More Related Content Similar to Red7 Product Portfolio Management (20) More from Robert Grupe, CSSLP CISSP PE PMP (16) Red7 Product Portfolio Management1. 1
Red7 :|: product management
STRATEGIC PRODUCT
PORTFOLIO MANAGEMENT
Tools and Process for Aligning Corporate Operational
Objectives with Product Leadership Strategies
robertGrupe, CISSP, CSSLP, PE, PMP
tags :|: product management, portfolio management, strategy, scorecard
© Copyright 2012-03 Robert Grupe. All rights reserved.
2. Red7 :|: product management
Description
• How can Product Managers
• effectively balance market leadership strategies with corporate
financial objectives?
• Do you find yourself
• firefighting and reacting to executive and sales crises instead of
building market leadership?
• This presentation will
• discuss how you can develop your product market strategy to align
with corporate operational objectives
• to drive meaningful development
• while demonstrating investment value and alignment.
© Copyright 2012-03 Robert Grupe. All rights reserved.
3. Red7 :|: product management
Table of Contents
• Product Portfolio Introduction
• Product Portfolio Management Tools
• Corporate Strategy Mapping
• Market Communication Strategy
• Integrated PMP: Putting IT All Together
© Copyright 2012-03 Robert Grupe. All rights reserved.
4. Red7 :|: product management
PRODUCT PORTFOLIO
INTRODUCTION
© Copyright 2012-03 Robert Grupe. All rights reserved.
5. Red7 :|: product management
Typical Product Portfolio Planning &
Management Process
© Copyright 2012-03 Robert Grupe. All rights reserved.
6. Red7 :|: product management
Evaluating Your PMP
• Does your portfolio reflect and support the business strategy?
• What is the quality of the portfolio – solid and high value?
• Are new products reaching market on time?
• Are your success rates and profit performance results consistent with forecasted
expectations?
• Are you allocating the appropriate levels of resources between sustaining
projects, new product development, and must-do maintenance?
• Do you have regular (quarterly) senior management reviews of all your projects
(market developments, forecast adjustments, progress, resource priorities)?
• Is the senior management team leading portfolio prioritisations?
• Do you have a portfolio funnel or tunnel?
© Copyright 2012-03 Robert Grupe. All rights reserved.
7. Red7 :|: product management
Effects of Ineffective PMP
• Reluctance to kill projects
• Once started, many projects added to list, total lack of focus
• Too many projects – resources spread too thin, projects queued, low execution quality
• Increased time to market, high failure rates
• Weak decision points
• poor Go/No-Go decisions
• Too many low value projects, tweaks and modifications, good projects starved
• Too few stellar product winners, many ho-hum launches
• No rigorous selection criteria
• projects selected on emotions, politics
• Wrong projects are selected
• Many failures
• No strategic criteria for project selection
• Projects lack strategic direction, projects not strategically aligned
• Scatter gun effort, does not support strategy
CORELLARY
PMP performance is not just about process,
but is also a function of organization maturity and effectiveness.
© Copyright 2012-03 Robert Grupe. All rights reserved.
8. Red7 :|: product management
Phase-Gate Development Only -
One Part of Whole NPD Process
Market &
Segments, Road
Business and Product Product Line and
Mapping
Strategy Solution Mapping
Technologies, &
Building Blocks
Phase-Gate Product
New Concept Concept Feasibility
and Solutions
Generation Assessment
Development
Lifecycle
Management and
Retire
Pipeline Throughput Management
© Copyright 2012-03 Robert Grupe. All rights reserved.
9. Red7 :|: product management
Sustainable Product
Portfolio Management Process (PMP)
• About balancing business priorities
• risk versus return
• maintenance versus growth
• short-term versus long term
• On-going process
• under constant review and revision
• Different things to different people
• Strategist: supporting the corporate vision and mission
• Financial: most efficient allocation of financial resources to maximize shareholder value
• Engineering: choosing projects to foster the right innovation
• Marketing: faster times to market
• CEO: positive financial impact, quickly
• Axioms
• Profit is required to sustain costs in future and for innovation,
• so cut any non-performing products or those without well understood forecast (futures modeling)
• Balanced = stakeholders
• (shareholders, customers, employees, suppliers, communities/government)
• Tradeoff: short-term profits versus long term investments
© Copyright 2012-03 Robert Grupe. All rights reserved.
