by Paul O’Connor
Why managing a product line as a system is so important.
Many managers don’t think about product lines as systems. And they don’t always see what makes innovation so important or not to a product line. Sure, they’ll spot how a superb new product might augment or replace a product in a line.
PRODUCT LINES AS SYSTEMS
But sometimes they don’t realize how the innovations they’re passionately working on may turn out to harm a product line’s performance. Or, perhaps they may not know their innovation could jump start the product line in an entirely new direction.
Connecting Parts
I have a favorite team exercise when I coach roadmapping. First, I pick two different product and innovation topics. For example, I may pick ideation and agile development. Then I ask the team to discuss how these different topics relate. After some discussion, I ask about two other items and more discussion follows.
The exercise point is more important than the discussion. The point is to show how each topic or item relates to every other topic and item. The real question is whether you can see and understand the relationship.
The insight that “everything relates” is very important. It suggests these topics form a system. But this insight doesn’t help managers to ramp up performance quickly. The scope and breadth of the system are too large. You’ll see applying systems thinking at this all-encompassing level is like wrestling with a jellyfish. When you grab onto one area, the jellyfish pops out in another.
Product Line Roadmapping
A Product Line roadmap is the activity plan for how the system’s flow will progress. A product line roadmap includes information about market segments, technologies, and platform-levers. This is a graphic plot of strategy execution. It differs from the traditional project view roadmap that shows project timelines for new products and advancement to exiting products.
Responsive Roadmapping is a knowledge management process that enables a feedback learning loop within the product system (some may call DevOps). Team use the product line roadmap as a dynamic dashboard to build insights and advance the product line’s flow. This use is central to smart product line oversight. Read more HERE.
The Product Line is Key
The system view becomes much sharper when you define the entity as a product or a set of many products. The most direct connection shows each product as a bundle of attributes that matches a bundle of customer needs. You’ll see every practice in product development and management seeks to streamline the match. But recognize this simple system is for one product at a time. And the actions and methods to carry it out are based on single-product thinking.
A startup is usually the only business that focuses on just one product. Other firms must create and manage multiple products. For that reason, most large companies find the multi-product view more impactful than the single product view. And the most important set of products is the product line.
Once you see a product line as a system, you’ll also see its many parts and forces. Plus, you’re left with the question of how to make these parts and forces interact and purposely work together to drive better product line performance.
Business Systems
I became interested in business management systems when I met MIT Professor Peter Senge. He and I shared the stage at a product development conference. But most important to me was that I got to hear him talk about systems thinking. Even today, I encourage young managers to read his book The Fifth Discipline. It changes how you think about nearly everything in business.
But systems thinking hit home when Nelson Repenning, now Associate Dean of MIT’s Sloan School, published research on product development’s “Tilting Effect.”
System Parts
There are two types of parts that contribute to each product line system. Basic Parts include PICs, PIDs and PIMs. And the basic parts also include many others like market segments technologies and platform-levers. Basic parts tie closely to product line roadmaps and project management.
The second type are Strategic Parts. These surround the basic parts to enable sharper focus and management. You’ll see that system forces need the strategic parts to push the product line forward. Strategic Parts include items like objectives, competencies, and organizational structures. Read more Here
Tilting the System
The Tilting Effect is a dilemma that traps companies without managers knowing. Repenning shows us how when companies shift resources to the back end of development to fix product issues and quality problems, the fix may be worse than the problem. It’s because, without well-resourced front-end work, developments have more issues and more problems. This then forces companies to shift even more resources to the back-end. And that leads to even more product related issues that need to be addressed.
It’s a self-fulfilling tilt where the fix to a single product hurts the flow of other products.
Tilting is a classic system. A change to one system part affects other parts. And in all systems, the parts are separated by space. Plus, you’ll see the effect of one part on another to be separated by time. In software systems, space and time separation are minutely small. But in the product line system, space and time separation can be notably large. It’s much harder to see and understand systems with large space and time separation. Even though product line systems sit in front of managers every day, their large time and space separation obscures the view.
Seeing the Beautiful Lady
Not seeing the system at first glance doesn’t mean it doesn’t exist. Instead, seeing the product line system demands you hone your brain. It’s like seeing both the beautiful lady and the old hag in the famous optical illusion. Once your brain adjusts and both heads pop into view, you can quickly flip between them.
The first time I saw a product line as a system was in the 1990s. My team and I were helping a client set up product development portfolio management. But we complemented the portfolio with a timeline-based roadmap.
Product Line System Parts
The idea was to use a timeline to lay out all product-related work. We wanted a graphic to show the client’s workstream from the front-end through development and into the market. To do this, we used our experience and collective knowledge.
We tagged development projects as PIDs and projects associated with existing SKU’s as PIMs. PID stands for products-in-development, and PIM is products-in-the-market. These names were straightforward. But our need to tie-in front-end work pointed to product innovation charters. This is a product-related document that few people know.
Product Innovation Charters
The innovation charter was first described by the late Professor Merle Crawford, a founder of the Product Development and Management Association (PDMA).
