Summary: Product portfolio management is concerned with selecting the right products to develop, making trade-off decisions, and generally maximizing the value of the product portfolio. It is an important activity in organizations that have more than one product, but it is also an activity that is difficult to learn about. I sought to find an expert who could discuss what is really involved. That expert is Carrie Nauyalis, the NPD Solution Evangelist for Planview. Carrie began her career at Planview implementing portfolio management solutions and training clients around the world. She has the experience and knowledge to know what is involved in product portfolio management. She is also well-versed on many other new product development topics and is an active blogger, public speaker, and guest lecturer.<br> In this interview, you will learn…<br> <br> * What portfolio management is,<br> * the goals of portfolio management,<br> * constructing and managing portfolios, and<br> * common mistakes you can avoid.<br> <br> Practices and Ideas for Product Managers and Innovators<br> Summary of questions discussed:<br> <br> * What is product portfolio management? It is the discipline and framework for applying the two most precious organizational resources—your people and your money—to get the greatest value out of your investment. If you think about portfolio management like you do with your 401K, it’s the same concept, but you’re applying it to innovation. It’s about making tradeoff decisions and balance decisions to achieve your corporate or innovation strategies.<br> <br> <br> * What are the goals of portfolio management? The primary goal is value maximization. Dr. Cooper and Dr. Edgett of Stage-Gate fame use that phrase — value maximization. We have don’t a ton of research and the biggest pain point is too much work for resources (people). That’s actually a portfolio management problem. You could be looking at one single project or product myopically and saying it is a good idea without the context of a larger or broader portfolio. So you’re missing that perspective of how that one idea fits in the greater good – the portfolio of projects. Some things to consider – do we already have multiple products in that space, will it cannibalize something else, are we hitting one market too hard and having a gap in another one? Many of these questions deal with the need to have balance in a portfolio, for example, reasonable percentages of resources on breakthrough projects vs customer satisfaction projects.<br> <br> <br> * What are the ways to construct a portfolio? This is one of those questions where it depends. There’s no one right answer and it really does vary pretty widely. Automotive or pharma, which have really long cycle times, versus a CPG company that has extremely short cycle times, will have portfolios constructed differently. In most cases, the portfolio is a mix of things. And, you can have multiple portfolios with a project showing up in different ways so that different people in the organization can see it the way that they want and how they think about it. There are top-down portfolios with goals set by senior leadership. As an example, a goal may be to deliver existing products to a new market- to enter the new market and grow revenue by X percent. It’s a conscious decision at the executive level. On the flipside is the bottom-up approach. That might be a situation where product features are driving a particular product, and customer requests are driving features. There are also dozens of other portfolio types. You might have a portfolio by region, by brand, by product line, etc.<br> <br> <br> * How are portfolios managed and controlled? It depends again on the business and the frequency, but a trend is establishing some kind of a project and portfolio management office. They call them Centers of Excellence. Having a place for the discipline, for the people, process,