10. Red7 :|: product management
Product PMP Context
Corporate Product
Strategy Strategy
Marcomms
Strategy
© Copyright 2012-03 Robert Grupe. All rights reserved.
11. Red7 :|: product management
PRODUCT STRATEGY
© Copyright 2012-03 Robert Grupe. All rights reserved.
12. Red7 :|: product management
Portfolio Management Tools
• Financial / Economic Models • Behavioural Approaches
• Payback period • Modified Delphi method
• Break even analysis • Q-Sort method
• ROI • Paired Comparison models
• Discounted cash flow (DCF) • Mathematical Optimisation
• Net Present Value (NPV) Procedures
• Internal Rate of Return (IRR) • Linear and mathematical programming
• Financial Ratios • Statistical decision theory
• Productivity Index
• Game theory
• Checklist Scoring Models • Probability Theory (Markov processes)
• Fit with corporate objectives
• Decision Support Systems (DSS)
• Competitive advantage
• Project Analysis and Support System
• Market attractiveness (PASS)
• Probabilistic Financial Models • Mapping Approaches / Bubble
• Monte Carlo Simulation Diagrams
• Decision Tree Analysis • Boston Consulting Group Matrix
• Options Pricing Theory (Real Options) • GE/McKinsey position vs attractiveness
© Copyright 2012-03 Robert Grupe. All rights reserved.
13. Red7 :|: product management
Best In Class Objective #1:
Maximizing Projects Portfolio Value
© Copyright 2012-03 Robert Grupe. All rights reserved.
14. Red7 :|: product management
Maximizing Value: Scoring Check Lists
Scored Project Screening Criteria
Rating Scale
Key Items Rating 0 4 7 10
Strategic Alignment & Importance 9.5
Product has only Modest fit, but not Strong fit with
Good fit with a
peripheral fit with with a key several key
Congruence 9 key element of
business element of the elements of
strategy
strategies strategy strategy
Minimal impact;
Moderate Significant Very strong
no noticeable
Impact 10 competitive, competitive and positive impact on
harm if product
financial impact financial impact the business
dropped
Product Competitive Advantage 6.7
Product offers Product offers
Product offers no Product offers
some benefits but positive, unique
Customer Benefits 7 unique benefits or unique features
not important to benefits and
features and benefits
customer features
Product is Product is clearly
Product is same Product is better
marginally better superior than
as competitors in than competitors
Meets Customer Needs 8 than competitors competitors in
meeting customer in meeting
in meeting meeting customer
needs customer needs
customer needs needs
Product is same
Product provides Product clearly
as competitors; Product has good
better value for has excellent
Customer Value for Money 5 poor value for value for money
money for the value for money
money for the for the customer
customer for the customer
customer
• Potential Categories
• Strategic Alignment
• Competitiveness
• Market Attractiveness
• Leverages Core Competencies
• Technical Feasibility
© Copyright 2012-03 Robert Grupe. All rights reserved.
15. Red7 :|: product management
Maximizing Value: Scored Prioritization
Strat Prod Mkt Core Tech Proj Staff Cumm
Project Fit Adv Attr Comp Feas Reward Attract FTE FTE Status
Echo 9 9 10 10 9 9 93.3 20 20 Go #1
Beta 10 10 7 7 7 7 80.0 20 40 Go #2
Foxtrot 8 7 7 8 8 9 75.0 15 55 Go #3
Charley 7 7 9 9 8 5 74.0 12 67 Go #4
Alpha 7 7 6 6 8 6 66.7 20 87 Hold
Golf 8 6 6 8 7 5 66.7 20 107 Hold
• 70 FTE constraint
• Project Attractiveness = Average of scores * 100
© Copyright 2012-03 Robert Grupe. All rights reserved.
16. Red7 :|: product management
Maximizing Value: NPV Prioritisation
Immediate
Resource Resource
Requirements Requirements
Project NPV Remaining (Next Quarter)
Lima 55.0 5.0 5.0
Alpha 52.0 9.5 3.2
Echo 48.5 7.0 1.3
Foxtrot 43.8 5.0 1.5
Delta 42.0 3.8 2.5
Golf 37.5 8.3 3.8
Beta 30.0 3.1 0.3
India 9.5 2.5 0.5
Charley 8.6 2.1 1.4
Juliet 6.2 0.8 0.8
Kilo 4.5 1.4 1.2
© Copyright 2012-03 Robert Grupe. All rights reserved.
