Importantly, when deciding whether or not to proceed with a new product or investment idea, the organisation should consider whether it is an appropriate use of the limited resources available in regard to its overall strategy and the availability and attractiveness of alternatives.
While operational considerations should not be used to drive product decisions, the operational implications of new ideas should be reviewed relatively early in the decision-making process. This will avoid operations being told later that they need to support a new product or investment capability that, in fact, exceeds the capability of the organisation to reliably support.
Finally, to avoid maintaining a product that is ultimately unprofitable, the product assessment should explicitly consider how the organisation might retire the product if it turns out to be unprofitable.
Forecasts, such as those of investment returns and market penetration, will be based on very loose assumptions and the track record for products actually meeting these forecasts tends to be poor.
Having a well thought-out exit plan for such products will furnish the organisation with the confidence that it can proceed to launch without being burdened by an unprofitable problem if the outcome turns out to be less rosy than forecast.
Tip 2: Embed project disciplines in the product-launch process
When implementing a new product, core project disciplines should be applied. That is:
• Establish a project and resource plan and communicate it to all relevant stakeholders. Resource planning should recognise the likely cost of the product to business areas and take into account employees’ day-to-day activity changes. Allocated resources and timeframes need to be agreed up front and with a suitable level of contingency planning.
• Identify new-product risks and ensure a risk register is maintained (with adequate ongoing operational risk-mitigation measures in place).
• Appoint the normal roles you would expect when running a project, with a project manager tasked with its execution. Preferably the project manager should not be the ultimate owner of the product, as execution often requires different skill sets from those originally responsible for conceiving the idea.
• There should be an agreed governance model to manage escalation of issues, decisions on fundamental issues such as scope and approving the product for launch to market.
• Develop a plan to transition operation of the project to the business. Consider the use of a warranty period to ensure appropriate support is provided to the business in the early days of a product’s operation.
project discipline, resource planning, product planning, business functions, business processes, operational issues, investment organisations, product-profitability metrics, product-development process, approval mechanism, checkpoints
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