The Product Pulse

For those of you with passion for the world of technology, today is without question a very sad day. Whether you are an Apple disciple (like myself), or someone with just a passion for technology, we all lost an inspirational figure in our industry and a remarkable human being. Of course the power of Steve was that he made the most innovative technologies accessible to everyone. The fact that my 75 year old mother (who loves her Mac) was one of the first people I called upon hearing the news of his death is testament to his legacy.

It is interesting talking to people today and the general sense that so many feel they lost someone they knew, although none of us have ever met the man. Few people in history have created that sense -- JFK, Martin Luther King, John Lennon, Jerry Garcia. In all these cases the person’s mission and vision were almost indiscernible from the person themself. In the case of Steve, every time you hold or interact with an Apple product, you get a visceral sense that his personal stamp is on every aspect of the product. Those products are the technological incarnation of Steve Jobs, and thus we all feel we know the man because we know the products.

I read a piece recently that discussed some recent research concluding that we "love" our iPhones. Through MRI scans of the brain, it was determined that iPhone use stimulates the same regions of the brain associated with feeling of love. Love is a strong word, but I can assure you that watching Steve at a launch event or playing with one of his creations certainly has brought joy to my life -- some of that joy will never be recreated in the same way.

We were blessed to have lived and experienced his genius. Over the past few months, anticipating this day, I will admit that at times I felt cheated out of coming decades of undiscovered joy that Steve would have brought us. But today we need to focus on the genius we were all able to witness and the path that he opened up for all of us. We were fortunate to be a part of it.

There were many great takeaways from my recent 2-day session with Pragmatic Marketing. Their expert team, including John Milburn, a friendly upbeat guy with 20 years of product management experience in the tech industry including long stints at Tivoli and VTEL, has more than 10 years of experience working with over 70,000 professionals globally in product management training.

Let's start with the most important thing: The FOOD at the AT&T Conference center on The University of Texas campus (where the class was held) is excellent! This information is neither here nor there but if you get the chance, check out the conference center or hotel as an option next time you're in Austin.

From a more business-oriented standpoint we learned:

• Product management's primary job is to know and speak for the customer.
  • The following quote (with a few modifications) by Peter Drucker was used multiple times: "The aim of product management is to know and understand the customer so well that the product or service fits him and sells itself."
• Product management's main responsibility is finding their market's problem. To do this, product managers should:
  • Contact customers (both their own and their competitors'), evaluators, and prospects.
  • Use various research methods including discovery (onsite interviews, focus groups, secondary research) and validation (surveys, choice models, experiments).
• Too often product management gets overwhelmed with tactical instead of strategic activities.
  • As Milburn noted in class, if product management doesn't do its job then the other departments will fill the void. Other groups have their own goals and ideas so if the product management team is not there to speak for the customer, an inside out product could result (one that solves a space problem but not a strategic one).
• By focusing on my customers' needs and wants, product managers can help their company build solutions that the market will buy, and what is profit if not the ultimate goal of any company?

After spending two full days getting my head stuffed with information (and my belly stuffed with yummy food), I was raring to go out and apply all these new tips and energy to my job. I was eager to see how much of what I learned in class was applicable to real life.

So far, most of the points ring true. I've spoken with multiple customers about their needs and concerns and gathered a lot of useful information. I have also met a good portion of the executives, sales, marketing, and development teams and worked with them on a hodgepodge of projects. It will be interesting to see how well I remember my role as Chief Customer Advocate once I get inundated with a lot of tactical stuff. I will try my best to focus on strategy, Milburn and Drucker!

I am new to product management, but there were people in my session with years of experience, and we each felt that Pragmatic Marketing taught us something useful. Just goes to show that no matter where you are on your career path, there are always opportunities to better understand the marketplace and your role in it. And, that information is almost as satisfying as the AT&T Conference Center's dessert bar!

It looks like this -- you have a portfolio of products to deliver, resources identified, and a staged process to move through the product development gates. Yet, shifting priorities, unexpected pull on your resources, and lack of visibility are impacting your product schedules. Welcome to Product Development. Now hit head against wall.

