Reducing risk and increasing productivity is always top-of-mind, especially in an uncertain or unstable environment. Organizations must constantly adapt through strategic decision-making to ensure success with minimal risk or cutbacks.
One essential part of this adaptation strategy is building a strong product portfolio; this requires a unified approach to aligning portfolio objectives with the overall business strategy, not just within a single team or function. It’s an “all hands on deck” scenario.
In a recent webinar with Planview, Forrester covered some best practices for effective product portfolio management—with a customer-centric approach. Let’s cover Forrester’s four core principles of product portfolio management and how they can be applied most effectively.
How High-Performing Organizations Stay Ahead of Uncertainty
Organizations that lead the pack have two things in common: an airtight alignment between investment spending and business strategy and a formal scoring model in place to determine any in-market product changes.
High-performing organizations are experts at prioritizing product portfolio alignment with their business strategy through these four processes:
- Continuous planning and replanning
- Broadly applied Lean and Agile processes that are strictly followed
- Implementing a robust tech stack that helps teams visualize change
- Following a framework for scoring, ranking, and prioritizing products, including whether or not to retire or kill a product
These processes help even the largest companies better understand current product portfolios and identify any gaps teams need to bridge to optimize business success and nurture continuous growth.
The Anatomy of Customer-Centric Product Portfolio Management Framework
Forrester states that four fundamental principles should influence the design and management of any product portfolio. Each of these principles introduces opportunities to ask important questions around the why, how, and where of a product. This four-part model consists of the following:
This principle gets you to ask “why.” Why should the product or portfolio exist?
That strategy should already target specific customer needs, and the portfolio strategy should support those needs, aligning the product function with its destination. Strategy requires organizations to define, focus, and plan the intended customer value and required functions that match the team’s goals.
Visualizing strategic alignment is essential for organizations to maximize overall portfolio value and differentiation.
This principle gets you to ask “how.” How connected should the business’ portfolio products be?
To answer this question, teams should determine the portfolio’s design, the level of integration between the portfolio mix, and the commercial readiness of the products. Only then will you be able to best deliver each portfolio’s unique capabilities. Orientation requires organizations to architect, integrate, and evaluate the different ways products can connect to find optimal success in commercialization.
The answer to this question should align with team goals and customer needs.
This principle gets you to ask, “where.” Where are the gaps in delivering portfolio capabilities to buyers, if any?
To meet buyer needs and ensure products resonate with audiences, organizations must assess how well their product capabilities map to the required portfolio capabilities. Identifying and prioritizing these discrepancies or imbalances is an essential part of this process that helps a business go to market with greater confidence.
Organizations can better understand where gaps exist and their potential impact by cataloging, mapping, and optimizing capabilities across the portfolio and its product mix. With that knowledge, they can take the most informed corrective actions to meet the customer’s top needs.
This principle gets you to ask “how” once again. How should investment allocations be adjusted?
Establishing a consistent process for all teams to follow that helps guide clear, fact-based decision-making on portfolio investments is key to aligning investments with portfolio objectives. Investment requires organizations to estimate, prioritize, and align their investments so they can adjust as needed.
This analysis can drive continuous improvement when performed at regular intervals by revealing more significant opportunities to increase portfolio value, leaving little room for lower-value ideas.
Bridge the Gap Between Product Strategy and Delivery
Organizations need a continuous analysis process for product portfolio investment from innovation to launch. To effectively manage a customer-centric product portfolio using the principles we have outlined–strategy, orientation, balance, investment–there are four core capabilities every team and organization will need to implement:
- Collect and analyze innovation at the front end to best inform business decisions
- Provide direction through ongoing planning, scoring, and prioritization
- Add speed through agility in project management and resource allocation
- Inform next steps and beyond through in-depth insights into post-launch activity
By maintaining team-centric collaboration and continuous improvement through each product portfolio, organizations can accelerate their time-to-market and increase team efficiency in a way they wouldn’t be able to otherwise.
Watch the entire on-demand webinar with Forrester today to learn more about product portfolio management and see real-world examples of how Planview has helped organizations adopt a similar framework to discover more business success.