What is Lean Product Development (LPD)?
Lean product development is a refinement in development methodologies based on cross-functional planning and collaboration. It is about managing risk in the development process by eliminating non-value added activities and poor communication between functional silos.
The basic idea of lean thinking is to reduce waste in any and all processes. Lean is about maximizing the value-added portion in any process. Lean as applied to the new product development process examines the entire value stream, and asks this question: “How much of what we’re doing truly benefits end users or customers?” Any work that does not produce a benefit to stakeholders is regarded as waste and should be cut to the absolute minimum.
Lean is similar to Agile in that both methodologies improve responsiveness and are oriented toward maximizing customer value. But, whereas Agile comes from the world of software development and is mainly an iterative approach to development, Lean has its origins in manufacturing. Both methodologies are applicable to any type of product. However, the focus of lean product development on the entire value stream, and on streamlining processes, makes it a good fit for digital and non-digital products alike. It is more common among developers of tangible products.
What are the benefits of Lean Product Development?
Lean product development is an opportunity to create a single source of the truth for all product development efforts. It accomplishes this by having a single, clear project champion. In lean product development, team members are dedicated to their product development projects. This minimizes churn and improves communication and efficiency.
Lean methodology also favors visual work tools, including product roadmaps or kanban boards that show the clear flow of work and reduce ambiguity. Lean thinking for development projects is also driven by product roadmaps and other visual maps that apply to both incremental improvements to existing products and “blue sky” development.
It is also an approach driven by constant learning. The principles of lean product development contribute to continuous improvement throughout the organization.
By reducing waste and churn, and clarifying handoffs, companies create better products that are more aligned to customer needs, while producing value for all stakeholders. Lean methodology also helps reduce time-to-market and improves workflows.
How do you implement Lean Product Development?
Visual dashboards are a hallmark of Lean. Such a dashboard shows the key performance metrics at a glance. It gives clear visual cues as to where the team stands with respect to the top five-to-seven metrics that are most important for conveying progress, improvement, or warnings. Sometimes dashboards contain meters, similar to a tachometer in a car that veers into a red zone when the metric in question begins to go off target.
Visual dashboards should:
- Contain the metrics that really matter to the team
- Track no more than seven metrics
- Be public and accessible
- Show the current state of the team at a glance
- Be simple and easy to update
Lean events, also known as lean workshops, are another key to implementing LPD. The purpose of these lean events is to ensure that you have the right people in the room to plan the flow of work together to reduce the back-and-forth communication between functional groups.
- Reduce the risk in projects by ensuring cross-functional collaboration
- Ensure that schedules, budgets, marketing requirements documents and other essential project artifacts are created by the right people
- Enable learning and communication that breaks down the barriers between functional silos
- Improve the workflow to reduce delays and speed products to market with minimal churn and waste.
Lean product development processes often use value stream mapping or maps of the project workflow to reveal the sources of waste, and create the smoothest flow of work (the critical path) that will realize value for all stakeholders. Common sources of waste that these maps often discover include:
- Too many reviews that allow managers to maintain control but do not help the development team
- Mandated corporate processes that do not add value that a customer would recognize
- Processes that have phases and gates that are irrelevant to the project at hand
- Approaches that “freeze the spec” too early and do not allow for learning and new information
Value stream mapping and other business process mapping methodologies are one way to identify these and other sources of waste, in order to eliminate them and increase the team’s proportion of value-added activities.
Minimum Viable Process
Another effective way to implement LPD and eliminate non-value added activities is to have a simplified product development process that reduces the usual six or seven phases and gates to only three check-ins between the team and Management. These three check-ins ensure 1) product-market fit (Definition check-in), 2) proof of concept created (Design check-in), and 3) confirm product feature set and go-to-market plan (Development check-in).
This three-step process we call a Minimum Viable Process. It is oriented toward enabling the team to create the best possible prototypes and products, with minimal interference from senior managers. It enables Management to know that its investments in new products are sound and that projects are running as planned. But it is oriented toward removing obstacles and making the team as efficient and as effective as it can be.
