Disposition Rates of Product Development Projects

References Cited

The Visibility Mandate for Engineering Operations, Profitable Growth and Engineering Staffing

Studies Cited

The Product Lifecycle Management (PLM) Study

Research is a funny thing.

You can painstakingly design a survey, hoping to prove or disprove specific hypotheses. You can vette it with practitioners, making your best effort to make sure the questions and answers reflect reality. You can plan and execute its promotion, gathering responses from the right range of respondents to ensure validity of the findings. Despite all that, research can still offer surprises. That’s what happened with our PLM Study (760 respondents, conducted January 2015). However, in this case, I just wish the surprise was a little more positive.

As part of this study, I asked numerous questions about organizational productivity in product development. I found correlations to specific practices and technologies, which I’ll publish in future posts. But here, in this post, I wanted to share findings that give us an understanding of our rate of success in product development. The bad news? We’re failing.

Defining Each Scenario

Before we go any further, let me give you a run down as to what each of these statistics mean.

  • Missing the Goal: Combined, a total of 45% of all development projects are either cancelled or miss their product launch date. Projects could be cancelled do to schedule delays, cost overruns or disappearing opportunities. Projects could miss their launch dates due to any number of reasons such as failed prototypes, incorrectly ordered parts, manufacturing issues or more. In all cases, these are pretty catastrophic scenarios.
  • The Mad Scramble: Another 42% of all development projects are launched on time, but not without a mad scramble. These projects required at least a 10% increase in staffing to make their deadline. Now, of course, those people were not sitting around twiddling their thumbs. They were working on other active development projects. However, they were pulled off those to get the lagging projects out the door. I have more findings on the effect this has on organizational productivity that I will publish in a future post. There is good news, however. These projects launched on time.
  • Hitting the Target: Finally, a mere 13% of all projects are launched on time without any major resource shift. In essence, these projects went according to plan. That means only 1 out of every 10 projects goes off without a hitch. Now, I know all sorts of kinks pop up in product development, but this is a pretty abysmal number.

In all, these statistics paint an incredibly chaotic picture.

The Takeaways

What’s the root cause here? There are many contributors including system level failed prototypes, overly aggressive planning, undisciplined verification and validation practices and much more. Over the coming weeks, I’ll be sharing more findings showing a correlation between missed launch dates and specific practices and use of laggard technologies.

For now, however, the takeaway is simple: real success in product development is exceedingly rare. In fact, its about 1 in 10.