The Product Pulse

The most innovative organizations -- noted for their creative designs, unorthodox service, or energizing workspace -- make innovation a part of their culture. It is integrated into all that they do, and not just limited to the CEO or an "innovation group." Here are 9 tips for achieving Integrated Innovation in your organization:

1. Don't Underestimate the Value of Innovation
   Legendary management guru Peter Drucker said, "Only marketing and innovation produce revenue. All other business functions produce costs." While this may be an extreme view, there is no doubt innovation generates value.
   
   
2. Never Assume Innovation is a Department
   Innovation is everyone's job. It should not be relegated to a single department or specific individuals. Your organizational structure, culture, and workspace should encourage innovation in all aspects of work.
   
   
3. Give Equal Attention to the Image and Quality of Your Products and Services
   Together, image and quality form the "identity" of your brand. To think that innovation is all about appearance or design is to shortchange the importance of innovative processes, logistics, partnerships, customer service, or sales models. And quality can't be overlooked.
   
   
4. Use Cross-functional Teams to Assure an Integrated Approach
   Using cross-functional teams to review product or service plans and designs will ensure that all perspectives are considered. It will avoid situations where an unorthodox design will price the product out of the desired market, or where manufacturing complexity will not accommodate aggressive release dates. Seeing the big picture allows tradeoffs to be made.
   
   
5. Focus on Goals and Themes, Not Activities
   Empower and align your teams with prioritized goals and themes; let them take it from there. Innovation thrives on freedom and collective intelligence. Focus on outcomes, provide priorities and needs, and challenge those closest to the action to surprise you with their ingenuity. Dictating activities inhibits innovation.
   
   
6. Recognize and Leverage Different Cultures
   Understand the cultural differences across business functions and geographies. People from engineering will often have different approaches and priorities than people in marketing. People in "rules-based" countries will bring something different to your team than people from "relationship-based" countries. There are always exceptions, but knowing what to look for, and then leveraging those differences can supercharge your teams.
   
   
7. Watch Your Language
   Use questions to drive understanding and scrutinize ideas. Rather than silencing the objectors or squash someone's ideas, challenge them with questions: How would we address the xyz situation? Are there other ways of accomplishing this? How might we do it with less money? Then what would happen? And so on…
   
   
8. Broaden Your Perspective
   Use systems thinking to validate the impacts of decisions on the organizational ecosystem. Nothing happens in isolation. Decisions will impact sales, marketing, customer services, engineering, manufacturing, and many other areas. Make a list of the variables that could be impacted, and document the cause-and-effect relationships across those variables.
   
   
9. Innovation is Not Limited to the Ideation Phase
   Innovation should permeate the entire value chain; it's not limited to "ideation" or "R&D." Look at the entire delivery cycle -- from demand generation through strategic planning, execution, and customer touch points -- and ask the crucial business questions at each step. All of them are opportunities to innovate. Sometimes the smallest touches have huge impact.

Collectively, these 9 tips can help your organization build a culture of innovation from the inside out; engaging employees and customers alike. For more on this, join us at PIPELINE 2012 and view my Breakout Session: Integrated Innovation -- the Art of Balancing Structure and Creativity.

I'd love to hear from you. How integrated is your innovation process? Share your experiences by leaving a comment below.

In both operations and manufacturing, the concept of "lean," has earned its reputation as a powerful toolset that drives down cost and improves cycle-times. Lean manufacturing achieves this value through a focus on eliminating waste, standardizing processes, and creating value from an end customer standpoint. As companies strive to increase growth and profitability from their New Product Development (NPD) and innovation investments, some executives are looking to apply lean concepts in this area. But when it comes to the more creative and fuzzy practices of innovation, following lean practices without strategic direction from portfolio and pipeline management (P&PM) capabilities can have unintended consequences including: stifling ideation processes, focusing only on customer requests and not the next big innovation, over-standardization, and speeding up the wrong projects.

From our experience, lean NPD efforts without P&PM often prove ineffective because they:

• Are unable to effectively communicate the value proposition and need for efficiency improvements to the NPD audience
• Become too binary with metrics -- occasionally canceling lower "value" but strategic projects
• Expend energy improving processes that aren't the constraint or that don't deliver results
• Distract from delivering large scale, high growth innovations simply because these are not "repeatable"

Combining P&PM processes with lean practices for NPD and innovation shows companies where to focus their efforts for maximum impact, and once established, creates processes that can be further improved. P&PM ensures that companies stay true to delivering results by providing visibility into what is most important. They can then apply tactical lean approaches to help get there.

