In the first part of this two-part series, “How to Get Away with Murder: Killing Projects Before They Ruin Your Portfolio” I encouraged innovators to courageously commit cold-blooded murder of the ideas and projects that do not achieve the objectives and strategies of the product portfolio based on thoughtful and calculated portfolio criteria all in the name of maximizing revenue. The second part of this murder plot, and the factors that are so commonly forgotten, are resources and resource management.
In product development and innovation, human resources are finite. But so often, capacity is not considered when giving projects the big thumbs up. To what extent are you considering the availability of your people before you let those ideas float past the gate?
The Fourth Product Portfolio Management Benchmark Study found a whopping 77 percent of participants look at only financial evaluations when determining criteria. And this makes complete sense because if the intent of a new product development project is to make the company money, we must pick projects and products that drive financial impact.
While financials are critical, they are not the only evidence to be considered in this murder case. According to the 2016 Resource Management and Capacity Planning Benchmark Study for Product Development Leaders, only 69% of lower maturity companies never or “sometimes” consider resource capacity in the project approval process. This is mind blowing! No matter how potentially profitable, competitively viable and strategically aligned the product, it simply won’t make it to market without the right resources with the right skills dedicated to work on it. Plain and simple: resources make or break even the best idea! Resource availability kills innovation. This should be a major consideration when determining which ideas to tackle.
Do You Have a Funnel or a Tunnel?
With every idea that is considered, you must have both money and people to move forward – requiring a solid resource and capacity planning capability. If you say yes to every idea, you have a tunnel instead of a funnel. The funnel is intended to narrow so the really good ideas get pushed out of the commercialization process, leaving only the best to easily flow through the narrow spout. Murder is a necessity for successfully launching products.
You must first align each idea to strategy to see if there is a fit. The next step is to determine revenue potential. The third and critical next step is to ensure you have the right resources available to actually execute the project. (Note the emphasis on “right”). Not every resource you have is qualified to work on every project. You must be specific about the exact skillset to rock that particular requirement. If not, you must look elsewhere and consider those costs in your evaluation.
I invite you to listen to a real world story of how Flowserve is consistently delivering products on time leveraging capacity planning and resource management.
I’d like to hear from you. What practices do you have in place to ensure your idea-to-launch process is a funnel instead of a tunnel? Share by leaving a comment below.
Photo by: Toby Hayman on Flickr