17. Red7 :|: product management
Maximizing Value: BBI Prioritisation
• $15m constrained portfolio
Immediate Cummulative
Resource Resource Immediate
Requirements Bang-for-Buck Requirements Resource
Project NPV Remaining Index (Next Quarter) Requirements
Delta 42.0 3.8 11.1 2.5 2.5
Lima 55.0 5.0 11.0 5.0 7.5
Beta 30.0 3.1 9.7 0.3 7.8
Foxtrot 43.8 5.0 8.8 1.5 9.3
Juliet 6.2 0.8 7.8 0.8 10.1
Echo 48.5 7.0 6.9 1.3 11.4
Alpha 52.0 9.5 5.5 3.2 14.6
Golf 37.5 8.3 4.5 3.8 18.4
Charley 8.6 2.1 4.1 1.4 19.8
India 9.5 2.5 3.8 0.5 20.3
Kilo 4.5 1.4 3.2 1.2 21.5
Hotel 3.0 1.0 3.0 0.7 22.2
Insight: More projects can be done simultaneously if
they do not compete for maximum resources in the
same quarter
BBI = NPV RRR
© Copyright 2012-03 Robert Grupe. All rights reserved.
18. Red7 :|: product management
Expected Commercial Value (ECV)
EVC = [ ( PV * Pcs - C ) * Pts ] - D
• Pts - Probability of technical success (0.0-1.0)
• Pcs - Probability of commercial success (0.0-1.00
• D - Development costs remaining
• C - Commercialization costs (launch)
• PV - Net Present Value of project’s future earnings
© Copyright 2012-03 Robert Grupe. All rights reserved.
19. Red7 :|: product management
Example: Maximizing Value
Dynamic Rank Order
Probability of
Strategic Technical
Project IRR NPV Importance Success IRR Rank NPV Rank
Alpha 20% $10.0 5 80% 2 3
Beta 15% $2.0 2 70% 4 6
Charlie 10% $5.0 3 90% 6 5
Delta 17% $12.0 2 65% 3 2
Echo 12% $20.0 4 90% 5 1
Foxtrot 22% $6.0 1 85% 1 4
Strategic Probability of
Importance Technical IRR*Pts NPV*Pts SI Ranking Prioritised
Project IRR NPV (SI) Success (Pts) IRR * Pts NPV*Pts Rank Rank Rank Mean Ranking
Alpha 20% $10.0 5 80% 16% $8.0 2 2 1 1.67 1
Beta 15% $2.0 2 70% 11% $1.4 5 6 4 5.00 6
Charlie 10% $5.0 3 90% 9% $4.5 6 5 3 4.67 5
Delta 17% $12.0 2 65% 11% $7.8 3 3 4 3.33 3
Echo 12% $20.0 4 90% 11% $18.0 4 1 2 2.33 2
Foxtrot 22% $6.0 1 85% 19% $5.1 1 4 6 3.67 4
© Copyright 2012-03 Robert Grupe. All rights reserved.
20. Red7 :|: product management
Best In Class Objective #2:
Right Balance of Portfolio Projects
• Long term, versus short/fast
• High risk and low risk
• Markets
• Types of technologies
• Types of projects: new, improvements, cost
reduction, research
© Copyright 2012-03 Robert Grupe. All rights reserved.
21. Boston Consulting Group
Red7 :|: product management
Growth-Share Matrix
High
Rate of
Industry
Growth
Low
Low Relative High
Product bubbles: revenue contribution
Market
X axis: Log 0.1-1.0-10.0 Share
© Copyright 2012-03 Robert Grupe. All rights reserved.
22. Red7 :|: product management
Risk-Reward Diagram
Bubble sizes: annual resources
Y: Probability of success, X: Reward (modest to excellent),
Y: Ease-Difficulty, X Low-High Importance
© Copyright 2012-03 Robert Grupe. All rights reserved.
23. Red7 :|: product management
Best In Class Objective #3:
Strategic Alignment
© Copyright 2012-03 Robert Grupe. All rights reserved.
24. Red7 :|: product management
Strategic Alignment
GE/McKinsey Directional Policy
Leader Growth Improve or Quit
High
Industry
Attractiveness
Try Harder Proceed with Care Phased Withdrawal
Medium Share
Cash Generator Phased Withdrawal Withdrawal
Low
High Medium Low
Enterprise Strength
© Copyright 2012-03 Robert Grupe. All rights reserved.
