Agile Product Development

Stephanie Potisek

Senior R & D Manager at Dow Chemical

Learning Objectives

Agility is necessary to be successful in R&D product development. We can learn this from taking a look at case studies of successful companies over time and how they’ve remained relevant as society changes. Agility, however, is usually associated with a small size, so how does a large company remain agile? Dow Inc. has successfully delivered new innovations in short times as demonstrated by its response to the pandemic with the development of PPE for the medical industry. In addition to examining the critical elements which made that possible, I will discuss my experience on leading the team through changing times and discuss 7 key components I found critical for agile product development.


Key Takeaways



  • Agility is critical for success

  • There are seven keys to agility: monitor loading trends, collaborate with a cross-functional team, empowerment, prioritization, robust pipeline, leadership and the right team


"There were some great projects that one day could be game changing, but we ruthlessly prioritized on what could bring value in the short term."

Stephanie Potisek

Senior R & D Manager at Dow Chemical

Transcript

My name is Stephanie potassic and I’m the senior r&d and TSM D manager at dow. Let me begin by telling you a little bit about my background. I’m an organic and polymer chemist and started my career in Dallas apoxie r&d group, developing new types of materials for electronic circuit boards. After several years, I moved to Dallas oil and gas r&d group where I initially worked on new chemicals to optimize oil production, resulting in an r&d 100 finalist award. Over the next six years, I took progressively larger roles within the group and finally was leaving the entire entire upstream oil and gas team. A couple of months ago, I accepted a position in innovation, a wholly owned subsidiary of dow weaving the product development and technical service team for our polyethylene licensing division. Throughout my career, agility has been key for our product development. And I’m going to tell you about that today.

Agile is defined by Merriam Webster, as marked by ready ability to move with quick, easy grace, and having a quick and resourceful and adaptable character. When I think of agility, one of the animals that comes to my mind is a cat. They’re very nimble, and this is very apparent for me when it’s time for me to give my cat his medicine, he speedily finds an escape route, and I don’t know how he does it, but he swiftly finds a way to avoid me as he squeezes himself in the narrow gap under my couch. Cats also have a high level of dexterity. their paws are multifunctional, and they’re highly skilled at using them for many different things. They are also adept at detection, their whiskers allow for sensing and you can easily navigate spaces, even in the dark. Finally, they’re incredibly alert. Have you seen how a cat can quickly spot a bird or a squirrel outside or maybe a fly in the house. They have sensors in their nose, in their lips and in their ears, which allow them to sense movement, they’re able to quickly focus on things which may present an opportunity or a threat. hummingbirds are another animal, which ice is highly agile. They’ve tremendous maneuverability, they can hover, fly backwards and upside down even. And they can very quickly change direction.

They’re also incredibly fast and can fly up to 45 miles per hour. Their stamina is fantastic, and they’ve been known to fly for 18 to 20 hours over large bodies of water, they’re able to go the distance and really sustain their effort for long periods of time. Finally, they’re highly adaptable. They can feed on a variety of different foods, including flowers, insects, and sap wells, depending on where they are, and they’re able to adjust to their environment and the conditions around them. All of these qualities makes cats and hummingbirds very agile. And they’re also key factors to being agile in product development. compare the two case studies of blockbuster, which filed for bankruptcy in 2010. And Netflix, which has seen soaring profits over the last 10 years. In 2009. Netflix was a $1.7 billion company, which today has grown to over $20 billion. There are a number of articles and case studies discussing blockbuster and Netflix and I’ll just touch on a couple of the points here. blockbuster had 1000s of retail locations, millions of customers massive marketing budgets and efficient operations, it really dominated the competition. However, they were overconfident in the brand and its success. Their strategy and revenue model focused on late fees and they didn’t adapt to the changing environment of DVDs and streaming video quickly enough. They did try to change their late fee strategy, and they did partner with Enron to create a video on demand service. But due to lack of focus on it, it wasn’t very successful. Ultimately, blockbuster abandon their online strategy and reinstated their late fees. Interestingly, in 1999, blockbuster also passed on an opportunity to buy Netflix failing to capitalize on the market trends. On the other hand, Netflix had an innovative idea that was disruptive to the market with their streaming services. They also adapted their ideas, trends change from the early on mailing DVD service to streaming, they capitalize on the new market and Pioneer the streaming trends and binge watching Actually, today they create a customized user content, and they’re now creating their own digital content as well. Now there are numerous streaming services from Disney, Amazon Prime and others. The key moving forward is how they’ll continue to innovate and stay agile to remain at the top of the game. When you think of agility you think of things that are small and nimble. Take David and Goliath for example,

