The Sloan Valve Company, founded in 1906 and headquartered in Franklin Park, Illinois, is a family-owned manufacturer of faucets, flushometers, showerheads, and sinks with growing domestic and international operations. The company has always taken pride in its ability to develop and introduce new products and innovations as a leader in its industry. Indeed, its mission explicitly notes “the ability to develop, manufacture, market and distribute breakthrough products and services” as a major goal of the organization. As a result of an increasing awareness that its approach to the development of new products was no longer delivering on that goal, management sought to introduce changes to the process. A new ERP package, while arguably well implemented, did little to help. A project to incrementally improve the logistic process was also abandoned after months of work resulted in little to show for it.

After the less-than-successful attempt to drive incremental improvements into the logistic process—a result of the complex interdependency of this process with many others in the company—management at Sloan Valve started looking for an alternative approach. Part of the problem was the need to change the way IT was perceived inside the company. Traditionally, employees viewed IT at Sloan Valve as a support function for individual departments, which resulted in well-defined boundaries between IT and those other functions. IT-enabled business processes, on the other hand, tend to cut across those same functions, so a new approach was needed. Recognizing these issues, senior management appointed the existing chief information officer (CIO) to the additional role of chief process officer (CPO). In fact, senior management went so far as to announce, in 2004, than these were not two different responsibilities held by the same person, but rather a single role. “It was a

clear signal from top management. The CIO is typically seen as a person in charge of technology. By combining the CIO and CPO roles, management sent a clear message that the CIO would from now on lead as a business executive and take on the role of a business leader as well,” says a manager at Sloan Valve.

Given its critical importance to the company, the New Product Development process was the first one targeted through a series of initiatives undertaken by Tom Coleman, now CIO/CPO. The first step was to procure exposure and training on business process reengineering for the entire senior management team. Eventually, all senior and middle managers, business analysts, and program managers underwent formal training. Senior management worked with reluctant executives to win them over to the new approach and gain their full commitment to the project. A few who had strongly opposed the plan left the company, and others were assigned to new functions. In order to obtain commitment and support from all involved, the CIO/CPO created a two-level governance structure. The strategic level would be composed of key members from each functional department, led by the CEO, and would enable cross-function coordination and communication. The process level would oversee efforts in particular processes. Tom Coleman took the role of architect and visionary, raising awareness of the new process orientation across the organization, and a strong IT manager with extensive business knowledge was made responsible for the day-to- day progress of the project.

For the New Product Development process, the Director of Design Engineering became the process owner. The BPM manager appointed by the CIO/CPO led the redesign team, which included members from manufacturing, design, engineering, IT, finance, marketing, and

operations—in short, from all areas of the company, as the process is integral to the organization and cuts across every single function. The team spent nine months studying the current process, identifying subprocesses, associated activities, and interfaces with other processes, as well as any other interdependencies that needed to be considered. Visualization tools from iGrafx aided the analysis of such a complex undertaking, which allowed the team to create a visual representation of the process and how information flowed from one to another of the sixteen functions included in it. This process map also served as a communication tool and to educate the company as to the many problems and deficiencies that existed in the current process. Indeed, for most people it was the first time they saw the entire process in action. “This technique typically shocks senior management in terms of how the company actually runs,” says Coleman. The graphical representation was also effective in a different way. When making a presentation about what the new process would look like, the manager in charge of the effort would bring down the ‘as-is’ diagram with all the steps across the sixteen functions from the wall and tear it up in front of everybody in the room— that typically had the effect of conveying to everybody how serious the company was about changing the way it worked.

A series of metrics were identified to help measure the extent to which the new project would be deemed successful. Chief among these were the metrics that reflected the main objectives the company wanted to achieve with the process redesign: namely, time-to-market, innovation rate, and total new products. These metrics were incorporated into strategy maps and balanced scorecards that further helped align the new process with the strategy of the organization. The CIO/CPO also decided to upgrade the ERP package into the MySAP business suite, which added customer relationship management, supply chain management, and product lifecycle management capabilities. The basic components

of the latter were put in place in 2006, with all the upgrades being completed by 2007. However, upgrading the ERP package at the same time the New Product Development process was being redesigned and continually improved was a major challenge for the company, as the software modules needed to be customized repeatedly for each new iteration of the process. The major issues, however, were not technical, but rather organizational. Says Coleman, “The major issues we faced with NPD [New Product Development] and other process efforts were leadership, change management, and slow organizational changes needed to make process work ‘sing.’ The technology issues are challenging but not nearly as difficult as the human side of change.”

The new process introduced at Sloan Valve consisted of six subprocesses, each grouping a logical set of activities. Employees from each of the individual functions that interacted with the old process were transferred to one of the subprocesses, with commensurate changes in their objectives and reward structures. A new program management office was created to coordinate the new product initiatives as they moved along the process, and to make sure the necessary resources—human or technological—were made available at the appropriate times, as well as overseeing project prioritization. In 2008, management created a new role for a senior vice president of New Product Development to lead the new process and take executive ownership of it.

Given the earlier issues with the original implementation of the ERP, the CIO/CPO wanted to develop strong IT capabilities to support the newly designed process effectively. These took the form of an “Ideation Portal,” an intranet platform that was deployed to provide structure to the management of new product ideas, which was done in a very ad hoc manner before, and effective use of the Product Lifecycle Module that was implemented when the company migrated to MySAP. The module allowed the process owner to get a complete picture of every project at every stage of the process, and track

and allocate resources as necessary to different ideas, as well as see which were lagging behind schedule. The software also solved the communication and coordination challenges faced by the company with the implementation of a centralized repository of all documents, reports, design templates, and other project files, which were available from any location due to the Web-enabled nature of the product.

The implementation of the new process has resulted in a number of benefits for the Sloan Valve Company. Most notably, the time-to- market of new ideas went from 18–24 months to less than 12 months, which significantly improves the agility and responsiveness of the company to bring new products to market and swiftly react to new demands or preferences from its customers. The governance structure of the process is much simplified, from 16 different units having to collaborate and coordinate among themselves to a two-tier governance structure led by top-level executives. The ability to see the entire process from end-to-end 

enabled managers to identify bottlenecks and quickly move to improve the flow of new ideas and products, an aspect that is enhanced by the increased accountability integrated into the new process. Increased emphasis in the idea-generation stage—further supported by technologies such as the Ideation Portal— allowed the company to sift through the many new ideas earlier than before, resulting in less design and prototyping work conducted for ideas that were eventually discarded, with significant savings. As a result, those ideas that did proceed to the later stages and eventually made it to market yielded a better return on investment, as only the solid ideas made it that far. This is, at the end of the day, what new product development is all about.

QUESTIONS

The endeavor chronicled here would arguably be considered a success. What were the key success factors— changes, practices, techniques, and so on—that made this possible? How did each contribute to the positive outcomes of the project?