What is Product Portfolio
Product Portfolio Management helps companies optimize a critical resource: its brightest ideas.
Before projects become products, they are ideas in the minds of your teams. They begin their life as product concepts, seeds of your company’s future growth. This should be managed as a portfolio of product ideas, those as-yet unformed concepts that will eventually enter the pipeline and pass through a gated product development process.
Too many companies do not adequately manage this portfolio of product concepts. They are missing systems for managing this fuzzy front-end of product development. What we have discovered is that success begins by having some means of de-mystifying the front end of product development. The most effective way to do this it through systems that enable decision-makers to converge quickly and reliably on the best opportunities for creating winning products.
Getting the fuzz out of the front end has two facets:
1) A lightweight process that manages the day-to-day decisions that move and filter product concepts as they make their way toward the pipeline
2) A yearly strategic planning process for product innovation.
TCGen’s dual approach to Product Portfolio Management helps companies optimize this critical resource: your company’s brightest ideas.
Who is Product Portfolio Management Consulting for?
TCGen works with product companies across industries. We have improved Product Portfolio Management in the medical devices, telecom, technology, software, computer hardware, and consumer electronics spaces. Any company that wants to pick winners more reliably, to create families of offerings that delight customers, and to manage more projects with fewer bottlenecks, can leverage TCGen’s Product Portfolio Management expertise. Typically we would work with CMOs, Chief Product Officers, SVPs of Marketing, GMs, or Engineering Leaders. We sometimes work with CEOs, most often in collaboration with Business Development leaders.
Companies Maturing into Leaders
Companies that are maturing well beyond the start-up phase are poised to take advantage of Product Portfolio Management Consulting. These are companies that are beginning to create a range of new products, including derivatives and spin-offs, as well as entirely new ideas that represent the future. Other companies are transitioning from many products in the marketplace to a handful. Any company faced with the challenge of managing these precious concepts over time, moving them into the pipeline and then into the marketplace, can benefit from our product portfolio tools and expertise.
Larger Companies Managing hundreds of Projects
As companies begin to scale they often find themselves caught between unmanageable growth and untenable stagnation. Striking the right balance between supporting core offerings and experimenting with bold, transformational offerings is fraught with risk: technical risk and market risk. A Harvard Business Review piece found that “Companies that allocated about 70% of their innovation activity to core initiatives, 20% to adjacent ones, and 10% to transformational ones outperformed their peers, typically realizing a P/E premium of 10% to 20%.”
The key to a balanced product portfolio is a two-tiered product portfolio system that manages the long-, mid- and short-terms. Too many successful companies create a hostile environment for new product concepts. Having a Product Portfolio Management process allows larger companies to nurture the best ideas – the concepts that will allow your company to sustain its success.
How do we structure Product Portfolio Management Consulting engagements?
Tested and Approved Methods
Typically, TCGen’s Product Portfolio Management Consulting engagements have four steps: assessment, developing custom solutions, training; and then using metrics to manage change by monitoring behavior. In Product Portfolio Management work, we use our proven tools to create a system that begins with a vision, that becomes a strategy, that then becomes a roadmap for long-term success, with a budget to support the plan.
A Typical Engagement
Typically we would work in a collaborative setting where we draw from our prior work on portfolio improvement projects. We help you understand how other companies rose to the challenge, and what they did to overcome obstacles, and the take-aways for your organization. We function as a combination of a thought leader, sounding board, and early warning system – we head off risks and accelerate improvements.
A typical product portfolio management consulting engagement might include any or all of the following:
1) Defining what measurable success looks like and when it will happen. Describing the concrete steps to make it happen. This becomes a high-level plan. Having a plan decreases the stress of organizational change and clarifies the path forward.
2) Identifying & addressing immediate challenges, that create early successes and lead to further support for improvement. E.g. ideation submission/curation process, definition of a light-weight/innovation-friendly process.
3) Solving medium term challenges such as making organizational changes that facilitate new product teams, for example changing the culture to be less risk-adverse, and more entrepreneurial. Or to quickly develop MVP ideas, learn and iterate. The key is to integrate the new portfolio process with the yearly budgeting and prioritization process.
Two Systems for Product Portfolio Management
Having both a formal Strategic Planning and an ongoing Front End Management process allows companies to respond to the change. Why Two? The reason two systems are effective is that product innovation is only one facet of your strategic plan. Having a lightweight front end management process, in addition to the yearly plan, helps to maintain focus on the tasks necessary to launch the right projects to realize your strategy, without being overwhelmed by other strategic initiatives contained in a comprehensive strategic plan, (such as capital structure, infrastructure, M&A, marketing initiatives).
Reviewing your product innovation future on only an annual basis makes your company liable to getting blindsided by changes such as new competitors, technological advances or rapidly emerging markets. Two linked processes, one long term and one short term, enables both foresight and forward motion to make sure your company’s future innovations are well in hand.
Change Management Experts
Our expertise includes both Product Portfolio Management and change management. Our Product Portfolio Management engagements take account of the special requirements of your team and your organization. Our change management approach eases teams into new processes, focuses on the most important levers of improvement, and uses metrics to influence behavior. Teams see the results when better product selection decisions are made, when new product success become more predictable, and when there are fewer resource bottlenecks. Strategic wins build buy-in and lead to ongoing improvements.
“We’re making better decisions faster.”
In what kind of timeframe do organizations see change after a Product Portfolio Management Consulting engagement?
TCGen’s assessments take about one to two months, with perhaps another month or two to create solutions and build te required training. In a Product Portfolio Management engagement, teams will see improvement in the longer-term.
Our Product Portfolio Management tools will quickly change how decisions are made. By tying the vision, the strategy, roadmaps and budgets, the value in the product portfolio becomes clear quickly in a visually accessible way. What once had been fuzzy, will be clarified, leading to better decisions, and more predictable results for innovation.
What kind of internal resource commitment should a company plan for when considering a Product Portfolio Management Consulting engagement?
A Point of Contact
Companies should plan to provide a contact who will serve as an internal driver for the engagement. This point person, usually an individual contributor or team manager, serves as the resident expert and as our guide through the organization. Typically our contact reports directly or indirectly to a GM, CMO, CPO or VP of Engineering. He or she helps to organize meetings and functions as a project manager for the engagement. Helping TCGen to improve the organization’s Product Portfolio Management capability should be this individual’s top priority.
Typically, in a Product Portfolio Management consulting engagement we also work with a Program Office, an internal consultant or someone at the Director or Vice-President level who serves as our internal champion. This individual will act as the driver of the engagement for the client organization, providing access to data, and attracting the attention of upper management as needed.
Teams may have to provide access to project data such as the corporate strategy, schedules, budgets, project plans, roadmaps, revenue and profit projections and other artifacts.
What do people say about their experience after a Product Portfolio Management Consulting Engagement?
Our Product Portfolio Management consulting clients report that they are making better decisions because there is a clear line between organizational intent and results in the marketplace. They balance their portfolios, typically increasing the resourcing of riskier projects; not infrequently they cancel programs that don’t move revenue ahead more than 10% for that division or at the corporate level. With the tools we provide, teams can begin to identify and better prioritize product concepts. They also take better advantage of synergies between projects in the pipeline.
The best testimonial we receive is repeat business. Companies that have taken advantage of our Product Portfolio Management consulting expertise often ask TCGen to solve wider challenges or to duplicate our prior success in another division. Product Portfolio Management is a broad, system or corporate-level challenge. Companies that take advantage of our Product Portfolio Management expertise may want to apply our best practices to more granular challenges, at the program or project level.