Actively Manage Your Products, or Fail

Organizations have limited amounts of money available for investment, and that investment has to generate a substantial return—achieving all of the goals and objectives that have been set for the reporting period, while also moving the organization closer to achieving its long-term vision. There isn't room for investment dollars to be wasted on initiatives that don't contribute, or even on projects that contribute in a less than optimal way. That's where the integrated product portfolio comes in.

It informs the decisions around the product portfolio by allowing leadership to ensure:

• Investments are focused on innovation and growth—that's the only way corporate performance can advance without throttling. (Cost reduction is important at times but will always have limited upsides because all costs have a floor.)
• Investment is balanced across different elements of the portfolio. Investments must be distributed across products at different stages of the lifecycle—ensuring those products that are currently enjoying high levels of adoption and sales remain attractive to fund the development of new products, while ensuring that declining products remain profitable by limiting investment. The same logic applies to distributing investments across different market segments and geographical regions.
• Project managers and teams have access to the full context of why their initiatives were approved. Instead of simply having a high-level explanation of project purpose, the teams can see how their product or service fits into the enterprise product portfolio and how their work directly benefits the organization's ability to succeed.

Of course, all of this is dynamic. Modern business is continuously evolving as technology advances, customer expectations increase, and competitors drive innovation. The product portfolio must therefore be managed actively, ensuring not only that each product or service is accurately represented in terms of current positioning, but that future directions and plans are realistic in that product's environment. Each individual adjustment will also impact the overall balance of all products or services, requiring further adjustments to retain an integrated product portfolio that distributes opportunity, risk and effort appropriately.

This relationship between product and project portfolio management is at the heart of why the product portfolio must be actively managed—continuously adjusting it to reflect the current operating and competitive environments, and positioning it to optimize the ability to respond to every opportunity and threat. The integrated product portfolio defines the plans, positioning, and expectations of all the organization's offerings—both individually and collectively. The project portfolio represents the work that is being undertaken to deliver on those plans, maintain or enhance the positioning, and fulfill the expectations. Success only comes when both of those aspects are aligned.

Organizations recognize that maintaining alignment in the project portfolio requires ongoing adjustments, and successful organizations have built that approach into their strategy execution approaches. They maintain an actively managed portfolio backlog, conduct planning reviews on at least a quarterly basis, and practice business agility to ensure the need to adjust goals and objectives is identified as early as possible.

That approach must now be extended into the product portfolio. Product owners should already be aware enough of the markets their offerings operate within to identify as changes are starting to occur. They must also be able to interpret the implications of those changes—does the product need to evolve and adapt, does it need to be repositioned, or can the change be ignored as insignificant. Organizationally, all of those ongoing adjustments must be brought together, evolving the entire integrated product portfolio and ensuring it always represents the current situation, opportunities, and threats for all products in all markets.

Anything less risks failure.