How to make your CEO a believer in NPD and Innovation!

whizard-1My friend Mark Mitchell, of Whizard Strategy recently wrote a blog post on

‘How to make your CEO a fan of marketing’

and shed light on the number of CEO’s who mistrust their CMOs.  He quoted John Wanamaker who famously said, “I know half the money I spend on advertising is wasted, but I can never find out which half.”  … and added “this pretty much sums up how CEO’s and CFO’s think about marketing”.  

Mark Mitchell called out an article on that supports how 70% of CEO’s don’t trust their Chief Marketing Officers.  Read the article Mark cites at Marketing Week Article.

maureen-carlson

This reminded me of another article I recently read on new product development and innovation, based on a recently released benchmark survey, that points to some significant improvements needed in the area of NPD and innovation processes for the majority of companies.   The executive management in charge of these companies must feel exactly the same about the quality and maturity of their new product development and innovation people, process, tools and investment.


Read this article by 
 at InnovationManagement.se for yourself and register for the full report.

Findings from the Fourth Product Portfolio Management Benchmark Survey

NPD and innovation managers, who are we kidding?  We have to get faster, more efficient and have more strategic impact to gain the needed resources.

office-fightMy own recent blog discussed the portfolio team feeling like a fight club.  Everyone is fighting for resources.  The CEO or executive one level up has to become the referee and has to choose how to best invest the company’s money to achieve the portfolio growth goals.  Teams want more resources, people, time, tools, capital and expenses.   Yet we deal in a economy where there are constraints on most or all of these.  As Mark states:

The IT person wants new software that he is sure will improve the bottom line.  The operations people want to invest in the plants to improve efficiency.  Sales management wants to add more salesmen.  HR wants to invest in training.  And then there is marketing…

I am an NPDP certified new product development professional so I have one more to add…

…and then there is new product development and innovation.  These NPD requests for resources go deep and are cross organizational.  Whose budget is it anyway?  Many departments make convincing cases for their departmental needs however when it is cross organizational and a strategic initiative, the stakes, risks and rewards are higher and more complex.  How do decisions get made?  Your CEO needs your help here.

Here’s how to make your CEO a believer in spending on people, processes and tools for new product development and innovation.

1.   Stop using meaningless terms, like innovation!  This seems contradictory.  The reason to stop using the term innovation is that it is an overused buzzword, means something different to everyone in the room, creates debate and discourse and has little discrete value without a lot more information that is rarely provided at the time the term is being tossed about the room.  Stay crystallized in your message to the CEO.  Talk about business results and how to get there.  Innovation is not the end game.  Innovation happens by the use of a group of sub-processes that produce business results.

The benchmark study, that Ms. Carlson cites, reports that a major pain point to these processes is speed (56%).  Other to pain points include resource allocation to the wrong products through missing VOC data or not cutting low impact projects in favor of supporting those with higher impact (52%), and product portfolios that are not aligned well enough with company strategies and objectives resulting in ineffective decision-making (53%).

2. Get rid of the silos and align around product line strategies.  Create a cross organizational team to define product line strategies.  Listen to all the functional roles involved, internal and external to confirm strategic thinking.   Ask customers and consumers what their biggest challenges are.  Be specific.  Get your organization outside of the building to see the problems customer and consumers face directly, including the CEO.  Learn what the competition is doing.

3.  risk fail roadmapCreate product line roadmaps.  Once you have this knowledge embedded in the team, you are in a position to create product line road maps that provide targets for your product development.   You have a way to show the CEO where you are going, why, and how it will achieve the business strategy and growth plans.  You can demonstrate the problem and the solution.  

4.  Involve the executive management in the process. When you involve the CEO and executive management in the process at the right place and time you will find yourself doing more than asking for more money.  You become an advisor and informed expert who can recommend the optimal path to achieve the strategic goal.

5. Make everything measurable and simple.  The benchmark study indicated the lack of hard data provided to CEOs to make smart strategic decisions.   Ms. Carlson reported on data:

…more than 80% of companies are supporting decision making with poor and/or hard to access data. This makes it difficult for leaders to make the tough decisions, such as what new initiatives to fund and which ones to kill.

