Solution strategies set intentions. Product roadmaps define the execution plan. Governance ensures these investments stay on track. One of the main failures of the Airbus A380 was not that the product idea came to life — it was that there was a lack of product roadmap governance that should have shown clear indicators the strategy was headed for a nosedive.
Should have being a key point, because Airbus is not alone in governance issues. A 2019 research study found that identifying data-driven firms were on the decline: from 37.1% in 2017 to 32.4% in 2018 to 31% in 2019.
As strategic business consultants — focused on supporting clients’ in improving revenue performance — we at Mereo have witnessed this first and foremost in recent years. The major offenders have not been in sales and marketing either, where metrics, pipeline and demand generation reviews abound and are, anecdotally, probably more tuned-in to the data and related analytics. Rather, we have found a lack of data-driven performance and governance most obviously in the product management space.
Most product management teams fail not in the development of a product roadmap but rather in its communication and execution, and rarely are there continuous and measurable governance actions to ensure effective remediation when execution begins to waiver. What makes this an even larger misstep is that research and development is often one of the largest investment areas. That means organizations are putting great sums of money behind solutions that live on a map that has been crumpled up and tossed in a drawer to never see the light of day again.
How can your product management team make better investment decisions? Follow along through these three core concepts for some direction.
The Continuous Investment Decision Process
Typically, the product strategy and roadmap lifecycle repeats at least annually, often due to alignment with the corporate budgeting cycles and more often as short-term roadmaps need updates.
In this lifecycle product management leadership should:
- Continually gather market inputs by performing an environmental scan.
- Assess and reassess the opportunities — defining and redefining your goals and objectives.
- Chart the path forward, updating strategies and roadmaps as needed.
- Execute those plans implementing your strategy.
- Monitor and measure your progress against goals, tracking key metrics and doing remediation as needed.
This last step is often difficult as most companies do not clearly define metrics for success of these investments in the first place.
Portfolio Rationalization Opportunities
It is important to always keep an eye on opportunities for portfolio rationalization. This is the area where there is often the greatest opportunity to improve efficiencies throughout the organization and to re-purpose resources to accelerate higher priority investments. It is not just about end-of-life; it is about finding ways to be more efficient because your resources are precious, and margin is critical.
Consider these points during each planning cycle:
- Sales volume, revenue, and profitability performance
- Impact of eliminating one offering on overall offerings
- Possible functionality synergies across various products
- Customer need or competitive advantage opportunities
- Potential resource allocation shifts where delivered value will be higher
Doing this without emotion means companies need to separate capability from technology. Often a company can change underlying technology and continue to deliver needed capabilities to the end users. In software this is often thought of as re-platforming. In hardware this is often an exercise in Bill of Material rationalization.
In one example, an $8 billion high-tech electronics manufacturer was plagued with high cost of materials and constant supply shortages impacting the manufacturing floor. The design organization specified unique components and requirements for each product without considering the broader portfolio of components in use. The manufacturing engineering team and purchasing team created a large display along the manufacturing floor with all the components required for each assembly and specific displays showing all the variety of specific components like capacitors and connectors.
The designers were invited to tour the floor, and while there they realized they could use common components from one assembly for another. Over a six-month period, the number of parts was reduced by 11% and shortages dropped 22%. Procurement costs improved as volumes of individual components increased, providing more purchasing power and better supply security.
Practice Product Management Governance
Companies need to institute a strong governance practice and culture to ensure a return on investment and to facilitate proactive and reactive response to market and technology changes.
But what is governance in practice for a B2B organization? It is helpful to think about governance in four key areas:
Validate that your processes are being followed and especially that constituent groups inside and outside the organization are contributing appropriately and being updated regularly.
Process governance focus areas include:
- Are processes and mechanisms in place for optimal customer and partner inputs into the strategy and roadmap?
- Are clear success metrics defined for each release (i.e., development, market and business metrics)?
- Are regular processes in place to communicate any changes in content and delivery schedules?
Keep a firm hand on a regular cadence of each type of activity critical to creating, launching and successfully selling solutions.
Activity governance focus areas include:
- Is a regular cadence of cross-functional planning and status reviews in place?
- Are communication activities occurring regularly to inform cross-functional organizations on release status?
- Are client advisory boards (CABs) in place and engaged to gather prioritization and strategic inputs from the target market?
Think about both metric establishment and the processes needed to inspect those metrics.
Performance governance focus areas include:
- Is overall progress status by release measured?
- Are metrics for success defined?
- Development / engineering-based
- Business / market-based
- Predictability metrics (e.g., performance of content and date delivery against goals)
- Are roadmaps available for a rolling period of 9 to 15 months in all key product / solution areas?
Consider how you inspect each key area on a regular basis. This includes not just the inspection of financial metrics but inspection of artifacts and activities as well.
Inspection governance focus areas include:
- Roadmap reviews and status checks
- Engineering metric presentations and remediation
- Business metric reviews and remediation
Unleash Sustainable Revenue Performance
Taking the time to appropriately create and execute effective product roadmap governance is one of the most critical aspects of continuous improvement and assurance of return on development investments.
At Mereo we have served hundreds of B2B companies with strategic governance support to drive sustainable revenue performance. Is your organization charging ahead without a clear map? Contact us to get started.
For more direction on launching a product efficiently and effectively, access the free Mereo eBook, The Product Launch Blueprint.