Resource capacity planning issues continue to plague the product development organization according to our newly published 2nd Annual Product Portfolio Management Benchmark Study. We've just reviewed this research at PIPELINE 2011, which was published earlier this year. In case you missed the event, I'd like to share some interesting takeaways.

Of the 922 product development professionals we surveyed at large product-driven companies:

• 57% indicated that one of their top 3 pain points was "too many projects for their resources" for the 2nd year in a row
• 42% find their schedules mostly or highly inaccurate.
• 50% said that managing changing priorities as business conditions change is their greatest risk.
• Only 25% rated themselves as good or excellent at resource capacity planning.
• Not being able to drive innovation fast enough was in the top 3 pain points this year and was identified by nearly 40% of respondents.

Is this sustainable?
Resources are finite and yet respondents reported a significant lack of visibility into capacity and availability, non-product roadmap demands on resources (ex. sales-driven "just do it" projects), and competing priorities.

Two of the people we interviewed via phone put it this way:

"The biggest pain point in my world continues to be execution. We are not doing a good job understanding resources that we have versus what it takes. The representation of existing resource is not great."
-- Manager of NPD, Scientific Products Company

"We do not have a good handle on our resource capacity, we could understand projects in-flight but did not do any forward planning because we do not have a handle on extra capacity, skills, etc."
-- Project Manager, Transportation and Energy Manufacturer

Find out what your peers are looking at in terms of solutions to manage their product portfolios. Download the full report: 2nd Annual Product Portfolio Management Benchmark Study.

Is it possible to be innovative and risk averse at the same time? Sure, I suppose so at some level but there must be a measure of calculated risk to achieve innovative breakthroughs.

Recently at PIPELINE 2011, we reviewed the research for the 2nd Annual Product Portfolio Benchmark Study with my colleagues at Appleseed Partners and OpenSky Research. We found enlightening contradictions in terms of innovation priorities and risk-averse cultures (or at least the perception of risk aversion by participants).

To give some background, we surveyed 922 product development professionals at large product-driven companies such as global manufacturers of a myriad of industries including technology, medical devices, consumer packaged goods and financial products among others. Our objective was to understand how they manage complex product portfolios, their most critical pain points and risks, as well as priorities for the coming year.

Here are a couple of interesting findings:

• Not being able to drive innovation fast enough was in the top 3 pain points this year and was identified by nearly 40% of respondents. Yet, 61% of respondents indicated that their organizations are risk averse to highly risk-averse on new product innovation.
• The results indicated that their greatest risk is managing priorities as business conditions change and the greatest pain point is having too many projects for their resources.
• Compared with a year ago, missing growth opportunities is a greater concern than cutting costs.
• 70% are refining their product development processes as a result of the recession.

I personally spoke to several R&D executives as part of the process to define our study and methodology this year. When asked whether the companies pulled back on innovation during the recession and whether their pipelines shriveled, most claimed that they maintained their innovation budget and did not slash it dramatically, therefore keeping the product pipeline healthy. Having said that, they all expressed a renewed focus on extreme prioritization in light of limited resources.

It seems that now more than ever, making data-driven decisions and calculated risks are important and filling the innovation pipeline is crucial. This report reveals that there may not be sufficient, accurate data and visibility into the product development process for prioritization and decision-making. That could make executives and managers feel risk-averse because no one wants to make bets without information. Are we over-relying on spreadsheets for one of the most strategic roles in the company?

Find out what your peers are looking at in terms of solutions to manage their product portfolios. Download the full report: 2nd Annual Product Portfolio Management Benchmark Study.

Not a day goes by in which I am not asked: Carrie, what do you see as the coming trends for product development companies? (Well, maybe a day or two passes without the question -- but with my travel schedule, I can be awfully hard track down.)

Given that, I thought I'd share with you the Top Five Trends for Product Development Companies that I've collected from gurus around the world.

