Becoming A Product Juggernaut

Juggernaut is an English adaptation of Jagannath, a traditional Indian divinity associated with the notion of irresistible or unstoppable force; and a product juggernaut is simply a company that keeps winning over its competitors through the sheer superiority of its product offering.

How product juggernauts work

All product juggernauts share a very strong, quasi-obsessive new product culture that extends from top management to the shopfloor. They recognise that they can best create lasting value for their stakeholders through persistent product superiority. While companies also create value through other means, such as financial engineering, mergers, acquisitions, restructuring, and downsizing, that value cannot last long unless the company also establishes market leadership and market leadership depends on product superiority.

 

Another characteristic of product juggernauts is that they can compete on multiple fronts simultaneously. They surprise their competitors by excelling at many things. They know how to proliferate their product lines to occupy all segments, including niches. They offer superb design, continuous innovation and impeccable service all with fast response and execution. Canon, in the field of 35 mm Single Lens Reflex cameras, as well as in home copiers, is an excellent example of a company that does not depend on a single dimension of competitiveness.

In contrast, companies that depend on only one advantage - a favourable cost position or a strong technology - will find their product superiority short-lived. Indeed, now that the key competitive characteristic is the ability to change quickly, management should remove any blinders that reduce its view of the world of competition to an either/or proposition. (Achieve cost leadership or quality/performance leadership. Play on the commodity or on the speciality side of the business.)

The ability to compete on multiple fronts cannot be improvised. It requires visionary strategy and planning and a world class product creation process. Product juggernauts devise bold, long-term game plans to define and target customer value. And, unlike most competitors who think in terms of one product generation at a time, juggernauts think and plan ahead. They build a vision of how they intend to dominate their industry and then implement its steadily, product mental and radical improvements. Aspiring juggernauts take product and technology cycle-planning very seriously. Most automotive companies, for example, plan their products at least 10 years into the future. Intel and Microsoft are working on products two generations beyond the product they are about to launch. Chrysler has managed quite well to combine incremental improvement with radical changes in styling and the cost-effectiveness of technology.

Of course, having a game plan is one thing; making it a winning plan is something else. That's where the world-class product creation process comes in. For most companies, product creation is a very complex and mysterious process. One of our clients equates it to the process of mating elephants. He says, It creates a lot of dust, trumpeting, and tree crashing - and you have to wait years to see the results.

Our experience shows that even if it always remains a bit chaotic, as most creative activities do, product creation can be organised and managed effectively. To do so, senior managers must first be able to comprehend it in its totality, to understand its various parts and the way they are interrelated. You need a high-level map.

A world -class product creation process

Product creation - or product innovation - extends both upstream and downstream, far beyond the management of new product projects. Upstream, it begins with the collection of intelligence on and insights into the market, customers, competitors and technology. Juggernauts such as 3M, Hewlett-Packard, Procter & Gamble and Toyota spend a lot of effort in what they call uncovering unarticulated customer needs. Aspiring juggernauts also try to formalise their vision and to manage ideas. Ideas are intellectual assets that need to be collected, generated, screened, enriched, evaluated, and finally, ranked for funding and programming. This process can be managed. Many companies in many industries - among them Gillette, Philips, Toshiba and Hewlett-Packard-now have well-documented processes for doing all this and go further to provide training to teams and their coaches on how to perform the necessary activities to a high standard of excellence.

The innovation and product creation process also extends downstream to product launch and support, in what we call product life-cycle management. Getting the product to market is probably one of the trickiest and most critical parts of product creation or innovation. Some industries - such as personal computers and telecommunications - have established completely new standards and benchmarks on speed of product launch and product life-cycle management, notably the highly delicate process of phasing products in and out. When you introduce a new product generation every nine months, as in the personal computer industry or some segments of the software industry, product life-cycle management becomes absolutely critical. Old products are phased out and new ones phased in with perfects synchronisation, so that there is neither confusion in the marketplace nor cannibalisation of one product by the other. Rubbermaid is a master of this.

Key success factors

A world-class product creation process has many facets. Five success factors play a determinant role across almost all industries:

Process management mechanisms;

Empowered programme managers;

Committed teams;

Superb resources;

Speed in execution;

Of these factors, two are particularly critical: empowered programme managers and committed teams.

Empowered programme managers. The first critical success factor is empowerment of heavyweight project leaders or rather - to define their scope more broadly - program managers. Program management, which started in the aerospace and defense industries, has been rapidly adopted in such high-tech sectors as information and communication technology. The auto industry has used it widely and other industrial sectors are following suit.

Programme management has evolved from functional project management, which was designed to deliver higher-quality products effectively and fast. Functional project management did generally improve performance, but as long as the functional managers insisted on calling the shots in their own fields, the improvements were limited. This approach is often referred to as lightweight program management. The project leader, who is often very junior in the hierarchy, becomes frustrated by this or her lack of power to make decisions and the project may loiter in the hallways of functional politics. Managing a complex product creation project in the traditional functional way is about as effective as asking an orchestra to play a symphony while letting each instrument group leader direct his or her own part of the score.

