Wednesday, February 10, 2010

Balancing four portfolio elements produces successful product launch

By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA

LIVE Front End of Innovation Europe 2010

Topic: Portfolio Planning Dos and Don’t: How to Launch a Successful Product

Speaker: Anthony Reese: Former Director, Mobile & Entertainment Portfolio Planning, PLANTRONICS

Launching a successful product depends on the way you structure your portfolio. Anthony Reese managed Plantronics with a framework and applied it to the development of Blue Tooth.

There are four portfolio elements:

1.) Customer Needs
2.) Organizational capabilities
3.) Channel and market cadence
4.) Organizational capacity

You add value by balancing each of these against the other. The way to choose to launch a product or not is by balancing these four elements.

Think about your customer needs:

1.) The core problem to see.
a. What the customer wants
b. Future needs
c. The 2 – 4 X factor list size
d. Mix of excites us or the WOW factor
2.) Identify and focus on the top priority.

Organizational Capabilities include:

• Strategize the vision
• Brand history
• Organizational structure
• Special knowledge and skills
-Core competencies vs. Differentiated competencies

Know your market channel and cadence.

• Identify the major players
• Number of channels
• Reset /Planning Windows
• Competitive presence and movement
• Breadth of offering

Here is an example. Every two years is the renewal term of phone plans in the U.S. Bluetooth headsets are replaced every year because customers lose them. This determines when to enter the market with a new product.

What is the cadence for Apple? Each year new products are unveiled at MAC world. This sets the timing for the portfolio.

Breadth of offering means that their distribution channels only want to limit the number of headsets that they offer to their customers.

For organizational capacity, these are the areas to keep in mind:

• Development Methodology
• Development Capacity
• Development Cycle Time
• Functional Equivalence

You need to build alignments between the company and the customer. Sort the problems you want to solve. Find efficient solutions; look for the 80/20.

Synch the pace both in the development area and in the market area. Evaluate customer and channel cycles, development cycles, and their established cadence between capacity and the market. Ask yourself, “At what speed do we need to be running?”

Your must strike a balance between all four portfolio elements.

Anthony then presented us with a case study for the Voyager Pro headset. First they had to figure out the core problem to solve. What does the customer want now? They could only do 2 or 3 programs, but the roadmap showed too much and they needed to resize their portfolio. How do they select the 2 or 3 that they can only do?

They asked themselves, “What makes headsets successful?” One product sells lots of units. Perhaps they could suggest improvements to the best seller? Do they need to throw everything out and start from scratch?

They made their decision based on organizational capacity. A premium high performance headset makes sense. They bought the precursor. Now who are the heavy users of headsets? Heavy users are truck drivers, taxi drivers, and professionals who are on the phone over three hours per day.

In terms of market and channel cadence, it is a challenge to be in a consumer space with competitors such as: AT&T, Best Buy, Target, Wal-Mart, and Sprint.

AT&T almost killed the headset, said they did not like it. However, Plantronics still moved forward with the headset because they had alignment. AT&T said they would not buy the headset. Plantronics had to ask themselves, should we do this, even without AT&T? There was a 50:50 chance they would change their minds.

However, some carriers asked, “Can you deliver these three months earlier? Their reasoning was so it would fit their reset cycle/planning window

Now it is time to evaluate their organizational capacity. They can only do 2 or 3 development projects. They considered how well it fit and the balancing requirements among all four portfolio elements:

1.) Customer Needs
2.) Organizational capabilities
3.) Channel and market cadence
4.) Organizational capacity

The project stayed in the portfolio. There are lots of ways to fail, but they used these four elements for alignment and balancing. You must strike a balance.

Success was achieved and they received many awards.

No comments:

Clicky Web Analytics