1. Portfolio Management: It's not just for IT anymore
   It used to be that IT was the only part of the organization applying the portfolio management discipline to its decision-making process. No more. I'm seeing a tremendous uptick in the number of R&D and Engineering groups applying portfolio management to the product portfolio.
   
   Why? According to Dr. Bob Cooper, Co-Founder of Stage-Gate and acknowledged braniac, "in order to win when developing new products, you must do products right and do the right products." And portfolio management can help you do both. It's really a natural fit.
   
   
2. Ideas, I need more ideas!
   Here at Planview, we recently surveyed 900+ people in our 2nd annual product development benchmark survey. "Not being able to drive innovation fast enough" has moved up to a top 3 pain point -- from #6 last year -- neatly trading places with "cutting costs without cutting the future."
   
   Driving innovation by getting more ideas into the funnel, and using smart, collaborative software to manage these ideas, is critical as we all go from cost-cutting recessionary moves to growth- and innovation-intensive tactics in this new economic environment.
   
   
3. People, I need more people!
   Ouch. Year after year -- as validated in our benchmark survey -- "too many projects for our resources" is the dubious winner as top pain point that product organizations face.
   
   Companies must place greater emphasis on resource capacity planning as part of the investment decision making process. No longer can they afford to look at their product portfolio myopically based solely on financial impact.
   
   
4. Incremental will only get you incremental
   The economy's back: now, it's about the breakthrough ideas -- creating products that are new to the world and that will drive new revenue. Investing only in incremental innovation -- enhancements and modifications -- is safe, which is great when you're hedging your bets. Your competition isn't hedging its bets. Should you be?
   
   Smart product organizations strive for a balanced product portfolio, with resources (people and money) allocated both to breakthrough and incremental innovation. Just ask our good friends at Kalypso -- they'll point you in the right direction.
   
   
5. It's a green world after all
   Whether it's a household cleaning product or an airline, a product's brand is now encompassing the impact on the environment. Selecting the right offerings for a product portfolio now is as much about their sustainability as it is about price point, market timing, competitive impact, and more.
   
   But while we all want to buy the world a Coke and sing in perfect harmony, the reality is that companies must make intelligent portfolio selections based not only on their green impact but also on their bottom-line impact, and will be making careful tradeoffs to ensure a pipeline geared to deliver the optimal mix of both.

So there you have it, Product Pulse Peeps… the top five trends I'm seeing for successful product development companies. Tell me what you're seeing!

I recently commented on a blog post written by Chad Jackson of Lifecycle Insights that raised a question on the difference between PLM applications and PPM applications. It sparked an interesting debate amongst several folks in the industry. Here's my point of view:

PLM -- Product Lifecycle Management -- lives more in the design and engineering aspects of the product development lifecycle, which are at the core of the PLM value proposition. The Product Portfolio Management, or PPM, aspect is essential as it relates to improving product innovation, especially in the areas of understanding the front-end of the pipeline, optimizing the portfolio, building credible capacity plans and product roadmaps, and then managing effective project execution. This comprehensive approach really helps product development teams maximize their capacity to innovate with their inherently constrained resources.

Both PLM and PPM can take an end-to-end approach -- it just depends on what "ends" you're focused on -- and bringing the two together is vital, especially for complex manufacturing-type product organizations. PLM operates at the engineering execution platform level, managing detailed processes and the exponential number of design and engineering artifacts required to bring complex products to market. PPM operates closer to the business dimensions of the organization by focusing on managing demand versus resources, tying the total cost of development of new products (and more on that below), as well as maintaining existing products with revenue and margin those products create.

About "total cost of development," note that, from the Planview perspective, this does include all work. Whether it's packaging design work that needs to be completed prior to launch, the ongoing costs of maintaining products and making incremental enhancements, research on new manufacturing techniques, brand and competitive analysis studies that need to be integrated into the marketing campaign, or the actual development of the product, our philosophy is that ALL work that is necessary to get a product to market should be included as part of the total cost of development and thus factored into revenue forecasts and margin projections.

