Professional Documents
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Actually Doing (Technology & Product) Strategy
Actually Doing (Technology & Product) Strategy
Outline:
Agenda
Measure capacity,
track resources
Measure resources
280
260
Projects
Total demand
all projects by function (1 Year)
240
220
Project A
Project B
200
Project C
Project D
180
160
Project E
Project F
140
Project G
120
Project H
100
Project I
Current Prod & Proc Support
80
Applied Research
60
40
20
Doc. - Illustrate
Testing
Purch - Mech
MFG - Mechanical
SE - Technician
Function
SE - Engineer
SE - Project Leader
SE-Combine PL / Eng
ME - Technician
ME - Drafter/Design
ME - Support Eng
ME - Project Leader
ME-Combine PL / Eng
EE - Technician
EE - Design
EE - Project Leader
0
EE-Combine PL / Eng
Total capacity
by function (1 Year)
Exploratory projects
Innovation projects
Product Support
Administration
4500
HOURS
PER MONTH
3000
CAPACITY
1500
3-Nov
14-Jul
24-Mar
3-Dec
13-Aug
23-Apr
1-Jan
11-Sep
Planned Resource
Allocation:
Project X
Process Engineering
R&D
Supply Chain
Marketing
FTEs
Process Engineering
R&D
Supply Chain
Marketing
Actual Resource
Consumption:
Project X
Jan
Feb
Mar
Apr
May
Jun
Group A
Research
Quality
Control
OEM
Customer
Marketing
Strategic
Planning
Group B
Senior
Management
Injector
Marketing Inputs
Screen 1
Department Changes
Screen 2
Final Evaluation
Phase I
Phase II
Phase III
Launch
Gatekeeper
Idea
Feasibility
Capability
Concept
refinement and
prototype
creation
Product
optimization
Generation
Initial marketing
and technical
concepts
Contract
Charter
One page description of
proposed project including
objective, rationale and
development routes. Early
Commercial Assessment
Cross-functional
development plan
including project plan as
contract between team
and Gatekeeper.
Launch &
Rollout
Commercialization
Production &
Distribution
Launch
Proposal
Launch Plan including
CEP approval request.
Post
Launch
Review
Tracks success of
and key learnings
from launched
products
KEY
= GATE
= DOCUMENT
Gates:
Idea
Generation
E
N
T
E
R
Phase
Review 1
Phase 1:
Concept
Investigation
Phase
Review 2
If yes, then
concept
approved
& full team
allocated
Phase 3:
Development
Phase 2:
Feasibility
Does the
product make
sense from
marketing,
technical &
financial
perspectives?
Phase
Review 3
What is the
product spec?
Can we develop
it within budget
and schedule?
Can we produce
it at the required
cost & volume?
If yes, then
prototype
approved
& full team
allocated
Phase
Review 4
Phase 4:
Post
Release
E
X Current
I Product
T Support
Is the product
meeting safety,
efficacy and
business targets
in the market?
If yes, then
closeout
approved
& handoff to
product support
Pre-Segment
Review, But
Resourced
Recurrent
activities
Launch
Concept
Development
Concept
Exploration
Execution
Business Case
Development
Gate 3
Gate 2
Gate I
Less
than
$xM
Between
$xM and
$xM
Between
$xM and
$xM
Greater
than $xM
Postlaunch
review
Phase I
Phase II
Phase III
Launch
The Reality?
Formally:
Pacing the funnel to the needs of the business, not the
other way around
Involving key decision makers early
Informally:
Leadership: tolerating high respect, high conflict
debate
Trust: but this would only work if we told the truth
Consistency
BUT.
