- Organizations should consider very specific criteria when deciding among product investment choices
- Leadership teams often struggle to develop criteria for assessing and comparing new product investment and upgrade opportunities
- Here are some suggestions to get started, based on the SiriusDecisions Offering Investment Scorecard
Over the past decade, Bruce Springsteen has devoted a portion of his live concerts to audience requests. Audience members in the general admission pit frantically wave their “sign requests” – decorated signs that often resemble second-grade projects – hoping that The Boss will play the song of their dreams. Bruce wades into the audience and scoops up a bunch of signs – sometimes six or seven. After carefully considering his options, Bruce selects a request to honor, props the sign on the microphone stand so the audience can see and, one…two… three…four…
What do concert sign requests have to do with B2B product portfolio optimization? When Bruce considers which song to play, he has some set criteria for judging which song best fits the moment. Does he want to convey a feeling of nostalgia? If so, he might reach for a real oldie. Does he need to give his veteran drummer a rest? Maybe a solo acoustic number is in order. Is it time to set the house alight? Maybe it’s time for “No Surrender.”
Organizations should also consider very specific criteria when deciding among product investment choices. The use of a consistent rubric to actually score product investment ideas not only helps ensure companies are making wise investment choices at the right time, but also provides a clear framework against which product teams can develop business cases for new and updated products.
That may be well and good, but as a product management analyst at SiriusDecisions, I often hear that leadership teams struggle to develop their own set of criteria for assessing and comparing their opportunities for new product investment and product upgrades. Here are some suggestions to get you started, based on the SiriusDecisions Offering Investment Scorecard.
- Start with the market opportunity and, specifically, the buyer. Even a great product will fail if the market opportunity is too small or overrun with fierce competition. Consider whether there is an obvious buying center and triggers that indicate that the market will be growing. Also ensure an understanding of the specific buyer need and the urgency and importance of addressing that need.
- Consider whether the idea aligns with the company growth strategy. Does the offering in question target the markets and buyers that are the focus for the rest of the organization? Do they fit with a solution approach the company is developing? A good scorecard measures how well a new product or product enhancement helps the company achieve its strategic goals, and therefore, its business goals.
- But, can we be successful? Not all market opportunities are winnable. Certainly, assess your ability to develop the offering in question – in-house or through partnerships – but also make sure you have the capability to go to market with the product. Do you have a channel to reach the buyers, for example, and the market domain knowledge to win them?
- Check the business case. We hear most about the financial criteria organizations use to compare investment opportunities, which, of course, are very important. But leadership teams are often unaware that they aren’t comparing apples to apples when they put two business cases side by side. For example, one business case might only include development costs while the other includes marketing, channel and sales enablement costs. Standardize the financial business case so it includes the full cost of innovation and go-to-market, and add financial thresholds for revenue, profit and ROI to the scorecard for clarity.
For a deeper dive into the SiriusDecisions Offering Investment Scorecard, register for our free, on-demand webcast.