In his 1962 book, The Success System That Never Fails, W. Clement Stone wrote, “Don’t expect what you don’t inspect.” It’s still true today. It’s human nature to put something off until someone asks for it. That “ask” creates a deadline for results and signals that someone is interested and watching.
The same principle applies to managing product-line performance. You must regularly inspect all the decisions, plans, actions, and results related to the performance of your product line. You can get this done with the six reviews shown in the table below. Each review will force you and your team to get organized, assess your situation, determine actions required, coordinate efforts, and report out to your stakeholders on a regular basis.
|Review Type||Purpose||Typical Frequency|
|1. Product Strategy||Decide what products to offer and when||Annual|
|2. Product Line||Inspect product-line-commercial performance and strategy execution||Quarterly|
|3. Phase Gate||Decide whether to advance a product to the next lifecycle phase||Upon phase completion|
|4. Product Development||Inspect product-development-program performance||Monthly|
|5. Product Team||Coordinate product-team activity||Weekly|
|6. Product Development Core Team||Coordinate product-development-core-team activity||Weekly|
Product Strategy Review
A product strategy review is a periodic inspection of your product strategy decisions. In this three-part review, you’ll examine your
- market environment,
- situation in that environment, and
- strategy to ensure growth and competitiveness
High-level, product-strategy process
In the environment review, you’ll examine your opportunities and the requirements to serve your target customer. In the situation review, you’ll assess your ability to meet customer requirements and compete for their business. Finally, in the strategy review, you’ll present and seek approval for product-strategy decisions based on the analysis of your environment and situation.
You may be tempted to compress environment, situation, and strategy reviews into a single just-give-me-the-answer event. Don’t. While this approach may save review time, it will significantly reduce decision quality. Product strategy decisions must be made in the context of your market and competitive environment. To make high-quality decisions, your understanding of your environment and your situation must also be high quality. This is best achieved when your environment, your situation, and your strategy are reviewed separately.
It’s also good practice to schedule product-strategy reviews so that each full, strategy-refresh cycle is immediately followed by annual-plan development. That way strategy decisions are fresh and top-of-mind when detailed planning begins. This can be accomplished with a strategy-review cycle like the one below.
- 1st quarter: Market environment review
- 2nd quarter: Situation review
- 3rd quarter: Strategy review
- 4th quarter: Annual plan review
The product-line review examines strategy execution and commercial performance. It’s a business review, very similar to other business reviews. It differs only in level of abstraction. In fact, it’s not unusual to find a slide from a product manager’s product-line review, in the CEO’s board deck. See the figure below.
Product-line review as part of overall business-review process
As such, a product-line-review agenda looks a lot like a business unit manager’s quarterly-business review, or even your CEO’s board-meeting agenda. In a smaller business where the CEO is effectively the product manager, the product line review and board meeting agenda are essentially the same. The agenda typically includes
- Scorecard metrics,
- Market position,
- Marketing and selling capability,
- Product development, and
- Customer satisfaction.
See table below for suggested content for each product-line-review agenda item.
|Agenda Item||Suggested Content|
|Scorecard Metrics||Key financial, operational, and customer performance metrics|
|Financials||Results and forecast for bookings, revenue, gross margin, and product costs|
|Market Position||Changes in market environment, changes in competitive environment, implications of those changes, win-loss report, and market share|
|Marketing and Selling Capability||Marketing campaign plans and results, selling-materials-development status, sales-training plans and results, and sales-channel performance|
|Product Development||Product-roadmap status, summary product-development status verses plan, risks and issues.|
|Customer Satisfaction||Installed-base performance, issues and action plans, customer-satisfaction levels, customer retention, and service capability and performance.|
Your product moves through multiple phases over its lifecycle. See the example in the figure below.
Product lifecycle with product-development-phase detail shown
Imagine that between each phase there is a gate. To get through that gate, a product must have satisfied all the requirements to move onto the next phase. A phase-gate review is where you make that determination. There are only three possible outcomes from a phase-gate review.
- Go to the next phase
- Return to the current phase, or
- Stop investing.
If the product has completed the current phase’s deliverables and remands viable, it is approved to go to the next phase. If the deliverables for the current phase are incomplete, then the product may be directed to return to the current phase to complete those deliverables. Lastly, if the product is deemed no longer viable, investment in the product may be stopped. See the figure below.
Three possible outcomes of a phase-gate review
Phase-gate reviews are usually chaired by a product-development-program manager when the product is in product-development phases. For all other phases it is usually chaired by the product manager. To reach a gate decision, the chair will prepare a phase-gate review around an agenda like the following:
- Purpose of the gate
- Project team recommendation
- Current-phase deliverables review
- High-level-lifecycle or product-development plan
- Detailed plan to complete next phase
- Gate decision
Continue reading – How to Manage Product Line Performance – Part II