Last month, I participated in a training on Huawei's IPD integrated product development organized by a consulting company. Combining the current actual situation of our factory and my many years of work experience, I will briefly summarize and share with you. First of all, let me make a conclusion. If the turnover of the enterprise is less than 10 billion, IPD should just listen to it. It will gain insight. Don't implement it impulsively.
Before sharing, I think it is necessary to clarify a misunderstanding, that is, at a very grassroots stage, Huawei has made up its mind to introduce IBM to carry out process changes. Perhaps for Huawei, it was grassroots in 1998, but for most companies, was Huawei really grassroots at that time?
In 1998, Huawei's sales were 8.9 billion yuan! In order to let everyone have an intuitive concept of this number, we use China's GDP as an analogy. In 1998, China's GDP was 8.52 trillion, and in 2019 it was 99 trillion. If Huawei's growth rate keeps pace with GDP growth, it is equivalent to reaching 103.4 billion yuan in sales in 2019. This number can be ranked among the top 100 listed companies in terms of sales revenue in 2019. Therefore, Huawei in the reckless stage has grown savagely to a very exaggerated volume. Home appliance giant Haier's sales revenue in 1998 was 16.27 billion (first), and Gree was 5.3 billion (fourth). If Huawei is placed in the home appliance industry, it can already rank second. Therefore, it is recommended to consider before learning Huawei. Is the company's business developed enough and complex enough to require a complete process system to constrain, regulate and re-empower?
Why did Huawei learn from IBM instead of other giants? Such as motorcycles, Lucent, and Microsoft. Because from the perspective of learning, IBM itself has a wealth of learning cases, including both success and failure. In the 1990s, Gerstner led IBM to complete the transformation and established a "customer-oriented" corporate culture. At the same time, in response to IBM's powerful but unresponsive illness, Gerstner boldly adopted the IPD (Integrated Product Development) R&D management model to shorten the time to market and increase product profits from two aspects of process reorganization and product reorganization. Ultimately, IBM completed the transformation from a technology-driven to a market-driven business model. Earlier, there was a product transformation led by Watson Jr. in the 1960s. Moreover, enterprise service consulting is also an important business of IBM, which can systematically and standardize internal experience and export it to the outside world. At that time, giants in the communications industry, such as Motorcycle and Lucent, basically belonged to the rich second generation with a golden key background. They were born to lead the industry with their technological advantages. Another important reason is that as a competitor, even if you want to learn, you can only watch and ponder it yourself. The teacher will not send someone to teach you hand in hand. IBM can not only teach you (although the fees are expensive), but also serve as an important endorsement for overseas business.
The source of the idea of IPD is the "Product and Life Cycle Optimization Law" published by the US PRTM company, but it was IBM who first put the system into practice. From two aspects of process reorganization and product reorganization to achieve the goal of shortening the real time of product launch, increasing product profits, effectively carrying out product development, and providing greater value for customers and shareholders. The core of the change lies in the fact that each department was like an independent kingdom before, fighting independently. After adopting IPD, it focuses on customer problems and integrates internal resources of the company for unified external output. At the same time, in terms of internal product planning, unified product portfolio management, integrated product planning based on market orientation, standardized product project approval and development process through a series of processes, improved product market success rate, and reduced waste of resources. To put it simply, it is to adopt a product planning and management mode of "passing the customs system".
It is mentioned in the training bell that IPD includes the following management points:
- Strict market feasibility demonstration and project screening are the preconditions for R&D projects
- Project-based operations, structured project activity settings, and rigorous business process management.
- The cross-functional R&D team consists of multiple resources of the enterprise to form the project core team and extended team.
- Strict stage review mechanism
- Enterprise executives representing different functions form a product decision-making committee to conduct stage reviews.
However, in the industry, the voices about IPD are not consistent. At present, the benchmark seen in China is Huawei, and first-tier Internet giants including Alibaba and Tencent have not systematically adopted IPD methods. In the book "How Google Works", Larry criticized it like this: Which team have you seen perform beyond the set goals? Uh, no. Has your team ever built a better product than planned? nor. If so, what's the point of planning? Planning is just holding us back. There must be a more efficient way than planning, go talk to an engineer.
In fact, IBM and Google belong to two very extreme situations. The business types of IBM and Huawei are actually very similar. They are mainly for enterprise-level users, with huge investment in research and development. Once the system is started, the inertia is huge and cannot be easily adjusted. A set of products/solutions has a long life cycle after being put into the market, and is deeply bound to the customer's business. However, Google's products are very flexible, and the cost of trial and error is extremely low. The direction can be adjusted at any time. The product life cycle is not fixed and can change at any time according to market conditions. Moreover, Google (including domestic Internet giants) is not deeply bound to customers (especially B-end customers), and may redefine the business form of this field after a breakthrough in a certain field at any time.
The business scale of a Huawei department is at the level of hundreds of billions, and the business input is complex and the inertia is huge. If there are no complex process specification constraints, once the direction deviates, the cost of recovery will be huge. Relatively speaking, the business scale of our factory is small, and the business form is relatively simple. The idea of IPD can be absorbed to standardize product project approval and review and assessment mechanism. However, if Huawei's IPD mechanism is directly copied, the process cost and learning cost will be very high, and it will not be able to generate immediate benefits. Moreover, there is a relatively large gap in team capabilities. When Huawei was learning from IBM, its business has grown to a very large scale. The team's capabilities have been well accumulated in the process of business development. At this time, the introduction of external brains is just right. Sort out, standardize and improve historical experience.
Through this training, for small and medium-sized enterprises, IPD has the following contents worth learning and paying attention to:
- Rigid first and then optimized is not suitable for most small and medium-sized enterprises, because there is a gap between human quality and business ability. In many cases, if you accidentally become rigid, you will really "fossilize". Huawei's organizational structure for IPD is not suitable for most enterprises, because the business volume is not large enough to share management costs.
- The goal of establishing a project must be clear, and there must be a profit and risk assessment, and all departments must agree.
- There must be an arbitration decision-making body that has the final ruling and assumes responsibility for wrong decisions.
- The project system must be effectively supported in terms of organizational structure, including resource mobilization and reward and punishment mechanisms.
- Copying industry leaders is more important than IPD. A very important role of IPD is to ensure that the direction does not go astray. (Original words from the consultant: Your business model is too simple, copy your homework first.)