Of all the things I expected to get out of last week's Thanksgiving holiday, a lesson that underscores Forrester's concept of 'disruptive renewal' wasn't one of them.

The holiday saw me and my husband at my parents' home. We had rolled in late the night before, said our good-nights and trundled off to bed. 7 a.m. the next morning we were greeted by opera blaring through the intercom system, a holdover from the house's build in the 60s. Good morning, indeed. The fact that I knew to expect this wake-up from many years of experience did not make it any more palatable.

Fumbling for my morning cup of Joe in the kitchen -- center of the house and also location of the main control panel for the intercom -- I was startled to see innovation had sprouted from this thing that had so aurally colored my teenage years. Perched on a small, purpose-built shelf integral to the console was an iPod. The aria that had roused me from my beauty rest was not issuing from a more-often-than-not staticky FM station, but from a selected track on Apple's slick offering.

(This led me to the inescapable conclusion that my parents are hipper than I suspected, which somehow made me feel even older. Mom and Dad are shopping at the Apple store. What's next? Abercrombie and Fitch?)

It brought to mind the Disruptive Renewal report recently issued by Mark Mulligan of Forrester which he blogs about here. In it, he makes the argument that disruptive technology -- connected devices that empower consumers to make all new kinds of choices about how to interact with your products -- can spell the future for your company or ring its death knell.

Forrester calls this disruptive renewal, which it breaks into three stages: that of disruptive empowerment, when new technology enables customers to make choices about how to interact with products; discontinuous change, when they re-evaluate traditional products and expect more from them; and the critical split of transformational innovation or terminal obsolescence, when businesses either react by transforming to meet (or exceed) the expectation -- or fail to do so, and just plain fail.

The power paradigm, as we know, has shifted. What was once the domain of the manufacturer has irrevocably moved to the consumer. Smart vendors -- like the hero of our little tale, the manufacturer of the intercom system -- hear and respond. Those who don't are likely to get outmaneuvered, become sidelined and irrelevant.

Is your company in danger of this? Forrester tells us that that enterprise products are as impacted as consumer products -- you don't shed your expectations as you walk into the office, do you? But in an October 2010 survey of 200+ product strategists, Forrester found that only 26% think their companies are responding effectively to disruptive technology, and only 5% think they are responding highly effectively.

I get it: it's daunting. The power shift. The weeding out the good ideas from the bad. The sheer costs associated with transforming how you respond. But take another look at our hero -- an iPod adaptor, a shelf, a calculated risk that their target demographic and Apple's intersect enough to make it worthwhile (also supported by the Forrester report, by the way), and boom, they've catapulted themselves from 1960 to 2010 and into relevance, and ya gotta think it's worth it, don't you?

When you think about it, the aim of ANY organization is to maximize resources toward high value. That's easier said than done. What's important to one department may be less important to another. And often it's difficult to determine what's of highest value to the overall organization when multiple parties, each with crucial initiatives, are competing for the same limited resources.

Value and Risk scoring can help. Attributes for determining the value of a project or program may include items such as:

• Regulatory / Contractual Impact
• Socio-Political Impact
• Strategic Alignment and Importance
• Financial Return / Profitability
• Competitive Advantage Impact
• Business Operations Impact / Reliability / Efficiency
• Probability of Commercial Success
• Organizational and Market Leverage / Reusability / Opportunity Enablement

The above scores can be weighted, averaged, and compared with a risk score to come up with a single composite score. Typical risk areas to assess are:

• Technical Complexity
• Program Complexity
• Existing Skill Base
• Availability of people and facilities

Alternatively, some organizations simplify this into a single "Complexity" score that can be subjectively determined and set to low, medium, or high.

Having scores is not a cure-all however. The best alignment of resources should never be left to an automated system. Though a score can give a general hint at a project's relative value, ultimately, what is needed is dialogue.

Use your personal budget as an example. If you have limited funds / resources, and your spouse has important purchases coming up, and you do as well, you may need to have a discussion to evaluate tradeoffs and / or work together toward a creative solution. It is the same in business. Meanwhile, a well thought-out scoring system can help speed up the decision process.

