PLM and OCM

Foreword

A few years ago, I led a PLM implementation project which began in September and by November was a disaster. We brought it back around, largely by abandoning traditional project management paradigms and adopting Agile, in fact a subset of Agile, to emphasize collective learning rather than the “check-the-box” approach of fulfilling requirements.

A 2019 article in engineering.com discussed the failure of a PLM implementation (definitely where we were headed) at the telecom giant Ericsson, while two years later an article in the Harvard Business Review described the success of Ericsson’s shift to work-from-home as the world faced the COVID pandemic. There are parallels in the cross-functional collaboration found in WFH and PLM, why was one successful and the other not, just a few years apart at the same organization? (You can find links to the articles, here: Collaboration fails without Organizational Learning (patrickhillberg.com))

The scenario is not limited to Ericsson but is an interesting study due to the contrasting articles written about it. Much attention is paid (including in my teaching) to catastrophic product failures like the GM Ignition Switch, the Boeing 737 Max, the Flint Water Crisis, and others. These failures in managing product lifecycles might be addressed through a cross-functional PLM strategy, but unfortunately the collaborative vision of PLM is antithetical to the mass production norms developed by Henry Ford. To paraphrase The Machine That Changed the World, the Fordist approach is to emphasize individual specializations (both on the line and in the offices) at the expense of systemic organization-wide goals. (And in a multi-tiered auto industry, even ‘organization’ is too small a term.) While a PLM strategy might overcome the failings of mass production, organizational norms still in effect are structured to encourage dysfunction. (And of course, there is a lot of Lean theory here.)

If you are a Lead Solution Architect, responsible for creating a strategic PLM solution for your client, your greatest challenges do not lie in implementing the technology, but rather in your ability to inspire organizational change. Departments, divisions, and individual performance goals all encourage divisiveness. When implementing a collaborative solution, you will find your client is broken into subgroups who tell you that “we are happy in what we do, and not looking to change, thank you very much!” Cross-functional collaboration implies the need to break down your client’s organizational walls. PLM is one piece of a digital transformation, and neither are separable from organizational change.

Your greatest challenges lie not in terms of making the technology work, but in your ability to inspire organizational change.

Earlier in my career I led large PLM projects. I am now an adjunct professor and teach, write, consult, and speak on sustainable product lifecycles. I leverage many books and journals, including The Five Dysfunctions of a Team, by Patrick Lencioni, and as he does, in this "PLM and OCM" series I am creating a fable based on an amalgam of experiences that I have lived through or witnessed, reinforced by the literature used in my teaching.

But let’s have a little fun and assume that the PLM client is Acme Manufacturing, whose products have been shown by Wile E. Coyote to be flawed, despite their specific purpose to catch Road Runners, as can be seen in this video. Assume the case Wile E. Coyote v. Acme Company, by Ian Frazier | The New Yorker is currently in litigation, and the Acme Board of Directors has seen fit to make significant changes in the company, to focus on building robotic automotive assembly lines, rather than dubious road runner capturing equipment for use by coyotes. Further, the Board looks to adopt modern technology such as PLM and Industry 4.0 to reshape the company and avoid such product litigations in the future.

In the following chapters, ‘Sarah’ is a solution architect for the fictional ‘Spacely Systems’ and reaches out to a former professor for mentorship on the project she is leading at Acme. The chapters are a dialog between Sarah and Prof. and while the story is fictional it is based on actual events. The purpose of each chapter is to establish context, highlight key points, and provide reference to further reading.

So, here we go…

Prologue

Sarah was deeply concerned. Three months after the start of the Acme project and it was a disaster. Everyone was mad at everyone else, the international team of which she was a part was divided into four conflicting groups on two continents, and the teams began every morning with a 30-person international conference call which devolved into 'verbal fist fights'. Sarah was often wide awake with worry at 3 AM and nodding off in meetings twelve hours later.

The implementation process established by Acme management at the kick-off was rigid, excessively detailed, poorly followed, and provided little sense that it led to a worthy goal. A large engagement for thousands of world-wide PLM users hung in the balance. As did Sarah’s career.

Something needed to change.

