Portfolio vitality is required if a company is going to ensure future performance and survival. This is achieved through the continual launch of new products and services to the customer. Some organization are referring to a combination of products and services as solutions or offerings. I will use all of these terms interchangeably in this post.
As someone whose domain expertise lies between the idea and launch of a new product, I am frequently asked what the most important things to do when attempting to increase portfolio vitality. There are three areas that organizations of any size need to consider: the new product must fix a pain point, it must be repeatedly available on demand & you must be able tell and deliver it to the customer. Project teams are crucial to addressing these areas. Each area needs a representative on the team. That representative is responsible for their area being successfully done.
The first is fixing a pain point. This requires a deep understanding of what the end customer actually needs. Without giving the customer a differentiated product from what already exists, there is no reason for them to switch. Launching something to the market just because it does something cool doesn’t ensure success. In fact, the biggest mistake in new product development is creating something nobody wants
Take a look at Apple Watch. It hasn’t enjoyed widespread adoption, even after two years and two generations of being in the market. A small percentage of people own one. Why? The price is high, the capabilities are mediocre and it requires a paired iPhone. Apple had its chance but lost out with the proliferation of smart fitness trackers that more closely provided what customers wanted. In order to win, you have to address a pain point.
Understanding the pain points is just the beginning. You have to have a development team that can translate those needs into a workable form. This usually starts with a design that leads to a prototype. It needs to be rigorously tested and then a finalized design completed for launch. The final product is ultimately what must fix the pain point(s). The design inevitably gets watered down with trade-off related to cost, technology readiness, and other areas. Don’t lose the focus on fixing pain points when getting to the final design.
It’s not enough to have a final service ready, the second area for a successful launch is needed. An organization must be able to repeatedly provide that service to the customer. Customers are not very forgiving when they go to purchase your service and it isn’t available. Only in rare cases the customer will be patient. Depending on the ratio of the value added to the wait required, the customer will likely move to a competitor. Your organization must be able to provide your services at the rate of customer demand.
Each unit provided should be defect free, matching the design intent. Two popular methodologies for repeatedly providing defect-free are lean and six sigma. Lean is the industry best practice for establishing waste-free operations, minimizing cost of production. Six sigma focuses on reducing variation to the lowest possible level. A disciplined approach using these principles will ensure the organization meets repeatable provision to the customer.
The last area is that the new offering must get to the customer. This includes the trigger and delivery. Proper advertising and fulfillment after an “order” is placed leads to strong revenue and growth. The better presentation to the intended customer, the more demand will be. The shorter the wait, the happier the customer will be. Marketing in the social media age has its own rules now and the shift in retail due to the Amazon effect has reset the playing field. Companies must keep up with what the leaders in their market are doing.
Each of these areas are critical to launching a new solution to the market. Get one right, you have one right. That doesn’t mean you’ll win. You need more than a great offering. You need all three for a successful launch: fix those pain points, make it available when ordered and be able to get it to the customer. That will win and that will lead to portfolio vitality and the future success of your firm.