Unless you manufacture commodities or specialize only in building custom products, the lifeblood of your business is innovation and new product development. What issues and risks are impacting the speed and success of your product pipeline? If your organization is like most, you’re likely struggling with having too many new product development projects for the available resources to work on, trying to get the new products out to market as soon as possible and reprioritizing efforts in order to adapt to constantly changing business conditions.
If your company has an endless supply of staff and financial resources, read no further. For the rest of you still reading along, there are proven ways to “do more with less” and improve efficiencies by applying some key principles of Product Portfolio Management. Product Portfolio Management, or Portfolio Management for short, involves taking a holistic view of the financial and human resources your company invests in its portfolio of current and prospective products/projects, and applies objective analysis and rigor in finding the right balance of investments that best align with your business strategy.
The results of implementing Portfolio Management can be significant, including:
- Faster time-to-market
- Optimized hiring decisions
- Lower financial risk
Below is a checklist you can use to quickly self-assess whether your organization is maximizing its ROI:
- Project Selection. Innovation is about new ideas. Ideas become valuable when they’re developed into products and commercialized. While it’s important to have a balanced mix of short-term, long-term, high-risk and low-risk initiatives, inevitably not every project can be Priority #1 and not everything you want to get done will be. Where do you draw the line? How do you assure the most strategic projects are getting prioritized? Project selection is both an art and a science. Take a hard look to make sure your organization is utilizing the science behind objective analysis, scoring models and strategic alignment to ensure consistent criteria in selecting the right initiatives.
- Resource Management. Aside from raw materials, your employees represent both the most valuable asset and the greatest cost to your business. You’ve probably already adopted Lean methods to reduce waste in your manufacturing processes. How well are you addressing the potentially greater waste of employees spending time on low-priority or under-performing projects? If you’re like most organizations, you don’t even know how the hundreds, thousands or hundreds of thousands of labor hours are being spent each year. You also probably don’t know if you have the necessary staff, both in terms of capabilities and capacity, to complete those key projects coming up on time or without burning people out. Fortunately, resource management tools and techniques are available to help ensure (A) your people are working on the most important initiatives, (B) you can get visibility ahead of time into resource conflicts and capacity shortages that could negatively impact your product release schedules, and (C) you can make more well-informed decisions on whom to hire, and when. Staff resources are a critical asset to your company. Make sure you’re investing the necessary time and attention to get the most out of them.
- Terminating Under-Performing Products. According to industry studies, well over 20% of all projects fail to meet their budget, schedule or desired goals. Not only are these projects/products unsuccessful, they’re pulling precious resources away from higher priority or value projects. While all projects start out with a positive outcome in mind, even the most successful organizations realize that failure is inevitable. They key is to not make failure needlessly more expensive. Take a look at your low-performing or never-ending projects – it might be time to cut bait. Not sure where to start? Implementing resource management (see above) will help you see where people are spending their time, which will help you identify tasks/projects that are drawing more value than they create.
Remember, Product Portfolio Management is a journey, not a destination. There are many other keys to success than those mentioned above. By assessing your internal practices, identifying areas of improvement and adopting better practices in Portfolio Management, you’ll be well on your way toward “doing more with less”. If you have any questions about adopting Product Portfolio Management within your organization, please contact Michael Pelletier by phone at 860.561.6869, or via email at email@example.com.