Optimal Product Management – Gate phases

The Optimal Product Process was created from AIPMM and 280group. AIPMM or otherwise The association of International Product Marketing & Management is the largest community of Product managers, Brand managers, and other Product professionals related fields that are related to the Product lifecycle. The OPP is contained in product management body of knowledge® (Prodbok®)

Link to AIPMM website: https://aipmm.com/

280group is a Product management and consulting company

Link to 280group website: https://280group.com/

The importance of Product management

I wanted to speak about the OPP and phase gates because is one of the most agile frameworks related to Product management I have met in my career. Product management and in general the role of Product manager is one of the most important in the Project management industry and in the general managerial domain. It was not always the same though. The product manager role is relatively new and only recent years have gained momentum.

 The Product Manager function was conceived by Procter and Gamble in the 1930’s and the product manager was more of a Brand owner or Brand manager. Then when the IT industry started growing and there was a demand for managers to understand IT functions and engineering the role of product manager was under engineering. Then, in the ’80s Product Manager role became part of Marketing on when product management needed a more holistic approach and engineering was already mature but not Marketing, that why a Product manager was important to be more close to Marketing. Nowadays Product manager role is an autonomous corporate entity where they report to senior leadership directly. The Product Manager role is one of the most ambiguous roles but at the same time the most rewarding as they bring the most valuable product into customers’ lives. To do that Product Managers have to work in alignment with all the departments of the company, namely: Finance, customers, support, channel, operations, executives, partners, marketing, sales, engineering, Press/analysts. This means that the Product manager should work collaboratively with each department. Which means adapting to each department’s way of work. Let’s say the finance department needs to lower costs and cut budgets for a product, and at the same time the marketing department foresees great ROI by building an app to support our main product – how to balance these 2 powers is a responsibility of PM. Sounds challenging but at the same time challenging. The Product Managers’ ability to talk to every department makes them able to understand the strategic level of the products that they are building – this is the reason that product managers are more possible to move into the C suite when they are promoted.

The challenging role of Product managers

As I said the role of PMs is challenging but at the same time. Why I say it’s challenging – please check the below facts on the statistics of the product fails:

  • 75% of new product development programs fail commercially

– Griffin, A. and Page, A. L. Journal of Product Innovation Management. 1996

▪ 65 percent of new products fail

– Rob Adams, “If You Build It Will They Come: Three Steps to Test and Validate Any Market Opportunity”, 2010

▪ Market research was simply not done in about 75% of new product developments

– Cooper, R. G., Winning at New Products Accelerating the Process from Idea to Launch 2001

▪ Poor definition was cited as single biggest reason products fail to meet market needs

– “Product Development Best Practices Survey: Report of Findings” Product Development Consulting, Inc. 1996.

▪ Approximately 60-70% of IT project failures result from poor requirements gathering, analysis and management

– Meta Group

▪ 80% – 95% of new product introductions fail

– “Returning Insight To The Consumer” – New Products Magazine Dec 2006

▪ Over 42% of defects are attributed to bad requirements

– Standish Group, 2002

▪ The number one reason application projects fail is due to flawed specifications

– Forrester, 2004

▪ 70% of product development life-cycle costs are determined during the crucial product definition phase

– Committee on Engineering Design Theory and Methodology, National Research Council. Improving Engineering Design: Designing for Competitive Advantage 1991

▪ About 65% of companies informally segment current customers or do not segment their market at all

– Gantry Group, LLC, Market Segmentation Practices: Insights into the Practices and Use of Market Segmentation 2007

▪ Three out of ten products fail – roughly one third – because of a poor value proposition

– Greg Stevens, James Burley, and Richard Divine, “Creativity + Business Discipline = Higher Profits Faster from New Product Development,” The Journal of Product Innovation Management 16 #5 (September 1999), 455 – 468

Now I think that you have a better grasp of why the role of PM’s is challenging. Not everybody wants to start an endeavor of making his product of success if he knew these statistics. Sometimes is not your fault but your stakeholder’s. Check the below sketch to understand what I mean

As you understand, managing the good flow of information and good communication is of utmost importance to have a product success. But this is what separates the good PM’s – even if they know these numbers they still want to take the challenge! Understanding and managing multiple people from various departments and using the right tools at the right time is what makes PM’s successful.

 OPP Way of management

There are a lot of ways to become a successful PM and manage people processes and tools, however, in this article, we will dive into OPP from 280group and AIPMM:

 The conceive phase is when you ideate a new product that can bring value to your customers. In this phase, you should align fully with your company strategic initiatives. In the second phase you plan on how to build the product, then the development team kicks off the development of the product. The development phase is not of course complete as we do agile development. That’s why at the same time we see if the product has good feedback from the customers which is the qualify phase. According to the feedback that we get we make the necessary tweaks to the product and we launch it. During the launch, the product will become more mature. In this phase our goal is to maximize the value that the product has in the market. And finally, we should not expect that our products can be evergreen. We should be prepared for retire our products or make the necessary changes to revive them.

As we can see on the conceive and plan phases the strategy column is tied as these phases are the most crucial in product development and necessary planning is important.

In every step you can see the exit criteria, from on gate to the next.

Gates in OPP

The gates represent phases where decisions are made and that’s why are important. They work as decision and status checkpoints. For each phase, there are prescribed activities that need to complete before we go into the next phase. So in order to go to the next phase, we should complete every criteria of the exit criteria bar. The exit criteria here are an example and this can be modified in every company. In each gate we decide if we move forward, we kill the project or we modify it. Let me know your thoughts!

Leave a Comment

Your email address will not be published. Required fields are marked *