In the 1980s, Professor Crawford studied the starting points teams used when they began product development projects which produced notable success. And he tied his findings to team charters, a popular team-building tool. Professor Crawford showed us that if teams have certain factors to focus on, they are more likely to create and then successfully launch an impactful new product. The product innovation charter calls out these factors. The good news was the innovation charter, or PIC, fit the systems approach. It became the third product-related object on the timeline, sitting in front of PIDs and PIMs.
Those who know my teachings on roadmapping are aware of PICs, PIDs, and PIMs, and how I use these acronyms to describe a flow of products and development projects. But a roadmap of a product line must also share where you’re taking the line. It should lay out a plan for how product features embed in each product and connect to customer needs. The view must also show how specific technology bundles will create the correct feature set in each product.
The insight that roadmaps should communicate more than just product projects is essential. It leads to market segments and technology building blocks joining the list of system parts.
The connection between product line system parts is critical. It suggests forces exist that induce interplay between the parts, and that the direction and intensity of these forces affect the line’s performance. And just as you may lay out the parts within a product line system, you can also lay out the forces that act on these parts. For example, the quality of the match between product features and customer needs will influence market demand ― acting like a magnet. The better the match, the stronger the pull.
Platform-Lever
Or, a core product design may create leverage as a force that speeds development and lowers development costs for many products. In product line systems we call this “platform-leverage.”
System Forces
Product Line System forces can be internal or external to the organization. They may also be controllable or non-controllable. Plus, each force may have a positive, negative or null effect on the system, other forces, and the system’s parts. Changes in system risks may also be seen as changes in system forces.
Constraints on the product line system may also be viewed as forces holding back the product line flow. Constraints are typically caused by a lack of a resource. But the best mitigation of a constraint does not always mean to increase that resource. The best solutions to constraints tend to be shifts in other forces of the system’s flow and to reconstruct system parts. Read more Here
Notable forces also exist outside the product line. Branding, competitor moves, and customer behavior changes come to mind. And there can be many more. But the most significant force that teams must manage stems from their organization and its culture. I refer to it as Chain-link alignment and synergy.
Chain-Link and Performance
The Chain-link force comes from how well different functions like sales and manufacturing align with the product line system. And unfortunately, it’s not guaranteed to be a positive force. Yet when alignment turns into synergy, the force can be a powerful boost. It can drive performance far beyond what the line would realize on its own.
A deep dive into a product line system reveals many parts and forces at play. And you’ll find each company has unique product line systems with individual strategies to drive them forward.
Old school business strategy helps companies gain positions in industries. It guides moves like entering China or buying a key technology. This is smart stuff. But the new school approach stresses actions and performance. And that’s precisely what the Product Line Systems approach enables.
System Oversight
Governing and managing the product line system is critical to success. Because the system is dynamic, oversight must focus on the system and be responsive to real-time changes across all system parts and forces. This requires a unique oversight framework that is designed and set up to focus purposely on critical parts and forces, plus their interplay. Product Line System Oversight differs greatly from common ad hoc product line management approaches. Read more HERE.
Intense Focus – Controlling the System
Managing your product line as a system gives you a powerful means to direct and control the line’s performance. It’s because in systems, a small set of parts and forces impacts performance far more than everything else. And smart strategies will create an intense focus on these critical parts and forces. You create such intense focus by using structure, processes, and methods. The results are far better than what companies gain from the typical ad hoc approach.
Today, the most important matter for product line teams is to focus correctly on their line as a system. It’s to innovate its parts and forces while driving a flow of positive outcomes. To do this, companies must stop doubling-down on the one-product-at-a-time approach, even when some experts call out such practices as being “best-in-class.”
Product Line Velocity
The single-product approach isn’t enough to keep pace with market and technology changes. Nor will it outmaneuver competitors. These moves, whether incremental advancements or major pivots, take more. That’s why product line teams need the system approach. It drives a continuous flow of significant results.
Managing the system to speed up its flow is a product line team’s top responsibility. And to do this, they must create better system parts and forces while purposely removing bottlenecks and hindrances. This requires a unique form of oversight and guidance.
The new product line oversight replaces time-to-market measures with the product line’s overall velocity. The focus is on the entire line, not just one project at a time. The velocity tracks how fast the line’s flow is progressing toward objectives and key results.
And to keep the flow at its best, management oversight must change or modify the system’s parts and forces. Plus, they may need to adjust the whole system and their organization to erase flow bottlenecks and hindrances.
Product line as systems is an important topic for all companies. And to get it right requires more than just reading a book or making it up as you go. Product line teams must learn new topics and put in notable work.
Managing The System Flow
Managing your product line as a system takes a team effort. Plus, it requires teams to build a new mindset and lay out a new approach. For many managers, this is counter to what they hear is best. The single-product approach tells them to gain freedom from existing products and create an entrepreneurial spirit. And while these steps seem positive, they simply push the single-product approach to be different. Unfortunately, it’s still the single product approach. And today, that’s seldom enough.
Please take time to learn more about product lines as systems. This multi-product approach is greatly needed as major changes in markets, technologies, and competition hits everyone, including your customers and your competitors.
