In both operations and manufacturing, the concept of “lean,” has earned its reputation as a powerful toolset that drives down cost and improves cycle-times. Lean manufacturing achieves this value through a focus on eliminating waste, standardizing processes, and creating value from an end customer standpoint. As companies strive to increase growth and profitability from their New Product Development (NPD) and innovation investments, some executives are looking to apply lean concepts in this area. But when it comes to the more creative and fuzzy practices of innovation, following lean practices without strategic direction from portfolio and pipeline management (P&PM) capabilities can have unintended consequences including: stifling ideation processes, focusing only on customer requests and not the next big innovation, over-standardization, and speeding up the wrong projects.
From our experience, lean NPD efforts without P&PM often prove ineffective because they:
- Are unable to effectively communicate the value proposition and need for efficiency improvements to the NPD audience
- Become too binary with metrics – occasionally canceling lower “value” but strategic projects
- Expend energy improving processes that aren’t the constraint or that don’t deliver results
- Distract from delivering large scale, high growth innovations simply because these are not “repeatable”
Combining P&PM processes with lean practices for NPD and innovation shows companies where to focus their efforts for maximum impact, and once established, creates processes that can be further improved. P&PM ensures that companies stay true to delivering results by providing visibility into what is most important. They can then apply tactical lean approaches to help get there.