January 11, 2011 §
I was invited by the Technology Association of Georgia (TAG) to join a panel tomorrow on issues related to Product Management and Strategy. The event is postponed due to the snow and ice, but the weather won’t deter me from commenting on what I think is a very worthwhile and timely topic. Changes in the business environment, and particularly within the technology field, are imposing new demands on both functions, and together, they can navigate them more successfully. We hope to reschedule the session soon, but in the meantime, here’s a summary of my point of view on the topic …
There is a fundamental gap between business owners’ requirements and the resources actually available to deliver them. Strategic planning processes often fail to pick up or resolve this issue, and produce plans that can be unrealistic in terms of timing and resources – business owners later gripe that their failure to deliver against plan is the fault of Product or Engineering.
To compensate, business owners argue for dedicated Product and Engineering teams, which are often prohibitively expensive, or submit aggressive ROI models to ensure they are allocated the resources they need from central planning. But even if resource allocations are “optimal” for a certain point in time, product innovation and development are not static processes given fluctuating market needs, unforeseen competitive threats, and unpredictable supply chains. The average PLC is shortening and is more susceptible to disruption than ever before. Companies and industries stuck in long planning and development cycles must either defy the odds and predict the future, or develop product that may be on the path to obsolescence even before it’s released. Recall how Microsoft’s Kin was killed 2 months after launch in favor of Windows Phone 7 devices, following a 2-year development cycle initiated with the 2008 acquisition of Sidekick maker Danger. Given this backdrop, I see several developments:
- Shortened planning cycles (e.g., quarterly, from annual), or more likely, continuation of the annual planning process, augmented with lighter monthly or quarterly refreshes.
- More iterative strategic planning processes that better align business plans with centralized resources (which means the process needs to start in Q3, rather than the all-too-common mad dash in Q4).
- Continued adoption of the Agile SDLC method – competitors whose business models depend on massive code pushes will need to challenge the status quo (note how Microsoft, taken to school by Google Docs, is preparing to launch Office 365, the cloud version of its popular software franchise).
- Extension of Agile development approaches to strategy and decision-making, highlighted by deconstruction of complex problems into smaller, testable implementation stages to packetize risk (what academics call “option value”).
- Increased levels of cross-training within centralized engineering/development teams to increase flexibility and maintain alignment between supply and demand across the enterprise.
- A challenging of the notion that core competencies cannot be outsourced – I’ve now worked for two companies, large and small, that outsourced major development projects because the resources didn’t exist internally, the vendor quality was high, and the cost was unbeatable. Obviously, outsourcing won’t be viable in all cases, but it’s time to challenge the old assumptions.
- Adaptation of key functions, such as Product Management, to support the new reality. PMs will need to manage global vendors, continuously align shifting resources with development projects, navigate fluctuating priorities, and work with business owners to determine how to create and deliver a roadmap broken into bite-sized pieces.