the smaller, more agile David was able to defeat the larger, slower and more encumbered Goliath. There are children’s videos actually that show number a nimble David running between the legs of Goliath. David was also well prepared, and he had thought through how to defeat the Goliath, knowing he couldn’t win in hand to hand combat but instead he brought rocks and sling. So how does a large company like dow with approximately 35,000 employees a Goliath if you will stay agile. One of the keys to that agility is Dow’s team of teams approach which was adapted from general Stanley McChrystal book team teams. General Stanley McChrystal was charged with leading the Joint Special Operations task force in the fight against al Qaeda in Iraq in the early 2000s. Al Qaeda was a decentralized network with unpredictable quick responses, a viral video from one region could spark an almost immediate response and another. In his book The general discusses tactics he used and how he modified the team in order to remain agile. It’s a fantastic book, and I highly recommend it. He talks about engaging the entire organization and creating a common vision for different divisions throughout the world. Dallas CEO Jim fingerling has successfully done this with the vision of being the most innovative customer centric, inclusive and sustainable material science company in the world. I can tell you that everyone in doubt knows that and understands these visions and four pillars. Another point that general Stanley McChrystal discusses in his book is providing transparency to everyone in the organization, he held a weekly meeting with all teams and sub teams, so everyone would be aware of the be aware of the latest Intel, and he empowered people to act on this Intel. This eliminated a lot of red tape, and saved a tremendous amount of time. He trusted that everyone had the latest information and can make the best decisions so that people were not waiting on a decision from someone higher in the chain. This removal of hierarchy really enable their team to be more agile. Tao similarly now operates in an incredibly transparent environment. Jim furling has a quarterly call with all the leaders in the company. He’s also created cohorts that meet monthly to disperse information down through the organization and enable people to voice concerns that can easily be raised to the top. During the start of the pandemic, his calls actually became weekly calls to quickly dispense information on dals actions and they were with all the leaders in the company.

Finally, in his book, General Stanley McChrystal also talks about collaboration across divisions. In one part of the book, he describes taking a high achiever from one division and temporarily assigning them to another division to improve networks, create connection and enable teams to understand how other teams operate. I’ll talk more about collaboration later. But this is an incredibly important aspect to remaining agile. Dell quickly put these type of tactics to work when the pandemic started. In developing PP in particular face shields and gowns for the medical industry. People felt empowered and they were challenged to find ways to provide solutions for the pandemic. In r&d in particular, there was a challenge but for us to collect different ideas. And one group in the health and hygiene space had a brainstorming session, and there were several ideas in the PP space. Doubt typically doesn’t manufacture final products, but the need for pp. In this case, there was an exception. Dell set up several collaborations with value chain partners to develop non woven level two medical isolation gowns, and we ended up donating a number to frontline workers in Texas, Louisiana and Mexico.

We also worked with Whirlpool and Reynolds to develop and manufacture powered air purifying respirators. In this case, we were able to use an already existing material, but apply it in a new way. A third solution that came out of the brainstorm was the development of a simplified facial design. We don’t need a lot of those to the industry and we also posted it on the internet so people could download the file and manufacture more of them. Overall, these were great demonstrations of how agile product development and how a larger a large company like Tao empowers their employees. It shows how people were able to quickly mobilize and prioritize work, initiate collaborations and successfully establish partnerships to address a need. Now I’d like to speak a little bit more on my personal experience as I mentioned, Lead Dow’s upstream oil and gas r&d group where the importance of agility was crucial in such a volatile market. As you can see in this chart of oil prices over the last 10 years, it’s constantly changing and very unpredictable. So how do you prepare? And how do you pivot? agility really is the only way. To give you a little background, our group moved from our own business unit, which was honestly more like a startup within down to a larger well established business unit. We were a non asset owning market facing and what I’ll actually call chemistry agnostic group, the developed products using chemistries all across dow, we use we developed chemistries including acrylics, silicones, and polyethylene. But we moved into a larger asset owning on envelope, which was focused on producing and selling surfactants and products derived from ethylene oxide and propylene oxide.

