One of the several interesting points in the recent Fortune Magazine article on Innovation at Apple (May 23, 2011 ) was the concept of making key decisions on what not to work on. There is a huge amount of information on new product development portfolio management, but let’s look at things from the 50,000 foot level. How many projects do you currently have going? Are they all fully resourced? Are they funded for success? In too many companies, especially start-ups there is a serious lack of focus. Too many projects, projects that are under resourced, or not funded to enable success. Ever wonder why?
I think it all goes back to risk tolerance. Many managers think that if they place many bets, the probability of success goes up since if any one project doesn’t work out, there are more in the pipeline. The problem with this approach is that if there are too many projects, then multiple variables impact the probability of success. The first issue with having too many projects is that they all slow down. Competition for resources causes conflicts between the various project teams and causes delays, specifically if many of the projects need the same critical resource such as lab testing, finite element modeling, access to pilot lines or manufacturing resources.
The second issue with too many projects is under resourcing. When key resources are spread too thin, then creativity and productivity decrease. The best scenario is to have your critical projects fully staffed with the right resources. Also, when scientists have to change back and forth between different projects, there is lost productivity since there is a time when they have to “come back up to speed” on the project. If you can focus your resources, then the project outcomes will be improved.
The third issue is funding. Like the resource discussion, if the new product development budget is spread across too many projects, it could happen that key projects are underfunded and not properly positioned for success.
The last issue is portfolio balance in terms of short-term, medium-term, and long-term projects. This could also be viewed as product enhancements, product line extensions, and new to the world products. Let’s look at Apple. While the article didn’t give any specifics on how they manage their new product development portfolio, looking at what they have introduced to the market provides some insights. It is clear Apple focuses pretty keenly on a few high impact projects. Aside from computers, the first was the iPod/iTunes. Then there were a series of product line enhancements over the years. The next product was the iPhone, again with a series of product line enhancements. The last Apple product was the iPad, which in the first version was pretty amazing, but lacked some key features. Guess what? Apple was already working on the iPad2, which addressed some of the limitations of the first product. Over the last 6-7 years, Apple released only 3 major new product platforms. They focused and finished. Then, like clockwork they released multiple product line enhancements or extensions to improve the consumer experience across all of the product platforms.
The question is; In your company, do you have a process to “Focus and Finish?”
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