A true story

An engineering consultancy was very successful at designing and building innovative drivetrains for demonstrator vehicles in record times.

The engineering team consisted of engineers selected for their outstanding problem-solving skills.  They strived at coming up with new designs from a clean sheet of paper.  The engineers needed to be constantly challenged with new problems to solve and resented routine tasks.

The light management structure and relatively small size of the business meant that decisions could be made quickly, and the business could adapt to meet urgent customer requirements.

Opportunity for fast growth

An opportunity arose to bid for a very large project taking over and completing the development of the drivetrain for a new production vehicle.

The value of the project was an order magnitude greater than projects previously undertaken by the company.  The drivetrain options for the new vehicle had already been designed.  There did not appear to be any major technical risks or challenges.

The company saw this as an opportunity to grow the business quickly and make a good profit on a large project. 

A bid was put together and the company won the contract. 

Mismatch of skills, experience and facilities

Part of the deal was that the engineering team that had started the project would be taken over by the engineering consultancy company.  It was a large team consisting mainly of development engineers with experience in integrating drivetrains into production vehicles.

The skills and experience of the development engineers were very different from the consultancy’s own engineers.  The development engineers were used to carry out long prescriptive development programmes, going through iterations until the design reached its final production standard.

There was very little synergy between both teams, who ended up working independently with minimum interactions.

The consultancy team had the technical expertise in all areas required by the new project such as analysis, design, manufacture, assembly, testing, vehicle modification and instrumentation.

However, it did not have the capacity to deal with the large number of prototypes required to develop a production vehicle.

To address this the business had to invest in new workshop facilities and recruited vehicle technicians dedicated to the new project.

Outcome

The project was delivered to the satisfaction of the customer, and the production vehicle was very successful.

However, by lack of experience of this type of large project, the level of profit anticipated at the proposal stage did not materialise due to the under-estimation of the costs and investment required in both facilities and manpower.

On completion of the project the development team moved back to its original location and the large office set up for the project became vacant.

This turned out to be a one-off with no follow-on projects of a similar size or nature.

Lessons learnt

This large development project diverted a significant amount of management resources away from the consultancy's core business.

Although the technical product was the same i.e. vehicle drivetrains, the skills, experience, and facilities required to deliver the development project were very different.

On completion of the project cost savings had to be made as the business shrank without a similar follow-on project.

With hindsight it became clear that the company’s core business was to solve challenging technical problems and demonstrate innovative drivetrain designs on a small number of vehicles in record times.

It was not to run large teams carrying out long iterative development projects to integrate existing drivetrains into production vehicles.

Help

I work with overstretched leaders of Engineering SMEs to help them prepare their business so they can achieve profitable growth.

One of the areas we work on is the clarification of the "why" and values guiding the growth of the business.

If you would like to explore how I could help you, please use the link below to book a free 30-minute conversation.

http://tinyurl.com/HerveJardonCalendar