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Product Portfolio Management (PPM) has often been positioned as an upfront process that is used to select which new product projects should be started. Once that decision is made then it moves into product or project management. I believe Portfolio Management is a horizontal process across the entire innovation value chain. It is not just about selecting the right new product or project upfront.  Portfolio management practices could and should be used throughout the lifecycle of a product. There are many decision points that need to be made throughout the lifecycle, such as analyzing market opportunities and deciding which ones to focus on, and in determining which features to put on the roadmap. Principles from portfolio management such as portfolio balancing and managing the portfolio mix can be used to decrease the total investment risk throughout the product development cycle. Maintaining a certain balance of innovation types in roadmaps and product releases so that you have the desired total risk based on the radical, semi-radical, and incremental innovations that are put into a product release. 

 In the Robert Cooper’s book on product portfolio management, he states the three main goals of portfolio management very well. First is to maximize the value of the entire portfolio of x (products, features, market opportunities, family activities, whatever you’re managing).   The second is to balance conflicting factors in your portfolio such as risk vs. reward, attractiveness vs. ease of implementation, etc. The third is to align the portfolio to strategy (product, corporate, or personal). If you simplify portfolio management it consists of 5 steps:

1.       List Alternatives

2.       Identify Selection Criteria

3.       Identify Ranking Metrics for Alternatives

4.       Weight Selection Criteria

5.       Determine Execution Capability

The first thing to do is make a list and identify all of your options. Once that is done, a set of selection criteria needs to be defined so that the selection is defendable and repeatable. Ranking metrics for each criterion need to be identified so that the options or alternatives can be ranked. The selection criteria need to be weighted based on their relative importance to your organization. Often times these weightings will change and be impacted by the current business driver of your organization. (Ex: increase sustainability, reduce cost, increase revenue, etc.) When this step is completed you have a ranked set of alternatives (opportunities, features, products, etc.) based on weighted selection criteria. The last step is to determine the capability of executing on the alternatives. This looks at resource demand and availability information to help select and sequence preferred selection in context of feasibility. Each one of these steps has best practices and approaches to performing them. In the future Portfolio Management Blog Series I will address each step individually.  

DerickWorkman Product Management, Product Portfolio Management

I find that often one of the issues that bubbles to the surface when dealing with developing new products is an organizational silo view of the customer. Support has a perspective of the customer based on their dealings with them, and so does development and marketing. Typically product managers engage in customer visits to try and gain a more complete picture of the customer. These visits are important for the product manager to see the customer in their own environment and feel the pressures that they have to deal with. Face to face discussion is typically more effective than phone calls, because you can see the emotions and reactions of the customer to your questions and the topics being discussed. Thanks to many best practice teaching organizations, many product managers are doing this today, but where we fall short is dissimenating that information to the the rest of the organization.

This creates the organizational silos, that prevent everyone to have a unified perspective of their customer. Even if they dissimenate the information gathered, can product management really gain a holistic view of their customer on their own? A product manager will be asking questions that they believe are important, and the feedback they are given from the customer will be focused on things they believe a product manager would care about. They probably wouldn’t bring up issues that are extremely detailed that only a developer or design engineer would be able to answer, because they aren’t in the meeting. This means that our customer visits are missing the customer perspective regarding issues that would be important to marketing, support, development, operations, and other organizations involved in the innovation value chain. These organizational silos cause everyone in the organization to see only a specific view of the elephant (customer) from a different perspective, and they all miss the entire elephant.

There’s a great book that I recommend to people, when trying to develop an effective customer visits program called “Customer Visits“. One of the key points in this book is that these visits should be made up of a cross-functional team inorder to address and discuss cross-functional issues that are important to the customer. By involving other organizations, these customer visits begin to foster a holistic perception of what who your customer is, what there needs are, and what type of solution would be most useful to them. When the product is being designed or developed, the engineer has an idea of the customer and can accurately imagine the use cases and scenarios that have been described. This complete view of the customer will enable each organization involved in the development of the product to more effectively execute on the plan and help the product manager to realize their product strategy.

The golden question today is, how do we do this in a downturn economy where everyone is cutting costs? Possible suggestions are to involve the entire cross-functional team in developing the discussion guide/topics and then have one person perform the visit. To avoid the silo, you can have a different organization responsible for each visit, so all of them are engaged.

I’d like to know some other ways people have come up with to gather this market research without spending all of their resources to do so.

DerickWorkman Product Management

What is the purpose of Product Management? Why does an organization need a product manager? I believe Product Management is all about executing strategy. Each product should have a strategy that is aligned to corporate strategy. Depending on what level you are at in the organization, you may be responsible for defining product strategy for individual products or for a product portfolio. For a lot of Product Managers the product strategy is already defined and they are responsible for executing on that strategy. So when people ask what is product management or what are PMs responsible for, I have to come back to executing the product strategy.

Everything we do as Product Managers should by tied to product strategy. We do win/loss analysis to verify our competitive strategy is working. We do competitive analysis to identify market gaps and differentiate in order to achieve a higher level product strategy, such as become market leaders in a specific segment. We develop roadmaps to communicate the strategic milestones we need to deliver in order to achieve our product strategy. We define/identify market problems in order to create business opportunities aligned to strategy…

So when asked how do we make Product Management success measurable and more strategic, I believe the answer is to develop metrics that keep the focus on executing product strategy and maintaining alignment to corporate strategy. If we are performing a product management task, we should ask how does this contribute, affect, or impact the product strategy. If we can’t answer this question we shouldn’t be performing that task. It may be a multitier relationship, but it must tie back to the strategy.  Otherwise product managers will get lost in the millions of tasks that don’t help them achieve their goals.

DerickWorkman Product Management