APPENDIX A
Project Success Case Studies
This appendix provides two additional case studies that describe success stories for project managers. The first describes the development of the Z3 by BMW (Shenhar and Dvir 2007). The second describes Sony’s effort to create the Walkman (Shenhar and Dvir 2007).
The BMW Z3
(What is the problem?) In the late 1980s, BMW struggled with slowing sales imposed by new Japanese luxury car competitors. The company also suffered from the decline of worldwide motorcycle markets. (What are the organizational goals?) In an effort to reverse this trend, BMW decided to reposition itself as a producer of quality-oriented luxury vehicles having a unique and definitive identity in the marketplace. It defined its product as “the ultimate driving machine,” built for people seeking excitement and a unique expression of individuality. (What are user needs?) Among other things, BMW needed a product that would satisfy the same needs that motorcycles do and would represent an exciting, aesthetically pleasing product. Several alternatives were considered, among them race cars, dune buggies, sport utility vehicles, and roadsters. (What is the set of feasible concepts?) The roadster concept was finally adopted in 1992 because it allowed BMW to maintain its goal of producing superior and exciting vehicles. The vehicle was dubbed Z3.
Aaron Shenhar and Dov Dvir, Reinventing Project Management: The Diamond Approach to Successful Growth and Innovation (Boston: Harvard Business School Press, 2007): 43-44. Copyright © 2007 by Harvard Business School Press. Reprinted with permission.
(What are the design challenges?) BMW understood the complexities of car production. It was accustomed to overcoming the difficulties associated with the design, development, and production of new cars as complex systems, a process involving the integration of many subsystems produced by numerous internal and external subcontractors. However, the Z3 presented additional levels of complexity. (What are the project goals?) The first was the decision to launch the Z3 as the first BMW car designed in Germany but produced in the United States, thereby aligning with a long-term company objective of becoming a truly global brand. (What is the project organization required to achieve project goals?) This decision required adapting to a different culture of concurrent cross-functional teams in a matrix organization. The goal was to use a new lean and flexible manufacturing environment, a lesson learned from Honda.
Second, BMW decided to leverage the buzz of the Z3 and invest 60 percent of its marketing efforts in nontraditional venues. (What is the marketing goal and strategy?) The goal was to generate interest in the Z3 two years before product launch. The nontraditional approach included, among other things, launching a tie-in with the new James Bond movie, Golden Eye, featuring the Z3 as a gift item in the Neiman Marcus catalog, and featuring the car in an interactive BMW home page on the web.
(What are user needs?) To cope with these complexities, managers attempted to make the design as simple as possible. (What are the design goals?) They used an existing 3 -series car platform and very few new components. (What is the prototype building and testing plan?) However, to make sure everything went right, BMW produced 150 integration and testing prototypes. This number was much higher than with any previous project. (What is the manufacturing and assembly plan?) (What is the optimal project location and layout?) Parts for initial units were made in Germany, but integration took place in the United States, and when completed, these cars were put in U.S. showrooms before product release. This action gave joint German and U.S. teams the opportunity to identify and resolve design and manufacturing problems early in the product’s life cycle. It also enabled redesign work without the need to shut down production, and it created market interest before the official launch.
(What are the success criteria?) When all bugs had been removed, and in spite of supply delays, the Z3 captured 32 percent of the estimated target market in its first year of sales, exceeding revenue forecasts by 50 percent. Featuring the Z3 in the James Bond movie and other nontraditional marketing techniques resulted in nine thousand preproduction orders and caused a marketing paradigm shift at BMW.
A Market Revolution Created by Sony
The first Walkman was born out of frustration. (What is the user need?) Masaru Ibuka, the cofounder and honorary chairman of Sony in the 1970s, told some of his subordinates, “I wish it was easy to listen to recorded music on an airplane. Whenever I fly on business I take a heavy tape deck and headphones onto the airplane.” (Define feasible concepts) To please their boss, a team of Sony employees removed the recording components from an existing handheld Sony tape recorder, making it lighter and smaller, and added a set of earphones. What was left became a prototype for the first Walkman—small enough to carry onto an airplane or listen to music while taking a walk.
Aaron Shenhar and Dov Dvir, Reinventing Project Management: The Diamond Approach to Successful Growth and Innovation (Boston: Harvard Business School Press, 2007): 41-42. Copyright © 2007 by Harvard Business School Press. Reprinted with permission.
Even though he had no marketing research support, CEO Akio Morita decided in 1979 to develop and market the Walkman as a commercial product. As Morita put it, “The market research is all in my head; we create markets!” (What are the product objectives?) With no clear specifications, the development team worked for months, with two objectives: good sound quality and small headphones that felt like you weren’t wearing them at all.
Although the technology was not new, the product represented a new-to-the-world concept. Initial customer reaction was lukewarm. (What are the success criteria?) Of 30,000 units produced, only 3,000 were sold, and Sony managers understood that they needed an innovative marketing strategy. But how could they convince people they needed a product that they’d never seen, owned, or even thought of before?
(What is the marketing strategy?) The first step was to get the word out to people who influence the public, such as celebrities and music industry people. Sony sent free Walkmans to Japanese recording artists and to TV and movie stars. Targeting younger people and active folks, Sony employees rode the trains, wearing their Walkmans and listening to music. On Sundays, they walked around in Tokyo shopping centers and cultural and sports events. Each employee wearing a Walkman became a walking sales demonstration.
Some people were skeptical at first, but when they tried out the new music system they were amazed. This was an entirely new experience. Japan was swept up in the Walkman wave, and soon visiting tourists were going home with these made-in-Japan souvenirs. Within a year, sales reached a million units and the Walkman revolution had begun. No wonder its brand name became generic and was admitted to the Oxford English Dictionary in 1986.