been! launched!within!Tata!and!has!gained!positive!comments!on!the!internet.!(McGrath,!2011)! 4.5.3 Overcome$negative$relationships$between$departments$ For!a!successful!PLR,!it!is!important!that!departments!overcome!their!negative!relationships.! There!are!usually!a!number!of!negative!relationships!between!departments.!A!few!of!them! are!mentioned!below.! !
According! to! Crawford! (1984)! there! are! usually! four! negative! outcomes! in! the! relationship! between!Marketing!and!R&D.!!
1. New!products!are!often!late!because!someone!is!not!capable!of!developing!it!or!if! the!resources!have!moved!to!another!project!
2. New! products! are! often! more! costly! because! R&D! is! unable! to! predict! technical! outcomes!
3. Products! do! not! sell! in! the! marketplace! because! (1)! marketers! did! not! really! understand!what!was!needed!or!(2)!R&D!failed!to!provide!solutions!to!problems! 4. Could!be!a!matter!of!different!personalities!or!the!natural!friction!between!any!two! disciplines.! * Not!only!there!are!negative!outcomes!in!the!relationship!between!Marketing!and!R&D,!there! are!also!negative!relationships!between!Marketing!and!Sales.!Strahle,!Spiro!and!Acito!(1996)! found! that! organizations! have! difficulties! in! coordinating! sales! department! goals! with! the! marketing! department’s! objectives.! Marketing! and! sales! often! have! different! goals! set! by! senior!management!and!both!departments!often!focus!on!becoming!individually!successful.! They!therefore!advice!that!marketing!executives!and!sales!managers!meet!regularly!and!reach! consensus!on!the!strategy!on!each!product.! 4.5.4 Barriers$to$organizational$learning$ Several!authors!came!up!with!barriers!that!usually!apply!to!organizational!learning.!The!most! important!barriers!for!stimulating,!capturing!and!sharing!learning!are!lack!of!documentation,! discontinuities!and!poor!documentation!(Jongbae!and!Wilemon,!2007)!It!is!thus!important!to! document!all!lessons!learned!in!the!right!way.!The!chairman!of!the!review!or!a!scribe!should! writeAup! the! lessons! learned! and! the! actions! planning.! This! review! should! be! send! to! the! participants!for!final!input!and!this!input!should!be!put!in!the!final!lessons!learned!document.! (Bruss,!2007)!!
!
Next! to! barriers,! van! Zedtwitz! (2002;! 2003)! came! up! with! more! barriers! that! should! be! overcome.!These!barriers!are!shown!in!Figure!10.!!
Literature!review!|27! ! Figure$10$Four$major$barriers$to$learning$from$postCproject$reviews$(von$Zedtwitz,$2002;$2003)$ According!to!Williams!(2007)!the!leading!reasons!that!lessons!learned!are!not!undertaken!are;! lack!of!employee!time!and!lack!of!management!support.! !
4.6 How*should*the*PLR*be*used*to*improve*organizational*learning?*
Every!new!product!development!project!should!not! only!deliver!a!successful!new!product,!but!it!should! also! generate! learning! for! the! organization.! Post! Launch! Reviews! are! recognized! by! both! practitioners! and! academics! as! an! appropriate!mechanism!to!stimulate!and!capture!learning!in!NPD!teams.!(Koners!and!Goffin,!2007)! !
Just! collecting! data! and! information! does! not! create! knowledge! or! learnings.! ! We! neither! learned!how!to!swim,!nor!to!read!or!cycle!by!acquiring!information!on!swimming,!reading,!or! cycling.!McDermott!(1999)!states!that!“to!know!a!topic!or!a!discipline!is!not!just!to!possess! information! about! it.! It! is! the! very! human! ability! to! use! that! information.! To! make! that! information! useful,! the! key! is! thinking.! Thinking! transforms! information! into! insights! and! insights! into! solutions.! Knowledge! is! thus! the! residue! of! thinking! and! it! comes! from! experience”.!
!