Financial Tools:
IRR & NPV
Risk vs Return
Options
Portfolio Concepts:
The Aggregate Project Plan
Scenario Analysis
Strengths
A focus on the
quantifiable costs and
benefits of the project
Allows for easy ranking
and comparison
Weaknesses
Forces a focus on the
numbers
Neglects the role of
uncertainty
Neglects strategic
considerations
Ignores
interdependency
between projects
LO
Liquid PT
IMS
BCT/Software 2.0
Fibrinogen
standards
Improvement
rev cTNI
Glyc HB
Pro C
US Update
DM
Cyclospori
n
FAST
Carbonate Sensor
Pharma
CAQ*/Update
MOD
Bence
Jones
OEM
DAT Improvement
Heparin
N Latex lgE
CRP mono
PP (4)
Procalcitonin
Controls
for Lupus
test
rev. C
reactive Pro
Liquid
conversion
program
Protei
nS
Viva
DM CEA
TTS Cystatin C
Forecast
Project
Expense
lgG Subklassen
CDT
DOAs
SRT 8,9,10
SCS
Digoxin Chemilum
>$5Mi
$1-5Mi
HIV p24 Ag
HTLV/I/II
HI
aPTT reagent
0%
50%
6-Acetyl Morphine
ex-Lock-Out
Lithium
ISD Group
100%
Cystatin-C (PP)
TLA Interface
Homocystein
150%
Tacrolimus
<$1Mi
-Direct LDL
Homocysteine
200%
250%
Return (IRR)
N latex SSA
SW V 2
300%
Tick Borne
Ezyphalitis
>500%
25,000
50/50
-2,000
50/50
50/50
-500
3,000
3,000
50/50
-500
1-p
V2
C2
A Range of Tools
Risk adjusted NPV
Pros
Established
methodology widely
accepted and
understood
Relatively easy and
quick to implement
A building block for
more complicated
valuation methods
Cons
Does not allow for
contingent
decisions
Collapses many
decisions and
outcomes down to
a single scenario
Does not account
for managerial
ability to react to
information.
Decision Trees
Simulations
e.g. Monte Carlo
Closed Formulas
e.g. Black-Scholes
Differential
Equations
Incorporates
decision making and
uncertainty
Determines optimal
decisions
Transparent and
easy to understand.
Building block for
other more
complicated
valuation methods.
Allows for
complicated and
multiple
uncertainties
spanning both
discrete and
continuous
outcomes.
Easier to model
non-standard
uncertainties
Elegant, easy to
implement with
formula in hand
A numerical
solution
incorporating
optimal decisions
and (possibly) both
continuous and
discrete
uncertainties.
Methods do not
determine optimal
policies.
Programming
becomes
complicated with
many decisions and
uncertainties.
Less transparent
than trees
Limited to relatively
simple decisions
and uncertainties.
Many simplifying
assumptions
usually have to be
made to obtain
closed form
solutions.
Extremely difficult, if
not impossible, to
implement in
realistic situations.
Time Consuming
Does not allow for
many different
uncertainties.
Portfolio Concepts:
Aggregate Planning Tools
Entirely new
benefit
Radical
Improvement
No change
Breakthrough
Platform
Technology
Reach
Derivative
Off the shelf
Product
Support
An Example
Consumer Value Perception
Enabling
Technology
New Core
Product
New
Benefits
Low
Resource
Improvement
Moderate
Resource
Variant
High
Resource
No Change
Breakthrough
Radical
Platform
Next
Generation
Derivative
Incremental
Product
Support
Base
An Example
Consumer Value Perception
Enabling
Technology
New Core
Product
New
Benefits
Low
Resource
Improvement
Moderate
Resource
Variant
High
Resource
No Change
Breakthrough
Radical
Platform
Next
Generation
Derivative
Incremental
Product
Support
Base
An Example
Consumer Value Perception
Enabling
Technology
New Core
Product
New
Benefits
Low
Resource
Improvement
Moderate
Resource
Variant
High
Resource
No Change
Breakthrough
Radical
Platform
Next
Generation
Derivative
Incremental
Product
Support
Base
An Example
Low
Resource
New Core
Product
New
Benefits
Improvement
High
Resource
Moderate
Resource
No Change
Variant
Breakthrough
Radical
Platform
Next
Generation
Sxxxx
Fruit
Cxxxx
Fruit
Natural
Incremental
Lxxxx
Export
Txxxx
Base
Cxxxx 2000
Fxxxx Face
Rxxxx
Fruit
Vxxxxx
Improvement
Brand
Support
Cxxxx
Lxxx
Derivative
Bxxxx
Extension
Super
Cxxxx
Entirely new
process
Radical
Improvement
No change
Breakthrough
Platform
Product
Reach
Derivative
Off the shelf
Product
Support
Product
Changes
New Core
Product
Next generation
of Core Product
Next
Generation
Process
ALPHA
WATER
EARTH
FIRE
Single
Dept.
Upgrade
Tuning and
Incremental
Improvement
No
Change
CALIFORNIA
NEW YORK
Addition to
Product Family
SPARROW
OWL
FINCH
SIGMA
Add-Ons and
Enhancements
KENYA
DELTA O
HAWK
No Change
B-THROUGH / PLATFORM
ROME V
ROME VI
ROME I
ROME II
ROME III
ROME IV
SUMMER
GEMINI 1-10 (10 PROJECTS)
CROW
CLEO
SOLSTACE
DALLAS
SPRING
AUSTIN
OAK
WINTER
SANTA FE
CEDAR
FALL
FLAGSTAFF
DERIVATIVE / CPS
LEO
ROLAND
PINE
Product
Changes
Process Changes
New Core
Process
Next
Generation
Process
Single
Dept.