In contrast, under empowered programme management, a single executive has full responsibility for a product programme (often a product family) from start to finish. While programme implementation still requires the participation and expertise of functional departments, the program manger has delegated authority to steer and manage the programme - as a conductor has delegated authority over all instrument groups for the duration of the concert.

Implementing this delegation - without demotivating the functional organisation - is not easy, particularly in strongly vertically managed, functional organisations. But, when the challenge is lean and speedy innovation, there are no alternatives. Chrysler's management attributes the company's highly successful recent series of new products in large part to the creation of empowered programme managers.

Committed teams. The second key success factor - which goes hand in hand with programme management - is the ability to work in integrated, multifunctional teams from start to finish. By integrated we mean including the participation of all internal functions, as well as suppliers, partners and vendors.

Today, in traditional companies, the product creation process remains a sort of relay race among the various functions. In this paradigm, management tries to improve and speed up the process by organising an orderly transfer of responsibility at project handover. As in a relay race, it is at the transfer of the baton that time is gained or lost.

Product juggernauts play a different game altogether. They build their teams to be multifunctional from the start. They move with the project as a cohesive and committed team, even though the role of each function is clearly recognised and some members join and leave the team at specific points. This model is now recognised as the only model that leads to product integrity, lower investments, and shorter lead times in complex manufacturing industries such as automotive, computers, appliances - and increasingly also in pharmaceuticals, speciality chemicals and even consumer goods. This kind of teamwork is not only effective, it's highly enjoyable. A member of the team that helped Fred Smith create the service of overnight package delivery at Federal Express recalled years later that he felt like the last knight on a white horse.

Making it work

How do you build this world-class capability in your organisation? Let's be realistic - we are not talking about a small change. Becoming a product juggernaut often requires a fundamental transformation. In some companies this may mean, in effect, a cultural

revolution. And, of course, this change must come about while you continue to run the business to meet short-term performance targets. A client of ours equates this challenge to that of converting a propeller plane into a jet plane while in the air. Not a menial task! But is there any other choice if the company wants to establish

sustained market leadership?

The first task for management is organisational. We don't mean that you need to reorganise in the classical sense of the term - in most cases, the organisation does not need to be changed. Rather, we are suggesting that you build a second dimension, the horizontal process dimension, next to the vertical, functional organisation. Many of our organisations, indeed, often look like towering functional organisations, a bit isolated from each other, each with different cultures and ways of working. Effective product creation cannot be achieved under such conditions.

We're not advocating flattening the functional towers. This would be detrimental to functional excellence, on which success depends. Instead, you need to break the silo mentality by organising and managing cross-functional processes as effective bridges across these towers. Product juggernauts are companies that have achieved this dual, informal, horizontal way of working - or networking - within the functional organisation.

The effect of this change in operating can be nothing short of revolutionary. Suddenly, the role of the functions becomes primarily to build and deploy top-notch resources to support the various processes. How do you convey this message effectively within the organisation to make functional heads realign their efforts? This is the key challenge in most companies. One measure that helps focus the organisation on processes is to define very clearly the roles and responsibilities of the two sides of the matrix in a sort of process management charter.

To make this change happen, companies need to mobilise the top management team by creating and steering process management mechanism, such as task forces, boards and councils - each mechanism dedicated to a specific process management task.

And, as with most transformation efforts, an organisation must root the change programme in a vision shared by the whole management team. Skeptics can kill a change effort. Managers must recognise the need to target specific improvements for the short term while building the necessary infrastructure of change for the long term through training and coaching.

The most important aspect of such a radical change process may be continuous improvement and learning. There are very few true product juggernauts around, but there are many aspiring ones. What characterises aspiring product juggernauts is their persistence in launching improvement efforts and carrying them out, as well as their steady rate of learning at three levels: individual learning, team learning and organisational learning. Only through such systematic learning and continuous improvement can companies achieve more intense customer obsession, bolder game plans and more effective, world-class product creation capabilities.n

This article is based on the book Product Juggernauts, by Jean-Philippe Deschamps and P Ranganath Nayak, published by the Harvard Business School Press, 1995.

Jean-Philippe Deschamps is a vice-president of Arthur D Little, Inc, and co-leader of the firm's Technology and Innovation Management Practice in Europe. P Ranganath Nayak is a senior vice-president of Arthur D Little, Incorporated.

All product juggernauts share a strong, quasi-obsessive new product culture that extends from top management to the shopfloor. They recognise that they can best create lasting value for their stakeholders through persistent product superiority.

Companies can create value through financial engineering, mergers, acquisitions restructuring etc. But that value cannot last long unless the company also establishes market leadership and market leadership depends on product superiority.