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Evaluating Product Portfolios—Saying NO To Good Ideas

As a product line manager in charge of several software products, my job is challenging. It’s a constant balancing act around delighting the customer, minimizing risk, maximizing revenue, leveraging resource availability, and about 12 other considerations. While I quite often think the pain of having to make difficult tradeoffs between good ideas, I have never had the opportunity to “measure” the portfolio that I didn’t choose. That is… not until I got to participate and help facilitate a Discovery Lab called Reinventing Portfolio Management at this year’s PDMA Global Conference in Phoenix. Let’s look more at evaluating product portfolios in cases where you end up saying no to good ideas.

The session was led by SmartOrg‘s Co-Founder, President, and CEO David Matheson who is a regular lecturer at Stanford on the topic of Strategic Portfolio Management. In his brief introduction to the workshop, David introduced the dice game. While the portfolio simulation sounded interesting and fun, I had no idea how enlightening it would be. While I don’t think we “reinvented” portfolio management, I certainly gained a perspective on portfolio management that was new. And after 16 years in the portfolio business, new is uncommon, and delicious.

Through the dice simulation, we were tasked to pick a portfolio of R&D projects to invest in. But that left a collection of projects not included in the selected portfolio but that still clearly had some sort of value. Before evaluating the selected portfolio, we were told to roll the dice to calculate the success and value of the unselected projects. For my Type-A personality, this was a little unsettling on two fronts:

  1. It’s very disturbing to me to think that a “roll of the dice” could be considered an accurate metaphor representing my chances of success with my portfolio. SURELY, I was a much better product manager (with better assessment criteria) and way too controlling to leave things up to chance, right? Statistically speaking, given the number of project and product failures, it can be a less than certain game, especially with new technologies.
  2. The second thing that was so disturbing to me was the fact that there was so much value in the projects that didn’t get selected. When you think of that value going unrealized, it can be a bitter pill to swallow. I’ve never actually considered calculating the potential value associated with my product backlog. Ouch.

I think that the dice simulation really opened my eyes about the real risk and uncertainty we deal with daily in portfolio management. It seems that this dice game gave everyone in the class (see picture below — such a good looking group!) a different insight or nugget to take home, based on the dynamics of their particular organization. Check out the post-class review video for some of those takeaways.

evaluating product portfolios

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Carrie Nauyalis
Written By

Carrie Nauyalis brings her passion, experience, and thought leadership in the product portfolio management industry to her current role as Executive in Residence at Planview. As an EIR, Carrie is collaborating on market research and sharing best practices with Planview prospects and customers. She is an active speaker, MBA guest lecturer, blogger, and vlogger on all things PPM, with warm places in her heart for State-Gate®, innovation, calculating ROI, and agile. Carrie spent 19 years with Planview in various positions, including global consulting, product management, and as the solution evangelist for innovation and new product development. Prior to Planview, Carrie held multiple systems engineering positions with Emerson Process. She earned her Bachelor’s degree from Truman State. Twitter: @PDPMprincess