Stuck!

1. Stuck! Professor Rebecca Henderson & Professor Nelson Repenning MIT Sloan School of Management Rhenderson@mit.edu & Nelsonr@mit.edu

2. Or

3. Why it can seem to be so hard to get anything done&What can be done about it

4. Or

5. Why you’re sometimes tempted to think the people who work for you are lazy&Why they don’t think so much of you, either

6. Outline • Why we get stuck: • An introduction to the dynamics of overload & the dangers of firefighting • Why we stay stuck: • The obvious solutions often make things worse • What can be done: • Knowing one’s capacity • Killing project #26 • Facing worse before better

7. Is This Your Project Pipeline?

8. Are these your delivery dates? Scheduled delivery date Actual delivery date

9. Does this look familiar? • 79% apparently complete by original deadline • 2 major unplanned iterations requiring redesign • Actual duration: 208% of schedule

10. Construction Project Project A • Cumulative Labor Hours: 403% of plan

11. What’s going on?

12. Resources Required for Completion (months) Implied Development Resource Allocation (months) Active Projects Months to Completion (desired) (formal development projects by number) This year Next year Year after that 1 2 3 4 5 . . . 26 27 28 29 30 54 123 86 286 24 352 75 215 153 29 8 24 12 20 4 36 9 30 18 3 40 38 50 92 24 48 62 40 60 29 14 62 36 172 0 150 13 80 93 0 0 23 0 22 0 120 0 95 0 0 All Other Support Activity –– –– 430 430 430 (customer support, troubleshooting) Total Development Requirements –– –– 2783 2956 2178 Available Resources (months) –– –– 960 960 960 Rate of Utilization (percent) –– –– 289.9 307.9 226.9 Overload at PreQuip

13. Overcommitment destroys productivity Average Value-Added Time on Engineering Tasks 100% 80% 60% 40% 20% 0% 1 2 3 4 5 6 Number of Projects per Engineer

14. ACTUAL MANAGEMENT ACTIVITY PROFILE And shifts attention away from early stage work Phases Knowledge Concept Basic Prototype Pilot Manufacturing Acquisition Investigation Design Building Production Ramp-Up High ABILITY TO INFLUENCE OUTCOME Index of Attention and Influence Low

15. And from:Building long term capabilityDoing strategyMaking decisions

16. We call this “The Capability Trap”

19. The Capability Trap in Manufacturing “In the minds of the [operations team leaders] they had to hit their pack counts. This meant if you were having a bad day and your yield had fallen ... you had to run like crazy to hit your target. You could say “you are making 20% garbage, stop the line and fix the problem”, and they would say, “I can’t hit my pack count without running like crazy.” They could never get ahead of the game.” -- improvement consultant Confidential, please do not cite or quote without author’s permission.

20. The Capability Trap in Product Development An engineer might not take the time to document her steps or put the results of a simulation on the bookshelf and because of that she saved engineering time and did her project more efficiently. But in the long run it prevented us from being able to deploy the reusability concepts that we were looking for. --chief engineer Confidential, please do not cite or quote without author’s permission.

21. In general… • “I knew I was in trouble when I had to give hourly updates….”

22. Declining Performance No time for up front work Overload We have to spend a ton of time fixing it… The stuff we bring to market is…

23. Declining Performance The people who work for us are lazy Overload We need more controls

24. Declining Performance There’s no time to do strategy Overload We can’t make decisions

25. Declining Performance No time for up front work Overload We have to spend a ton of time fixing it… The stuff we bring to market is…

26. What can be done?

27. Recognize you have a problem • There are two theories. One says, "there’s a problem let’s fix it." The other says "we have a problem, someone is screwing up, let’s go beat them up." To make improvement we could no longer embrace the second theory, we had to use the first.

28. Kill project 26!

29. Why is killing project #26 so hard? (Part 1) • It’s a “good” project! • Good managers can meet stretch goals (and I’m a good manager) • Making difficult decisions takes time & energy It’s very hard to kill projects without a strategy

30. Why is killing project #26 so hard? (Part 2) • Killing project 26 will give us very serious problems right now…

31. “Worse before better” Performance Time

32. * =

33. * =

34. So, all you need to do is: • Measure capacity & track resources • Balance long and short term effort • Avoid tipping into firefighting • Develop a strategy & the ability to act • Learn to kill project 26 • Face worse before better • Develop the ability to have “high conflict, high respect” decisions

35. What happens on Monday morning?

36. Two case studies • Medtronics • Kirkham Instruments

37. Some Models of Change • The Vision Model (aka, the Field of Dreams model) • Change happens by giving people new ideas • The Document Model • Change happens by writing those new ideas down • The “My Way or the Highway” Model • Change happens by telling people to use the new ideas, watching them closely, and penalizing those that don’t

38. All of these are probably necessary, but none are sufficient • Organizational change efforts don’t produce change unless somebody in the organization actually does something differently • Doing things differently is tough and does not come naturally • Successful change requires: • Understanding how the current situation emerged • Identifying how your behavior (inadvertently) contributed to the current challenges • Taking a disciplined approach to changing (your own) bad habits

39. “We Should” • things that others need to do to allow your new behaviors • “I Will” • new things you will do • old things you will stop doing

40. Good luck!