At the same time, Dell was undergoing a lot of changes, and we had a tight timeline to demonstrate the value of the team, we really had a spotlight on us and agility was key, we had to shift our strategy and priorities quickly. And there are seven elements that I’ll discuss that made this pivot possible. Those seven elements are collaboration with a cross functional team, empowerment, prioritization, monitoring, leading trends, developing a robust pipeline, solid leadership, and having the right team. First of all talk about class benchwarmer cross functional collaboration. During this time, we had to pivot our strategy. We assembled a team with representation from key functions including sales, marketing, r&d, tech service and supply chain, the team consisted of five people. Believe it or not, it was actually a long debate on what the size of the team would be. Do we include additional regional representation to include scientists and account managers, we ultimately decided that we wanted to keep the team small to fill silicate quick decisions. Each person was chosen to represent his or her function. And the diverse team had knowledge of the different aspects that were mean needed for successful innovation. Sales brought the link to the customer marketing brought the insight into market trends and drivers and help to understand our value proposition. Tech service enabled connection to our customers technical partners to communicate value, they could translate the technical needs to r&d, which would then initiate product to development to meet demand.

Finally, supply chain offered value and understanding product availability and delivery. And we wouldn’t have been successful without all these pieces, new products could have been created. But without understanding the value proposition. And without having the relationships with our customers, we would not have been successful. And without understanding raw material availability, we could have developed products that were too expensive or not even available. This collaboration was key. With the five of us, we set target goals that we were all aligned to. We had a certain revenue, we wanted to reach a certain number of products, we wanted to launch and programs that needed key decisions. We set milestones for these goals that we could track periodically. And if we weren’t meeting the milestones, as a team, we evaluated the cause. And of course corrected if we need to do we met often, we actually met weekly to make sure we were all aligned. An example of of how this team worked was with one of our development programs in the oil sands market. We’d invested a significant amount of money into this space, but we weren’t seeing that returns. We had a number of successful trials. But for one reason or another, we weren’t able to get any of them commercialize. We ended up setting milestones to acquire a trial, demonstrate success, and then gain commercial sales with that customer for after the trial. Ultimately, this didn’t happen. And we ended up changing our strategy and shifting people because we didn’t meet the milestones, and we shifted the people to other higher priority projects. Honestly, this was not an easy decision. Because before I led the entire upstream portfolio, I actually helped to build our oil sands team. So it was difficult to terminate a project I had set spent several years working to build. Ultimately though it was necessary and it was the right call. We changed our service service strategy into one that aligned better with the new division and it’s more service light, if you will. The final point I want to make regarding cross functional collaboration is that each person on the team represented his or her function and was given the authority To make decisions without alignment, without representation with functions, and without the authority to make decisions,

