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February 2012

How Does Your Product Organization Compare?

Written by Maureen Carlson, Partner at Appleseed

Maureen Carlson

Participate in The Third Annual Product Portfolio Management Benchmark Survey

It's hard to believe that we're now conducting the third annual benchmark survey on the State of Product Portfolio Management. More and more product development professionals are looking to this study to learn about how their peers manage complex product portfolios and what trends are affecting their processes and automation plans.

The last survey was conducted in late 2010 and the results were posted in 2011. We have learned a lot about the key risks and pain points that companies face including risk adversity, how companies recognize good projects and kill bad projects, the challenges around allocating, and we've added new questions this year to glean even more valuable information. Our goal is to share the results with peers in the product development community to continue to evolve this strategically important area as a discipline.

Here are a few takeaways from the last survey:

  • 57% of participants said that one of their top three pain points was having "too many projects for their resources"
  • 42% find their forecasted schedules "mostly to highly inaccurate"
  • The 3rd greatest risk was "Not being able to drive innovation fast enough"
  • 60% indicated that their organizations are "risk averse to highly risk averse on new product innovation"

We invite you to take 10 minutes to participate in The Third Annual Product Portfolio Management Benchmark Survey and automatically enter to win an Apple® iPad as a way to say thank you for your time. We will provide the full report and share the results on May 10th at PIPELINE 2012.

The Crucial Brand-Building Role of Sustainable Product Development

Written by Steven Cristol, Founder and Managing Partner
of Strategic Harmony® Partners

Steven Cristol

A hopeful but volatile 2012 confronts all product development professionals with an immutable truth: companies can no longer effectively manage their brands without proactively managing sustainability. Brand reputation and appeal increasingly depend on it. For products companies, it's the products that comprise the vast majority of total corporate environmental footprint. So it won't be the CMO or slick advertising that leads the way in persuading your customers that your company is walking the talk on sustainable business practices. It will be you, and the decisions you make -- decisions on what new products and features to approve, and how sustainably they will be designed, sourced, made, distributed, and disposed of or re-used.

Gartner, the technology analyst firm, recently released compelling new research¹ on achieving competitive advantage through sustainable business. One of their top three recommendations is building an integrated and multidisciplinary approach to sustainability. But what does "integrated" really mean from a product portfolio management perspective?

Sustainable Portfolio ManagementIt may seem obvious that it means sustainability decisions can't be made in a vacuum. If obvious, then why are most sustainability assessments still segregated from core portfolio assessments such as overall customer impact, competitive impact, cost, and risk? Less obvious is the fact that true integration also requires something more -- something explained beautifully the other day by a very articulate VP-Corporate Social Responsibility. He said to me, "Even with all we've achieved as a sustainability leader, until now without the right portfolio management tools we didn't have a way for our product development teams to systematically encounter sustainability criteria early in the portfolio decision cycle." His engineers were culturally conscious about sustainability considerations, but needed a platform for concept evaluation to assess trade-offs within sustainability criteria as well as trade-offs between sustainability and other customer requirements; hence, systematic.

That's how a lithium-ion battery manufacturer, for example, sees that proposed new battery "Concept A" is more sustainable than what it replaces and yet still will improve customer experience on other key criteria as well, while Concept B, only slightly more sustainable, makes too many performance compromises. But the product development VP also had to know that the reason both concepts were more sustainable than their current product is lower toxicity and less energy use in production, even though water use would be somewhat higher. The key was looking at systematic trade-offs both inside and outside sustainability in an integrated assessment of the development portfolio.

Managing sustainable product development as part of a larger portfolio management system also means giving sustainability expertise a seat at the table right alongside cross-functional team members from engineering, product management, and marketing early in product development decisions before it gets much more expensive to make mid-course corrections. Back to the Gartner recommendation: multidisciplinary, which now includes sustainability -- extending across the C-suite. (I discussed the CIO role in a previous post titled, How Portfolio Management Can Maximize CIO Contribution to Shareholder Value.)

What's the return for sustainable product development? Not just stronger brands, stronger customer relationships, and the premium pricing and investor confidence that accrues to that, but also better employee attraction, retention, and satisfaction. In short, sustainability propels shareholder value and brand success. I hope they are both yours in 2012 and beyond.

¹ Gartner, Inc. (Stephen Stokes and Simon Mingay), "Achieving Competitive Advantage Through the Pursuit of Sustainable Business," December 2011.

Top 5 Tips for Capturing the Voice of Your Customer

Product Development managers know how critical it is to develop products people want. How do you figure that out without simply guessing? How do you ensure your choice of which product or service to produce wasn't just your opinion? You need customer-driven data. Here are my Top 5 Tips on how to get it right:

1. Ideation

Never underestimate the power of the masses to give you the best ideas. By opening up the question to the world, or even just your customer base, you will be amazed at how many great ideas you can generate. You can simply ask your internal customers, like sales and support, or find key constituents who are passionate about the topic. The key is to choose an audience, maybe 10-15 customers, that is varied enough to capture the true market yet narrow enough as not to overwhelm. At Planview, we use the Agile process that enables our target audience to participate throughout the entire lifecycle and see progress every two weeks. The product (or service, project, etc.) can be refined with each iteration, giving us flexibility with inevitable changes.

Refinement. Once you have the ideas, you need a mechanism to narrow down the choices. We incent our target audience to vote on them. Again, the Agile process enables our audience to remain involved in the process beyond ideation. Because we are using the same audience from the ideation phase, we can ensure we are capturing the voice of the market, not just the voices of our executives.Product Development and Your Customer's Voice

2. Alignment

Now that you have a list of plausible ideas, you need a mechanism to align them with your strategy. With clear strategic goals and set criteria, you can score the ideas based on key metrics, such as revenue, market share, new markets, etc. You must decide what's important and then measure the ideas to find the absolute best ones for your company. Make the criteria visible to the company so everyone can understand how each idea was scored.

3. Capacity

With your best ideas in hand, it's time to estimate your capacity to develop them. "What if" scenarios allow you to imagine specific situations and how they would affect resources, revenue, time lines, and other criteria. With this data, you can make sound decisions to prioritize ideas based on real information. Many companies still do this process manually in spreadsheets, adding tab after tab with capacity and financials. But if something changes, which it always does, it's ridiculously time-consuming to make those changes to static spreadsheets -- even with pivot tables. An automated process saves countless hours of time and risks for errors.

4. Measurement

After you develop and release the product (or service), you need to measure the results. What was the actual versus estimated revenue? How long did the project take? What did it cost to get it on the market? Actuals help you improve the next planning cycle. Comparing actual results is much easier and accurate when it is done with a product development tool rather than spreadsheets and manual reports.

5. Repeat

Although your process should remain constant, your plan will constantly change because there are so many dynamic factors in play. The ability to see where you started and track your progress throughout the product development cycle enables you to make adjustments towards best practices.

Creating a process for capturing the voice of the customer is essential to developing the products people want. In fact, we followed this process for our latest software release and incorporated 320 customer-driven enhancements.

I want to hear from you. What are your methods for capturing the voice of your customers? Share your experiences and best practices -- leave a comment below.