ModIV Product Development Team

For trio deal In particular, forward-looking IV everyplacely typified the ch every(prenominal)enges of realiseing amid peeled pressures and demands. As director of hand Controls, unity of the Building Controls parts four harvest beas, Linda Whitman was the sr. commercialiseing person for the modernistic IV harvest-time line and had primary profit and loss function for Mod IV. She could see the Impact a delay would obligate on her areas coifance, and she understood the pressing commercialize acquire to have Mod IV contain cunning features. When she first became director of confound Controls in 1 986, she realized that selling had to play a more than active role in training of Mod IV.Since then she had watched her fellow marketers on the Mod IV team work through problems and conflicts with engineers, and she knew some of the most difficult issues still had to be resolved. But actors lineing every issue required patience, persistence, and tact, and even the n Linda often found herself torn. She had to make sure HAVE Controls met its regurgitateions, which required collaborating with applied science and manufacturing, both(prenominal) of which seemed at multiplication all overburdened and at times unresponsive. Larry Rodgers, lead design engineer on Mod IV, had been Involved In the Mod IV project for five eld.He could sense the pressure mounting both on the team and on the division as Mod IV encountered difficulties entering the final months of the project. Larry and six of the engineers he administer had their hands full trying to curtail the noise the Mod IV motor was generating. He knew the marketers had concerns just more or less(prenominal) Mod Ivys appeal to customers, yet with Bibs limited resources and its stress on fast maturement, he wondered how he could address himself to marketings concerns at this time.Like many engineers at BCC, Larry understood the competitive and financial challenges BCC faced, simply he won dered if others appreciated the profoundness and complexity of design work and engineering problems. Research Associate Joshua D. Marigolds prepared this case under the supervision of Professor Anne Donnelly as the basis for class discussion rather than to Illustrate either effective or Ineffective handling of an administrative situation. Figures In this case have been disguised. Call (617) 495-6117 or write the publication Division, Harvard Business School, Boston, MA 02163.No part of this publication may be reproduced, stored in a retrieval system, employ in a spreadsheet, or transmitted in any form or by any means? electronic, mechanical, photocopying, recording, or otherwise?without the permission of Harvard Business School. 1 This document is authorized for use whole by Wing Chou in Project MGM taught by George Variations Case Western Reserve University from dreadful 2014 to December 2014. 491-030 tail Bailey, general manager of BCC, could all but hear the foot step of com petitors eager to grab origin from his division.Although he bristled at the thought of a delay and its effect on Bibs ability to take in corporate financial targets,l he wanted to respect the teams autonomy. John knew the team was grappling with several(prenominal) ribosome issues, and though he focused his attention on make sure the division met its objectives, he wanted to interpret delegacys to assume the team as it addressed the problems before it. Building Controls Division H peerlessy wellhead Building Controls Division (BCC) produced climate controls and systems for four market areas HAVE, burners and boilers, lighting, and water products.BCC employed 1250 mountain and recorded 1988 gross sales of more than $cl million. The division dealt with both types of customers, original equipment manufacturers (Moms) and trade customers. The Moms incorporated Honeywell products into their own reduces, which they in turn sold to the market. trade in customers sold Honeywell pr oducts directly to the market. BCC placed highest priority on the quality of its products, on the divisions flexibility, and on its response to customers.The divisions gainfulness and return on investment?both well higher up industry averages?were points of pride. 1981 marked the first and moreover year in Honeywell history that its Residential and Building Controls Division lost money. Controls were Honeywell original business, and the shock of 1981 brought new management to this division, management obstinate to regain Honeywell competitive edge. As part of the recovery make, Honeywell split residential and building controls into two separate divisions, thus creating the Building Controls Division.To end the days when plenty from engineering, manufacturing, and marketing/sales worked in different locations, a new building was constructed with enough room to house everyone. To integrate the three major functional areas, BCC introduced a series of miscellanys that intertwined to create a new form of product development. BCC hoped to interpret itself into an agile organization capable of outnumbering competitors through faster carrefour Development and the Controls BusinessIn the old system of product development, the product passed through from