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Strategicmanagement
The first article of this series of these two issues often leads to a is an idea whose time has come’.
defined product management as the weak product portfolio that ultimately Victor Hugo (1802-1885) French poet,
role within a business that has the delivers lower profit margins. dramatist and novelist. Product
responsibility for managing the product Portfolio management and its enabling ideas are conceived and ultimately
portfolio. It also outlined the three core process steps and roles mitigate or communicated through a variety of
processes of portfolio management, eliminate these conditions (Table 1). means and channels, often unique to
project management, and resource Portfolio Management, as defined, is a the industry or specific to a business.
management (figure 1), as well as the systematic process that manages the They can be conceived by consumers,
thirteen enabling steps and roles of the products of a business through all the customers, suppliers, employees
process (figure 2).Many organizations stages of the product lifecycle and is or by engaging an external product
do not have a systematic process in guided by the strategic intent and profit development service. Product ideas
place to manage existing products objectives of the business. are generated through surveys, focus
through their lifecycles. There is also Portfolio Management Enabling groups, individual contemplation,
a lack of systematic processes for Process Steps and Roles: ideation sessions or research, and are
selecting and managing products to 1. Idea screening communicated through documented
be phased in and phased out of the ‘There is one thing stronger than reports and studies and physical or
product portfolio. The combination all the armies in the world, and that electronic idea submittal processes.
March 08 www.bus-ex.com 13
No matter how the ideas are initially portfolio. It is also critical that a more detailed investigation of the
conceived and communicated, all product managers manage each product idea that results in a clear
must be first subjected to an initial product through its entire product definition of the product, its value
screening step. The initial evaluation lifecycle. This includes existing proposition, its target market, the
of the conceptual product ideas that products as well as new products to voice of the customer, the competitive
are submitted to the business occurs be phased in and mature products landscape, technical feasibility and
during the formal Idea Screening scheduled to be phased out of the the supporting financial plan.
Review. Here, they are evaluated and product portfolio. The content of the project proposal
considered based on a series of “yes” For the ideas that address a need form will vary depending on the type of
or “no” criteria, such as: in the current product portfolio, the project being proposed—a completely
• Strategic fit: Does the idea product manager works with the new product, line extension, packaging
align with the strategic intent of the sponsor of the idea to complete a change, change in manufacturing
business? project proposal form. The objective source, divestiture, or product kill.
• Market attractiveness: Are the is to expand on the criteria used in Completing the project proposal
market size, growth, and opportunities the idea screening review. Additional form for the idea requires
attractive? information is obtained and detailed significantly more effort than the
• Technical feasibility: Is there a for: initial idea screening and the
reasonable likelihood that the product • Strategic alignment product manager screening. Part
can be developed and produced? • Project feasibility of the reason is that the necessary
• Disqualifying variables: Are • Magnitude of the opportunity inputs are required from multiple
there any known legal, regulatory, or • Market attractiveness sources and at a greater level of
environmental issues? • Product advantage detail. We recommend that this task
Financial criteria and hurdles are • Ability to leverage the businesses be assigned to a cross-functional
not part of the initial idea screening resources group that will most likely form the
process. The ideas having potential • Fit with business policies. nucleus of the project team if the
merit are then distributed to the High-level financial criteria and project is approved.
appropriate product managers for hurdles are now considered and The project proposal form will be
further evaluation. included as part of the product used as the basis for the next step
2. Product manager managers’ screening process. in the process, the evaluation, which
Product managers are responsible 3. Project proposal will be conducted by the Portfolio
for refining the product ideas that It is in the project proposal stage Management Committee. This group of
pass the initial screening review and where the business case for each senior executives decides whether the
make their decisions on whether to idea is developed and documented. idea should progress to the next stage
further develop an idea based on The project proposal form is used for of development and, thus, become a
the specific needs of the product this purpose and typically involves formal project within the business.
14 www.bus-ex.com March 08
Strategicmanagement
Donald McNaughton, an Oliver Wight principal, is a consultant and educator providing guidance on the design and
implementation of effective business processes, including sales and operations planning and product management. March 08 www.bus-ex.com 15