One of the key things that I’ve had to learn over the last couple of years is how to best manage a portfolio of products. When I started out as a product manager, I could focus on a single product and was fully accountable for the performance of that product. However, as time has gone by, I’ve found myself becoming responsible for a range of products, and having to make tough trade-off decisions between them. Being able to manage a portfolio of products is therefore an important skill to have in your toolkit as a product manager:
- What is a product portfolio? — A set of products, services or features that a company offers and which often need to be managed simultaneously.
- What is product portfolio management? — Managing a portfolio of products is all about a balanced allocation of resources — people, time, money, hardware, etc. — to achieve business goals. It’s all about “value maximisation” as new product development expert Carrie Nauyalis called out in a recent podcast.
- Types of product portfolio: top down — “Top down” portfolios are typically more strategic, with a ‘programme of work’ at the top (see Fig. 1 below). For example, the business might be looking to deliver products or services into a new market. These are often conscious decisions, taken at the executive level of an organisation.
- Types of product portfolio: bottom-up — With “Bottom up” portfolios, the strategy is often coming from customer requests — both with regard to B2C and B2B products or services — and tends to be more tactical. For example, customers asking for specific features to meet their needs or to solve their specific products.
- It’s all about analysing trade-offs and decision making! — Some product people use a Stage-Gate approach to create and manage a balanced portfolio, and to help make tough prioritisation and trade-off decisions (see Fig. 2). I personally don’t use the Stage-Gate approach, since I work in more a iterative and continuous fashion, but to me it’s all about linking to key goals and results that the business is looking to achieve, and making hard trade-off decisions on the back of these data points (see Fig. 3 below).
- Use data to make your trade-off decisions and evaluate product portfolio performance — As the aforementioned Carrie Nauyalis explained in the podcast, the ultimate role of having a product portfolio is to analyse. Looking at performance of the different products within a portfolio and understanding how they each attribute to key business goals. Reason why I believe it’s critical to include metrics in your product portfolio roadmap — you can see a good example of this in Roman Pichler’s template for a goal-oriented product portfolio roadmap (see Fig. 3 below).
Main learning point: I don’t feel like you need a whole new toolkit just to manage a suite of product or services. What I’ve learned about managing product portfolios is that it brings difficult trade-off questions to the fore more. Having a clear, goal-oriented product portfolio roadmap will help you in analysing trade-offs better and making well-informed decisions.
Fig. 1 — Top down vs Bottom up approach to portfolio management — Taken from: https://www.sopheon.com/top-down-vs-bottom-up-resource-planning-which-is-better/
Fig. 2 — The standard Stage-Gate approach to product innovation — Taken from: http://www.stage-gate.com/resources_stage-gate_omicron.php
Fig. 3 — A goal-oriented product portfolio roadmap — Taken from: http://www.romanpichler.com/blog/the-go-portfolio-roadmap/
Related links for further learning: