Are you building the right product?
Success is a function of focusing on the right market opportunities, building the right product for that market opportunity and building that product the right way. In our experience, the area that fails to get the right attention most often is “building the right product”. Companies very often do not seek the right inputs, perform the right analysis or have the right discussions to select the product and feature set with the greatest value to their users. Very young companies tend to ping between several ideas of the day, resulting in lost opportunity as product initiatives are started and abandoned before completion. Without product management, these ideas result in disjointed and loosely related features getting bundled into a product offering that is not well understood by the end user. Oftentimes, especially in SaaS environments, feature enhancements such as scalability, availability and performance are abandoned without being evaluated for their impact to profitability and strategic fit when compared to feature enhancements.
Our recommendation to help resolve some of these issues is for companies to introduce a process that forces critical thinking about the product feature set, allows for open discussion amongst the business and technology leaders and prioritizes opportunities based on costs, benefits and strategic fit. The process that we recommend most is a process called the product council. The product council should include the GM or P&L leader of the product/business in question, senior engineering executives for the product and the appropriate product manager and product management leadership. The meeting should be held at least monthly, but your company’s release frequency and average time of development might suggest more frequent meetings.
The purpose of a product council is to ensure that the company is choosing the right product features to build given the following: the competitive landscape, customer needs and wants, the need for scale and availability, and company/product profitability. To this end, the company should create a living list of all the features and product ideas that have been generated within the company and its extended community (shareholders, end users, and other stakeholders). This list should be analyzed by the product council for strategic fit, financial benefit and risk.
In analyzing strategic fit, the requests/features are evaluated in order to determine the degree to which they are aligned with the business objectives and strategic direction of the company. A Maslow’s hierarchy approach to identifying strategic fit is a good way to help prioritize product requests:
• Which features are necessary to complete a base product offering?
• Which features add significant benefit but aren’t absolutely necessary?
• Which features are simply nice to have?
Debate as to the strategic fit of each of the initiatives should happen within the product council meeting to help ensure that the product initiatives with the greatest fit are prioritized appropriately.
The activity is to perform a lightweight financial analysis. The financial analysis might be as simple as determining rough cost to build and expected business benefit. As the company matures it should consider maturation of this process into something that looks more like a probabilistic equation with percentages allocated to each possible financial outcome. The intent here is to measure impact to profitability. Product council should return to this analysis after launch to determine if the expected benefits were achieved.
Finally, we recommend evaluating risk as measured through customer impact, potential impact to availability or scalability, and the actions that competitors might take. A simple method of risk analysis can be accomplished by using the Failure Mode and Effects Analysis framework that we shared in a previous post.
The result of the strategic, financial, and risk analysis should be a prioritized list of product initiatives. We urge the inclusion of this well defined but easy to manage process as part of your product management practices. Let us know if you use or prefer something else to ensure you are working on the right products.