While effective product functions may seem commonsensical, my observation is that investment organisations often struggle with this. Products are generally developed to exploit a perceived market and/or investment opportunity and, while attractive to the business in isolation, when measured against other comparable opportunities may not represent the optimal use of an organisation’s capital.
In addition, due primarily to insufficient early engagement with investment-support functions, products are often brought to market that are unable to be operationally supported in a sustainable manner.
Furthermore, once the decision is made to proceed with the launch of a product, issues often arise in its implementation. To assist with the product launch, teams are often required to operate outside of their normal business functions and to juggle these tasks with their ‘day jobs’.
Failure to properly plan and motivate staff can lead to delays and frustration among teams as well as delays in the launch of the product. Also, the introduction of new products will often require changes to be made to business processes to accommodate their unique aspects. Failure to properly identify, plan and manage these changes for this can result in serious operational issues and in some cases can prevent the successful launch of the product.
Finally, I have seen that many investment organisations typically persist with products that have either never been successful or have passed their use-by date. This proliferation of ‘legacy’ products often leads to systemic and ongoing operational risk issues and greatly constrains the commercial and operational efficiency of such organisations.
Due to a lack of reliable and effective product-profitability metrics, many organisations are unaware of the true cost of these products and simply persist with them in the belief that closing them down would deliver minimal benefit.
By using the following strategies, great improvements can be made to the product development process.
Tip 1: Develop a transparent product search and evaluation framework
An organisation should have a well-defined framework in place in order to identify, evaluate and ultimately approve – or reject – new product ideas.
The framework should apply various checkpoints to the product-development process and enable the encouragement of new ideas without undue bureaucracy being imposed too early.
That said, to avoid bad ideas persisting too long, there should be a fast-fail mechanism to allow such initiatives to be discounted early before too much capital – both financial and emotional – is invested.
The approval mechanism, checkpoints and the information required to support each decision should be clearly communicated and understood by all people responsible for identifying new product ideas.