Acme Explores “PLM”

The idea to adopt Product Lifecycle Management began in Acme’s German corporate headquarters a year earlier and long before Sarah was involved. In addition to heading off liability lawsuits related to their road runner products, the Board of Directors wanted the company to adopt the methods of the Fourth Industrial Revolution (4IR), which were being promoted via the German government. Acme’s corporate CFO formed an executive council to investigate 4IR and PLM further, consisting of:

• A member of the corporate Board of Directors
• The Chief Financial Officer,
• The VP of Engineering,
• The VP of Sales, and
• The Chief Technology Officer.

This council then hired business consultants (from a company like EY, Deloitte, Accenture, or McKinsey) to develop a report describing the value of PLM and Digital Twins and Threads in terms that every CFO would love, like “increased revenues”, “reduced head count”, “efficient procurement”, “improved EBIT”, and “decreased risk”. The CEO, who was always looking for ways to bring products to market faster, asked the VP of Engineering “Will PLM make your people more productive?” to which the VP had little choice but to say “Yes”. The large capital expense of the project, and the forward vision which the board wanted to promote, was published to shareholders in Acme’s annual report. The initiative included the adoption of PLM technology and a new ERP system. Tens of millions of euros would be spent.

The council and consultants reached out to key technology providers like Siemens, Dassault, Aras, PTC, and Sarah’s (fictional) company, Spacely Systems, to determine which supplier’s technology would be best suited for Acme. The suppliers took Acme’s request for proposal very seriously, as it will be an important sale in terms of revenue, marketing, and advertising if they can notch a “win” at Acme. Each supplier wants to outperform the others, and they attempt this by both increasing the level of technology in what they offer, and directing Acme’s attention to the benefits of what they have, and away from the detriments they do not.

In this dynamic, there are differing incentives at play:

• The needs of Acme’s business, at a time when the council knows little about its own future or the value of PLM.
• The opinions and revenue goals of the business consultants,
• The products, opinions, and revenue goals of each technology supplier, which are colored by an ongoing “buy-off” as the suppliers compete, under the watchful eyes of the consultants.

Once a technology supplier is chosen, the implementation will be worth millions of additional dollars, which both the consultants and tech suppliers are vying for. Acme is relying on consultants and suppliers to provide it with the information needed to make the best decision for its own goals, while their vendors have similar, if not identical, incentives.

Dysfunction, and an Oversupply of Performance

The challenges created in this decision process were now (at least) two-fold.

The suppliers were competing, but their technology and any differentiation in what they offered far exceeded Acme’s needs, or the council’s ability to understand. The author Clay Christensen refers to this in The Innovator’s Dilemma as an “Oversupply of Performance”. Suppliers increase their technology (and its complexity) to surpass their competitors and lose focus on their customers’ actual needs. Each supplier pushes the others up the technology curve, losing sight that their offerings are far beyond their customer’s ability to comprehend.

And the second challenge, unbeknownst to Sarah, was the dysfunction within Acme’s executive council. Each had formed their own mental model of “how the world works” based on personal motivations, incentives, and past experiences. They individually held different goals, priorities, means, and the metrics by which they judge their own accomplishments. The ability of the group to function was based on the intersection within some unwritten Venn diagram of mental models.

In the executive committee:

• The Board of Directors was driven to make the company ready for the “technology of the future”,
• The Chief Financial Officer wants to improve year-over-year efficiency metrics,
• The VP of Sales has been tasked by the CEO with creating significant new revenue growth,
• The VP of Engineering doesn’t want to disrupt his current organization, and
• The Chief Technology Officer has seen CTOs in other companies lose their jobs over failed IT implementations.

From The Challenger Customer, by Adamson and Dixon:

“Stakeholders will come together… and if they find little common ground for mutual understanding, they settle on the lowest common denominator where they’re most likely to agree. They avoid risk, move cautiously, reduce disruption, and save money.”

Each of which is antithetical to innovation. And this is the dysfunction created by only the five individuals on the council, and it will surely grow as more people become involved.

The nature of the project creates a dynamic of contradictory goals where the technology suppliers want to “win” the deal by oversupplying performance, but the client faces conflicting views on whether the company should change.

This is the environment in which Sarah must architect a solution.

Learning Goal:

• As an architect, you are facing a difficult dynamic between an oversupply of technology from the vendor, and a resistance to change, from the client.

Next: Customers are a Poor Judge of What They Need.