How product managers can extend product roadmaps to portfolio management.
Product roadmaps are one of the best-known tools and also the most misused by product managers. We have talked twice before with Bruce McCarthy, co-author of the book, Product Roadmaps Relaunched: How to Set Direction while Embracing Uncertainty, to learn how to make roadmaps work for us instead of against us. The first time was in episode 169, which was right after he wrote the book. Then we talked a year later, to see what he had learned since writing the book, which was episode 226 . This time we talk about the role of roadmaps in portfolio management. In the process, we discuss what a portfolio is, how portfolios can be created and managed, and how to construct a roadmap for a portfolio.
Also, I want to share some stories of how listeners are putting this podcast to good use. I’ll start with a friend who was considering moving from her marketing role in a non-profit organization to a larger product role in a for-profit organization. That was a really big shift in her mind — non-profit to for-profit, and a marketing role to product role. After I read the job description she was applying for, I gave her about a dozen specific episodes to listen to. After listening to them, she realized the work she was doing at the non-profit was very similar to the new product role. She just needed to switch her terminology from managing programs to managing products and put her experience in the right context for the new company. Long story short, this was an extremely competitive position with a lengthy multi-interview process, and she got the job. In the process, she about doubled her salary. Awesome! And she credits the discussions from this podcast that helped her do well in the interviews.
Wow, isn’t that a great use of this podcast! I’m am so excited the topics we discuss are really helping people and I’m working to make it even better.
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Keep reading for insights on properly applying product roadmaps and extending them to portfolio management.
Summary of some concepts discussed for product managers:
[4:28] What is a product portfolio and how does it differ from a program?
It is a set of products, also called a product line, that a company builds and sells. Hopefully, the products and the portfolio are complementary to each other. Each one should add to profitability and the whole should be greater than the sum of its parts. From a product point of view, I think of how to create a go-to-market package that’s complete. A portfolio should also include products at various points in the lifecycle.
[8:25] How should a portfolio be structured?
You can think of it from an internal or investment point of view and apply McKinsey’s Three Horizons framework. Horizon 1 is the products that are cash cows and delivering right now. Horizon 2 products are in the growth stage and will eventually become major revenue generators. Horizon 3 products are the experiments and the things that might be next. The other way to organize a portfolio is market-based. Retailers want to know that you have a broad array of products you can sell and that you have all the bases covered for their customers.
[19:26] What mistakes do you see product teams make in managing portfolios?
They tend to focus on Horizon 1 and the biggest source of current revenue. Longer-term ideas and projects get kicked further down the road and Horizon 3 never becomes a reality. The sales team only provides ideas that they’re hearing from current customers about the current product. Marketing only talks to current customers and support only supports current customers. There has to be a deliberate attempt to fund today things that will not pay off until the future. Otherwise, there won’t be anything left when Horizon 1 ends. The other mistake I see is companies reproducing products in digital form or adding a cloud component. Those changes are fine, but they’re not Horizon 2 or 3 and should be thought of as such.
[24:48] Who is a product portfolio for?
It’s designed to help the executive team make good decisions, and then communicate those decisions across the organization. It’s a roll-up of the roadmaps for all of your products. It is an internally-focused document designed to help executives make investment decisions and communicate those decisions internally. They should be able to say where investments fit into the three horizons.
[28:44] What about from a marketing perspective?
The portfolio roadmap can be used to show retailers or other customers current offerings and price tiers, as well as a mapping of what the future for those offerings looks like. It can be in months, quarters, or whatever the timeline is for your industry. It should show what you envision adding to the value proposition at each stage of the process and be used for a conversation about adding value over time.
[31:47] What should a portfolio product map look like?
Many look like Gantt charts or timelines, but both of those are a mistake because they don’t allow for the relevant information to be included. Gantt charts are all about project execution, duration of work, and resource dependencies. They do not show investments over time in things that are not current products. Retailers and customers do not care about resource allocation or duration of work. Instead, I prefer a simple table that’s organized with parts of the portfolio as rows so you can show your investments in different parts of the portfolio are all going on simultaneously. Your time dimensions can be whatever they need to be. That approach also allows you to add rows at the bottom to show things like marketing pushes or trade shows that might impact the entire portfolio. The table model also shows that our measures of success are different for each horizon in the portfolio.
- Product Roadmaps Relaunched: How to Set Direction while Embracing Uncertainty at Amazon or O’Reilly.
- Bruce’s weekly nano letter about product culture.
- Bruce is speaking at Mind the Product, San Francisco, July 2019
“Start with why.” -Simon Sinek
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