Capability Maturity Model for Portfolio and Pipeline Management

Faster benefits from Portfolio and Pipeline Management (PPM)

Would you like to get good results from NPD Portfolio and Pipeline Management (PPM)?  It is easy.  Simply adjust the mix of new product development projects so that the projects will have the biggest impact in the market over the selected planning horizon.  But at the same time, make sure you assign the right people to the right tasks on the right projects over the right time-period.  That's all you have to do.  I'll guarantee that your organization will realize notable gains.  It's just that easy.

How about that for consulting advice!!

It doesn't take much real-world experience to recognize how this advice is.  What is the correct mix?  Who are the right people for which tasks on which projects over what time?  Those working to advance their organization's productivity in new product development through portfolio and pipeline management know these and other challenges all too well.

Research conducted by The Adept Group reveals that few organizations have a firm handle on all of the challenges in PPM.  Still, many organizations have embarked on substantial initiatives in PPM.  Every organization wants to reap the benefits.  And, there is no question why they want these.  The benefits can be substantial: faster time to market, greater strategic impact, and more efficient use of resources.  The research suggests, though, that how an organization goes about implementation is critical to how fast these desired benefits accrue.

Adept Group's research took a hard look at many practices contributing to PPM for companies spanning different experience levels. The findings, I believe, open the door to organizations gaining major benefits significantly faster than most current implementations approaches deliver.  So what is the key?  In one word: execution.

Management at most organizations recognize several critical practice components that must be advanced in PPM (see Table 1).  Yet, for each practice component, getting to the end-point too fast or out of sync with other practice components can be highly problematic.  For example, anchoring metrics too early in PPM deployment can have serious negative affect on pipeline throughput optimization.   Or, skipping risk measurements can leave an management team hard pressed to justify what the "right" mix of projects might be.  In a nutshell, all of the practice components are related, and all must be addressed. 

Table 1:    Portfolio and Pipeline Management Practice Components

1) Mix Management     - Project Selection Criteria     - Mix Criteria     - Strategic Buckets     - Project Impact Dependencies     - Mix Optimization Analysis 2) Throughput Management      - Project Management Foundation     - Project Prioritization     - Resources to Project Assignments     - Resource Use Forecasts     - Critical Chain Buffer Management  3) Measures and methods     - Metrics     - Financial Priority Listing     - Risk Assessment 4) Software and Data     - Data Gathering and Handling     - View Creation Software     - Enterprise Systems 5) Front-to-back process management      - Product innovation charters     - Products in development     - Products in the market     - Stage-gate redesign     - Front-end concept generation     - Product line mapping 6) Implementation Focus     - Top Management Involvement     - Management Decision Proficiency     - Implementation Team Orientation

Implementations must recognize the interconnection among PPM practice components and advance them together.   As Diagram 1 below suggests, the desired execution is through a "spiral up" work effort.  The implementation should extend and improve each practice component as efforts move the organization up the spiral to each new capability level.

Categorizing the use of practice components into steps or "capability levels" reveals the progression that managers must induce their organizations to make.  Each level extends or advances each practice component.  Similar to the "Capability Maturity Model" used in the software industry for improving code, NPD managers must establish consistent, cross-organization use of each practice component at each level.  Once the organization "matures" in capability, the practice component can then be extended to the next level. 

Here are five of the many insights about PPM implementation suggested by our research:

  1. Moving one practice component several levels ahead of an organization's capability level can cause implementations to stall.
  2. Establishing certain practice components at different levels is critical to anchoring PPM benefits.  Certain practice components are uniquely important to each capability level.
  3. The relative importance of practice components changes as organizations mature through each capability level.
  4. Consistency-in-use of each practice component, across the organization, is what drives benefit accrual.
  5. Executing an intelligent game plan (think project plan, Gantt chart, et. al.) for implementation is a must. The game plan enables coordination of the many work efforts required throughout implementation.

Many advances can be accelerated with outside expertise.  The key here, though, is in facilitation.  Outsiders can advise, guide and help, but insiders need to execute.

If you would like to learn about other key insights from our research and how organizations can speed accrual of benefits in PPM implementation, please do not hesitate to contact me.  I will gladly share with you the details of the research and how Adept Group can help your organization gain benefit from PPM faster and more efficiently.

Please feel free to share this e-Newsletter with others in your organization that might find it beneficial.   And, as always, please do not hesitate to email back your thoughts .

My Best Regards,

Paul O'Connor

The Adept Group Limited, Inc.
Tel: 904-273-5319
Fax: 904-285-3488
www.adept-plm.com
Focused on Productivit in New Product Development