We all know that strong and healthy team collaboration significantly contributes to the success of a product-centric company. Visibility and alignment are essential for an organization to operate and grow, especially in today’s fast-paced and rapidly moving market, with teams distributed all over the world.
But despite having a team of hard-working and communicative employees, maintaining collaboration can be challenging. Common goals, transparency, and cross-functional excellence, among other elements, are required to truly drive outcomes.
That’s why teams are introducing responsive product portfolio management (responsive PPM) to connect objectives, products, and resources with execution.
Curious? Keep reading to learn all about responsive PPM and how it empowers all teams, from sales to product and engineering, to work together to delight customers and deliver business results.
What Is Traditional PPM?
For a better understanding of responsive PPM, let’s first go over what traditional project portfolio management (PPM) is.
Traditional PPM involves strategic planning, which usually takes place once a year. During annual planning, executives met to discuss the organization’s goals.
Teams would assess and determine the projects required to achieve these company goals and develop a budget for these projects.
This form of PPM worked well when the world was shifting very slowly, and executives had more information on the company’s goals than the rest of their teams.
With the rise of agile and the state of business changing so rapidly, having a predetermined set of projects planned long in advance no longer works.
Plus, exclusively including the executives of a company in determining the strategies of a business doesn’t empower other leaders in the company and encourage them to grow in their roles. Using financials solely to measure investment and outcome is also limiting.
Our fast-changing world and the increased knowledge of employees in companies have introduced the next level of PPM – responsive PPM.
What is Responsive PPM?
Responsive product portfolio management (PPM) is a method of portfolio management for agile, product-centric and teams and companies.
Responsive PPM unites objectives, products, and resources with execution. It responsively adapts to the state of a business and the market.
Unlike traditional PPM that uses a top-down approach to set up the fixed scope project portfolio, responsive PPM is a multi-directional top-down and bottom-up method.
It’s developed with an iterative strategic planning and agile execution phase. Not only does responsive PPM involve the organization’s executives, but functional leaders from across the business are included for even more powerful collaboration.
Responsive PPM replaces the list of top-down projects with a collection of bottom-up product initiatives that help the companies achieve their goals.. This new roadmap enables easy adjustment and shifting of plans based on the outcome of execution.
This form of PPM adopts three-time horizons, uses MoAR to assess opportunities, and utilizes a portfolio allocation approach.
Allocating Resources For The Highest Yield
When it comes to investment options, responsive PPM uses a multidimensional approach.
One dimension could refer to business goals. For example, to keep existing customers or grow new accounts. Another could be market segments, such as enterprise, SMB, or international. Another dimension could be the varieties of product investments, like new product development or extending to adjacent markets.
This enables a big picture level of allocation by portfolio dimension. It promotes better-aligned innovation and collaboration for product leaders and their teams.
Responsive PPM also takes resourcing requirements and limitations into consideration, enabling teams to allocate based on various dimensions and objectives that will achieve the highest portfolio yield.
Portfolio Outcomes
Responsive PPM also takes a multidimensional approach when it comes to the measures of portfolio outcomes. This includes monetary metrics such as revenue and others like NPS, platform uptime, and new market penetration velocity. These metrics can help measure the various goals that organizations plan to achieve.
One of the metrics that responsive PPM emphasizes the most, instead of ROI, is MoAR (metrics over available resources). Since ROI measures the success of a product based on monetary value, (which may not be realized in the short term) MoAR is a more immediate measure when evaluating opportunities that maximize product and business outcomes.
So how does MoAR work? It’s simply the ratio of relevant contribution of a product feature towards a metric used to measure a business outcome, over the number of resources needed to achieve this contribution.
Supporting Individual Product Managers
A successful product organization defines goals responsively to the shifting state of the market and product performance across many dimensions.
Responsive PPM helps product managers with this. Not only is responsive PPM relevant and beneficial for executives and cross-functional leaders, but it helps individual product managers, too, even though they may not have control of the company’s whole product portfolio.
Every product manager leads a “portfolio” as their product or area must help with various goals, segments, and themes.
Responsive PPM helps individual product managers successfully prioritize competing needs from various company areas and manage both short-term goals and long-term vision.
A Multi-Dimensional Product Portfolio Approach
When it comes to putting responsive PPM into use, a purpose-built platform like Dragonboat can help. Dragonboat is developed on the responsive PPM framework to provide an effective and consistent practice with automated workflows for ultimate ease.
Dragonboat enables leaders to follow responsive PPM effectively. Teams can connect goals to initiatives, allocate resources, plan dependencies and adjust and adapt in real-time as needed.
If you’re not ready for a tool and want to learn more about the framework, sign up to get responsive PPM certified here.
Author: Ellie Swain