The design-to-value approach can help companies boost sales and profitability—but rolling it out across an entire product portfolio is no easy task.
Success factors for managing DTV
McKInsey identied in 2013, four success factors for DTV programs: a clear vision set by top management, effective cross-functional governance, a dedicated working team, standardized tools
Top management has to align functions across the organization involved in DTV enterprise program by developing and communicating a clear vision for the DTV program. Leaders can make that
vision actionable by developing plans that aim at stretch targets which are smart. The product level teams have to be given the responsibility of developing fact collection, idea generation, idea assessment and program implementation plans with timelines. Also there has to be plan for DTV application to specific number of products in the coming year and future years. Senior management needs to organize a structure to implement the DTV process. They need to hold review meetings as a part of directing and control functions.
A cross-functional governance body for DTV efforts has to be created. This entity needs to include managers from all relevant functions—Product management, R&D, marketing, procurement,
finance, manufacturing, industrial engineering and product development at the corporate level and business unit level. The governance body has an important role to play early in the DTVprocess to identify the resources required to initiate and implement DTV program and provide those resources., both by ensuring that the company generates enough high-impact ideas in its
priority areas and by selecting the ideas to be implemented.
As DTV efforts progress, the governance body would monitor performance; help resolve any
conflicts among functions, emphasizing the importance of finding feasible solutions that
deliver the best value for consumers; and ensure that important projects receive sufficient funding.
Any abandoning of any specific project in the DTV project of a product needs to be approved by the cross-functional governance body.
Members of the governance body have to serve as DTV “ambassadors” by informing the success of DTV projects and best practices to various groups in the company and mainting the positive attitude towards the initiative till it becomes a part of the accepted tool and process kit of the company.
Dedicated DTV teams
Many companies that initiated DTV failed to allocate enough employees to DTV projects. Creative
thinkers in sufficient numers are to be involved early in the project to develop sufficient number of high-impact, feasible ideas. Persons with expertise in design, value analysis, value engineering and process improvement are required in good number during rollout of specific projects based on the ideas. . The business functions or business units are to be persuaded to release people from their daily responsibilities to work on DTV, as this is a strategic initiative that will give results in the future..
In some companies top-managements mandated creating core DTV working teams for key product categories that remain intact for the duration of DTV projects. These teams for product specific categories also include experts from marketing, R&D, purchasing, manufacturing, industrial engineering and finance.
Standardized tools and processes
The functional groups use a variety of tools or processes for design related activities performed by their group. As persons from different functions form a cross-functional team, the lack of a common
language makes alignment and collaboration difficult. The right activity at the outset has to be development of standardized tools and processes across the organization. The important techniques include marketing related activities, teardown related activities, and clean-sheet cost-modeling techniques.
Time Frame for Expanding DTV efforts across the portfolio
It takes time for DTV efforts to generate significant results over the entire portfolio of products after the initial decision by the company to initiate the effort. It typically requires two to three years from start to finish, including embedding the approach across the product portfolio. McKinsey identified
three phases in the implementation process: : start-up, idea generation, and rollout.
The start-up phase, is three to six months long. During this phase., the company establishes the
basic organizational and management structure for DTV and develops the necessary technical
skills and tools and work with limited number of core products.
Once a company gains confidence in its DTV technology and infrastructure, the idea generation
phase—usually a six- to nine-month start using more sophisticated tools.
During the rollout phase, the implementation of the selected ideas are implemented in value chain activities. It may take 12 months to complete this phase initially. As the success is realized in the early product, the DTV process can be implemented in more products with a short time horizon. Many companies are now giving 12 month horizon to idea generation and implementation. At any time number of parallel projects in variety of products take place.
Based on McKinsey Note
Capturing the full potential of design to value