The Product Pulse

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.

It's a notion counter to everything in our marketing bones, but sometimes our obsession for delighting customers can actually be too much of a good thing. From a product portfolio perspective, I wouldn't go quite as far as the recent Harvard Business Review article, "Stop Trying to Delight Your Customers" (Jul-Aug 2010 issue). But this is a serious product development issue: with limited resources, every time a product or service over-delivers on one customer benefit, it increases the probability of under-delivering on another. And lurking in that resource misallocation is vulnerability for your brand.

At the simplest level, over-delivery is providing any customer benefit in excess of what is required to attract and keep customers. So how do you know -- before the product is built (and long before customer satisfaction research sometime after launch)? The answer is quite straightforward if you already score your product development projects in terms of alignment with specific customer benefits (drivers of brand choice that define ideal customer experience -- e.g., easy to use, reliable, etc.) and if you know your current competitive standing on each benefit (e.g., superior to competitors, inferior, or parity).

Armed with those basics, you can look at how all product features on a roadmap (or headed for it) are aggregately aligned with each benefit. When doing this, we often see that the bigger product improvements are on one or more benefits where the company is already the clear leader. Meanwhile, that same roadmap is under-delivering on benefits where competitors are at parity or even ahead. Analyzing total roadmap delivery by benefit also helps prevent over-delivering on, say, the #4 most important benefit to your customers while under-delivering on #1 -- another all-too-frequent outcome without such analysis. 

Human nature: we love doing things we're already great at. But when this happens in excess in product development, the brand often ends up extending its lead on customer benefits that it's already comfortably superior on while opening itself to competitive attacks on other key benefits. So by all means let's delight customers with next year's new products. But let's do it in proportion to the relative importance of each customer benefit and where your brand needs the most help competitively.

Welcome to The Product Pulse, our new blog focused on innovation and optimizing the product portfolio.

As you probably know, we didn't just pick this name out of a hat. We held a contest open to the world to help us pick the right name. We had come up with what we thought were some great ideas… but "The Product Pulse" came from one of you. Which is so fitting, because we want this to be a community of interaction on cool topics that matter to the product development community.

So, what about this particular name and tagline manifested the Eureka moment? It came down to a couple of key words, to wit:

• "Pulse" -- product development teams are living organisms, they have a pulse that is rarely in a state of relaxation (in fact, most of the development teams that I have been a part of spend much more of their time closer to peak heart rate!). Cranking out new products and maintaining existing ones, working to keep existing customers delighted, striving to attract new customers, and driving to establish competitive advantage -- these all keep the heart pumping. My guess is that we are all accustomed to the "pulse."
• "Innovation" -- here's a loaded word for sure. Innovation has reemerged after a period of cost-focused survival as the number one priority for most product organizations. Innovation is at the heart of what we do, it's the payoff that gets most of us come to work every day, to bring new ideas to market in a way that fuels the success of our customers and our companies. Seems pertinent for us to talk "innovation."
• Finally, the "Product Portfolio" -- this is where the rubber hits the road. None of us have the luxury of being able to focus exclusively on introducing the newest, latest products to market. Whether or not we refer to it as such, we all manage a "portfolio" of new, mature, successful, struggling, and long-in-the tooth products. How we optimize our performance given this reality is typically the most challenging aspect of our jobs. The everyday trade-offs demanded by our portfolios is our reality and we hope to share ideas on managing this process.

So that's where this blog is starting: rooted in these concepts. We look forward to seeing what it grows into, with your participation. We hope you will find this to be a unique place to engage with peers and thought leaders on the full range of topics that encompass the idea-to-launch-to-ongoing support processes associated with maximizing innovation and managing the product portfolio. Ultimately we hope that you learn (and share!) a few things that make your team more successful and your job a little easier. Thanks for joining us!