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Unformatted text preview: International Instruments Corporation
International Instruments Corporation (IIC) is a mid-sized manufacturer of electron
microscopes, mass spectrometers, and gas / liquid chromatographs used in academic and
industrial research analytical labs. Although the three divisions selling this equipment had
traditionally operated in relative autonomy, the company’s customers began to demand
linking the analytical capabilities of many of these instruments through software. This
required more coordination in product development across product lines than in the past, to
ensure that features and interfaces are compatible, and upgrades introduced in a
coordinated way. As a result, the company was working to exert a greater degree of central
control over new product decision-making than in the past.
One day the firm’s CEO, Jeff Jefferson, attended a seminar on strategic project
management and project portfolio management. The seminar was designed to aid
executives responsible for managing new product development. Jefferson was impressed
that these concepts were targeted at exactly the sorts of challenges faced by IIC. He
decided to arrange for the seminar instructors to lead his senior management team through
a short in-house course. At the conclusion of the course the executives unanimously
affirmed their support of the project portfolio management concepts and tools as an
improved method for managing the problems they faced. Jefferson assigned Sally Smith
(VP of Research and Development) to lead the implementation effort. This work was to be
carried out by the six members of the IIC Executive Management Committee (EMC):
Jefferson, the CFO, managing directors of the company's three operating divisions, and
The EMC hoped to implement three specific elements of the project portfolio management
1. Define a set of breakthrough, platform and derivative development projects which, if
executed effectively over time, would enable IIC to implement its growth strategy;
2. Begin using a set of selection, definition and planning documents and phase
review/decision meetings to manage the flow of projects into and through the
3. Reduce the number of development projects underway at any given time, so that they
were not attempting to do more than they had the capacity to execute.
REALITY SETS IN
The EMC started by attempting to cut the number of projects in half, and used the seminar
instructors to train IIC employees in the use of project portfolio management. The training
seminar created considerable excitement, suggesting that senior management finally had
recognized and would address some of the most persistent and detrimental problems
afflicting new product development at IIC. However, the EMC was subsequently unable to
agree on what projects of consequence were even being worked on in the company, let
alone prioritize them and decide which to cancel. It took several months just to arrive at a list
of projects underway that everyone agreed was accurate (primarily because no one on the
EMC wanted their own projects to be cut). 1 International Instruments Corporation
When the EMC did attempt to cancel projects, the company's stated strategy proved to be
so wide-ranging that nearly every project could somehow be justified under its logic. As a
result, "strategic fit" was not a usable criterion for ranking projects. Various measures of
potential returns on investment were likewise difficult to compare across the set of projects,
further impeding EMC efforts to reduce the number of projects. These delays caused the
newly-trained employees to become skeptical about any meaningful change taking place.
To them, project portfolio management appeared to be just another management fad they
could wait out like so many others in the past.
To break the logjam, the EMC engaged a consulting firm touting a "vigorous" methodology
for quantifying the business value of development
projects, since revenues and profits constituted a
common language that everyone on the EMC could
understand. They hoped that by ranking projects by an
objective measure of value, they could determine which
projects to forego. Smith subsequently delegated the
task of overseeing the consulting firm's work to Kevin, a
young strategic planning associate.
With implementation put on hold pending the
Technology - Market Matrix
consultants' report, Smith turned to making use of the
technology-market matrix (see figure) and project scope
statements. Although these tools had been designed to help managers change basic
management processes, IIC implemented them as communication tools, to become better
informed about what projects were going on, and what stage of development they were in.
Generating the information required for these tools placed significant additional work burden
on the middle managers engaged in development. Moreover, since management processes
did not change, the project managers developed strong negative opinions about the
concepts and tools of project portfolio management.
1. Why did the managing directors have such a difficult time reducing the number of
projects? How might this challenge have been approached more effectively?
2. If you were Jefferson, what sequence of actions would you have undertaken to ensure
that the system got implemented effectively at IIC?
3. Given the present situation, what should Jefferson do? 2 ...
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- Spring '10