Knowledge!is!not!the!stuff!between!the!ears!of!the!individual.!We!don’t!learn!on!our!own,!but! we!are!born!into!a!world!already!full!of!knowledge.!We!learn!by!participating!in!communities! that! already! possess! the! knowledge.! In! other! words;! knowing! is! a! human! act,! whereas! information!is!an!object!that!can!be!filed,!stored!and!moved!around.!Knowledge!is!a!product! of!thinking!created!in!the!present!moment!whereas!information!is!fully!made!and!can!sit!in! storage.!! ! During!PLRs!it!is!thus!important!to!not!only!collect!data!and!information!like!for!example!sales! figures,!but!to!think!about!it.!Thinking!about!this!information!and!finding!its!rootAcauses!will! create!knowledge.! ! “Knowledge!is!experience.! Everything!else!is!just!information”! (Albert!Einstein)!
28!|!Literature!review!
Knowledge! gathered! by! PLRs! should! be! shared! and! managed.! To! share! and! manage! knowledge,!the!concept!of!‘knowledge!management’!will!be!used.!“Knowledge$management$
is$ defined$ as$ a$ conscious$ strategy$ of$ getting$ the$ right$ knowledge$ to$ the$ right$ people$ at$ the$ right$ time$ and$ helping$ people$ share$ and$ put$ information$ into$ action$ in$ ways$ that$ strive$ to$ improve$organizational$performance”$(O’Dell$and$Grayson,$1998)!
!
Where! information! can! be! acquired! by! reading,! observing,! or! otherwise! absorbing! it,! this! is! not! possible!for!knowledge.!A!way!to!acquire!knowledge!is! to!participate!in!a!community!of!practice.!(McDermott,! 1999)!
$
Not!only!should!be!learned!from!failure,!but!also!from! success.! There! is! nothing! wrong! with! celebrating! success,! but! after! toasting,! the! success! should! be! investigated.! Successful! product! introductions! often! make!companies!less!reflective,!which!causes!them!to! be! more! likely! to! fail! on! the! next! project.! (Gino! and! Pisano,! 2011)! Successful! projects! often! could! have! been! even! more! successful! and! investigating! those! projects! often! lead! to! finding! critical! problems! in! the! process!that!need!to!be!fixed!before!starting!the!next! project.!
!
A! recent! study! confirmed! that! students! who! failed! a! project!the!first!time,!and!examined!it,!showed!much! higher!results!in!the!second!project.!!
$
Individuals! who! learn! and! keep! knowledge! to! themselves! is! not! sufficient! to! help! organizations!learn!and!develop.!Lessons!learned!during!projects!should!thus!be!documented! and! shared.! According! to! Williams! (2007)! straight! forward! noting! of! points! may! not! be! effective,!but!the!social!process!of!narrative!telling!and!recording!is!a!more!effective!way.!In! his!book,!he!mentioned!that!project!teams!would!clearly!benefit!if!they!are!told!the!stories! around! the! lessons! learned.! An! excellence! center! can! point! a! project! team! to! relevant! individuals! for! consultation! about! these! lessons! learned.! However,! the! problem! with! individuals!who!consult!is!that!they!leave!the!organization!at!some!point.!
!
The! difficulty! in! dissemination! of! lessons! learned! is! that! not! all! knowledge! can! be! codified.! Literature!makes!a!distinction!between!Tacit!and!Explicit!knowledge.!Explicit!knowledge!can! be!spelled!out!or!formalized,!and!tacit!knowledge!is!that!associated!with!skills!or!knowAhow.!! !
Explicit! knowledge! can! be! disseminated! by! using! ITAmediated! methods.! By! far,! the! most! common!used!method!is!a!lessons!learned!database.!*
*
Before! Tacit! knowledge! can! be! stored! and! shared,! it! should! be! codified.! Codifying! Tacit! knowledge! however,! is! difficult! and! knowledge! will! often! get! lost! in! the! transformation! process.! It! is! often! the! question! whether! codifying! knowledge! is! an! improvement! or! not.! In! a! recent! study! among! U.S.! universities,! students! were! asked! to! work! on! two! decisionAmaking! problems.! After! submitting! their! solutions! to! the! first! problem,! the! participants! were! told! whether! or! not!they!had!succeeded.!They!were! then! given! the! time! to! reflect! before! starting! the! second! problem.! Compared! to! those! that! had! succeeded,! the! people! who! failed! spent! much! more! time! reflecting.! Result:! people! who! succeeded!the!first!time!were!more! likely!to!fail!on!the!second.!In!other! words,! success$ makes$ us$ less$ reflective$ and$ thus$ more$ likely$ to$ fail$in$future$projects.!
