TVP – Metric 14 Development Pipeline Milestone Achieved

Resource Type
Tool
Authors
Alan Fusfeld, Innovation Research Interchange
Topics
Innovation Metrics, Stage-Gate, Tools and Techniques
Associated Event
Publication

Background | User Guide | Program Contents | Stakeholders | List of Metrics

1. Metric Definition

The percent, by project or overall by sub-organization or laboratory, of all project milestones completed on schedule or within some acceptable time window or, for specific project milestones, the percent of all expected objectives met at the milestone date by which they are forecast to be completed. This metric is useful in grading the effectiveness of management and planning of each R&D project. It may also be used as an indicator of performance problems on a given project.  If a project is found to have a high level of missed milestones, then subsequent analysis and recovery procedures to give each project the best possible chance of success. There are two possible variations of the metric which may be used, percent of project milestones achieved and performance level at each milestone.

a. Metric 1

The percent of project milestones achieved measures the percent, by project or overall by sub-organization or laboratory, of all project milestones completed on schedule or within some acceptable time window (90 days, for example) of the forecast date. Trend studies can then be established for organizational performance based on analysis of the data collected by quarter or for whatever other time period is appropriate for the particular industry group.

b. Metric 2

Performance level at each milestone, on a project basis, is the percent of all expected objectives met at the milestone date by which they are forecast to be completed.

2. Advantages and Limitations

The primary advantages of this metric are for project diagnostics and as an indicator of the overall planning and management health of the organization. There are several possible limitations. First, a consistent management system must be in place to assure that the variability of the number, quality, and difficulty of the milestones does not cause random fluctuations in the metric. Secondly, the calibration of the metric is important. Since both the stage of the R&D project and the industry of the business involved can greatly affect the trend analyses, the metric user must be careful to identify what the real danger signals are in terms of management and planning deficiencies, as well as what really constitutes an indicator of project problems for this metric to be useful.

3. How to Use the Metric

The percent of project milestones achieved uses a simple approach to tabulate milestones met on schedule: 1 = 90 days late (which may constitute on schedule in some cases); 2 = 90-180 days late; and so forth. The tabulation can be done quarterly, and the trend information publicized to the organization to focus attention on performance issues.

Performance level at each milestone is more useful as a project diagnostic. One approach is to require project managers to use this metric to summarize performance quarterly or semiannually at an operations review.  If the project has failed to meet an acceptable performance level (which will depend on the R&D discipline, the industry, and the stage of the innovation process) for two or more time periods, then the project leader should be  prepared to cover diagnostic or recovery steps.. This will depend on the R&D discipline, the industry, and the stage of the innovation process

4. Options and Variations

One problem with using milestone achievement as a key metric is that pressure is exerted to make all the milestones. With strong pressure to meet milestone dates, the project manager may be tempted to populate the project plan with easy milestones in order to assure that the milestone “hit rate” is good. It is important therefore to make sure that milestones are realistic and aggressive. Especially in the later stages of the innovation cycle, in product design and product development or manufacturing process development, it is important to assure that the business customer, marketing representative, and other project stakeholders approve the project milestones.  This will assure that the product development cycle meets the market window requirements of the business. In this case, a much closer tracking of milestone achievement may be necessary than in the earlier stages of the innovation cycle (for example, monthly, or in some cases even more frequently).

Another problem with using the milestone approach is that early in the innovation cycle (the “R” part of R&D) milestones are often hard to define and even harder to forecast. With the heavy level of uncertainty in a long-term research project, the definition of a milestone may be vague, or defined in terms such as identify a consumer need or develop concept. In these circumstances, project managers feel especially uneasy in setting milestone dates for which they become accountable. This issue can be mitigated by  realizing that: 1) exact dates are less important, since product or market need windows probably have not been established (and in some cases, market needs or even product existence!); and 2) many of these projects which are early in the innovation cycle will certainly fail, since in the research phase, many more ideas are explored than have a positive outcome. In this context, using milestones as a performance metric may not be useful, or, if used, the metric should probably be relaxed in some way. For example, instead of setting a goal of completing 100% of milestones, perhaps a goal of 50%, 60%, or 80% may be set. Another possibility is to declare any milestone made within 90 or 120 days of the forecast date to be on time. The specific approach taken will depend on the industry, the research area, and the stage in the innovation cycle.

5. Champions and Contacts

 

6. References