My previous post was about a couple of tools to address the top three pain points in the management of product portfolio according to the Third Product Portfolio Management Benchmark Study by Planview (http://www.planview.com/m1/pd/3rd-product-portfolio-management-benchmark-study-hph).
- Too many projects for available resources,
- Not being able to drive innovation fast enough,
- Decisions that go back and forth, get made late or ineffectively.
In this post, I will address the second pain: Not being able to drive innovation fast enough.
Eric Ries introduces two concepts in The Lean Startup (http://theleanstartup.com):
- Minimum Viable Product (MVP) – a product that is aimed to test fundamental business hypotheses and learn from. It is not (necessarily) a prototype or a beta version of the product.
- Pivoting – making changes to product concept based on results from success or failures of MVPs.
Most organizations go through a linear development cycle, which goes something like:
- Define business model, business goals, requirements, target market, product/service to be offered and its value proposition
- De-risk technology, develop conceptual design, gather market intelligence
- Develop product/service
- Prototype/beta testing
- Transfer to production, crank-up marketing engine, operationalize
- Focus on sales
The problem with this approach is two-fold:
- The product/service is market-ready only after a lengthy cycle. Depending on the complexity of the product/service, the cycle may take anywhere from a few months to a few years.
- There are few opportunities to experiment with market acceptance and change direction (if necessary)
The importance of multiple cycles to reach the final product is not a new concept. Before Ries, many others made the same argument and gained considerable traction (eg. W. Edwards Deming). However, this appears to be a difficult concept to put into practice. We tend to get lost in the race to the finish line and forget that sometimes a detour is the smarter path to the end-result.
My experience, which is learned the hard way, shows that these MVP-pivot cycles need to be explicitly introduced into development process. Each cycle needs to include a decision point where the hypothesis of the MVP is tested, results analysed and one of the following decisions are made:
- Go – all is well, hypothesis is validated.
- Pivot – hypothesis is not validated but lessons-learned indicate new opportunities.
- No-Go – hypothesis is not validated and we don’t know what else to do.
I welcome your comments on my blog. If you have specific questions, please feel free to contact me at email@example.com.