Literature!review!|29! Instead! of! codifying! tacit! knowledge,! it! is! more! appropriate! to! use! social! methods! like! narrative!telling.!(Williams,!2007)!! ! Bruss!(2007)!said!one!way!to!do!this!is!to!organize!a!seminar!where!involved!and!interested! employees!are!invited.!Because!not!everyone!who!needs!this!information!is!involved!in!the! seminar,!the!lessons!learned!should!also!be!documented!and!stored!in!an!accessible!place.!! ! The!best!opportunity!for!managers!to!influence!the!learning!that!will!take!place!within!an!NPD! team!is!at!the!start!of!a!new!project,!when!the!team!is!facing!fresh!challenges!and!is!keen!to! try!new!approaches.!Therefore,!it!makes!sense!to!hold!a!kickAoff!meeting!to!clarify!the!project! goals,!to!ensure!that!the!process!is!clear,!motivate!the!team,!and!share!lessons!learned!from! previous! projects.! At! kickAoff! meetings,! knowledge! brokers! can! present! key! insights! from! other! projects! and! make! the! new! team! aware! of! the! issues! that! can! arise.! Lesson! learned! should!be!documented!and!used!during!next!PLR’s.!(Koners!and!Goffin,!2010)! ! Other!possibilities!to!share!(tacit)!knowledge!are!communities!of!practice!(McDermott,!1997)! and!knowledge!brokers.! ! In!the!next!table!you!will!find!some!possible!ways!to!disseminate!knowledge!and!the!author! that!mentioned!that!method.! !
Type$of$knowledge$ Possible$ways$to$disseminate$ Author$
Explicit! ITAmediated!methods! Williams,!2007!
Lessons!learned!documents! Von! Zedtwitz! (2003),!
Williams!(2007)!and!more.! Tacit!&!Explicit! Narrative!telling! Williams,!2007!
Seminars! Bruss,!2007! ! Communities!of!practice! McDermott,!1997! ! Thinking!about!information! McDermott,!1997! ! Centre!of!Intelligence! Williams,!2007! ! Knowledge!brokers! Koners!and!Goffin,!2010! ! Socialization! Williams,!2007! ! Reflective!learning!diaries! Williams,!2007! ! Recorded!stories! Williams,!2007! ! Micro!articles! Williams,!2007! !
According! to! Weggeman! (2000)! there! are! many! methods! to! collect,! share! and! manage! knowledge,! but! there! is! no! best! way.! A! solution! should! be! found! that! best! suit! the! kind! of! information,!the!organization!and!environment.!
30!|!Literature!review!
4.7 How*should*the*PLR*be*implemented?**
There!are!not!many!articles!written!about!how!a!PLR!should!be!implemented.!However!Von! Zedtwitz!(2003)!wrote!about!how!PostAProject!Review!processes!usually!mature.!This!model! can!be!used!to!think!about!review!practices!and!to!help!advance!to!the!next!level.! ! ! Figure$11$(Von$Zedtwitz,$2003)$ ! !Wavin’s!PLR!process!|31! Figure$12$Regional$structure$
5. Wavin’s(PLR(process$
This!chapter!will!start!with!a!short!introduction!about!the!organizational!structure!of!Wavin.! After!that!the!results!from!interviews!and!a!survey!within!Wavin!are!presented!about!what! the!current!PLR!processes!look!like!and!what!employees!think!should!be!improved.!! !5.1 Introduction*
Wavin! operates! in! 26! countries! worldwide.! Those! countries! are! managed! based! on! a! regional! structure.! The! regions! including! their! revenues! are! shown! in! Figure!12.!
!
Around! 70%! of! the! new! products! are! developed! at! T&I! and! smaller! innovations! or! innovations! for! a! region,! take! place! at! a! regional! level.!
!