Upgrade
Tuning and
Incremental
Improvement
No
Change
New Core
Product
ALPHA
GAMMA
VENUS
Next generation
of Core Product
Addition to
Product Family
BETA
MARS
DELTA
DELTA I
ZEUS
ATLANTIS
SIGMA
ROME V
DELPHI
Add-Ons and
Enhancements
DELTA II
ROLAND
LEO
ROME I
ROME II
ROME III
No Change
ROME IV
B-THROUGH / PLATFORM
DERIVATIVE / CPS
CLEO
OAK
CEDAR
PINE
Less Is More:
Medical Products Co.
36
21
Before
After
# of Projects
in Portfolio
Before
After
# of Projects
Launched /Year
Target l
Target 2
Target 3
Target 4
Project Reach
Platform
Line
Extension
Maintenance/
Enhancement
Less
than
$xM
Between
$xM and
$xM
Between
$xM and
$xM
Greater
than $xM
High risk
Medium risk
Low risk
Requires entirely
New skills
Significant Challenge
Technical/Operational Challenge
Significant
Stretch
Generally
accessible
Support
Resident
capabilities
Significant Challenge
Technical/Operational Challenge
Significant
Stretch
Generally
accessible
Support
Resident
capabilities
Less
than
$xM
Between
$xM and
$xM
Between
$xM and
$xM
Greater
than $xM
High risk
Medium risk
Low risk
Low
Strength
Of
Entrenched
Competition
High
Low
High
Leverages Current Advantage
Very Important
Critical
New Benefit
Leapfrog
Only We
Can Do It
Competitive Insulation
Jump
High
Barrier
Advance
Some
Barrier
Me-Too
No
Barrier
Less
than
$xM
Between
$xM and
$xM
Between
$xM and
$xM
Greater
than $xM
High risk
Medium risk
Low risk
Time
What it is:
A way of mapping the future, of focusing attention on
critical uncertainties
A way of building robust strategies
A means of generating a common language
How it is done:
Phase III
Phase II
Ind
Tufts
Phase I
Discovery
20
40
60
80
Cumulative Probabilities
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
Discovery
Phase I
Phase II
Phase III
Tufts
Ind
Tuft
Ind (1)
Ind (2)
60
40
20
0
Disc
Phase I
Phase II
Phase III
Trends in Pharmaceutical
Productivity
35000
60
50
25000
40
20000
30
15000
20
10000
10
5000
0
1965
1970
1975
1980
1985
Time
1990
1995
2000
0
2005
NDAs approved
30000
Pharmacogenetics/genomics
Sequence analysis
Expression analysis
Genome mapping
Family studies or Population studies
With thanks to
Tony Sinsky
Environmental
Challenges
Heightened visibility
Drug Expend as % H.Care, US
1800
12.0
1600
10.0
1400
Expenditures, $bn
1200
8.0
1000
Series1
6.0
Series3
800
600
4.0
400
2.0
200
0
1970
Series2
0.0
1975
1980
1985
1990
Year
1995
2000
2005
CHINESE
BILLION IN 2002
BUSINESS
Exercise:
Summary
How will we
Create value?
How will we
How will we
Deliver value? Capture value?
Maturity
Takeoff
Ferment
Create
Deliver
Capture
What happens on
Monday morning?
Or: Getting there from here
Information gatherer
What are the problems and opportunities?
Analyst
What are the key choices? What should we do?
Leader
Modeling the use of time and attention
Supporting the team in making real decisions
Medtronics
Kirkham Instruments
Successful Implementation:
Common Lessons
Diagnostic phase
Aligned with the market
As well as with the existing culture and organization
Key Activities
0.5-3 months
2-6
Design
and Pilot
4-6 months
4-8
Organization
Wide Roll-out &
Implementation
6-12 months
4-8
Key stakeholders
Senior management
sponsor
Dedicated project
team
Access to pilot teams
Key stakeholders
Senior management
sponsor
Dedicated project
team shifts members
Whole organization
Key stakeholders
Senior management
sponsor
Interviews w/key
stakeholders
Process mapping
Assessment of key
issues
Create steering team
Training of new
tools / processes
Documentation of
process
Automation of
process
Organizational
change and cultural
alignment
Good Luck!