Principles of Product Portfolio Planning

Marty Cagan argues that most software companies handle product portfolio planning poorly, and that while no single process fits every company because culture and leadership matter, a set of overarching principles can guide an effective approach. The principles cover clarity on business strategy, talent, managing uncertainty with two investment decision points, executive sponsorship, keeping executives out of details, grooming the portfolio, and thinking multi-year. He also stresses killing weak projects early, embracing pivots found through customer contact, supporting planning with a PMO, and having corporate courage. The aim is a planning process that is effective without being bureaucratic.

01Key takeaways

• Work with leaders to articulate a clear business strategy and connect each product team's scorecard to it.
• Split investment into two gates: is the opportunity promising, and does the team have customer evidence and a confident cost estimate.
• Give every major investment an executive sponsor and keep executives focused on strategy rather than micro-managing features.
• Use the same team for discovery and delivery, and invest in strong product leaders as a deciding factor.
• Build the discipline to kill projects early, and treat customer-driven pivots as opportunities rather than rejections.
• Plan in multi-year horizons and be willing to cannibalize your own products before competitors do.

02Key sections

Clarify the business strategy

Product teams often lack an accurate picture of the business strategy, so the product organization should help leaders articulate it and make sure it is understood and agreed upon. Product scorecards can show how each team contributes to it.

Accept what cannot be known

Early business plans are almost always wrong about cost and customer appeal, so investment should be split into two decision points: whether the opportunity is promising, and whether there is customer evidence and a reliable cost estimate for a solution.

Governance and focus

Every key investment needs an executive sponsor and open executive debate, while executives should stay focused on strategy and big investments rather than features and design details. Projects should be groomed continually, investing, sustaining, or phasing out.

People, long-term thinking and killing projects

Leaders matter more than interchangeable staff, so the same team should discover and deliver. Companies should favor multi-year strategies and be willing to kill projects that fail discovery rather than build products nobody uses.

Pivots, PMO and corporate courage

Customer feedback can reveal better opportunities that should be embraced as pivots, a PMO supports informed what-if decisions, and successful companies are willing to compete with and obsolete themselves.

03From the post

“A partnership dedicated to teaching best practices to product teams and product leaders”

04Frameworks mentioned

Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.