This!research!is!mainly!conducted!in!Wavin’s!largest!region,!North!West!Europe.!The!figure! below!shows!the!organogram!of!Wavin.!In!the!organogram!the!interviewed!departments!are! highlighted!in!orange.!Besides!this!organogram,!it!is!important!to!know!there!is!an!innovation! board.! This! board! exists! out! of! a! member! of! the! management! board,! representatives! from! three!regions,!scopex,!director!of!M&T!and!the!director!of!T&I.!Although!not!everyone!in!the! organization!is!aware,!this!innovation!board!evaluates!all!large!innovations.!*
32!|!Wavin’s!PLR!process!
5.2 When*does*Wavin*conduct*PLR’s*and*who*is*involved?*
Before! explaining! what! the! current! evaluations! look! like,! we! will! start! with! questioning! whether!there!are!formal!procedures!or!guidelines!for!learning!lessons!from!PLRs,!who!are! involved!in!these!procedures!and!who!should!be!involved.!!
!
Although! 61%! of! the! survey! respondents! is! aware! of! formal! procedures! or! guidelines! for! learning! lessons! from! projects,! only! 11%! say! they! are! closely! adhered! to.! The! only! respondents! who! say! they! are! involved! in! formal! evaluations! work! at! the! local! product! development!or!within!T&I.!When!looking!further!into!the!respondents!who!say!they!adhere! to!the!procedures,!it!seems!they!on!average!only!have!been!involved!in!1.5!evaluations!in!the! past! 5! years.! An! important! note! is,! not! every! employee! has! been! involved! in! multiple! NPD! projects!during!the!past!years.!
!
Following! the! question! about! how! many! times! people! have! been! involved! in! formal! evaluations,! the! question! was! asked:! “do! you! think! you! should! be! involved! in! more! evaluations!on!NPD!projects?”!95%!answered!“yes”.!
!
After! that! questions! were! asked! for! which! project! employees! thought! there! is! a! formal! evaluation!and!after!that!for!which!projects!there!should!be!a!formal!evaluation.!The!results! are!shown!below.! ! ! Figure$14$For$which$projects$are$and$should$there$be$formal$evaluations?$ !
Wavin’s!PLR!process!|33! During! exploratory! interviews! it! became! clear! that! employees! believe! the! innovation! board! should! be! informed! about! the! most! important! and! relevant! results! from! PLRs,! but! another! department! should! be! responsible! for! conducting! PLRs.! Therefore! the! question! was! asked:! “Who!should!be!leading!evaluations!on!new!product!development!projects?”!The!answers!on! this!question!are!shown!below.! ! ! Figure$15$Who$should$be$leading$evaluations$on$NPD$projects?$ ! 61%!of!the!respondents!said!the!business!units!should!be!leading!evaluations,!11%!answered! product!management!and!27%!answered!other.!The!people!that!answered!other!said!there! should! be! a! distinction! between! group! and! local! developments.! Their! comments! could! be! summarized! as! following.! “For! group! developments! the! business! unit! (which! also! includes! European!product!managers),!should!be!leading!the!evaluations!and!for!local!developments! these!evaluations!should!be!led!by!local!product!management”.! ! To!find!out!who!should!be!involved,!all!respondents!was!asked!to!select!the!departments!they! want!to!have!involved.! ! Figure$16$Who$should$be$involved?$ ! On!this!question!everyone!answered!that!at!least!product!management!should!be!involved.!In! the!comment!section!included!in!this!question,!the!comments!could!all!be!summarized!as:!it! depends! on! the! kind! of! product! and! in! general! the! departments! that! are! involved! in! the! project,!should!be!involved!in!the!evaluation.!!
34!|!Wavin’s!PLR!process! !
Furthermore! during! interviews! most! people! said:! “someone! who! represents! the! customer! should!be!involved.”!When!questioning!about!who!should!represent!the!customer,!everyone! answered:!“this!depends!on!the!kind!of!project!and!market”.!! ! At!what!moment!should!Wavin!evaluate!its!new!products?!For!this!question!a!distinction!was! made!between!a!commercial!and!a!technical!evaluation.!Respondents!were!asked!after!how! many!months!of!the!release!from!T&I!a!technical!and!after!what!time!a!commercial!evaluation! should!take!place.! ! Evaluation$ Average$time$after$release$from$T&I$that$it$should$take$place$according$to$respondents.$ Technical! 4!months! Commercial! 12!months! !
