Everyone has experienced issues with managing and prioritizing the resources between several products or projects. So how can we do it better? How can we prioritize and manage better the uncertainty and the life cycle of an organization’s products?
As part of a large organization we can easily see that there are a lot of cool new ideas, technology and infrastructure ideas and ideas how to make already existing business grow. It is good to have a constant flow of ideas and we don’t want to stop them. What we can do is to use a better approach to evaluate these ideas and the uncertainty around them.
We can split the ideas based on their uncertainty in three major categories which somehow also are related to product life cycle:
- Customer related ideas – Ideas which need better understanding of new customer needs and how to solve them – Is there a need? Does our solution cover the need?
- Sustainability related ideas – Ideas which need understanding of the new business and how to make it work – Is the business model sustainable? Is the market large enough? Can we create technology, infrastructure and operations that can support the delivered service/solution and still make profit?
- Growth related ideas – Ideas which need understanding of the current business and how to optimize it for better profit – How can we grow the current business? What can we improve in order to improve the profit?
Once we have the ideas split like this, we can get better visibility and understanding of how to better balance the organization’s portfolio according to its risk tolerance, strategy and product lice cycle. As an example resources can be split in:
- 20% for understanding new customer needs and how to solve them;
- 30% for developing profitable business models on already understood customer needs;
- 50% for optimizing existing processes and improving profits.
Be also aware that each category answers different questions and that’s why its progress should be measured by its own metrics. It is a common mistake for organizations to measure the progress on all ideas in the same way like revenue, profit, customer acquisition, no matter which category they are in. Make sure you set the right measure expectations for each type of ideas:
- Customer related ideas – measure the “Customer Love”, customer readiness to commit to the proposed solution;
- Sustainability related ideas – set metrics that track winning market share and rapid growth rather than profitability;
- Growth related ideas – revenue, growth, profitability and efficiency.
Splitting and working on ideas based on their uncertainty stage will provide you with better alignment around your organization’s strategy and should bring up the clarity of what is the most appropriate to be done for the specific stage.
Read more:
Jeff Gothelf & Josh Seiden, Sense & Responde, 2017