Management By Exception
Management by exception can also help your team to become more Lean. In this approach, rather than having pre-set deliverables and outcomes that the team must meet in order to pass a review, the team continues to affirm throughout the process that it is meeting a set of broad parameters, called boundary conditions, that define the project. If the team is meeting these parameters, Management should leave the team alone; if it’s not meeting them, then the team follows a lean escalation process to inform the Senior Management and get back on track.
How does lean PD help reduce product development cycle time?
Lean is all about the distinction between value-added and non-value-added processes. Traditional phases and gates processes and traditional design reviews are largely oriented toward management control. But internal customers and end-users don’t care about management control. In most cases, they care about a timely effective solution to their own challenges, offered at an affordable price point.
Anything that adds administration and meets purely corporate, internal needs is of no interest to customers, and therefore it falls into the category of process waste. By reducing decision-making to the lowest possible level, and inviting cross-functional cooperation, lean reduces internal churn and communication issues that also add cycle time to product development. By reducing these non-value added activities, lean can substantially accelerate your product development projects. Lean methodologies reduce cycle time by cutting out bureaucracy while focusing narrowly on the value stream.
Isn’t Lean just for manufacturing?
Lean had its origins in the Toyota Production System where it was oriented toward improving manufacturing project management. In manufacturing processes, it is easier to identify waste, such as work-product that piles up at a single station on the shop floor. In many cases, a manufacturing manager can look at the production line and see waste, for example defective parts or materials, or bottlenecks where a portion of the process is overloaded.
In a product development system it is more difficult to see waste. But it appears in a number of identifiable forms. For example, development teams may have:
- Poor communication across functions.
- Meetings that are unnecessary and unproductive.
- A lack of essential resources which create wasteful and expensive downtime.
- Product requirements that are poorly defined.
- Product design teams stretched between too many projects.
- Product development metrics that are costly to collect but don’t improve team performance.
Despite the fact that manufacturing waste is more visible than waste in the broader value chain, the principles remain the same. Lean manufacturing and lean product development are both oriented toward customer value. In both cases, waste is in the way of creating successful products in the most efficient and cost-effective way.
Eliminate the waste and you will give your design teams, whether they’re in a startup or an old established corporation, the opportunity to create innovations using lean design that lead to measurable benefits throughout the product lifecycle.
Tips for Successful Lean PD
1. Reduce reviews and gates to create a Minimum Viable Process
Onerous design reviews and technology reviews are often oriented toward management control rather than toward helping the teams do their jobs better. It is both more effective and efficient to have, at most, three check-ins that enable Management to maintain its oversight of goals and investments, while enabling the team to not waste precious time on reviews that are really for someone else – not for the team.
2. Have the right people in the room when you create essential documents that define the team’s work (budget, schedule, technology roadmaps)
Crossed wires between the cross functions are a major source of waste and non-value added activities in product development. When you create the documents such as technology roadmaps or schedules that depend on cross-functional participation, break down the silos and make sure that you have the people who are going to be affected by these documents in the room to create them. Lean product development is about cross-functional collaboration.
3. Use boundary conditions to manage projects
Boundary conditions are parameters for the project (such as features, product cost, timing. etc.) that the team agrees with Management to meet. Once the boundary conditions are established, the team does its work without interference, as long as it predicts it will hit these targets. If the team appears to veering away from meeting one or more of its parameters, then it follows a rapid escalation process where it proposes to a senior team a remedy to the situation, either by agreeing to extend the broken boundary condition, or through some other means. The key to this escalation process is speed – senior management needs to respond in hours or days, not weeks or months.
4. Have a clear project champion
A lean product development process greatly benefits from having a clear project champion, often from a Product Marketing or Product Management background. The project champion serves as a tie-breaker if the team has disagreements. The champion is also the single point of contact for the project with senior management. The champion is also responsible for seeing that junior team members have the proper mentoring.
5. Use visual tools to guide your lean process
Whether its value stream mapping, product roadmaps, or technology roadmaps, visual cues are an important part of lean. They help create “a single version of the truth” and convey what is essential for meeting the agreed-upon boundary conditions. Make sure that your process development includes outputs in the form of visual artifacts or diagrams that capture, at a glance, the essentials of your project.