25. Red7 :|: product management
Attractiveness vs. Competitive-Position
Portfolio Classification and Strategies
Strong Medium Low
High PROTECT POSITION INVEST TO BUILD BUILD SELECTIVELY
• Invest to grow at maximum • Challenge for leadership • Specialize around limited
digestible rate • Build selectively on strengths strengths
• Concentrate effort on • Reinforce vulnerable areas • Seeks ways to overcome
maintaining strength weaknesses
• Withdraw if indications of
sustainable growth are lacking
Medium BUILD SELECTIVELY SELECTIVITY/MANAGE FOR LIMITED EXPANSION OR
• Invest heavily in most EARNINGS HARVEST
attractive segments • Protect existing programs • Look for ways to expand
• Build up ability to counter • Concentrate investments in without high risk; otherwise,
competition segments where profitability minimize investment and
• Emphasize profitability by is good and risk is relatively rationalize operations
raising productivity low
Low PROTECT AND REFOCUS MANAGE FOR EARNINGS DIVEST
• Manage for current earnings • Protect position in most • Sell at time that will maximize
• Concentrate on attractive profitable segments cash value
segments • Upgrade product line • Cut fixed costs and avoid
• Defend strengths • Minimize investments investment meanwhile
© Copyright 2012-03 Robert Grupe. All rights reserved.
26. Red7 :|: product management
Strategic
Ansoff Matrix
© Copyright 2012-03 Robert Grupe. All rights reserved.
27. Red7 :|: product management
Best In Class Objective #4:
Right Number of Projects
© Copyright 2012-03 Robert Grupe. All rights reserved.
28. Red7 :|: product management
Risk-Benefit Balance
Maintenance
(fixes)
New Product
Projects
Enhancements
& Extensions
© Copyright 2012-03 Robert Grupe. All rights reserved.
29. Red7 :|: product management
Risk-Benefit Balance
Best Average Worst
Promotional
developments
& package
New to the changes
world 10%
products
10%
New to the
business Incremental
product
products
25% improvements
& changes
33%
Major product
revisions
22%
© Copyright 2012-03 Robert Grupe. All rights reserved.
30. Red7 :|: product management
PMP Tools Evaluation
© Copyright 2012-03 Robert Grupe. All rights reserved.
31. Red7 :|: product management
Strengths and Weaknesses of PMP Tools
Strategic Financial Scoring Bubble
Performance Methods Methods Model Diagrams
Projects are aligned
with business
objectives
Portfolio contains very
high value projects
Spending reflects the
business strategy
Projects on done on
time no-gridlock
Portfolio has good
balance of projects
Portfolio has right
number of projects
When used as a dominant portfolio method:
- Best method for performance criteria
- worst method for performance criteria
© Copyright 2012-03 Robert Grupe. All rights reserved.
32. Red7 :|: product management
Satisfaction with PMP Tools
Strategic Financial Scoring Bubble
Performance Methods Methods Model Diagrams
Method truly used to
make Go/No-Go
decisions
Fits management
style
Understood by
management
User friendly easy to
use
Realistic method
Perceived as efficient
Perceived as effective
Method rated as
excellent
Business would
recommend method
When used as a dominant portfolio method:
- Best method for performance criteria
- Worst method for performance criteria
© Copyright 2012-03 Robert Grupe. All rights reserved.
33. Red7 :|: product management
PMP Tools: Take Aways
• Formal portfolio management methods work
• There is no one right portfolio management method
• Beware of over-reliance on financial methods and models
• Look more to strategic approaches as the way to manage your
portfolio
• Consider a scoring model as an effective prioritization tool
• Bubble diagrams must also be part of your portfolio models
• Corporate Strategic Alignment
• Focus is only on product development, not market execution
• Product functionality and features only focus
• Assumes that promotional strategy and investment will be someone
else’s responsibility
• Don’t forget your market strategy :: great product, but no one knows
about it or your sales aren’t promoting it
• Sales incentives
• Demand generation
© Copyright 2012-03 Robert Grupe. All rights reserved.
34. Red7 :|: product management
CORPORATE STRATEGY
MAPPING
© Copyright 2012-03 Robert Grupe. All rights reserved.