we wouldn’t have been able to act with agility. This leads me to my next point, empowerment. As I mentioned, our team not only had the ability to make decisions and implement them, but we had they not only had the ability in the sorry, as I’m, as I mentioned, our team had not only the ability, but the authority to make decisions and implement them. The key point and being agile and applying the team of teams approach, as I mentioned previously, is having this authority. If we wanted to initiate a new project, our team made the decision, there were no layers, no red tape, and it was actually a huge time saver. Once we made the decision to start a new project, for example, we took the necessary steps to make it happen. The result was quick decision making and fast implementation. And this all started with leadership’s trust in our team trust that we were the most knowledgeable and well equipped to make the right calls. Our team of five had a lot of experience in the oil and gas market, something our new leadership didn’t, it was important that they trusted us to make the decisions. And this isn’t to say we didn’t keep them informed and we could go rogue, we saw monthly meetings with the business president to provide updates on progress, we were given the go ahead to do what we needed to do to make things happen. The monthly status meetings were important. And one particular benefit was actually executive support to remove barriers. If there were delays, we had help. And usually just after one phone call, we could get what we needed to move quickly. The third point is prioritization. Our group traditionally had a large product development portfolio. But at the time, there was a significant attention on our group to deliver, we had a large number of resources invested for growth, but the lack of growth didn’t justify the number of resources we had. We first agreed on the high level goal that we needed to demonstrate value. This was critical so that we were all aligned on priorities, and our focus for the moment would be on short term projects. We started with a top down approach of looking at how much revenue each segment was delivering, and what resources were justified by that revenue. We then evaluated all the projects to determine delivery timelines, and we postponed a number of longer term blue sky projects. There were some great projects that one day could be game changing, but we ruthlessly prioritize on what could bring value in the short term. For this evaluation, the first point I mentioned was key. Having a cross functional team, we need to do ensure that we considered all the angles Were there any gaps that could bite us in product availability, regulatory or IP, for example. Finally, we made the decision on priorities and we stuck with it. Despite pushback from their teams, and leadership. In a few cases, we actually stuck to our guns. We didn’t have time to flip flop on issues, and we had to be decisive in order to act with agility. One aspect that helped us in this prioritization was monitoring leading trends would be great to have a crystal ball to see into the future and know what changes are coming in the world. It would allow for insight into the market, it wouldn’t enable planning and preparation. But unfortunately, a crystal ball doesn’t exist. So in lieu of that, the best we could do is monitor leading trends.

For the oil and gas industry we kept a close eye on oil price, but we did a lot more. We looked at rig counts, for example, where new rigs being built, where were they being built, and what types of products were they use in some of the databases that are publicly available.

Most of our products were sold to service companies like Baker Hughes or Halliburton, so we could also look at trends at our customers. If we found out they were laying off people or cutting programs that would impact our business. On the other hand if they announced new programs, or jayvees that could Bri buy new opportunities for our team. These market indicators will be different for different businesses, but understanding them can provide key insights and can help you prepare if you need to shift directions. One additional example of this is our shift in our hydraulic fracturing program. We created a heat map on how decreasing oil prices would impact each of our development areas. With the start of the pandemic we anticipated there would be a decrease in travel, ultimately creating a supply shock to the oil and gas market. In parallel at this time, there was a demand shock due to the fall of OPEC in March. we predicted this would impact fracturing in the US so we temporarily stopped some long term programs in hydraulic fracturing. When you stop programs, it’s important to have a robust pipeline. I mentioned ruthless prioritization. And we did temporarily cut a number of long term projects. And we wouldn’t have been able to do that if we didn’t have a robust pipeline. Because we did have a gap balanced project performance portfolio, we were able to shift to purely shirt short term projects to deliver value. That being said, it was important to keep the long term ideas in the hopper. And after we turn the business around, we did end up bringing a number of projects back. It has been said that up to 95% of new products fail for one reason or another. So it’s important to keep a broad and robust portfolio. As trends and markets change, you need to have a number of irons in the fire so you can shift as needed. You also need a multi generational plan, you can’t wait to start generation two until generation one is complete. Generation one may not be successful for some reason. Or you could be too late to the game if you start Gen two after a successful Gen one. In the case of our wax development program, we had a vision with four generations of products. Gen one was a novel more environmentally friendly products, which was successful, but it took about 10 years. In parallel, we worked on Gen two, which we had an amazing technical solution. But ultimately, we needed capital to make the product successful. And we weren’t back integrated and one of the raw materials which ultimately made our solution economically disadvantaged. So we moved on to Gen three, which is still a work in progress, but it’s looking promising. If we waited to start Gen two until after we completed Gen one, we’d still be working on Gen two, and we wouldn’t have made it to Gen three yet. This leads me to my last point, fail fast. And don’t wait until it’s perfect. With so many ideas in the pipeline. If it’s going to fail, you want to quickly fail you so you can move resources to the next great idea. Next, in order to remain agile and be effective in doing so you need to have solid leadership. When you pivot, it can be really stressful for our team. And actually, our pivot was a real learning experience for me, I was making a lot of changes in the team. And I tried to do so behind the curtain and to shield people from upcoming changes to prevent stress and anxiety. I communicated after changes were made. But now I realized that it probably cause more stress that way. In hindsight, I would have communicated the big picture upfront and let people know we were making changes and why I would have provided a lot more transparency to the team. They realized what was happening anyway. It’s a balance between sharing too much and not enough. But if I did it again, I’d be a lot more transparent the second time. The second learning experience. After all the changes we made was on motivation. One of the goals was to grow our revenue. And to me that was a great target. Similar to watching one of those thermometers gradually fill up for our fundraising event,

