Don Reinertsen: Priorities Are The Last Refuge of the Innumerate

February 26th, 2008 Sean Murphy

Don Reinertsen, co-author (with Preston Smith) of “Developing Products in Half the Time” and “Managing the Design Factory: The Product Developers Toolkit” has a great quote about managing product priorities on his home page this month:

Priorities: Last Refuge of the Innumerate

What is our highest product development priority, cycle time or unit manufacturing cost? To even ask this question, suggests a fundamental misunderstanding of product development economics. If cycle time takes priority over unit cost, then it follows that we would prefer the smallest improvement in cycle time to the largest improvement in unit cost. If unit cost takes priority, then we would prefer the smallest improvement in unit cost to the largest improvement in cycle time. Does this make any sense? Of course not. When we prioritize we give strict precedence to one objective over another. Such strict precedence leads to bad economic choices.

The value of cycle time and the value of unit cost must be expressed in the same unit of measure: life cycle profit impact. It is only with this quantification that we can make good economic decisions to trade one for the other. Setting priorities for individual measures of performance is simply avoiding the important job of understanding how performance influences economics.

I really like this because it encourages founders to develop a simple model for what profitable operation looks like.

Reinertsen also coined the phrase “Fuzzy Front End” for the early part of the the design process in “Blitzkrieg product development: Cut development time in half.” Electronic Business, January 15, 1985. He later proposed some methods for “Taking the Fuzziness Out of the Front End” (hat tip to Preston Smith and his Don Reinertsen page).

Some other variations on “X is the last refuge of Y”

• “Patriotism is the last refuge of a scoundrel.” Samuel Johnson
• “Violence is the last refuge of the incompetent.” Isaac Asimov (said by Salvor Hardin in Foundation)
• “Consistency is the last refuge of the unimaginative.” Oscar Wilde
• “Entrepreneurship is the last refuge of the troublemaker.” Natalie Clifford Barney

Entry Filed under: Quotes, skmurphy