Product Requirements Are Not Negotiable

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It took one of those heavy-duty staplers to secure the pages of your Market Requirements Document (MRD). You’re a seasoned professional, so you knew to ask for more product capability than you really need. That way, you’ll emerge from your negotiation with engineering with a plan that you can live with. But engineering knows how you work. They’ve padded the schedule and held back on performance commitments. Let the bargaining begin.

In many organizations, this is how the game is played. In fact, a capital equipment company CEO once said to me,

“Marketing asks for 100 percent; engineering commits to 80 percent of the marketing request and then delivers 80 percent of their commitment. That’s just how it works. So, you have to write your MRD accordingly.”

But, the idea that somehow you can negotiate product requirements is fundamentally flawed. Product requirements are independent of what an individual supplier can do. Product requirements are determined by coupling market requirements and your vision for unique value.  Market requirements are those things that your product must do to address the customer’s use case. Your vision for unique value identifies those things you intend to do better than the competition to win your target customer’s business. Product requirements are 100 percent about your customers’ needs and what you must do to win their business.

This negotiation mindset leads to product managers bloating their MRDs to overshoot what they really need, and, as a result, they never end up with a document that describes the true product requirements. Therefore, the piecemeal negotiation with engineering is almost guaranteed to result in a product definition far from the coherent whole that the market and your company really need.

There’s a better way. Instead of asking for more than you need as a hedge, seek a product definition that will achieve your business objectives with the least amount of engineering effort. It might go against your instincts, but the MRD must describe what is needed to satisfy the business case for a new product and nothing more. To accomplish this, follow this three-step process.

  1. Define your vision for unique value.
  2. Set target product performance levels to exceed those of your competitors only on product attributes that make up your vision for unique value.
  3. Set requirements on all other product attributes to meet, not beat, market requirements.

Notice that you will not set all product performance attributes to be better than those of the competition. It’s not necessary, and it’s a waste of engineering time and money. You’re looking to be the best at the few things that fulfill your vision for unique value and drive customers’ purchasing decisions. For everything else, you’re going to target being “just good enough.”

An automotive industry example can help illustrate this point. Volvo, a Swedish car manufacturer, creates a competitive advantage by producing the safest cars. Compared to their competitors, their cars have the most complete and most technically advanced safety features. However, their gas mileage, engine power, and interior appointments are “just good enough,” not exceptional. This is their version of a lean product.

So, make sure your MRD describes a lean product that beats the competition on just the key value drivers. You’ll get a winning product. Plus, you will reduce the time, cost, and risk in your product development program.