To hear more on how P&PM capabilities can help your company focus lean efforts to strategically drive new ideas to market while cutting waste -- not creativity, please join Kalypso's Pamela Soin for her session during PIPELINE 2012. Register today at www.pipeline2012.com.

40% to 75% of New Products Fail -- How to Improve Your Odds of Winning!

Innovation and new product development are risky. 40% to 75% of new products fail. This is not because people make dumb decisions; it's the nature of things when you face an uncertain future. Think about it. If you could consistently produce winners (products that meet revenue and profit forecasts) you would be very rich. The good news is that you can improve the odds of winning.

First, recognize that there will be a number of factors, like market size, market share, price and such that may be very uncertain. You can identify these using a technique called "sensitivity analysis" that identifies the impact of uncertainty on each variable in your business model. Experience shows that only three to four variables will account for 90% of the impact of uncertainty on your project's net present value. By focusing resources on these variables, you will avoid wasting time and effort on things that do not matter.

Second, success will come from assembling these carefully evaluated projects into a portfolio that compares projects based on the probability that you can successfully "pull it off" and, if you can pull it off, what the project is worth. A well-balanced portfolio will have some "sure things", but will also have a group of risky projects that, if successful, can be blockbusters.

Why a portfolio? Early on you cannot, as noted above, consistently identify individual winners. In your portfolio, some will lose and others will win; in the aggregate you will come out ahead.

In a recent white paper by Tech-Clarity, author Jim Brown introduced the subject of Advanced PPM to differentiate the use of enhanced analytics such as those described above, to provide deeper analysis of the economics and risks and uncertainties where subjective approaches like scoring rules, scorecards and questionnaires are not adequate. You can download a reprint of this white paper to learn more.

To delve deeper into this discussion, join me at PIPELINE 2012, the Online Conference for Innovative Product Development on May 10th. My Breakout Session "Winning in an Uncertain World" will provide insights to help you improve the odds of winning using the tools of Advanced PPM -- taking project and portfolio evaluation beyond scoring rules, questionnaires and other subjective methods. You can also learn more from Jim Brown who will participate in a panel discussion with Bill Poston, Managing Partner, Kalypso, and Carrie Nauyalis, Solutions Marketing Manager, Planview.

For additional information: www.smartorg.com

As I check TweetDeck again and again to see who's posting what about PIPELINE 2012 at #PL12, I acknowledge that I'm excited about this conference. Admittedly, it's good that I'm jazzed as I'm the event manager. But my job is to help you be excited and, honestly, I believe that will be a very easy task. I have two convincing points to "sell" my case:

1. PIPELINE 2012 is online, easy to attend and it's free. In my experience, in addition to being convenient and cost-effective, virtual events can be dynamic and fun. If you haven't attended one yet let me paint the picture for you: imagine a recent event you've attended in person and visualize seeing that on your computer while you remain comfortably in your office with your coffee mug in hand. That is what amazes me about virtual environments -- you enter a main lobby; you can see the other participants online; you can step into the networking lounge to chat with colleagues, speakers, and attendees; enter the exhibit hall and check out the sponsor areas -- each contains all the features of a physical booth. As a booth rep greets you, you download your collateral, (no more hassle with papers falling out of your arms as you maneuver through crowds at a physical event) and watch videos. And you won't want to miss the highlight of PIPELINE -- enter the auditorium where you'll have live access to presentations by best-selling authors, innovation experts, scholars and industry leaders.

This takes me to my second point.

2. PIPELINE is THE online conference for product leaders to gather knowledge, network and get inspired to innovate! The knowledge-sharing opportunity of this conference, I believe in many ways surpasses the average physical trade show. From the scheduled chats with speakers and sponsors to general sessions with live Q&A -- you will have ample opportunity to discover new ways innovation can drive your product pipeline. And, as an added bonus, the conference is available online for 90 days so you can stop back to view presentations any time.

