Product Line Entropy

Growth and Entropy

Cash Flows

Our governments want their cash pipelines to flow into many trickling streams. First, it seems the major flows are overfilling cash reservoirs and holding tanks. The great trickle streams have yet to meander through our economies. But that’s changing.

If you’re in a mid- or large-sized company, get ready for what’s ahead. Topline revenue is about to jump. It won’t be equal for everyone, but on average it’ll be big. And that’s excellent news. But before you get your surfboard out to ride the cash tsunami, a few warnings are in order.

Growth Mistakes

So why should you be concerned? It’s because a cash tsunami can mask many issues. The wave will make most management teams look brilliant, no matter what they do. Growth forgives mistakes.

Growth allows entropy to build throughout organizations. The more growth a company experiences, the greater its store of entropy.

Entropy is an energy that’s disorderly and unavailable to drive a system’s output or results. When energy is orderly, you can guide it to your advantage. When it’s chaotic, you can’t use it. The big problem is that this unusable energy can build up and cause a mess.

Entropy Build-up

Growth-induced entropy has two characteristics that managers should understand. First, it can work against your goals. Because it’s chaotic, it’s not likely to push in the direction you want. And second, when left alone, entropy always grows. You need to spot and tame entropy if you wish to avoid bad outcomes.

In product line systems, market growth is a powerful entropy battery charger. Unfortunately, an entropy battery can release its disorderly power in a flash.

The pent-up chaos eventually needs to be tamed. If you wait too long, the stored entropy may wipe out all the cash tsunami gains. It may not be until growth returns to normal levels, but all entropy must be dealt with or experienced.

The Product View

Product developers and product managers will have a front-row seat to the growth sea-change. If you’re working on a project or two, top management will repeatedly send you the same message: do more and do it faster. The race will be on.

There’s nothing new with that; we’ve heard the more-faster mantra for years. Now, the difference is the omnipresent growth. There’ll be enormous pressure to get all you can while you can. No one wants to be left behind. Yet, that’s precisely what forces entropy into storage. It builds the chaos in waiting.

The get-it-while-you-can philosophy pushes short-term gains over long-term plans. Just when you think you have the time to focus on meaningful long-term innovations, the sales force reveals many opportunities. You’ll hear, “tweak this product,” “change that design,” or “merge these components.” These become the critical projects that must get done and get done fast. The message will be clear. Here’s what customers want, and we need these projects completed right away if we wish to win our slice of the pie.

Leaders and Entropy

There will be many kudos and accolades for those delivering these critical customer-centric gems. Yet, there won’t be a peep of praise that recognizes tough decisions that mitigate entropy. This is the hard part of trying to do the right thing. If you’re successful in purging a product line of entropy-induced chaos, no one will know. The chaos never happens. How could that be a success?

That’s why managing entropy is a leadership task. It’s not an in-the-trenches, nose-to-the-grindstone job. It’s impossible to carry out if you can’t influence work away from short-term scrambles. Plus, managing entropy is meaningless without a clear vision of how you wish to advance your products.

The big deal is that it’s near impossible to sense entropy at a microscopic level, yet it’s easy to spot from a macro view. In product line’s you’ll notice the same. At the local level of a single project over a month or two, you’re not likely to sense entropy. But at the global level of an entire product line system over a year, you’ll feel this chaotic energy build week after week. It’s an unease about the chaos that may happen.

This insight suggests project teams won’t notice entropy. But those overseeing product lines will see the build up of chaos that’s pushing in the wrong direction.

Figuring Entropy

So how do you know if work on a single project might create uncomfortable levels of entropy for a product line? The job takes experience and knowledge. You can, though, build specific skills to speed up entropy mitigation.

You’ll find bad outcomes from entropy fall into three groups, each linked to a critical product line strategy element. Any change to these elements will affect a product line’s performance. Unfortunately, entropy-induced change most often leads to adverse results.

These key strategy elements are:

  1. Platform-Leverage,
  2. Chain-Link Alignment, and
  3. Attribute-Positioning.

Some companies also experience a cascading effect, where a negative change to one area spills over to the others. This cascade can make a complete mess of a product line.

Mitigating Entropy

Most product line teams want to mitigate entropy. To do so, they must focus on the three strategy elements. The job is to examine every decision and action related to each element.

The idea isn’t to squash entropy. That’s impossible. Instead, the job is to monitor and mitigate the chaotic energy as it builds up. This is a critical part of overseeing a product line. And it takes place throughout a process called Responsive Roadmapping.