35. Red7 :|: product management
Balanced Scorecard Strategy Map
Strategy Map
Financial Perspective Long-Term
Shareholder
If we succeed, how will we look to Value Revenue
our shareholders? Productivity Growth
Customer Perspective
Quality Time Function Partnership
To achieve our vision, how must
we look to our customers? Price Brand
Internal Perspective
Manage Regulatory
To satisfy our customers, which Manage Operations Manage Customers Manage Innovation and Social
processes must we succeed at? Processes
Learning & Growth
Perspective
Human Information Organization
To achieve our vision, how must Capital
+ Capital
+ Capital
our organization learn and
improve?
© Copyright 2012-03 Robert Grupe. All rights reserved.
36. Balanced Scorecard Example
Red7 :|: product management
• Organizational Scorecard
Strategy Map Balanced Scorecard Action Plan
Process: Operations Management
Objectives Measurement Target Initiative Budget
Theme: Ground Turnaround
Financial Perspective • Profitability • Market Value • 30% CAGR
If we succeed, how will we look to our shareholders? • Growth revenue • Seat Revenue • 20% CAGR
• Fewer planes • Plane lease cost • 5% CAGR
Customer Perspective • Attract & retain • # repeat customers • 70% • Implement CRM • $XXX
To achieve our vision, how must we look to our more customers • # customers • Increase system • $xxx
customers? • Flight is on time • FAA on-time arrival 12% • Quality • $xxx
• Lowest prices rating annually Management
• Customer ranking • #1 • Customer
• #1 Loyalty program
Internal Perspective • Fast ground • On-ground time • 30 minutes • Cycle-time • $xxx
To satisfy our customers, which processes must we turnaround • On-time departure • 90% optimization
succeed at?
Learning & Growth Perspective • Develop the • Strategic job • Yr. 1-70% • Ground crew • $xxx
To achieve our vision, how must our organization necessary skills readiness Yr. 3-90% training • $xxx
learn and improve? • Develop the • Info system Yr. 5-100% • Crew scheduling • $xxx
support system availability • 100% system rollout • $xxx
• Ground crew • Strategic awareness • 100% • Employee Stock
aligned with • % ground crew • 100% Ownership
strategy stockholders • Plan
Total Budget $XXXX
• Staffing Resources Scorecards
• Goals, Weighting, Thresholds, Target, Stretch, Comments
© Copyright 2012-03 Robert Grupe. All rights reserved.
37. Red7 :|: product management
MARKETING
COMMUNICATIONS
STRATEGY
Don’t forget the 4th P
© Copyright 2012-03 Robert Grupe. All rights reserved.
38. Red7 :|: product management
The Fourth P
• 4 P’s of Marketing
• Product Product Strategy
• Price Product Strategy
• Placement (distribution) Product Strategy
• Promotion MarComs (Marketing Communications)
© Copyright 2012-03 Robert Grupe. All rights reserved.
39. Red7 :|: product management
MarCom Dashboard
© Copyright 2012-03 Robert Grupe. All rights reserved.
40. Red7 :|: product management
MarComs Tools
• Advertising
• Sales Promotion
• Public Relations
• Personal Selling
• Legitimization
© Copyright 2012-03 Robert Grupe. All rights reserved.
41. Red7 :|: product management
Advertising Digital Content Digital Channels Metrics
TV Vlogs YouTube Viewers
Radio
Print
MarCom Tools: Advertising
Podcasts iTunes, TalkShoe Listeners/downloads
Packaging - outer
Packaging - inserts
Mailings Direct email Constant Contact
Video
Magazines Webzines
Brochures Micro websites
Posters
Leaflets
Directories Search Engine Optimization Google, Bing, others
(SEO)
Search Engine Marketing
(SEM): Paid Search /Adwords
Director/reviews Yelp, Angie's List
Paid Search / AdWords
Reprints of ads
Billboards Banner ads
Augmented Reality Apps
Point of purchase displays Affilate links
Audio/visual materials
Symbols and logos
© Copyright 2012-03 Robert Grupe. All rights reserved.
42. Red7 :|: product management
Sales Promotion Digital Content Digital Channels Metrics
MarCom Tools: Sales Promotion
Contests, games
Premiums and gifts
Online contests, games
Blogs, RSS feeds
Sampling
Fairs and trade shows
Exhibits
Demonstration
Couponing
Rebates
Low-interest financing
Entertainment
Trade-in allowance
Trading stamps
Tie-ins Mobile app tie-ins
© Copyright 2012-03 Robert Grupe. All rights reserved.