each one functional area in a sequence of discrete steps marketers conceived of a product idea and passed it along to design engineers, who would design the product and pass the design to make engineers process engineers determined how to make the product and then dropped the plans into the laps of the manufacturing engineers and the plants. At each stage in the sequence, people encountered problems created by work done at earlier stages.Process engineers, for example, would discover they could non make what the design engineers had crafted. Product development thus became a game of tossing the bear over the wall. When you comp permited your particular piece of the project, you tossed it over the wall to th e next group, non caring what took place on 1 . A widely-cited economic cast developed by McKinney and Company calculates that vent 50% over budget during development to get a product out on time reduces . .. Profits by only 4%. But staying on budget and getting to market six months late reduces profits by a third. (David Woodruff and Stephen Phillips, A Smarter Way to Manufacture, Business Week, April 30, 1990, p. 111 . See also Brian Domains, How Managers Can Succeed Through Speed, Fortune, February 13, 1989. ) 2 the other side. If you had problems with work done at previous stages, you do your changes and tossed the design back to the previous group for them to adjust their work. The process was slow and costly. Every change meant more time, higher cost, and heightened animosity betwixt functional areas. But rapid changes in the controls business inspired the division to calculate for new approaches.John Bailey explained In the early sass the lam to electronics and microe lectronics was accelerating, and e were having a hard time dealing with that by using engineering and manufacturing techniques that had evolved over one-hundred years and were slighted toward a really slow-moving industry and slow-moving technology. To suddenly get into a cycle going from products that you could design and have on the line for thirty years, to three years life expectancy?well, we couldnt do a development in three years. So in that respect was a big need for change imposed on us by technology and by the new competitors that technology brought into the market. Layers, to at one point in the early sass we counted 160 competitors?150 of them ere pocketable electric assembly shops, where a couple of engineers would get unitedly, lay out a circuit board, stuff it, and start selling. A fewer of those competitors grew up, prospered, and became viable. They grew out of that change in technology. But it meant we had to change. We had to change for many reasons. We were c oming out of a stream when we werent profitable enough. We were changing because we were going from part of a division to a stand-alone division.Our competitive purlieu was changing, technology was changing, and our customers were demanding a different set of requirements from us. So there was no alternative but to change. match Development and Teams When BCC abandoned sequential development in the mid-sass, it embraced a new process called parallel development. In this system, a core team of people assembled from the three critical functions?manufacturing, marketing/sales, and engineering?worked together to head a project from the conceptual stage all the charge through final production.People still account to their functional managers, who continued to supervise and evaluate all employees, and each functional area continued to perform its specialized role on the project yet all areas at a time worked on he equal project simultaneously. The core team guided and tracked the development, coordinating efforts across functions and addressing issues of mutual concern. A computer course of instruction manager secured resources for the team, orchestrated its work, kept an eye on the complete project, and served as a liaison to major(postnominal) managers.One BCC employee described the personal effect the new approach had The team system does non allow people to single-minded defend the position of their functional area, of whats easiest, or best, or cheapest for their own functional area. It forces people to look at a bigger picture. . Engineering, when used alone, refers to both product and process engineering. 3 As BCC made the transition to parallel development, it had to confront its history and discard old habits. Marketing had always enjoyed a tabu position at BCC, as John Bailey explained Marketing called all the shots, controlled the purse strings.Engineering felt it worked for marketing. To make the team-system work, Bailey and his ripened staff felt they would have to create parity among the functional groups. Each area had to see itself as an equal partner and contributor. People had to accept additional responsibility responsibility for the success of the entire project, not respectable relevant to their functional area or not. A manufacturing engineer, for example, had to attend team meetings even if the project was only at a design stage.Since people were accustomed simply to completing a business and passing the project on, they felt team meetings stole time from doing actual work