Ben Almojuela is an Associate Technical Fellow of The Boeing Company, currently working in Product Development for Boeing Commercial Airplanes (BCA). We caught up with Ben to hear more about the role roadmapping plays in relation to portfolio management, and how they fit into the strategic product planning process.
Q: You've been fundamentally involved with BCA's strategic roadmapping and portfolio management processes. How do those distinct processes fit together in the overall strategic planning domain?
A: Roadmapping and portfolio management are two key parts of a robust strategic planning process. Roadmaps provide a context for planning, much like a highway map provides a context for planning a driving vacation. Portfolio management, on the other hand, defines potential options and provides the tactical decision-making framework for accomplishing selected options. Again using the driving vacation analogy, you can decide which route you wish to take to a destination based on speed, scenery, weather or screaming kids in the back seat.
Of course, roadmapping and portfolio management aren't the only elements of strategic planning. Other key elements include processes for setting strategic goals and objectives, processes for developing effective competitive or market intelligence and processes for making strategic decisions. It's pretty hard to make good strategic decisions using a haphazard or ad-hoc process.
One hidden value of roadmapping and portfolio management appears when things don't go "as planned." If the roadmap and the portfolio are robust, strategic planners can quickly assess the new situation, look at their roadmaps, pick a new approach out of their portfolio and proceed with a new plan. This helps avoid the "organizational paralysis" and "finger-pointing" that occurs when things go wrong.
Q: What are some of the key synergies between roadmapping and portfolio management?
A: Roadmapping and portfolio management are separate but overlapping processes, so the synergies occur naturally. It's difficult to work with one process without simultaneously thinking about the other.
For example, one of the major activities in portfolio management is resource allocation (budget, personnel, technical capabilities, etc.). It is nearly impossible to allocate resources in a strategic or long-term manner without visualizing the time dimension that a roadmap provides. Thus the strategic time dimension of the roadmap is synergistic with the resource planning and allocation function in portfolio management.
Roadmaps can be used to provide visibility of various strategic scenarios, but they don't provide good visibility of risk involved in those scenarios. The risk management function with portfolio management can provide the desired visibility so that selections between scenarios can be made effectively.
Most users of portfolio management focus mainly on product improvements or incremental innovation. Roadmapping provides visibility of radical or disruptive innovation, so that the portfolio can also reflect the whole technology picture and potential development trends.
Q: In what ways can roadmapping impact portfolio management effectiveness?
A: Portfolio management, by itself, is a valuable adjunct to near-term project management. However, for longer-term planning, it is difficult to identify strategic or longer-term criteria by which to evaluate changes to the portfolio mix. Without a roadmap with a longer time horizon, organizations tend to assume that the current criteria by which projects are selected are static - in other words, that they never change. This myopic view will eventually lead to an ineffective process, sometimes with disastrous results.
Roadmapping can also identify the need to include small projects in the portfolio to cover uncertain scenarios. For example, a small project to identify what modifications can be made to an existing product as a fallback position in case a new product introduction does not go as well as hoped. The introduction of "New Coke" and the subsequent rapid re-introduction of "Coke Classic" comes to mind. If Coca-Cola had not provided for the fallback to their previous formula in new packaging, we might all be Pepsi drinkers now.
Q: How can strategic roadmapping and portfolio management each play a part in business and product strategy validation?
A: Strategic planning is an inherently uncertain process. Validating a strategic plan means trying to assess and minimize that uncertainty with the best data and estimates at any given time. But strategic plan validation is a continuous process because we're "always getting smarter."
Roadmaps are essential for identifying potential courses of action with regard to a market. Portfolio management is used to assess the risk, cost and payoff for those potential actions. This knowledge gives strategic planners the best possible information at any given time so that they can make effective decisions (those meeting desired cost/risk/payoff criteria). Without this knowledge, strategic planning is really an exercise in creative intuition, rather than a "disciplined" process. Portfolio management is always about testing of three broad objectives on a way to achieve strategic alignment: strategic fit, strategic contribution, and strategic priorities.
Q: How do strategic roadmapping and portfolio management help to capitalize on new opportunities?
A: Markets and environment around a product or service continually change. Roadmaps should always represent our "best guess" at what might happen to the market, with special attention given to market evolutions or changes, because these areas are where most future opportunities lie. The portfolio mix can then be modified to take advantage of these opportunities if they arise (or be deleted if they don't).
A roadmap can provide visibility of "disruptive" influences or capabilities that would not be included in a simple near-term or tactical portfolio. "Disruptive" market opportunities may require new capabilities that don't even appear in today's portfolio...but you can bet the competitor who sees the disruption coming and incorporates it into their portfolio will have a definite strategic advantage.
A strategic roadmap may also be used to identify opportunities for an organization to proactively change a market, rather than be purely reactive. Resources can be adjusted in the portfolio to provide market-driving opportunities. Ideally, a competitor would use these portfolio resources to effectively create "heartburn" for other competitors. When an organization gets to this level of proficiency with a roadmap, it becomes a very nimble competitor, indeed.
Q: What role does each process play in terms of strengthening communication and collaboration?
A: We find that roadmaps naturally tend to generate high levels of collaboration and common understanding. But when it comes down to choosing projects and allocating resources, portfolio management provides the necessary discipline so that all stakeholders understand precisely what has been decided.
Roadmaps can also be used to provide effective co-development or collaboration between business partners through sharing of high-level roadmaps. Each partner can retain their own portfolio as private while helping maintain a common high-level roadmap. The partners can reap the benefits of collaboration through the roadmap while protecting their unique assets in their private portfolio.
That being said, commonality in portfolio management approaches ensures better alignment and integration between projects in different yet related portfolios. Early understanding of benefits of user-developer interaction and common approach in project maturation provides a platform for better communication and collaboration throughout product life cycles.
Q: How do you promote collaboration and reduce conflict with strategic roadmapping and portfolio management?
A: That's an interesting question. Portfolio management, by its very nature, utilizes a "disciplined" structure and imposes a common nomenclature to support critical decision making. In order to make good decisions, conflict between stakeholders is actually desirable in order to drive out and resolve all issues.
Roadmapping, on the other hand, is much less rigid in how things are represented, since it must be able to provide visibility to multiple scenarios (some of which may be conflicting). Sitting around a roadmap and discussing high-level issues actually leads to high-level consensus, and keeps lower-level issues from inhibiting progress.
Both conflict and consensus elements must be present for effective strategic decision-making. Conflict generally occurs only when a stakeholder doesn't fully understand or accept one or both processes. The resolution of that kind of conflict generally involves executive-level leadership.