Mr Mitchell stated that smart CEOs know that the data is poor and expect some bullshit when functions try to gain resources for their projects.  Gone are the days..

“We have to do it” or “We’ve always done it.”  Everything should have a measurable outcome.

6. Don’t underestimate cultural inertia and short term focus.  Ms. Carlson reports..

More than 70% reported that their leadership is averse to risk and equates killing products with failure. In fact, overall risk aversion is growing steadily. Too few are rewarded for taking calculated risks, which is the bedrock of innovation.

Convert your CEO to be a believer in product development not a referee of squabbling siblings. Take some of these steps today and behave your way into a leadership position by  improving your organization’s cross organizational performance instead of an attitude of fighting for an undeserved entitlement from a suspicious parent.

For more on the subject of product line strategies and roadmaps, see http://www.adept-plm.com.

 

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6 Steps to End the Fight Club Mentality in Your Portfolio Team

office-fight

Is Everyone Fighting for Resources?

6 Steps to Better Portfolio Management

1. Have a standing cross-organizational portfolio team:

A Portfolio Analysis and Recommendation Team – ‘PART’ with a structure, process, cadence,  measures, metrics and portfolio goals will create an efficient and credible environment for portfolio issues to be managed.  The PART Team must know the overall business strategy and work to deliver the strategy by establishing functional department strategies and product-line strategies.

2. Develop and define product-line strategies:  

With organization and management input, define product-line strategies within the portfolios so they are clear to the organization and the cross-organizational project teams.  Without this critical information the teams will not be aligned on ‘where to play and how to win’ at each point of the functional strategies.  Create leverage for your product lines by developing them with a product-line platform approach.

Here is a link to a white paper discussing the value and benefit of product-line strategies, written by Paul O’Connor of The Adept Group.

The PART (portfolio team) analyzes portfolio scenarios based on cross-organizational data.  It optimizes and rationalizes the opportunities.  The  PART then makes portfolio recommendations on execution paths forward to business decision makers.

bubble chart

3. Create product line roadmaps:

Using the product-line strategies, and targets for innovation and development, create and align around product-line roadmaps that create a framework of ‘critical-to-roadmap’, events, milestones, technology development or procurement, to track portfolio execution, metrics, and progress.  If you need some help on how to create smart effective product line strategies and product-line roadmaps, there are many workshops, white papers, webinars, and conferences.

4. Optimize the portfolio:

Collect the right data to create and analyze portfolio scenarios, identify gaps, and make recommendations to decision makers on resource allocation, based on data not emotion.
Try software support like  Sopheon Accolade,  Sopheon circlefor straightforward management and visual graphing of portfolio scenarios from innovation planning, targeted idea generation and development, process and project management, through portfolio optimization.  It is an easy-to-use, efficient software and a robust way to compare the options.

5.  Allocate resources:

Track and allocate resources by project and by total portfolio. Make decisions one level above where the resources are shared, so that each decision does not turn into a boxing match.  Software can identify resource constraints and help to prioritize the reallocation of resources to those critical-to-strategy products and projects.

6. Analyze the risk:

Analyze the risk to your projects and assess the risk of your total portfolio so that you can add resources, kill, hold, speed up slow, down and add more projects to meet the goals the business has set.  RiskAssessor™ SoftwareFind a smart and practical way to assess project and portfolio risk.

If your portfolio team is not recommending some projects slow down, while others get killed, or be replaced by projects with more impact, then you may not have a strategy or critical roadmap activities identified.

If your team doesn’t have a framework such as product-line strategies and product-line roadmaps then it will not be able to optimize the allocation of resources and recommend the most strategic and impactful path forward for the development effort.  You will be slower and less efficient than you could be otherwise,  or worse slower and less efficient than the competition!

roadmap picture


Stop wasting time and energy fighting for resources and get behind a common roadmap and execution plan.  
Use these six steps to create a data-based approach to the management of your product portfolio, new product development and innovation.

Your comments are welcome at INSIGHTOVATION.COM