What do these two companies have in common:
- Sara Lee Corporation: Global manufacturer and marketer in the packaged meats, frozen baked goods, shoe care, coffee, hosiery, underwear, fleecewear, and bra industries.
- Harley-Davidson: Manufacturer of iconic American motorcycles.
If you guessed Dantar P. Oosterwal, you'd be correct.
Oosterwal's biography notes that he "led global innovation improvements as vice president of innovation at Sara Lee and as director of product development at Harley-Davidson." Currently a partner with The Milwaukee Consulting Group, which focuses on helping organizations improve their operational efficiencies, Oosterwal also is author of the new book The Lean Machine: How Harley-Davidson Drove Top-Line Growth and Profitability with Revolutionary Lean Product Development.
The book discusses the innovation culture within Harley-Davidson and moreover describes Oosterwal's quest, and that of the company, to accelerate new product introduction and development. By the time Oosterwal walked in the door of Harley-Davidson's Milwaukee, Wis., headquarters in January 2002, the company was already experiencing something of a renaissance, having rebuilt the brand image — and profits — after a number of troubling years. Harley even then was known for its new innovative new products, garnering the Product Development and Management Association's Corporate Innovator Award in 2003. But Oosterwal saw an opportunity to take new product development at Harley to the "next level" by introducing a fresh approach to innovation based on Lean principles.
The challenge that Harley-Davidson faced, Oosterwal says, was that the company was manufacturing bikes faster than it was manufacturing customers. "From a supply and demand perspective, even though we had a two-year waitlist, our rate of filling those orders was going up so much faster that we couldn't get enough people to come in to buy our products in the future," he explains. "So if we wanted to continue to grow at the rate that Harley-Davidson had come to expect, we had to figure out how to get more customers to our products and at a faster rate. And the only way that happens for most companies involves the flow of new products."
The Lean Machine is partly a personal narrative describing Oosterwal's own journey in coming to understand the principles of Lean Product Development, as well as a "how to" book intended to give practitioners a roadmap for implement Lean in their own product development processes to drive faster and more effective new product introductions. The results that Oosterwal and Harley-Davidson achieved with Lean Product Development are incentive enough to consider LPD: a 50 percent reduction in time to market and a quadrupling of throughput while maintaining a quality level of 98 percent repurchase intent. Some of the key takeaways that the publisher is highlighting in promoting the book are that business leaders must:
- Acknowledge that bad systems always beat good people and trust the consensus on when it's time to change an underlying systemic structure rather than merely applying new tools.
- Recognize the financial and human toll of "firefighting" or rushing in to fix last-minute problems, and design incremental rework loops into the product development process.
- Break out of the phase- and toll-gate methodology of product development and focus on creating reusable knowledge and establishing a breakthrough process of cadence and flow, based on planned, experiential learning cycles.
- Replace yesterday's "railroad planning" according to a fixed schedule with "combat planning" to accommodate today's market turbulence.
So how did Oosterwal go from Softails and hogs at Harley to sausages and hot dogs at Sara Lee? "The reason I went to Sara Lee is that I believe you have to put yourself outside your comfort zone, and if you really think you know something, go try it in a different environment," he explains. "Sara Lee offered me the opportunity to create an innovation system on a global basis." And create they did. Within a year of his arrival, having brought his Lean Product Development principles to his new organization, Sara Lee saw a 35 percent increase in R&D efficiency and, within one U.S. division, a five-fold increase in revenues from new product sales. "You can change the names and faces and places that people work, but the fundamentals are the same wherever you go," Oosterwal concludes.
How are you helping your company to accelerate new product development? What place do you see for Lean in the NDP process? Drop me a line at [email protected] and share your thoughts. I'll look forward to hearing from you.