The! boxplot! below! shows! what! most! respondents! believe! is! the! right! moment! to! conduct! reviews.! ! ! Figure$17$How$many$months$after$release$should$we$conduct$a$PLR?$ With!regards!to!the!moment!a!review!should!be!conducted,!some!interviewees!mention!that! it!is!important!to!have!a!clear!definition!of!the!moment!after!which!it!should!be!conducted.!A! PostAlaunch!review!usually!takes!place!after!a!certain!moment!in!time!after!market!launch.! However,! for! Wavin,! the! moment! of! market! launch! could! be! defined! in! two! ways:! (1)! the! moment!at!which!a!product!is!released!from!T&I!or!(2)!as!the!moment!at!which!a!product!has! been!introduced!in!the!most!important!countries!for!Wavin.!
5.3 What*do*these*PLR’s*look*like?*
As!mentioned!in!the!former!paragraph,!Wavin!does!not!always!adhere!to!the!formal!processes! and!projects!are!usually!evaluated!ad!hoc.!During!interviews!employees!stated!that!in!order!to! capture! lessons! learned! from! projects,! they! sometimes! used! the! procedures! in! the! graph! below.! It! seems! that! the! most! common! procedures! are! meetings/workshops! and! project! reviews.!!
Wavin’s!PLR!process!|35! ! Figure$18$Which$procedures$to$capture$lessons$are$employees$familiar$with?$
!
Although! most! employees! are! not! aware! of! them,! there! are! formal! procedures! to! learn! lessons!from!NPD!projects.!There!are!documents!for!evaluations!within!T&I!and!local!product! development,! which! are! shown! in! appendix! 3! and! 4.$ Furthermore! business! cases! for! large! projects!and!project!failures!are!compared!with!actual!results.!! ! Root<cause*analysis* Certain!employees!have!stated!during!exploratory!interviews!that!they!do!use!tools!to!get!to! rootAcauses!of!project!outcomes.!Therefore!the!question!was!asked!which!tools!are!used.!! ! ! Figure$19$What$tools$are$used$to$get$to$rootCcauses?$ ! It!seems!that!most!respondents!don’t!use!tools!or!they!use!other!‘tools’.!Fishbone!diagrams! are! used! twice! and! the! Five! “why’s”! is! only! used! once.! The! other! tools! that! respondents! answered!they!are!using!are:! A Market!research!! A External!consultant! A Comparing!processes!with!model!of!Cooper! A Documenting!and!analyzing!changes!in!the!process! ! * 0! 5! 10!
Fishbone!diagrams! Five!"why's! No!tools! Other!
What$tools$do$you$usually$use$to$get$to$rootC
causes$of$project$outcomes?$
36!|!Wavin’s!PLR!process!
5.4 What*performance*metrics*are*used?*
Since!most!employees!are!not!familiar!with!formal!procedures,!the!results!in!this!section!are! based!on!interviews!with!employees!who!are!aware!of!these!procedures.!The!list!with!metrics! from! chapter! 4.2! was! shown! and! then! asked! whether! these! metrics! are! used.! Not! every! respondent!selected!the!same!and!not!every!metric!was!used!in!every!evaluation.!A!list!with! metrics!that!are!used!is!included!in!appendix!9.!Something!that!was!mentioned!during!almost! every! interview! with! regards! to! the! metrics,! was! that! the! customer! is! often! forgotten! in! evaluations.!!
5.5 Communication*of*lessons*learned*
How! are! the! lessons! learned! shared! within! Wavin?! The! following! graph! shows! with! which! procedures! respondents! are! familiar! and! what! they! believe! Wavin! should! be! doing! in! the! future.!!! ! ! Figure$20$Which$procedures$should$be$and$are$used$to$communicate$lessons$learned?$ In!general!most!respondents!are!aware!of!seminars/presentations,!training!and!meetings!to! share!lessons!learned.!When!asking!what!should!Wavin!be!using,!66%!said!Kickoff!meetings.!! !
