A startup product manager friend shared her challenges in juggling competing priorities and stakeholders’ needs. So I recommend she try Dragonboat, a Responsive PPM platform. She was puzzled “but we only only have 1 product. We don’t have a portfolio. Isn’t portfolio management only for large companies with many product lines?”
Good questions! Is portfolio management only for companies with multiple product lines? I think this definition of portfolio management is a bit too narrow.
In the Financial world,
Portfolio management is the art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance. Portfolio management is all about determining strengths, weaknesses, opportunities, and threats in the choice of debt vs. equity, domestic vs. international, growth vs. safety, and many other trade-offs encountered in the attempt to maximize return at a given appetite for risk.– Investopedia
As a product manager, you are constantly facing the decisions about the product investment mix to maximize desired outcome. In fact product manager has a much harder job than in financial portfolio management – because the desired outcome could be very broad (more complex than ROI)
A digital product, e.g. Google Search, is a one product portfolio – think how many product managers are involved in building Google Search?! A product is also a multi-dimensional portfolio.
Every product manager needs to apply the portfolio management approach to her roadmap. The roadmap needs to support
- a portfolio of customer segments such as new, existing, enterprise, partner
- a portfolio of investment categories, such as horizon 1, horizon 2, or Product innovation vs tech platform refactor.
- a portfolio of stakeholder needs – sales are pressed by prospects demands, support are challenged by existing customer issues and feature requests, marketing needs to align product with market positions and competitive differentiators, technology team needs to address upgrades and tech debts, and product has product visions and innovations
Similar to the process of financial portfolio management, the evaluation of “strengths, weaknesses, opportunities and threats”, aka the SWOT analysis, is an essential part of our strategic roadmap planning process. .
Actually as product managers, the art of portfolio management is even more challenging than the financial portfolio management, because the definition of desired / best outcome is much broader than monetary value – it could be profit, or revenue, or market share.
Now you can see the same roadmap could be 3 or 4 different types of portfolios based on how you view them. How do you use this information?
- Prioritize and allocate accordingly – for example a newer product may focus on retention to increase stickiness and then you will focus on acquisition as you have “keep retention under control”. Then you may move efficiency and so on. Understanding the state of the product helps to decide where to focus and be intentional on investing your product features and team capacity towards each
- Effectively and quantitatively balance competing stakeholder demands. The failure of a product or company is “peanut buttering” as the famous Yahoo memo.
- By looking at different dimensions, you will not unintentionally miss key strategic vectors when you linearly prioritize features.
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