Don Reinertsen's 7 Big Ideas for Lean Product Development

Don Reinertsen presented his 7 big ideas behind Lean Product Development at the Lean Start up Conference, 2013. Eric Ries has apparently been asking Don to present at his conferences for years as much of Lean Startup thinking is based on Don's thinking.

Anyone that has tried Don's ideas in New Product Development can vouch --they work! We certainly agree at PLAYBOOK. After 17 years of implementing Don's theories on new product development projects , we've helped our client’s reduce project timelines by 30 to 50%. In fact, we developed PLAYBOOK with many of Don’s concepts built right in.

Here is a high-level summary of Don's 7 big ideas for Lean Product Development at the Lean Startup Conference, 2013. We urge you to watch the video below.

Big Idea #1: Base new product development decisions on economics, not gut feel

In summary, if you make sure everyone on the team is aligned with the economics behind the project, bad decisions (and team conflict) will be minimized while maximizing profit.

In Don's studies he has found that gut-feel estimates for project costs and profits can vary among management teams by 50 to 1. Management teams often need to make choices between things like launching early or delaying launch to reduce the cost of production. Understanding what makes economic sense is critical and easy to calculate. However, most teams just base these decisions on estimates and gut feel.

Big Idea #2: Make your work queues visible on the project and control them

"Invisible unmanaged queues are the root cause of poor economics in product development."

The analogy Don uses to explain this concept is our life experience with traffic. If you close down one lane of highway during rush hour, you have three lanes left. Does this mean the flow of rush hour traffic is reduced by 25%. No, it's way higher than this. Try gridlock!

The same is true in new product development. When you overload the system (i.e., overload people expecting them to work at 95% of capacity), you will greatly increase project timelines.

Big Idea #3: Create a process to exploit variability (innovation) in new product development projects.

According to Don, when developing new products, variability is innovation, but it is also risk. We like to eliminate risk, but if there is no variability, you never innovate. The Lean Startup method allows you to do things like learn early to minimize risk. This is exactly what Don urges you to do, as opposed to killing innovation.

Big Idea #4: Reduce queues by reducing batch sizes in new product development

Things like daily stand ups (scrums and huddles) facilitate smaller batch learning. When you learn earlier, you reduce risk earlier. Similarly, developing a product in small batches' enables you to show your client or a potential customer or your work colleagues a minimal viable product earlier. This enables you to discover issues, as well as benefits, earlier so you can make changes with minimal effort. You also reduce the need for large reports, overhead -- improving project economics overall.

Big Idea #5: Control the amount of work in progress to speed up time to market

I really urge you to listen to the video below beginning at 32.19 as Don's explanation is completely ironic and LOL funny. But a quick summary is:

"The earlier I start, the earlier I finish," is never true in a capacity constrained system, which new product development systems are. In fact, too much work in progress actually means less profit. Complete the project that has the largest cost of delay first, this is the most profitable approach.

Big Idea #6: With proper sequencing, you can reduce the cost of queues without reducing the size of queues

Ensure the high cost of delay jobs remain in the system a shorter time.

Big Idea # 7: Accelerate feedback with smaller batches

Fast feedback loops enable economic performance in the presence of uncertainty.

According to Don, this is how lean startup works. The big idea is that when you learn early you can put your resources behind what works earlier - pivot earlier.

Watch the video and read Don's books. They will change the w

ay you think about project management and developing new products.