international instruments

international instruments - International Instruments...

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Unformatted text preview: International Instruments Corporation BACKGROUND 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 Smith. GRAND OBJECTIVES The EMC hoped to implement three specific elements of the project portfolio management process: 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 development process; 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. THE RESULT 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. QUESTIONS: 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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