During! interviews! certain! employees! believed! ITAmediated! methods! or! lessons! learned! documents!can!be!useful,!but!in!general!they!are!too!static!and!do!not!make!people!think.! Other!employees!however!specifically!said!they!would!have!benefitted!from!a!lessons!learned! database.!During!interviews!people!referred!to!former!jobs!in!other!companies!in!which!they! had! databases! with! learning! from! old! NPD! projects.! Being! able! to! look! up! these! learnings! could!have!spared!them!much!time.!! ! Some!interviewees!argued!after!this!question:!“we!probably!use!the!right!procedures,!but!we! don’t!make!structurally!use!of!them!and!we!don’t!use!them!effective”.!Therefore!questions! were!asked!about!how!effective!lessons!learned!move!within!the!organization.!The!results!of! these!questions!are!shown!in!the!next!figure.! Which!procedures!is! Wavin!using?! What!procedures! should!Wavin!be! using?!
Wavin’s!PLR!process!|37! ! figure$21$How$well$are$lessons$communicated?$ ! As!shown!in!this!figure,!respondents!do!not!agree!that!learning!is!achieved!effectively!beyond! the!project!team,!and!across!regions.!Furthermore!lessons!learned!are!not!always!applied!by! other!project!teams.!! ! During!interviews,!a!number!of!employees!complained!about!the!crowded!meetings.!In!their! opinion!meetings!were!not!efficient.!To!confirm!this!finding!there!was!a!survey!question!about! the!number!of!participants.!The!results!of!this!question!are!shown!in!the!graph!below.!! ! ! figure$22$The$number$of$participants$during$meetings$ Most!respondents!believe!the!number!of!participants!is!generally!about!right.!A!number!of! respondents!believes!there!are!too!many!participants!in!meetings,!but!also!people!said!there! are!too!few.!In!general,!we!cannot!conclude!there!are!too!many!or!too!few!people!involved.!! !
During! exploratory! interviews! some! also! mentioned! the! meetings! are! not! well! prepared,! employees!are!not!aware!of!their!tasks!and!responsibilities!and!the!lines!of!communication! are!not!clear!enough.!This!question!has!also!been!asked!in!the!survey.! ! ! figure$23$General$questions$ ! ! 0%! 50%! 100%!
About!right! Too!few! Too!many!
The$number$of$parfcipants$in$meefngs$is$
usually$
38!|!Wavin’s!PLR!process! As!you!can!see!in!this!table!the!lines!of!communication!do!not!seem!to!be!clear!for!everyone,! but!employees!do!not!seem!to!be!unaware!of!their!tasks!and!responsibilities!and!meetings!are! not!necessarily!unprepared.!With!respect!to!the!awareness!of!tasks!and!responsibilities!some! commented:!“everyone!is!aware!of!them,!but!in!too!many!situations!employees!do!not!seem! to!respond!accordingly”.! !
5.6 Barriers*to*learning*
Based!on!the!barriers!to!learning!as!described!by!Von!Zedtwitz!(2002),!interviewees!was!asked! whether! they! agreed! that! the! following! barriers! to! learning! applied.! The! results! were! as! following:!!! figure$24$Barriers$to$learning$within$Wavin$
!
Another! barrier! that! was! mentioned! in! the! comment! section! was! lack! of! management! support.!
Wavin’s!PLR!process!|39!
5.7 Wavin’s*current*PLR*performance*
This!paragraph!is!based!on!survey!results.!Although!not!many!reviews!have!been!conducted,! employees! are! rather! positive! about! how! well! they! are! able! to! learn.! When! looking! at! this! figure,!a!few!conclusions!could!be!drawn.!! 1. We!are!good!at!learning!simple!lessons,!but!learning!complex!lessons!is!more!difficult.! 2. We!do!not!only!simply!collect!data,!but!we!are!sometimes!able!to!create!knowledge! 3. We!can!identify!and!prioritize!issues! 4. Not!all!people!are!willing!to!share!learning!about!project!failures.!However,!this!is!only! slightly!negative! 5. Although!only!a!few!people!use!tools!to!conduct!rootAcause!analysis,!we!do!get!to!the! rootAcauses!of!most!project!outcomes! 6. Reviews!focus!on!both!technical!and!commercial!aspects.! ! figure$25$Wavin's$current$PLR$performance$ ! !
