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June 2011

The Pain Continues: You're Not Alone in Lacking Resources


Written by Maureen Carlson, Partner at Appleseed
Partners

Maureen Carlson

It looks like this -- you have a portfolio of products to deliver, resources identified, and a staged process to move through the product development gates. Yet, shifting priorities, unexpected pull on your resources, and lack of visibility are impacting your product schedules. Welcome to Product Development. Now hit head against wall.

Resource capacity planning issues continue to plague the product development organization according to our newly published 2nd Annual Product Portfolio Management Benchmark Study. We've just reviewed this research at PIPELINE 2011, which was published earlier this year. In case you missed the event, I'd like to share some interesting takeaways.

Of the 922 product development professionals we surveyed at large product-driven companies:

  • 57% indicated that one of their top 3 pain points was "too many projects for their resources" for the 2nd year in a row
  • 42% find their schedules mostly or highly inaccurate.
  • 50% said that managing changing priorities as business conditions change is their greatest risk.
  • Only 25% rated themselves as good or excellent at resource capacity planning.
  • Not being able to drive innovation fast enough was in the top 3 pain points this year and was identified by nearly 40% of respondents.

Is this sustainable?
Resources are finite and yet respondents reported a significant lack of visibility into capacity and availability, non-product roadmap demands on resources (ex. sales-driven "just do it" projects), and competing priorities.

Two of the people we interviewed via phone put it this way:

"The biggest pain point in my world continues to be execution. We are not doing a good job understanding resources that we have versus what it takes. The representation of existing resource is not great."
-- Manager of NPD, Scientific Products Company

"We do not have a good handle on our resource capacity, we could understand projects in-flight but did not do any forward planning because we do not have a handle on extra capacity, skills, etc."
-- Project Manager, Transportation and Energy Manufacturer

Find out what your peers are looking at in terms of solutions to manage their product portfolios. Download the full report: 2nd Annual Product Portfolio Management Benchmark Study.

Innovative But Risk Averse. A Contradiction?


Written by Maureen Carlson, Partner at Appleseed
Partners

Maureen Carlson

Is it possible to be innovative and risk averse at the same time? Sure, I suppose so at some level but there must be a measure of calculated risk to achieve innovative breakthroughs.

Recently at PIPELINE 2011, we reviewed the research for the 2nd Annual Product Portfolio Benchmark Study with my colleagues at Appleseed Partners and OpenSky Research. We found enlightening contradictions in terms of innovation priorities and risk-averse cultures (or at least the perception of risk aversion by participants).

To give some background, we surveyed 922 product development professionals at large product-driven companies such as global manufacturers of a myriad of industries including technology, medical devices, consumer packaged goods and financial products among others. Our objective was to understand how they manage complex product portfolios, their most critical pain points and risks, as well as priorities for the coming year.

Here are a couple of interesting findings:

  • Not being able to drive innovation fast enough was in the top 3 pain points this year and was identified by nearly 40% of respondents. Yet, 61% of respondents indicated that their organizations are risk averse to highly risk-averse on new product innovation.
  • The results indicated that their greatest risk is managing priorities as business conditions change and the greatest pain point is having too many projects for their resources.
  • Compared with a year ago, missing growth opportunities is a greater concern than cutting costs.
  • 70% are refining their product development processes as a result of the recession.

I personally spoke to several R&D executives as part of the process to define our study and methodology this year. When asked whether the companies pulled back on innovation during the recession and whether their pipelines shriveled, most claimed that they maintained their innovation budget and did not slash it dramatically, therefore keeping the product pipeline healthy. Having said that, they all expressed a renewed focus on extreme prioritization in light of limited resources.

It seems that now more than ever, making data-driven decisions and calculated risks are important and filling the innovation pipeline is crucial. This report reveals that there may not be sufficient, accurate data and visibility into the product development process for prioritization and decision-making. That could make executives and managers feel risk-averse because no one wants to make bets without information. Are we over-relying on spreadsheets for one of the most strategic roles in the company?

Find out what your peers are looking at in terms of solutions to manage their product portfolios. Download the full report: 2nd Annual Product Portfolio Management Benchmark Study.