Many managers think they can create better products just by improving the development process or adding new tools. But it’s skilled people, not processes, that create great products.
We frequently visit companies where managers say they want to improve their product development capability. They want to learn how lean principles and practices can improve their ability to innovate while reducing costs and improving quality. When we inquire about their approach to human resource development, we often hear, as one vice president of product development recently told us, that “of course, people are our most important asset. So we recruit and hire the top people from the best universities and get out of their way.”
However, the only things many companies actually do under the heading of people development is to have an annual training-hours target and a travel budget for sending employees to conferences. If managers really thought that people were their greatest asset and that it’s the energy and creativity of employees that drives innovation, why do companies do so little? Why doesn’t growing and developing people excite them just as much as installing new additive manufacturing equipment or the latest cloud-based collaboration tool?
In studying manufacturing over the past two decades, we have learned that operational excellence is not achieved by just applying so-called “lean” practices to every process. More than anything, it requires cultivating an aptitude and an expectation for continuous improvement within every employee.1 Similarly, we learned from studying lean product development that people, not processes, make great products. (See “About the Research.”) We frequently encounter managers who think improvements in the development process will pay off in better products. But better products don’t just appear out of thin air: They are created by developers working with better knowledge and supported by good design processes.
The final design, including the product, manufacturing, and supply chain specifications, is the product of a complex network of interrelated technical decisions. How developers interact in the decision-making process — everything from framing problems, choosing ideas, and negotiating constraints to testing prototypes — is what shapes the product. In more transactional systems such as manufacturing or accounting, good processes usually produce a good outcome. What’s important in lean product development isn’t just whether you follow the right steps but how the work is done. Indeed, there are plenty of cases where companies followed “good” processes but had terrible results.