and added to total work-load. As people gradually adapted to parallel development and teams, they continued to struggle with their expanded roles and responsibilities. Many people at BCC felt the new product development system exerted too some(prenominal) reassure on them. Because people now worked on projects from beginning to end, not Just when their piece had to be done, they had denary projects to beguile at once. Combined wit h the emphasis on fast development, this at times overwhelmed BCC employees.Several people described the pressures they felt and what they comprehend to be their sources We have to make a decision on the deployment of resources. When it comes to choosing between things to do, the answer from above is, Do both?with no added resources. Or if we get additional resources, were Just stealing them from another project. The system is firmly loaded, especially since were learning a new way of working. There are many things to do with little headcount and no relief with the project schedule. Engineering doesnt have a realistic schedule. This puts stress on the system.Teams could help but there are obstacles to having a team work on a project. You need true support from management. If somebodys supposed to be dedicated to a team, management has to be testamenting to let that person spend all of his or her time on the project. Logistics also need work. You have to be able to work out the fr actions of peoples time. You need one fully dedicated person from each function, but you also rely on the entire functional group. So people working on multiple projects have to know how to split their time. How do you prioritize projects? All work is high priority.And how do you reinforcement people? Even John Bailey recognized he would have to alter his management style. The tone of the way the division is managed comes right from the top. If I want teams, and I promote me and cultivate them, then there will be teams. If Im going to dictate orders, then thats the way my staff will act? dictate orders. I mean those things get reflected right through an organization because I think people look up to see whats happening, and if you dont lead by example, then youre not going to get what you want. People watch actions more than words. I houset be autocratic and dictatorial to my people, as I tended to be when I was vice elegant good dictator. Im very comfortable with that style. Par t of the problem is, I grew up in this business. I earn HAVE. Its real easy for me to tell people what I think they have to do on near any issue. But if I do that, and my staff does that, it goes right down the line, and we dont have teamwork. We also dont receipts from the ideas and perspectives of the whole work force. So Ive tried to learn to have patience, change my style, look for consensus, have engagement of my staff as a team, share more information, be more open.Ive had to learn that you take a risk with this and not everything comes out the way you want it, but the potential payoffs far outweigh the risks. I dont know how you legislate dedication, creativity, or motivation into people. I dont think you can. You cant tell people they have to do it a certain way. What you do is create the environment and the responsibility and be plastic. But those are all new things for me. I didnt come to this as a natural team player. I got into this because it looked like the way th is business could run best.People throughout BCC spoke exceedingly of John Bailey, crediting him with creating a vibrant climate, but they perceived remnants of an autocratic style. Two stories circulated widely through BCC, highlighting both Johns own struggle to change and the two sides to communion within the division. One story detailed the way John and his staff calmly standard a teams decision to cancel a project and start anew after the team determined the initial plan to be unfeasible. The other told of Johns visit to a team meeting?to show his support?where he learned of a time delay.Although John made sure not to criticize the team, he was visibly upset and subsequently castigated his higher-ranking managers for not informing him of the delay. Some of those managers were themselves unaware of the delay, and the team both sensed and learned of Johns displeasure with the news. Using parallel development, BCC management believed the division was now in a position to make better products?and in less time. Because all functional areas participated in the entire development, team members could understand the needs f their teammates and could work on their pieces of the project with those requirements in mind.Engineers could design a product with a better grasp of customer needs and manufacturing requirements, era manufacturing and marketing people would understand the limits of what the engineers could do. sooner of tossing the product and problems back and forth over walls, teams could identify potential problems and prevent them. The walls could come down as people from different functions talked with one another more frequently. Fewer problems and overlapping work would deliver what John Bailey coveted most reduced placement time.According to the divisions estimates, the new product development system had reduced development time from an average of 38 months to an average of 14 months. John saw speed as Bibs arm for reclaiming competitive promine nce, and he campaigned tenaciously to cut the time it took to get products from concept to carton. 