My last blog was about using Scrum to accelerate a product’s speed-to-market time. In that post I introduced you to my client, Schier Products (Schier). Today’s post will reveal the 9 Real Benefits of Scrum that Schier has experienced. The nine benefits are both tangible (4) and intangible (5). Today we’ll discuss the tangible benefits of using Scrum and in next month’s post we’ll dive into the intangible benefits.
Four Tangible Benefits
1. Increased Product Speed-to-Market
Let me share quantifiable measures on the “significant increase” I previously mentioned about Schier’s speed-to-market timeline. Their previous product took 24 months from design to deployment and by using Scrum principles, they reduced that to 10 months. And the 58% improvement is a conservative number, because their tooling vendor’s shipment was two months late! If we removed this delay, Schier’s speed-to-market time jumps to a 67% improvement...wow!
2. More Units Sold
Since their product reached the market much quicker than in the past, Schier most likely will sell more units over the life of the product.
3. On-the-Fly Design Improvements
Schier originally planned to develop a new grease interceptor* with stand-alone component systems, but using Scrum really expanded their vision. Through its use, they uncovered a larger product improvement opportunity than they anticipated. Instead of a stand-alone component for a single new product, Schier could design component systems to fit their entire product line, nine in total! This “modular” (or standardized unit) approach would increase production speed and lower costs for all their products, not just the new grease interceptor. Making the decision to use the modular approach was truly a no-brainer.
4. Lower Development Costs
Development costs were significantly reduced from previous product development efforts. The savings in development costs between a 24 month product development cycle and 10 month cycle is clear. This is just another additional tangible benefit of using Scrum!
Five Intangible Benefits
Schier also experienced intangible benefits. These can’t be measured precisely, but had significant impact on their business. These intangible benefits are:
5. Laser focus on the task at hand
6. Discipline and thorough planning
7. Scrum as an extension of Lean thinking
8. Final solution resulted in very few mid-stream changes/problems
9. Increased team transparency
The list isn’t exhaustive, but these five areas have produced the most powerful outcomes for Schier so far.
The 9 Real Benefits of Scrum -- tangible and intangible -- have been proven time and again in many organizations. Schier’s product development improvements are one example. And their Scrum journey was so successful that they’ve replicated it by launching two new Scrum teams. These teams will focus on New Product Development and Product Improvement, respectively. Imagine the benefits that will come from their expanded use of Scrum!
Schier couldn’t be more pleased with the results. In the words of their CEO, Luke Ismert says: “Kathy was just what we needed to get us started on Scrum and pointed [us] in the right direction. She methodically and professionally held me and our Scrum team accountable and made sure we were in-line with the tenets. Her start-up leadership helped us shave weeks off of the Scrum learning curve."
Stay tuned for my next blog where I’ll dive into the five intangible benefits. And feel free to contact me at 816-429-1042 or email@example.com if you’d like to learn more!
*Grease Interceptor: a plumbing device (a type of trap) designed to intercept most greases and solids before they enter a wastewater disposal system. These traps reduce the amount of fats, oils and greases that enter sewers.
In today’s competitive environment, how do manufacturers not just survive, but thrive? With tight budgets, how do they also develop innovative products and get them to market more quickly? The answer is Scrum.
What is Scrum?
It’s a process framework for developing products, all the way from envisioning the product to its completion. To put it simply, cross functional team members come together to develop products in an iterative flow that solves problems in real time.
Benefits of Scrum
Here are a few worth mentioning: reduced speed-to-market timelines, lower product development costs, products are more on-target with customer needs, more engaged technical employees, and increased profitability.
Scrum for Hardware
Scrum has historically been used for software development. To a lesser degree, it’s been used on manufactured goods, such as cars, computer hardware, and aerospace products. However, it’s not common for Scrum usage on manufactured goods, aka Scrum for Hardware. A real need definitely exists (how many manufacturers don’t want to accelerate the speed-to-market for their products?)!
Case Study: Schier Products
With the lack of established precedent, how does one go about implementing Scrum for manufactured goods? I had the same question and therefore began work on an answer.
Schier Products in Edwardsville, KS, wanted to do exactly what we’re talking about: implement a Scrum strategy for product development purposes. Their existing stage gate process was both inefficient and ineffective; their last new product development effort required two years to complete! Schier’s goal was to speed up their development timelines. I partnered with them to do just that.
Adapting Scrum to Hardware
Although my knowledge of Scrum is extensive, I had never before applied Scrum principles to manufactured goods, so there was a short period of trial and error. Hardware is obviously different from software in a lot of ways, so it took some adaptation and ingenuity to make Scrum work for them.
The end result has been amazing! It required two months to develop and implement the process, and it took only 10 months to launch their newest product. That’s a 58% increase in speed-to-market! That is a whole lot better than two years!
The Bottom Line
Scrum is a strong solution for increasing speed-to-market timelines for manufactured goods, as evidenced by Schier’s success. But their story is still being written. It’s only been a couple of months since their product launch, so tune into my next blog to hear more as the story unfolds!
If you are interested in learning more, please contact me at 816-429-1042 or firstname.lastname@example.org.
Imagine the following scenario…
Your business launched a highly anticipated new product or service into the market, and results were well below expectations. So much time, money and effort were spent on creating it, and the development team was positive it was going to take the market by storm.