Our lineup of speakers this year is sure to impress -- from authors and experts on innovation such as, Jeff Dyer and Jeff DeGraff; to professionals who've had to walk-the-talk on the job like Mona Mohan from Ghirardelli; to breakout sessions from industry leaders like Kalypso, IBM Rational, and SmartOrg. I've had the opportunity to speak with the presenters and I am jazzed to hear their unique perspectives on May 10th! As the host sponsor, Planview is particularly excited to share the results of the 3rd Product Portfolio Management Benchmark Survey during the conference. These results will reveal the top pain points product developers are facing and how they are (or are not) addressing them. You're going to want to hear what your peers shared!

If you're not excited now, I'm afraid I must check your pulse. PIPELINE 2012 will be THE place to be if you're a product leader and want to connect with innovation in whole new ways! You can learn more and sign up for your free spot on the PIPELINE 2012 website. So mark your calendar for May 10th, get your coffee in hand, and join us online. See you there!

The beginning of any new year brings with it a familiar cadence of activities for our organization. Most revolve around ramping up a fiscal year with our sales team and launching the latest version of Planview Enterprise®. This annual cycle certainly represents one of the most intense times of the year. Preparing for sales and consulting meetings, launching the latest release, and the subsequent GA process make Q1 a big push across the country.

Part of our product launch plan is a comprehensive process of touching base and briefing all of the industry analysts that cover the portfolio management space. Every year, as the portfolio management segment continues to grow, this activity gets larger and larger. Globally, we are interacting with close to 30 analysts across a wide range of sectors. This body of work always provides interesting insights I thought I'd share a few highlights.

Enterprise software is a good place to be. In addition to introducing our latest products, part of these briefings is a review of our previous year performance as a company. We were fortunate to have a very strong 2011, a record year across most metrics. From our analyst meetings it was clear that we did better than average, but it was equally clear that enterprise software companies across the board had strong years. As we continue to read varying reports about the state of the economy, software is a strong sector. In short, organizations are still looking to drive efficiencies in their operations and focus their limited capital on innovation -- software is a good investment on both fronts.

Software as a Service (SaaS) continues to gain momentum and drive growth. It is no surprise that the cloud and SaaS are hot trends in software, but the full impact of this trend. We all read about the pure SaaS players that are the poster children for this trend may not be obvious. But the other side are the hybrid companies like Planview that for the past several years have aggressively retooled themselves to leverage the SaaS trend while continuing the commitment to new and existing on-premise customers. In 2011, SaaS represented over half of our new customers, and our SaaS offering created incremental new market opportunities that were not addressable before. The analysts I spoke with recognize that "established" software companies need to be hyper aggressive to serve this new landscape and this has been our approach.

Markets are built by best of breed players. Across the analyst community there is validation that portfolio management is seeing tremendous growth in traditional segments like IT and also in a variety of line-of-business (LoB) segments. IT product portfolio and program management (PPM) has been a vibrant market for many years and these new LoB segments are emerging markets that require commitment and investment to reach their full potential. In my conversations I think it is safe to say that it is the best-of-breed players, like Planview, that are making these investments. The mega-enterprise software players have too broad a product portfolio to apply the focus necessary. They are not agile enough to navigate the dynamics of these new segments. Someday they will look to harvest the opportunities created, but in the mean time, the best-of-breeds will drive forward. This is common in many categories; we are now living it in PPM.

Product Portfolio Management has "Crossed the Chasm." As mentioned previously, we are experiencing a period of rapid growth in the use of portfolio management. One of these areas is the use of PPM by product development teams looking to make the best pipeline selection decisions and ensure the optimal use of their precious engineering resources. This has been a growing trend, but during this year's analyst briefings there was a sense of critical mass to this conversation. Indeed, when posed the question, every analyst I spoke with agreed that this application of PPM has "crossed the chasm." I will spare everyone a lesson on the technology adoption lifecycle, but this is an important moment in the expansion of the portfolio management discipline. If you want to learn more, plan to attend PIPELINE 2012 on May 10.

Just a few observations from our annual analyst briefings, I hope you find them useful.

Planview just finished our 2012 Product Expo introducing Planview Enterprise 10.4 -- and we did it virtually. Here's what we have found to be great about virtual product launch events:

1. We are able to get more customers and prospects to attend at a global level. They can participate from their office -- all they need is an Internet connection.
2. We can control the content so attendees receive comprehensive, product-focused information that not only drives product adoption but also reinforces your brand.
3. Presentations and demos are available to attendees for 90 days so they can share it with their teams and watch on-demand.