43. Red7 :|: product management
Public Relations Digital Content Digital Channels Metrics
Press Kits Online press kits
MarCom Tools: Public Relations
Speaches
Seminars
Webcast recording
Webcast live/recording
Articles Social news services Digg, reddit
Newletters Blogs, RSS feeds
Annual reports IR website
Charitable donations Non-profit digital sponsorships
Sponsorships Webinars, Microsites
Publications
Community Relations Microblogging Twitter
Community networks Ning, MySpace, PatientsLikeMe,
LinkedIn Groups
Social networks Facebook, LinkedIn, Xing,
Community Content Newsgroups, Wikis, epinion
Affinity groups
Social Bookmarking Services Delicious, Linkroll
Product reviews
Lobbying
Identity media
© Copyright 2012-03 Robert Grupe. All rights reserved.
44. Red7 :|: product management
Personal Selling Digital Content Digital Channels Metrics
MarCom Tools: Personal Selling
Sales presentations
Sales meetings Online meetings
Slideshare, YouTube
Telemarketing Direct Email
Incentive programs
Samples
Fairs and trade shows
© Copyright 2012-03 Robert Grupe. All rights reserved.
45. Red7 :|: product management
Legitimization Digital Content Digital Channels Metrics
MarCom Tools: Legitimization
Corporate brochure
Product brochure
Company web site
Product web site
Building signs Online community web sites LinkedIn, Facebook
© Copyright 2012-03 Robert Grupe. All rights reserved.
46. Red7 :|: product management
Online PR: Social Sharing Reach
• Social Sharing now produces
• estimated 10 percent of all Internet traffic and
• 31 percent of referral traffic to sites from search and social.
• Search is still about twice as big.
• Facebook makes up 56 percent of all shared content
• Up from 45 percent in August, 2010
• Email at 15 percent (down from 34 percent)
• Twitter at 8 percent (down from 12 percent).
• Email 17%, Other (bookmarking, blogs) 34%
• Twitter links are clicked on 4.9 times each, versus 4.3
times for Facebook links and 1.7 times for emailed links.
© Copyright 2012-03 Robert Grupe. All rights reserved.
47. Red7 :|: product management
INTEGRATED PMP
PROCESS
Putting It All Together
© Copyright 2012-03 Robert Grupe. All rights reserved.
48. Red7 :|: product management
Sustainable Product
Portfolio Management Process (PMP)
• About balancing business priorities
• risk versus return
• maintenance versus growth
• short-term versus long term
• On-going process
• under constant review and revision
• Different things to different people
• Strategist: supporting the corporate vision and mission
• Financial: most efficient allocation of financial resources to maximize shareholder value
• Engineering: choosing projects to foster the right innovation
• Marketing: faster times to market
• CEO: positive financial impact, quickly
• Axioms
• Profit is required to sustain costs in future and for innovation,
• so cut any non-performing products or those without well understood forecast (futures modeling)
• Balanced = stakeholders
• (shareholders, customers, employees, suppliers, communities/government)
• Tradeoff: short-term profits versus long term investments
© Copyright 2012-03 Robert Grupe. All rights reserved.
49. Red7 :|: product management
Integrated Portfolio Management
Framework
Corporate
Strategy
Market
Research &
Strategy
Marcomms Product
Strategy Strategy
© Copyright 2012-03 Robert Grupe. All rights reserved.
