Friday, March 25, 2011

Don't Spend Billions on a Metaphor

It is not best that we should all think alike; it is a difference of opinion that makes horse races. Mark Twain

Horse racing has been on my mind. Not because I particularly like horse racing, or know much about it, but because I listened to a Lockheed Martin executive describe their new product development system as a horse race.

Only, this exec claims, that instead of paying for all of the horse at the beginning of the race, they pay by the yard. As soon as you felt the horse wasn't going to win, you'd stop paying for it.

The exec meant that Lockheed Martin had implemented stage-gate, a process made famous by Cooper in his 1986 book "Winning at New Products". Apparently it took Lockheed Martin 25 years to discover what most large research intensive companies had already implemented........ and abandon.

On the surface, it sounds reasonable. Try to kill a new research project as soon as possible by finding its fatal flaw early, before it costs lots and lots of money. If it survives all attempts to kill it then it must be a good idea.

So let's revisit the horse race to test this stage-gate, kill the bad ideas fast concept. If a horse is in last place midway through the race, should we give up on him? What about the horse that is in first place a hundred yards out of the start, is he the winner? A frequent and exciting moment in a horse race is one coming from far back in the home stretch and winning by a nose.

Much like a horse race, it's hard to be certain that a new product idea is fatally flawed until almost the end of the race! Much as Twain's quote, the opinion on which horse (product) will win differs by the person, but a majority opinion doesn't make a winner.

But let's extend the horse race metaphor further. The costs really aren't in the race, but the events leading up to the race. And the prize isn't really the purse at the end of the race (although it can be a nice chunk of change), but the way in which the horse is genetically marketed after.

Perhaps breeding is the first step in creating a winning horse, like basic research. Then picking the youngsters which appear physically fit and training them is applied research. Racing them could be considered the product launch. Putting the winner out to breed is the mature product being mass marketed.

So, Mr. Lockheed Martin executive, why don't you buy your horses after they have won?

It could BE different if you did.

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