My product management toolkit (14): Product Portfolio Planning

One of the key things that I’ve had to learn over the last couple of years is how to best manage a portfolio of products. When I started out as a product manager, I could focus on a single product and was fully accountable for the performance of that product. However, as time has gone by, I’ve found myself becoming responsible for a range of products, and having to make tough trade-off decisions between them. Being able to manage a portfolio of products is therefore an important skill to have in your toolkit as a product manager:

  1. What is a product portfolio? – A set of products, services or features that a company offers and which often need to be managed simultaneously.
  2. What is product portfolio management? – Managing a portfolio of products is all about a balanced allocation of resources – people, time, money, hardware, etc. – to achieve business goals. It’s all about “value maximisation” as new product development expert Carrie Nauyalis called out in a recent podcast.
  3. Types of product portfolio: top down – “Top down” portfolios are typically more strategic, with a ‘programme of work’ at the top (see Fig. 1 below). For example, the business might be looking to deliver products or services into a new market. These are often conscious decisions, taken at the executive level of an organisation.
  4. Types of product portfolio: bottom-up – With “Bottom up” portfolios, the strategy is often coming from customer requests – both with regard to B2C and B2B products or services – and tends to be more tactical. For example, customers asking for specific features to meet their needs or to solve their specific products.
  5. It’s all about analysing trade-offs and decision making! – Some product people use a Stage-Gate approach to create and manage a balanced portfolio, and to help make tough prioritisation and trade-off decisions (see Fig. 2). I personally don’t use the Stage-Gate approach, since I work in more a iterative and continuous fashion, but to me it’s all about linking to key goals and results that the business is looking to achieve, and making hard trade-off decisions on the back of these data points (see Fig. 3 below).
  6. Use data to make your trade-off decisions and evaluate product portfolio performance – As the aforementioned Carrie Nauyalis explained in the podcast, the ultimate role of having a product portfolio is to analyse. Looking at performance of the different products within a portfolio and understanding how they each attribute to key business goals. Reason why I believe it’s critical to include metrics in your product portfolio roadmap – you can see a good example of this in Roman Pichler‘s template for a goal-oriented product portfolio roadmap (see Fig. 3 below).

Main learning point: I don’t feel like you need a whole new toolkit just to manage a suite of product or services. What I’ve learned about managing product portfolios is that it brings difficult trade-off questions to the fore more. Having a clear, goal-oriented product portfolio roadmap will help you in analysing  trade-offs better and making well-informed decisions.

 

Fig. 1 – Top down vs Bottom up approach to portfolio management – Taken from: https://www.sopheon.com/top-down-vs-bottom-up-resource-planning-which-is-better/

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Fig. 2 – The standard Stage-Gate approach to product innovation – Taken from: http://www.stage-gate.com/resources_stage-gate_omicron.php

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Fig. 3 – A goal-oriented product portfolio roadmap – Taken from: http://www.romanpichler.com/blog/the-go-portfolio-roadmap/

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Related links for further learning:

  1. http://www.planview.com/solutions/product-development/product-portfolio-management-for-product-development/
  2. http://www.prod-dev.com/portfolio_management.php
  3. http://www.stage-gate.net/downloads/wp/wp_13.pdf
  4. http://www.romanpichler.com/blog/the-go-portfolio-roadmap/
  5. http://www.productinnovationeducators.com/blog/tei-084-product-portfolio-management-with-carrie-nauyalis/
  6. https://www.sopheon.com/top-down-vs-bottom-up-resource-planning-which-is-better/

 

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