ENT 1000 Organization and processes Tomas Hellström

ENT 1000 – Organization and processes Tomas Hellström

Product Development, organizational structure and value generation Topics: Product development processes n Organizational structure n The value web n Business alignment n

Overview: Think of it in terms of a value chain…

Product development processes n Challenges: ¨ Provide leadership in all phases of PD ¨ Integrate competences and capabilities for the product ¨ Forecast product requirements ¨ Retain flexibility (cost of change=low) of product characteristics as development process proceeds

Design n Concrete arrangement of the various aspects of the concept Form and function Design connects the novel concept with potential institutional needs n n familiarity+novelty impact+acceptance Attractive to see and easy to use Product robustness

Development process 1. Research and development A. Establish the product goals and attributes B 1. Which components/ parameters available for selection? Develop or buy? 2. Product design B 2. Identify/record the physical contraints 3. Build prototype C. Write performance specification for the product D. Establish product configuration 4. Test No 5. Satisfactory performance? E. Select the components of the product Yes F. Optimize the parameters of the product 6. Finalize design

Product development leadership n n n Commitment to the design process among founders/senior management Clear product vision/goals. Everybody in startup must understand the idea/vision of the product clearly Improvisation/iteration to develop prototype Open sharing of information Cross-functional collaboration in the team

Understanding the customer Preferences n Purchase criteria n Decision making processes n Buyer behavior n Functional needs n

Coordinated design system – Product, process and supply chain

Organizational design and form n Decisions to be made: Organization structure: Define members’ jobs and communication relationships. Depicted in an organizational chart. ¨ Planning, measurement and evaluation schemes: How will plans be achieved and updated? How measured and how evaluated? ¨ n n Goals (e. g. tied to people, processes, outcomes etc) Project flow-descriptions (e. g. Gantt-charts) Rewards: Criteria and strategy for bonuses, raises etc Selection critieria: Guidelines for selecting individuals to positions ¨ Training: Competence development on and off the job must be specified. Educational criteria for tasks and learning skills defined. ¨ ¨

Typical organizational charts for startups Stage 1 CEO Production/ Product development Marketing/ sales Stage 2 Production/ Product development Assembly/ quality control Administration CEO Marketing/ sales Sales Promotion/ advertising Administration Finance Purchasing Shipping receiving

The organization and the value chain

The Value Web

The Value Web (Cisco example)

Goal: Self-reinforcing growth

Goal: Business Alignment