Does your organisation have the right processes in place to support the next great idea? Once an evaluation and selection framework is in place, aligning an “idea pipeline” with the project portfolio is crucial. Otherwise, your next star project might not even get a chance to soar doomed or less-promising initiatives drain resources.
Successful products all begin with a great idea. Yet, the idea itself is the first ingredient in a cocktail of factors, including resource and talent management, that contribute to a product’s success. The ability to capture new project development (NPD) ideas and prioritise their value based on organisational metrics, resources, strategic alignment and critical success factors is essential to developing an innovation pipeline.
The first step in selecting the best NPD project ideas begins with a systematic approach to capturing data so all stakeholders can contribute to the project selection process. Building the right framework around product ideas allows companies to make well-informed decisions based on facts. When developing this framework, the following elements should be considered:
> Data Integrity – Parameters must be in place to ensure that the output from processing product idea information is useful. Information sources for validating product ideas need to be consistent so that contributors are using the same approaches and metrics to measure the idea’s potential.
> Clear Targets – Identify clear targets that are aligned with the business objectives and stakeholder needs. Gauging product ideas in relation to corporate goals already endorsed by key executives and stakeholders (e.g. sales targets or resource alignment) will ensure that organisations select the project ideas that will have the best chance for success.
> Relevant Success Factors – Building fact-based metrics will allow for a more transparent evaluation, ranking and scoring of the project ideas pipeline. Anyone submitting or evaluating a project idea should include a standardised risk assessment score and include other metrics for ROI, strategic alignment and priority ranking to provide better visibility into the potential of the ideas up for consideration.
> Systematised Decisions – As important as it is to capture accurate data, it is equally important to develop a systematic approach to prioritising, evaluating and selecting your project ideas. Establishing a governance framework with a phase-review process for all relevant stakeholders will ensure that all factors are weighed and will provide the necessary discipline needed to deliver a go/no-go strategy when managing what at times can be an overwhelming ideas pipeline.
Once an evaluation and selection framework is in place, aligning the ideas pipeline with the projects portfolio will be crucial in developing of these new products. Many organisations analyse their ideas pipeline in relation to external market conditions and often neglect the impact that new projects may have on active projects and internal resources. In light of this reality, a project and portfolio management (PPM) method allows an organisation to integrate the ideas pipeline into the entire project work flow. A comprehensive PPM strategy will ensure that idea proposals take into consideration all the external and internal factors that contribute to a complete project environment. So, the ideas pipeline will reflect the chances for success with the understanding that the next “star” project can be fully supported by the people responsible for its delivery.
PRODUCT SELECTION: ARE YOU BALANCING THE SCALES?
A solid new product selection process demands a balanced ranking of all the relevant elements. Successful products begin with an idea management process. It is not enough to just include all the necessary elements. As with a well-prepared meal, just the right amount of seasoning and ingredients will determine an idea’s success.
At the most fundamental level, project ideas need to be treated as corporate investments where the portfolio is aligned with the business objectives. Furthermore, your portfolio needs to reflect your tolerance for risk and your ability to manage your investments (i.e. your project ideas pipeline). The prioritisation, scoring and ranking of your pipeline will depend on business culture, stakeholder needs and the ability to make informed decisions on the information gathered.
To ensure that your ranking system will yield successful results both internal factors (e.g. available resource pool) and external considerations (e.g. market demands) need to be carefully calibrated to deliver the right mix of criteria to showcase your pipeline. When selecting your ranking criteria you may want to ask yourself the following questions:
- Are your ranking metrics aligned with both stakeholder needs and market demand?
- Is your portfolio balanced by allowing for the ranking of ideas based on relative importance?
- Do you have enough visibility into your current resources and future abilities to assess your pipeline’s ongoing viability?
- Are you employing fact-based metrics, such as Return on Investment (ROI), Internal Rate of Return (IRR) and Net Present Value (NPV) to assist in product selection?
- Does your selection of project ideas take into account your current active portfolio of projects?
Most product development businesses would agree that launching a product means selecting the right product, at the right time with the right people. Where many businesses would differ is in the path they choose to get the product to market. Although for some it may be timing or intuition that leads to success, for others it may be a more formal method. In any case, most organisations agree that a systematic approach to monitoring NPD projects from concept to end of life is a wise move. The earlier you can identify whether a product has potential or is doomed for failure, the faster you can make money from the new product ideas or cancel them before real damage is done.