My
new book,
Summary
Resource optimization efforts often end up overloading your resources and creating bottlenecks. Make sure your critical resources have time built in to address unplanned activities. Focusing on fewer projects will speed up the time to market and avoid resource constraints.
New Product Development: Hurry up and wait
Often efforts to speed things up only slow things down
Resource optimization may ensure that your critical resources won't be available when you need them
Personally, whenever I hear the word "optimization,"
I shudder. To me, it means the same thing as "perfection,"
i.e., an effort in futility. Unfortunately, due to the current
fixation on trying to do more with less, many companies
embark on resource optimization, especially in the new product
development area.
Usually, a resource optimization effort will start by identifying
critical resources, those whose skills are in short supply
and high demand. In NPD, this is often a resource in a shared
function like quality or regulatory who gets spread across
many teams. A resource manager will determine how
many activities this type of resource can accomplish and
will then begin scheduling these activities for this resource
in order to maximize their time. The result is that this
person/people is spread even thinner on even more projects.
However, no matter how much of a fudge factor is built in,
this resource estimation is almost always wrong due to several
factors. One is the planning fallacy which is our tendency
to use best-case scenarios when making estimates. Another
factor is multi-tasking. Every time someone switches to
a new project or task, there is a small learning curve beforehand
where they have to get up to speed with what they are doing.
People can only remember so much information at one time.
The more switching, the less time available for adding value.
Lastly, similar to planning fallacy, we rarely consider
that most of our day is spent in meetings, responding to
emails, and fighting fires, not on our project tasks. The
result is that our critical resources are always over-extended,
ensuring that they become even bigger bottlenecks.
The only way to ensure that you have critical resources
available for your important projects is to under schedule
them. Critical resources should be underutilized to give
them time to fight the inevitable fires that arise. As a
rule of thumb, project resources should not be working on
more than 3 or 4 projects at a time and a project manager
should have no more than 1 or 2 projects at a time.
More projects in the pipeline mean less out the door
As a corollary to above, an easy way to reduce your time-to-market
is to just work on less projects at a time. Spreading resources
across numerous projects only increases your chances of
bottlenecks, errors, and delays. I once had the opportunity
to see how this works using a simulation of the same number
of projects - one scenario where they were scheduled sequentially
and the other where the projects took place in parallel.
The projects completed in sequence resulted in faster cycle
times, earlier product introductions, and more revenues.
The only scenario where scheduling projects in parallel
was more beneficial was when the teams needed to share lessons
across the projects for successful development.
Creating the discipline to delay project start dates is
difficult for many companies because they are afraid competitors
will get there first or the project is a pet of the CEO's
or an idea is so exciting everyone wants to start on it
right away. It's just that starting now doesn't actually
get you there any sooner.
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