5 Although people attributed much(prenominal) of the divisions resurgence in the sass to the close working relationships that now existed between different functional groups, there was some feeling that antagonism had not evaporated entirely and that finger- pointing still occurred.A marketer and an engineer gave separate examples From a schedule standpoint, engineerings credibility was no good. They were telling us dates that Just werent getting met. We tried to arrange shared out goals and objectives, and it was like pulling teeth from engineering. They utter they had their own milestones. The first shared deadline they suggested wasnt valid since we needed things from them well before that. We in engineering thought we had a minor design problem that we could solve as we worked on other problems. However, the problem didnt go away, so we moved it up on our list of priorities.Fin ally, we had to scourge the whistle on ourselves because we felt the changes would require more time than the schedule allowed. We went to the head of marketing with our position. We said we were making progress but did not feel we would make our introduction date and needed more time. He said we had to stick to the dates we had. Its his prerogative to demand that the target dates be met, so the target dates were not changed, even though the team knew we werent going to make it. Insisting that a date not change, though, can lead too project problem.Im not sure whats accomplished by insisting on false dates. Mod With its new strategy for product development, BCC approached the Mod IV project intent on making the dates happen. John Bailey explained the urgency behind the project Two competitors have introduced new products and retooled. They have overcapacity and are Just waiting to steal market share. We cannot make a mistake. BCC was spending $19 million to develop Mod IV and pl anned to have it replace products accounting for over 30% of the divisions profit. These figures led one senior manager to call Mod IV our golden egg. Although the golden egg was about to hatch, Mod IV had had a long gestation. History of Mod IV In 1981 Jay Lander, process engineer on the legitimate Mod IV team, was asked to examine how the company could improve the quality of its motors and reduce their cost. His study turned into a cost-reduction, quality-improvement initiative executed in three phases. Mod IV represented the final and most would-be(prenominal) phase. Although inspired by engineering, Mod IV promised the most dramatic innovations in manufacturing and therefore was deemed a flexible manufacturing project. With the one Mod IV motor line, BCC planned to automate its entire assembly process and over $20 million in revenue. The project promised to reduce costs and improve profit arising, making it glossy to the manufacturing people. But some marketers were concerned that customers would not accept this new motor and BCC would lose market share. That would reduce revenues, the primary index of marketings contribution to the organization. The team, 6 however, intended to offer a product replete with features and enhancements attractive to customers.The team would then use price incentives to encourage customers to convert to the Mod V. BCC began work on Mod IV in 1984, prior to the introduction of teams and parallel development, but the same design and process engineers had worked together on Mod IV from the beginning. They had even carved out an open office area, nicknamed the bullpen, by removing partitions between cubicles and setting up a central conference table. Manufacturing engineers were frequent visitors to the bullpen and initiated many of the impromptu meetings.Design, process, and manufacturing, however, did not collaborate closely with marketing until 1986, when the current Mod IV marketing people began replacing their predecessors on the project. One engineer spoke about marketings involvement The marketing people have changed since the project began while the engineers have been the same since the beginning. Marketing decisions changed each time the marketing people changed. We had to do two rounds of market research. This has had a negative psychological effect. It leaves the impression that the rationale developed in marketing is only as good as the people who developed it.So we lived through a change of direction. Not one marketing person is the same as when the project began. For a long time, marketing didnt buy into Mod IV. They were labored enthusiastic. Now theyre enthusiastic because its a better product, but its been a lot of extra work for them. They would have been better off with the combination of the old reduce and the absence of this extra work. From the time Linda Whitman became director of HAVE Controls in 1986, she had collaborated closely with her peers in other functional areas.As she p ut it in terms of Mod IV, Manufacturing and engineering were a whole lot further ahead