Disappointed is hardly a word that describes everyone’s emotions. The ramifications were not too pretty as well…one person lost their job, another was demoted, revenues plummeted, etc. Thankfully someone on the development team asked the question: ”What could we have done differently?”
Perhaps you don’t need to imagine this situation, because it unfortunately happened in your business. If that’s the case, here’s an answer to this all-important question…it’s possible your business could have done a better of job of listening to the Voice of the Customer (VOC), before you ever started the development project. If customer requirements were well documented in advance, your new product or service could have been tailored to meet the customer needs. By doing so, the likelihood of a more successful product or service launch would have increased significantly.
This scenario, Product/Service Launch Failures, is just the first warning sign that your company needs to use VOC techniques. Here are other indicators:
High Levels of Customer Churn
There’s no need to scratch your head, wondering why they left. The best solution is to reach out to them and find out the reasons for their departure. Perhaps a survey or focus group would be beneficial. Then, armed with these insights, you can put together an action plan to resolve the issues.
Rising Customer Complaints
If you’ve noticed an uptick in your customer complaints, it’s time to start doing a better job of understanding what is making them unhappy. Next, devise a plan to reverse the trend.
It’s not a far leap to find a connection between less-than-stellar profits and less-than-happy customers. Digging in deep to find out the reasons for their disenchantment can provide actionable insights for your business.
No Formalized Method of Gathering, Recording or Acting on Customer Feedback
It’s so important to a business’ profitability to have a standardized way of ensuring feedback is properly gathered, stored, and acted upon. In fact, one study proves that companies with VOC programs outperform all others by as much as 22% across a number of categories, including revenue, customer churn, among others. There’s proof that VOC works!
What’s Your Story?
If your business hasn’t encountered these warning signs, congratulations! You’re most likely doing a good job of listening to your customers. However, if any of these situations sound familiar, your business could be a good candidate for using VOC techniques. It can only help your organization! What have you got to lose (besides customers, profitability, etc.)? ;-)
In my last blog article I discussed the effectiveness of Voice of the Customer (VOC). Now let's turn our attention to a quick overview of techniques that can help you improve your bottom line.
Voice of the Customer Techniques
There are many VOC techniques, but my favorites are: customer interviews, focus groups, observation, informal conversations, and customer surveys. Let’s briefly dive into each of these.
These are one-on-one conversations with customers that use a pre-determined interview guide that often take place at the customer site.
Focus groups involve a collaborative experience with a small group of customers so that feedback can build upon each other’s input.
Also known as Ethnographic Market Research (EMR), this involves interviewing and observing the customer while they interact with products.
This technically is not a traditional VOC technique, but how many of us have amazing conversations with our clients and we forget to document what we've learned? One client of mine made it a standalone model in their process, since they want to ensure they capture important content from these conversations.
I’m sure we’re all painfully aware of surveys, but they can be a quick and dirty way to gather feedback from customers.
How Can VOC Improve My Bottom Line?
Now you may ask, this information is all well and good, but how can these techniques help me?
In a nutshell, companies with VOC programs outperform all others across many categories, including increased revenue and customer win-back rate. Although these techniques are often used as standalone approaches, they are most effective as building blocks in a complete VOC program. When used in the context of such a program, every customer-facing employee has the ability to gather customer feedback across many different channels. As companies consistently gather, analyze and put this feedback to use, they are empowered to create products and services that customers want and expect. When that happens, companies can’t help but improve their bottom line!
Happy customers…what does it take to truly make them happy? Many organizations struggle with answering this question, but in today’s competitive business environment, organizations have do at least do a better job of listening to their customers in order to thrive. That’s why effective customer feedback strategies are so important, and using Voice of the Customer techniques is a great way to get there.
What is Voice of the Customer (VOC)?
It is an in-depth process that is used to gather customer requirements and feedback in order to provide customers with best-in-class services and/or products.
Voice of the Customer Works!
A study conducted by the Aberdeen Group in 2014 shows that companies that have VOC programs outperform all others by as much as 22% across nine categories, including annual company revenue and customer win-back rate. When organizations have these programs in place, knowing what customers want becomes more second nature, and products can be more easily created to meet these expectations.
Whether the focus is using VOC techniques to determine customer satisfaction levels with current products/services, capturing feedback to develop new products and/or services or ideally using both approaches, consistent use of VOC principles works.
What Happens When You Don't Use VOC...
How many of you have been involved in New Product Development (NPD) efforts and have experienced a newly launched product failing in the market? I’m sure it wasn’t a pretty picture. Perhaps the breakdown was due to changing customer demands. Or the product may not have functioned as the customer intended. In either case, a lot of resources were likely wasted to achieve mediocre results...poor sales and ROI. There's a good chance that this failure could have been avoided if VOC activities has properly occurred during NPD efforts. That is why capturing VOC is so important!
Here are some other examples of bad outcomes:
What Happens When You Do…
Many of these problems can be avoided when a VOC process is properly integrated into an organization. That way, a standard methodology and tools to capture customer feedback are at each employees' finger tips. Consistently gathering valuable feedback becomes more of an everyday experience when employees know how and when to use them. When this consistently occurs, great things can happen:
The Bottom Line
Today’s competitive environment requires an ever increasing need to listen to what customers want and expect from companies. To do otherwise can spell disaster. When VOC techniques are consistently used by an organization's employees, companies will have genuine customer feedback from which to make decisions during NPD and service delivery cycles. Making your customers happy will no longer a guessing game, and who doesn’t want that?