Kim van OorschotAssociate Professor Project Management & System Dynamics

BI Norwegian Business School

kim.v.oorschot@bi.no

Plan for creativity

Two methods – Mutually exclusive

• Stick to the plan, follow the rules, use the standards

• Stability, reliability

• Be spontaneous, think outside the box, improvise

• Change, innovation

Planning in traffic

What do we do in traffic?

More cars on the road, more roads crossing each other

More danger, more risk of accidents

More rules, more signs, more signals, more traffic lights, more lanes

Less accidents? Or different kind of accidents?

Unintended consequences

• We stop thinking, and trust the rules

• We start reading the signs, and do what the signs tell us to do

• This is fine, as long as the signs are clear

• Otherwise:

Mixed Signals & Missed Signals

• On April 21, 2012, two trains bumped into each other in Amsterdam, because the driver of one of the trains missed a red signal. One person was killed, over 100 people were injured

• ”This error is a logical consequence of the way in which signs are placed. There is no unity in this,” say colleagues of the unfortunate driver

Multitude of tracks and signals leads to confusion among drivers (Volkskrant 28-04-2012)

An example case: Airbus A380Management of an aircraft development project

joint work with Henk AkkermansProfessor Supply Network DynamicsTilburg University, The Netherlands

Introduction: Late Arrivals

• Many if not all new aircraft development programmes are much delayed

• Obviously, complex technology & volatile markets play a role

• But in aerospace, we know that most major incidents are caused by human error

• So, couldn’t these delays be caused by managerial error, rather than by technology?

The Case for Human Error

• Managers in aerospace NPD (New Product Development) work in highly complex settings

• People in highly complex settings frequently make mistakes

• To prevent mistakes, they become more risk-aversive, preferring structures and simple solutions, that have worked in the past, with immediate benefits

The managerial response:Intense planning & Stage gates

• In NPD, decision-making has been professionalized, leading to formal planning methods, such as Stage gates (Cooper 2008)

• Stage gates don’t work in dynamically complex settings (Van Oorschot et al. AMJ 2013, Van Oorschot et al. JPIM 2010, Cooper 2008)

• Stage gates ignore the unk-unk’s, the unknown unknowns that characterize the early stage of every NPD project (Sommer & Loch 2004)

Basic Design Detailed Design Tooling Proto Production

stage gate

“First time right”“Nothing leaves the basic design phase before it is

100% correct”

A Clash of Ideas

Sequential Design, structured Stage-Gate approach

Concurrent Design, less structure, overlapping of phases

Basic Design Detailed Design Tooling Proto Production

Basic Design

Detailed Design

Tooling

Proto Production

early start of next phase based on preliminary

information from previous phase

Risk of iterationsFaster learning

feedback from detailed design to basic design

feedback from tooling to detailed design

feedback from proto to tooling

Decision Trap

EFFECTProject Duration

short long

CAUSEConcurrent

Engineering (overlapping

phases)

no

short duration caused by first

time right (no or few iterations)

long duration caused by slow

learning

yes

short duration caused by fast

learning

long duration caused by

endless iterations

Perceived relationship

Most likely relationship

Conclusions from this research

• In complex aircraft NPD, managers are tempted to ”look tough” and go for strict rules, structures, and gates to prevent mistakes

• This decreases feedback from downstream to upstream phases and leads to less communication and learning

• This may be seen as a managerial decision trap, since another managerial decision (less strict gates, more overlap) would have had a more positive impact on overall performance

Without rules

Without rules?

• If you look closely, there are traffic “rules” in India– Use horn– Eye contact– Give and take– Drive slowly, but keep moving

• Communication• Learning• Iteration• Progress

These rules do not limit our ability to think.Instead, they enable us to see through the complexity

Template of flexible process(Lenfle & Loch, 2010)

Communication, learning, iteration, progress

Plan for creativity

Two methods – Mutually enabling(Farjoun, 2010)

Stability enables change

Routines help manage the non-routine

Control enables design and invention

Change enables stability

Moderate experimentation mitigates drastic mistakes

Doubt and mindfulness foster security

Go your own road – Erik Johansson

Thank you for your attention!