The practice requires teams to use methods or techniques called strategy lenses. In this case, teams must create lenses that foster insights into how entropy may affect the three critical strategy elements.

Entropy Lenses

There’s no standard template to help form the entropy lenses. The approach is to explore possibilities by asking questions and playing through “what-if” scenarios. This activity must be specific to the product line, its markets, and its technologies.

When teams start, they don’t need perfect knowledge of the three strategy elements. Nor do they need to be experts in entropy’s cause and effect. But to tame the entropy monster, they must track and build awareness about the interplay between their strategy and the chaotic energy.

The three tables below share examples and what you should know about entropy related to the product line strategy elements. The lists are not exhaustive explorations, but they highlight how entropy may play out. You may use the lists as starting points to form strategy lens reviews of product line actions and decisions.

The three questions each lens must answer are

  1. Is chaotic energy building up?
  2. How might the entropy play out in the future?
  3. Should we do anything about the entropy, and if so, what?

Table 1: Platform-Leverage & Entropy

What is Platform-Leverage?Platform leverage results from a platform-lever and plays out across multiple products. It delivers superior product performance to development cost ratios, faster development times, and quicker market penetration. See more HERE
1.     Example of Entropy Cause and EffectFast duct tape advancements of products can cause loss of leverage. This happens when new technologies are “duct taped” to existing products that were not designed for the new technology.
2.     Example of Entropy Cause and EffectPursing a proliferation of products that stand independent from one another. There’s no leverage; Loss of “bang for the buck”
3.     Example of Entropy Cause and EffectPushing products independent of platform leverage increases the likelihood of creating in market quality issues
Entropy SensingYou’ll sense projects seem to float in their own direction, independent of platform-leverage.
Entropy Mitigation Acceptance of projects to develop a product should require it to be “on-roadmap” which also means “tied to a platform-lever

Table 2: Chain-Link Alignment & Entropy

What is Platform-Leverage?Platform leverage results from a platform-lever and plays out across multiple products. It delivers superior product performance to development cost ratios, faster development times, and quicker market penetration. See more HERE
1.     Example of Entropy Cause and EffectFast duct tape advancements of products can cause loss of leverage. This happens when new technologies are “duct taped” to existing products that were not designed for the new technology.
2.     Example of Entropy Cause and EffectPursing a proliferation of products that stand independent from one another. There’s no leverage; Loss of “bang for the buck”
3.     Example of Entropy Cause and EffectPushing products independent of platform leverage increases the likelihood of creating in market quality issues
Entropy SensingYou’ll sense projects seem to float in their own direction, independent of platform-leverage.
Entropy Mitigation Acceptance of projects to develop a product should require it to be “on-roadmap” which also means “tied to a platform-lever

Table 3: Attribute-Positioning & Entropy

What is Chain-link Alignment?This is the purposeful alignment of all functional strategies and approaches (for supply chain, marketing, operations, finance, etc.) with a product line’s strategy. Gaining and maintaining alignment across chain-link functions drives faster product line performance results. See more HERE
1.     Example of Entropy Cause and EffectNon product related chain-links (functions) act independently to improve their performance, causing disconnects with product line goals. This can disrupt product line flow.
2.     Example of Entropy Cause and EffectIn times of growth, customer needs and preference can change notably. If products aren’t adjusted, customer satisfaction will drop.
3.     Example of Entropy Cause and EffectIf a product line pivots is underway, its success is dependent on chain-link alignment. Pivots always require chain-link changes. If a function seeks its own improvement with disregard for the pivot, the pivot won’t succeed.
Entropy Sensing A focus on customer satisfaction and competitiveness may indicate certain chain-link actions have worked against the product line.
Entropy Mitigation Constantly review chain-link alignment, with each chain-link and across the full set. Communicate and re-communicate all product line moves.

Strategies and Roadmaps

The more you dig into product line entropy, the more you’ll see the importance of having a coherent strategy coupled to responsive roadmapping. If you don’t know where you’re taking your product line, and you lack a means to guide you in getting there, taming entropy is frustrating at best.

The good news is there are many resources to help with strategy and roadmapping specific to product lines. Here are some you may consider.

Let’s celebrate the strong growth going forward. But please be smart. Growth forgive mistakes. It’s a product line team’s job to make sure the mistakes and the entropy don’t wipe out the line’s future performance.

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