50. Red7 :|: product management
Integrated Portfolio Management
Dashboards
Corporate Strategy Map
4/8/2012 Robert Grupe
Objectives Goals Plan
Measurement Target Initiative Budget
# YR-01 YR-02 YR-03 YR-04 YR-05
Financial
Product Porfolio Plan
1 Profitability 4/8/2012 Robert Grupe
Market Value 30% CAGR
2 Revenue Growth Unit Revenue 20% CAGR
3 Objectives Strategy Products Forecasts
Positioning Budget Revenues
4 Corporate Initiative Classification Strategy SKU Initative/Project Priority YR-01 YR-02 YR-03 YR-04 YR-05 YR-01 YR-02 YR-03 YR-04 YR-05
5 TOTALS $23 $25 $26 $27 $32 $200 $181 $225 $260 $275
Processes
6 New (world/company)
7 Corp Initative A Invest to Build PN-006 Product G v1 1 $10 $4 $1 $1 $1 $10 $50 $70 $100
Organization B
Corp Initative PN-007 Product H v1 5 $2 $6 $5 $1 $1 $1 $20 $40 $50
Enhancement
Corp Initiative A Protect Position PN-002 Poduct B v3 2 $5 $1 $1 $2 $1 $100 $110 $115 $120 $115
Corp Initiative D Manage Earning PN-004 Product D v2 4 $1 $5 $1 $1 $2
Maintenance
Corp Initiative D Cost reduction 10% PN-003 Product C v5 3 $2 $1 $5 $1 $1
Corp Initiative C Protect/Refocus PN-005 Product F v2 4 $3 $1 $3 $1 $1
Hold/Retire $100 $60 $40 $30 $10
Corp Initative D Divest PN-001 Product A v6 $1 $1
Undefined/TBD $6 $10 $19 $25
© Copyright 2012-03 Robert Grupe. All rights reserved.
51. Red7 :|: product management
Integrated Product Development
Portfolio Management Process
© Copyright 2012-03 Robert Grupe. All rights reserved.
52. Red7 :|: product management
Initiation: Organizational Context
• What is the driving influence of your organization’s executive
team?
• Determines if you should start with Corporate Score Card, Market
Analysis, or Marcomms strategy
• Then your Product Management leadership will be to balance the organize
• Risks and Impediments
• Who will you be threatening with this new process?
• The visionary: who needs to be balanced and reigned in?
• The stock price value maximizer: who doesn’t get future risk for long term
growth ?
• Technical founder: who is use to calling all shots?
• Etc.
• Senior management buy-in and sponsorship of PMP initiative
• Whosoever sets the strategy must be responsible for the prioritisation
© Copyright 2012-03 Robert Grupe. All rights reserved.
53. Red7 :|: product management
Implementing PMP
1. Form a portfolio management tools & process evaluation team
• Evaluate current company approaches, review current best practices
• Stakeholder representation
• Finance
• Marketing & Sales (Product Management)
• R&D
• Customer Support
• Regions
2. Determine Product Projects Phased Exit Criteria: Go, No-Go
• Must-Meet / Should-Meet
3. Provide checklist scoring and Financial metrics for all existing projects
• (except maintenance releases)
4. Review of industry best practices
5. Selection of methods suitable for leadership style of the organisation
• Not all tools are appropriate for your organisation
6. Integrate team recommendations into product lifecycle decision point
processes
7. Continuous Process Improvement (CPI)
• Real-time monitoring against models
• Seasonal Trends, Market Changes (anticipated and not), Competitive Moves
• Reviews & Retrospectives
© Copyright 2012-03 Robert Grupe. All rights reserved.
54. Red7 :|: product management
Portfolio and Project Reviews
Business Strategy & New
Product Strategy
(drives both decisions processes)
Portfolio Projects
Review Review
Review decision gates At key project decision gates
* Review all projects together Decisions & adjustments * Project pass Must-Meet
* Identify Strategic Criteria
imperatives * Scored on Should-Meet
* Check project priorities Criteria
* Check portfolio balance * Go/No-Go decisions
* Projects prioritized
Project status & scores
* Resources allocated
Portfolio Management Project Framework
• Evaluation of new business opportunities • Evaluation of project phase exit
and approval to become projects deliverables to ensure completeness
and required level of quality
• Project prioritization based on strategic
fit and financial return • Project resource allocation based on
project prioritisation and available
• Regular re-evaluation and prioritization resources
of existing projects against revised
market and project status information
© Copyright 2012-03 Robert Grupe. All rights reserved.
55. Red7 :|: product management
CODA
© Copyright 2012-03 Robert Grupe. All rights reserved.
56. Red7 :|: product management
Finis
• What we measure and how we measure determine what
will be considered relevant, and determine, thereby, not
just what we see, but what we - and others - do.
• Peter Drucker, Management: Tasks, Responsibilities, Practices
• This Presentation & Further Resources
• www.red7managementsolutions.com
• Questions, suggestions, & requests
• Robert Grupe, CISSP, CSSLP, PE, PMP
• robert.grupe@red7managementsolutions.com
• +1.636.236.8434
© Copyright 2012-03 Robert Grupe. All rights reserved.
