You Don’t Want the Plumber to Build the Whole House! Governance Methods for the Realization of Smart Products, with Huub Rutten

Innovation in complex arenas is not for the faint of heart! Modern products often require:

*Software that lives outside the product

*Digitized assembly lines

*Ongoing efforts to sustain the product in market

*Sustainability (e.g., cradle-to-cradle planning)

*Price pressure on both revenue and margin.  

Of late, many organizations have invested deeply in one or another development framework, for example, Agile Development.   For some departments, like fast-moving software teams, something like Agile makes perfect sense. But for others, such as hardware development, the work in its very nature requires extensive planning and coordination with many other stakeholders — think fabricators, suppliers, etc.  No one party can change its mind in the short run, without a massive effect on the whole system. Huub Rutten  points out: Agile is just a tool — metaphorically, Agile is just plumbing. It isn’t the whole project.  

In complex settings, you need an overarching governance model. Sound like a lot of bureaucracy? Not at all — Huub teaches that governance is a set of guidelines that keep things running smoothly. Think of the difference between traffic in Bangalore (no particular guidelines), and traffic in Maastricht (crystal clear guidelines and a designated breakdown lane). In a crisis, which will work better?  

Want a scorecard for your company’s governance capacity? Rate yourself on a scale of 1-10 for each of these statements:

1. We have a governance charter published by the C level. (A score of 10 means that in a crisis, your company will be ready to make a decision within one day)
2. Product line owners are in charge of roadmaps/calendars (not just following them, but owning them)
3. Product lines own a quantified portion of engineering capacity to realize roadmaps
4. Projects come with explicit cost ceilings, just like vendor agreements
5. Manufacturing has controls early in the development process of new features, to avoid redoings and recalls
6. We have explicit internal SLAs between engineering and product management
7. The product manager owns the business lifecycle of feature and products
8. Product lines have measurable targets for digitization & sustainability

How did you do? 100 means you’re perfect!  If you’re at 40 or below, you might consider revisiting governance in your shop!