I was excited to see how our revenue grew with the changes we implemented. And I tried to rally the team around this so they could strive towards a common purpose. after the fact and after several conversation, I realized it was really only me that carried that cared about this target. And not surprisingly, people were more interested in their individual projects and understanding how their piece fit into the big picture instead of a revenue goal. It’s really important to find something that resonates with the team in order to motivate them. At the end of the day, it was really connecting with individuals to understand their concerns, and keeping morale up by creating an environment where people felt trusted, valued part of a team. It took a year to build up the team morale and get everyone in a good place, which demonstrates the importance of leadership when you’re shifting and trying to be agile. Another important piece of leadership is communicating a vision. People knew we were shifting to focus on short term projects, but they still wanted to know what was next. I had laid out a vision for our group and high plan for us to grow and become the best scientific solutions provider for service companies in the industry. But they needed reassurance. We brought senior leadership down several times and we had many town halls to address questions. It was important to show the alignment throughout the organization and to let people that know they had support of senior leadership. Finally, I’ll talk about having the right team. It’s important to have the right team in place. You want people with diverse backgrounds and a diverse set of skills. Not only are there numerous studies that show diverse teams are more successful and deliver more value, but if you want to be agile, you need to have a diverse team that can tackle a variety of problems and can shift their focus as needed. HSBC had an interesting ad campaign A number of years ago that actually speaks to the importance of diversity. These three showed three pictures of the same object. One ad in particular had three pictures of a rug. The word on the top of the first drug said decor, the word on the second rug said souvenir and the word on top of the last rug said place of prayer. So depending on your background, you might interpret this rug differently as either decor souvenir or a place of prayer. So it’s important to have a diverse team that can bring these different viewpoints so you can think outside the budget box and develop new ideas. When I took over the group, it already had great diversity. We had chemists, material scientists, mechanical and chemical engineers, and modelers, and we represented seven different countries. But there were teams that didn’t get along and didn’t trust each other. In some cases, data wasn’t even being shared between team members. collaboration and having a team that works well together and trust each other is critical. In order to do this, we had to shift some people around to match skills and projects and move some people out of the organization in order to build high functioning teams. In order to get this diverse and collaborative team, don’t be afraid to make changes. If there’s one bad person, it can be a cancer to the organization and spread and cause a lot of negative impact. Finally, you can’t forget about partnerships. internal teams are great, but often their significant value from other networks and added skill sets. I mentioned this when I was talking about down the pandemic. For us, we established certain partnerships where we didn’t have the right know how this expedited development timelines for two reasons. First, when we needed to test our materials in the field, we would find a service company partner, which enabled us to obtain key case studies on our product that we could then use for marketing. Second, it would have taken us a considerable amount of time to develop some of the expertise internally, so it was much faster to engage others that already had the knowledge to wrap up. With these pieces in place, we successfully nearly doubled our innovation revenue and a year. This year. While I recently moved to a different role, the group’s on track to further grow and innovation revenue should increase despite the challenging times. And we were able to do so by remaining agile like the cat and the hummingbird. And by focusing on the seven points I outlined for agility in my talk, I appreciate your time today and I hope you’re able to use these concepts to make your product development more agile. I encourage you to ask questions and leave comments and thank you for listening to my presentation.


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