For those of you following this space, you know that a few months ago I asked for your participation in a survey that benchmarks today's product portfolio management opportunities and challenges. To those who joined in: a big thank you! We had an overwhelming response with nearly 1000 participants this year.

I'm pleased to say the results are in and the report is ready to roll off the press. A few tantalizing tidbits to whet your appetites:

• 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,"
• "Not being able to drive innovation fast enough" was ranked as their 3rd greatest risk YET
• 60% indicated that their organizations are "risk averse to highly risk averse on new product innovation."

And that, my friends, is just the tip of the iceberg. Of course, all survey participants will receive a copy of the report in the coming weeks. But if you can't wait that long, attend my session at the free PIPELINE 2010 online conference this Wednesday, November 10th. You can sign up at www.pipeline2010.com.

See how you stack up against your peers, split out by industry, job title, revenue, and reporting structure. Does your organization take the lead, join the pack, or lag behind when it comes to taking risks, killing bad projects, and allocating resources? Now's the time to find out. And what next steps can you take to shore up where you need to? The key takeaways and recommendations sections may offer the guidance you're looking for.

Plus, all who attend my session (and of course all participants) will also get a copy of last year's report, so you can compare where we all stood a year ago to where we are now, and draw your own conclusions about what that might mean for 2011.

Hope to see you at Pipeline 2010!

When it comes to implementing time tracking for Resource Management, many companies disagree on the granularity at which they should capture time. Some feel that summary or phase-level tracking is adequate, while others want to track activity at the task level.

Here are a few tips that can help resolve this common dilemma:

1. Manage outcomes, not actions -- Use outcomes instead of tasks in your project schedules and timesheets. This gives a sense of freedom to people closer to the action; meanwhile, outcomes can be linked to milestones and prerequisite outcomes.
2. Manage results, not hours -- Similar to the above; rather than focus on people accounting for a 40 hour week, simply have them enter their time spent against specific outcomes or results, regardless of what it adds up to. This drives the focus toward analysis of where effort is being spent, and away from how many hours people are working, which can be a de-motivator.
3. Consider Daily Time Tracking -- It has been proven that daily time entry is actually easier, not to mention more accurate. People merely track time daily, then they can submit it weekly with greater accuracy.
4. Understand How Time Capture Relates to Your Goals -- Time capture can tell you what was spent in the past, and enables a basis for future estimates, so it has some impact on later allocations. And if time entry includes a contributor estimate of the time remaining (see the next tip), then time tracking plays an even more significant role in predicting resource availability.
5. Institute Contributor Estimates -- As a resource enters time against a specific outcome or task, they should always be sure to revise, if necessary, the remaining time. This can greatly enhance the accuracy of future allocations and thus resource availability.
6. Don't Reserve the Whole Library if You Only Need One Book -- If you allocate resources to phases or projects, they will appear to be booked for months ahead. There will be no way to realistically see their availability for a two-week window of work (or make alterations at that level). If you want to be able to make decisions at a granularity of weeks, then you must allocate resources at that same level.  Same if you want to assess plan vs. actual at that level.
7. Get Everyone on the Bus -- In order to make time capture work, all middle managers must be on board, especially if a culture change is required. Senior management must see to this, as it will take the entire organization's cooperation to make sure this is carried out effectively.
8. Understand the Reasons for Time Capture -- Understanding the situations where time capture is required can help you sell it throughout the organization. Time capture is especially vital in the following scenarios:

• When there's contract labor, in order to assess billed hours
• For government contracts -- it's the law
• For financial labor reporting, especially where regulatory oversight is present
• When people are splitting their time on multiple projects
• When paid overtime is involved
• When work is being charged back to other departments
• When you want to forecast cost at completion more accurately
• When you want to improve your estimating capability by looking at past trends

Collectively, these 8 tips can help you get past the potential roadblock of capturing time for greater resource planning and estimation.