in the project. And if it was going to be successful, there had to be a balance in terms of expertise and authority. Linda stressed equal participation, but her role as director think thats the way business-unit directors are expected to perform. Of all the players, we have ultimate responsibility for the P&L Profit and Loss. And I am responsible for my engineering deliverables. The engineers do not report to me, but I am accountable for telling them what projects to work on and in what order.Likewise, sales does not report to me, but my marketing group controls the revenue plan and unit-sales targets they must achieve to earn bonuses. Were also responsible for developing their programs for customers and for authorizing special deals. Were responsible for defining the product road-maps and introducing the products. We provide the technical support to customers the training, the hotlist, the tech nical support for the ambit reps. Were in charge of pricing, advertising, and sales promotion activities. Were also responsible for arbitrating unresolved sales pitch problems and for determining delivery codes and lead times.It runs the gamut. 7 Linda explained how marketing had to make up for lost time on Mod IV Marketing was uninvolved for a long time?for two reasons. First, it was never a marketing- driven development, which is highly unusual. Second, marketing was so Johnny- come-lately. By the time we had a solid marketing team established, engineering and manufacturing were fasten in the way they believed it should be done. That made it much harder when we did come along. The new marketers concern led the team to revise the projects scope, but marketers still had some lingering uneasiness.A marketer explained Mod IV is replacing our staff of life and butter for no market-driven reason. Sure, its a cost reduction and a quality improvement, but our motors already are very hi gh quality and provide high margins, so from a marketing standpoint, it didnt have to be done. The customer-benefits derived from Mod V, including modules, could be developed for our present motor lines. Team Members Linda Whitman Director, HAVE Controls. Linda became the head of marketing for HAVE Controls, one of Bibs four market areas, in early 1986.In nine years with Honeywell, Linda had progressed through five positions, each time dramatically improving the department she oversee. Although Linda succeeded in each of her new positions, with three of her Job changes she replaced an officeholder man who had been relegated to another position as she acknowledged, This was not the Linda described herself as results-oriented, hard-driving, intense, and compassionate. Organization, discipline, and strong strategic plan were Lands llamas, but she insisted on letting her marketers work autonomously.She enjoyed working at BCC and praised its comfortable, diverse environment. Her manag ement style, though, had caused her to think about being female in an engineering- dominated, Midwestern manufacturing company. Its extremely difficult for many people to accept a woman whos hardwiring and results-oriented the same way they can accept a man in that role. Its the old classic. A lot of times pejoratives are assigned, whereas if it were a man, its Just a person doing his Job. I think theres much more forgiveness for men to have quirks than there is for women.Linda was in her mid thirties. yap Scott Program Manager, Manufacturing. knee bend served as Program Manager while also supervising the projects manufacturing efforts. He also supervised several other manufacturing activities. Jack had Joined the Mod IV team a year and a half(a) earlier, and though he had known all of the projects engineers for ten years, he called himself the new kid on the block. Jack described his role 8 I try to keep all ends tied together for the crystalise result. Where are we on tooli ng dollars, engineering design, order and delivery of the production machines?I tie all the ices together to make sure they hit the floor at the same time. I make sure communication is happening so that all things are getting done. I make sure we dont get one of these things where we get all done and someone says, You didnt tell us about that. Jack was in his forties. Jay Lander major(postnominal) Principal Process Engineer. Father of the Mod V. Jays 1981 study led to development of Mod V, which he now worked on. Jay was in his sixties. Larry Rodgers Mechanical Design Manager. In charge of all engineering efforts on Mod V, Larry supervised all seven design engineers working on HAVE Controls products.Six of those engineers were working on Mod V, and Larry himself had worked on Mod IV since it began in 1984. Larry displayed constant equanimity, rarely letting the pressure of a situation relate his demeanor, which some considered aloof. However, he readily acknowledged the history o f tension on the project The impetus for the program was increased profit. The project is attractive to manufacturing because theyre profit-driven. Marketing is revenue-driven, and this product may reduce revenue. Since it will cost less to make the Mod IV, customers will want it for less, and that will reduce revenue. Engineerings objectives are to