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Telecom Leader Dials Up a Winning Strategy

An equipment manufacturer fosters internal cooperation to reverse lagging product innovation.

In the highly competitive mobile telecommunications market, timely product development can mean the difference between leading and falling behind. No group understood this better than the leaders of a large manufacturer of infrastructure equipment for cellular networks. However, the company’s product development process was consistently slow, taking 30 months to develop a new release of its network hardware and software while the industry benchmark for this area was only 20 months.

The delays had wide-ranging consequences. The company’s profit margins and market share were in decline, and to catch up after the delays, quality tests were skipped. Faced with this poor performance, the executive team started to question the overall engagement of the firm’s four main development units.

Understanding What People Do

The company implemented the first two rules of Smart Simplicity—understanding what people do and providing reinforcement for integrators, those individuals or units whose influence makes a difference on the work of others.

The problem? The company’s program managers were responsible for creating overall product specifications, finalizing the specs, and communicating them to the engineering units. Because product releases were so far behind schedule, the specs for next-generation releases also arrived late. However, delays affected only two of the three development units. 

Schedules for the third group (which was responsible for new transceivers) were influenced more by the rollout of international standards than by the company’s managers and customers. As a result, the transceiver team could start its work earlier and finish sooner than the other units.

Because the transceiver unit got a head start, other units had to adjust their work in ways that led to inefficient work-arounds and unbudgeted costs. But the company also identified an opportunity in this special status. 

Since the transceiver group had the power to force others to cooperate with it, that unit adopted the role of integrators. Thus, the company created a situation in which these engineers had an interest in cooperating with the other product development units, and together they could make better choices for the entire process.

Better Results Through Collaboration

The manufacturer’s management team created a new constraint for the transceiver unit: Its engineers would now be accountable for any delay in the design and production of the entire system, not just in their particular area. This unit suddenly had the power to foster cooperation when dealing with complexity. 

In response, transceiver engineers began to listen more to customers and to their marketing and sales colleagues, and they started collaborating more effectively with other product development units.

After 15 months with the transceiver group acting in the integrator role, the company reported impressive results. It was beating industry benchmarks for speed to market by 20%, while also matching competitors on cost and quality. Delays no longer passed from one release to the next, and the company broke the cycle of product delays.

The Benefits of Reinforcing Integrators

  • More direct cooperation to align conflicting performance requirements
  • Less complicated processes, thanks to the removal of matrix dimensions and hierarchical layers
  • Less waste and fewer mistakes from escalating decisions
  • Decisions made as close as possible to where the action takes place and where information is richest
Smart Simplicity
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