2012 Planview Product Expo Command Central

Selfishly, I will add a fourth benefit. From Command Central, I was easily able see all the booth representatives interacting live with customers from around the world. I love that part! Our customers drive our products so it's very exciting to read live commentary. Booth experts were able to respond instantly to questions about product functionality and enhancements while simultaneously continuing to strengthen a positive level of partnership with customers.

Why Host Virtually?

Two years ago, we found that our typical approach of emails and webcasts were no longer creating the desired impact and awareness we needed to communicate a global product launch with new market positioning. With only 100 customers able to attend the last launch webcast series, we needed a better way to engage more of our client base, strategically position our overall solution, and provide customers an opportunity to demo specific product functionality. Traditional methods were not working and physical events were logistically impossible for most customers.

Building on our experience with hosting a virtual User Conference in Nov 2009, we partnered with Intercall (formerly Unisfair) to help us build an interactive product launch experience for our customers. The virtual platform recreates a physical event down to the smallest detail, with presentations, live Q&As, demos, Meet the Expert sessions, and chat rooms. We set up the virtual environment to deliver three levels of content and customers could choose how deep they want to dive on any specific capability.

The three levels of content include:

1. Overview of product release with featured presentations and live Q&A
2. Expo Hall with virtual booths that contained what's new by solution areas and access to the Product Team via chats
3. Customer area with representatives and release information, interactive release notes, migration planning, customer support, and enablement programs

Product Development Booth at the 2012 Planview Product Expo

While going virtual helped us increase launch participation by 400%, it isn't for the faint of heart. Planning a virtual event takes every bit of effort as other options, if not more.

It takes a team of dedicated staff to organize deliverables, drive people to meet deadlines, pre-record content, and communicate regularly with attendees. But patience is key. We have seen about half of the registrations come in within 48 hours of the event go-live date.

But the outcome is well worth the effort. Hosting a virtual event is a contemporary approach to communicating your corporate initiatives to key stakeholders worldwide. Customers, prospects, partners, and analysts benefit from the rich, targeted content and one-on-one conversations with subject matter experts. You have the ability to set the stage and create a dialog around product capabilities and corporate messaging while educating the audience on a variety of product offerings for future implementation.

I'd like to hear from you. What are some of your experiences and best practices for product launch communications and what are your experiences hosting virtual events? Post a comment below.

As many of you probably know, releasing a product to market involves a whole system of moving parts. It's not as simple as coming up with a great idea and then seeing it on the shelf a few months later. If only!

The only way to ensure you're meeting time-to-market targets for your new products, and thus having a significant impact on market share and profitability, is to synchronize all of those moving parts. It's a highly-orchestrated process that requires a comprehensive release management initiative. Instead of getting caught up in individual roles or parts of the product release, every department within your company needs visibility into how their piece, which may consist of multiple projects, are impacting the larger release schedule of the product portfolio. Everyone needs to be actively assessing the big picture via a centralized roadmap, proactively communicating any potential roadblocks, collaborating on release details, and working towards one common goal: a successful product release.

And really, it doesn't matter if you're releasing products to market or applications to the business -- the same rules still apply. In fact, in our technology-driven world, IT often has a starring role in developing the software components or applications embedded within the products you use every day.

Ask yourself these questions:

• Do all interested parties in the company have access to the requirements delivered in a release?
• How will this product be messaged and marketed?
• Is everyone along the supply chain well informed about the timing and impact of release?
• Is there a central location where all release and product content is stored?
• Are you able to deliver a long-term visual roadmap to your customers and stakeholders?

If you're tracking all of this information via emails and static spreadsheets, you have my sincere condolences because you're likely living in spreadsheet hell. Increase the number of products you're releasing, and the complexity increases exponentially. I know organizations are struggling with juggling all of these release details -- it's exactly why we made the enhancements we did to the release management capabilities in the newest version of our software. In the end, with the right tools and processes, you will be able to harness the power of all of that disparate information you've been tracking to get products out on time.

One company that has been quite successful in product release management is Green Mountain Coffee Roasters. As the world's second fastest growing company, they've had to learn quickly what it means to look at the bigger picture when it comes to ensuring their products are delivered on time to the market. Check out this fascinating webcast to learn more about how they do it.

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.

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?

It 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.

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.

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.