Product organisations face significant and growing challenges in speeding innovation, according to more than 500 product development leaders who completed the Fourth Product Portfolio Management Benchmark Survey. Commissioned by Planview® and conducted by Appleseed Partners and OpenSky Research, the survey found that product development organisations face more pressure to deliver timely, on-target products but lack key elements to drive a programmatic, repeatable innovation program in line with company goals.
Top Pain Points Persist
Survey participants indicated facing the same top pain points first reported in the 2009 survey results, and these are trending up: They have more opportunities than people to work on them and cannot drive innovation fast enough.
Speeding the pace of innovation and delivering market-driven products requires the ability to measure the value of projects, secure the right resources at the right time, and make timely decisions, which are all key challenges for product development organisations.
Time to Market Risk Intensifying
Mounting pressure to meet product development targets caused time to market – missing important seasonal or competitive windows – to jump from the number five position in 2012 to the greatest risk conveyed by survey participants this year. The second highest areas of concern are developing the wrong products and not cutting lower value products and projects that take resources away from more strategic ones.
The Missing Elements for Speeding Innovation
What are the reasons for the persistent and escalating pain points around product portfolios and pipelines, which lead to critical failures in the creation and delivery of new products? The survey uncovered four missing elements:
- A Defined Pathway: From 45 to 70 percent of product leaders (depending upon maturity level) conveyed that while maturing their innovation program is imperative, their companies lack a clear path on how to improve and develop in this area.
- Data: More than 80 percent of companies are supporting decision making with poor and/or hard to access data. As a result, executives experience difficulty making timely decisions, such as what initiatives to discontinue.
- Strategic Alignment: More than half of the survey respondents indicated that their product portfolios are not aligned well enough with company strategies and objectives, creating numerous pain points that include ineffective decision-making (53 percent).
- Culture: More than 70 percent responded that their leadership is averse to risk and equates killing products with failure. In fact, overall risk aversion is growing steadily. Too few companies are celebrating early failures and taking calculated risks, which is the bedrock for delivering breakthrough innovations.
“The benchmark study results show that product organisations face increasing pressure to innovate but don’t have the right level of people, processes, and tools needed to achieve success,” said Carrie Nauyalis, new product development solution evangelist at Planview. “The good news is that there’s a lot of low hanging fruit to create quick wins, as well as established best practices to emulate from companies who are really walking the walk, instead of just talking the talk.”
Maturing Innovation Programs
The majority of organisations surveyed want to move up in innovation management maturity, according to the survey. For the first time, survey respondents were asked to rank themselves according to the new Innovation Management Maturity Model created by Planview. The model helps define a pathway to a sustainable innovation program, enabling product groups to compare their programs to other organisations.
Few organisations have achieved the highest level of maturity according to the survey results, but those who rated themselves higher up the scale revealed sophisticated usage of the missing elements: innovation is operationalised and embedded in their company cultures, with a supporting organisation, well-defined processes, purpose-built tools, and better data.
The survey also showed a distinct separation between the lowest maturity organisations and the remainder, with better use of tools as the only way to jump that chasm. Of these lower maturity companies, 61 percent admit that they cannot effectively make decisions, and 44 percent are not even capturing data, signaling a need to leverage product portfolio management technology.
Watch the YouTube video highlighting the benchmark study’s finding. The full report is available here: www.planview.com/benchmark. To review the Innovation Management Maturity Model and rank the maturity of your innovation program, visit www.planview.com/InnovationModel.