Editor's Notes BioRobert Grupe is an experienced international business leader with a background in engineering, sales, marketing, PR, and product support in the software, digital marketing, health care, electro-optic and aerospace industries. From Fortune 100 to start-up companies, Robert has worked for industry leaders including Boeing, McAfee, Text 100 PR, and Express Scripts. Management experience includes working with and leading local, as well as internationally distributed, teams while implementing best practices to maximum organizational and market performance. Robert is a registered Certified Information Security Professional (CISSP), Certified Secure Software Lifecycle Professional (CSSLP), Professional Engineer (PE), and Product Management Professional (PMP). Update listing of new product ideas and enhancements to existing productsPrioritize the list based on executive decision influenceEngineering preferencesNew sales commitments (whale / major account proposal needs)Renewal sales customer dissatisfaction issues‘Visionary’ leap to new uncontested market opportunitySelect next projects based on development resource availabilityAdd to portfolio management dashboardDevelop product<<Preform web research and revenue projections for business case>>Launch productRepeatProduct Portfolio Management is actually Project Program Management New Product Life Cycle (NPLC) ProcessPhase-Gate Process Well understood, good process to generate and process new product ideasChallengesCorporate strategy mapping usually happens at the end of effortsLong process from Ideas Discovery to development kickoffHow to determine and demonstrate corporate strategic alignment?Small mention of market positioning strategyWhat your future, current non-customers, will want Primary FocusCorporate strategy – weak for innovationProduct Strategy – Technology Star-upsMarcomms Strategy – mid-sized / aggressive growth (Dot.Coms)What other tools are needed? How do they fit together?But Then What, How Do you Do that?Here is a view based on the toolsProcess Steps Financial ModelsUsesGo/No-Go decision: Kill if too weakRanking: Resource allocation from strongest-weakest, others killed or put on hold (positive, but not enough resources)Best PracticeUse with other methodsLimitation: worst real-work performance = lack of research rigorChecklist Scoring: UsesGo/No-Go decisions, especially in early phasesRanking of resourcesBest PracticesRequires well informed management group to assessBehavior: Bringing managers to team consensus WARNINGStudy 129 firms found that those who follow portfolio planning models like the BCG matrix had lower shareholder returns.Doesn’t evaluate profitabilityDepends on how “market” is definedLeads to conclusion to funnel money from cows to stars (so that cows turn into dogs)This should only be attempted for real lines that have a sufficient history to allow some prediction; if the corporation has made only a few products and called them a product line, the sample variance will be too high for this sort of analysis to be meaningful.Use GE/McKinsey Strategic Alignment instead P31 – need another arrow http://www.strategy2act.com/solutions/bsc_toolkit/02-building-balanced-scorecard.htmhttp://www.schneiderman.com/Concepts/Scorecard/How_to_Build_a_Balanced_Scorecard/how_to_build_a_BSC_intro.htmDrucker ThoughtsBalanced Objectives: market standing, innovation (10% invest), productivity, physical and financial resources, profitability, manager performance and development, worker performance and attitude, and public responsibility (patient outcomes) Marketing Strategy is more important than product featuresthink insurance, coffee, heavy machinery, airlines, etc.You need to lead or follow your corporate marketing strategyWhat are your organization’s strengths and weaknesses?What will this product need to succeed?Positioning Direct ResearchSurveysCustomer firmographic & physchographic profilesIndirect ResearchAnalyst market researchMarket & Competitive Analysis Promotional TacticsVoC / QFDSales channel development & incentivesPhyschographic: IAO variables (for Interests, Activities, and Opinions). They can be contrasted with demographic variables (such as age and gender), behavioral variables (such as usage rate or loyalty), and firmographic variables (such as industry, seniority and functional area). http://techcrunch.com/2011/06/06/sharethis-facebook-38-percent-traffic/ Effective Product Portfolio ManagementMaximize return on investmentsBalance of project types Strategic alignment of all effortsRight number of projectsPMP = focusing strategic vision into realityAnything worthwhile will face oppositionreassess, but stay focused if opposition is destructively motivated.Learn from mistakesStay aligned into sponsorsPersonal Professional FocusExtended into your own personal objectives and plansTeam to personal Scorecard From The DailyDrucker, 3/13Bonus – apply this same principle to your own life (God’s purpose for your life, we your plans)