“Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing. This can happen very easily in large organizations.

– Jeff Bezos 

Dear all,

It could be just the AIs powering my media feeds getting the wrong impression from my professional internet consumption. Still, in my daily dose of curated newsletters this morning, I received yet another article comparing two product development process variants.

Europeans, especially we Germans, seem to have a strange fixation with processes. As a result, many organizations we work with are highly focused on process optimization. Product development luminary Marty Cagan calls it the „European Process Disease.“

I recently attended a meeting where it became evident that a lack of product strategy and priorities had led to the impending disaster the meeting was called to fix. Still, the closing sentence was like, „If we can fix the process, we will make it.“

I beg to disagree.

Processes are the outstanding achievement of the industrialization of the 19th and 20th centuries. Think Eli Whitney and Frederick Winslow Taylor. Similar parts combined in similar production processes efficiently mass-produced similar goods – and rather predictably.

Efficiency creates economies of scale that are optimized by high asset utilization.

When creating new products, the efficiency paradigm becomes insufficient when you move beyond the „Core“ category in Nagji and Tuff’s (2012) innovation ambition model. The „Core“ category is about improving existing products for existing customers. When developing „Adjacent“ or „Transformational“ products which aim to solve new problems for – possibly – new customers, effectiveness becomes more important than efficiency to achieve success.

In Peter Drucker’s terms, „doing things right“ must give way to „doing the right things.“

Translating this into a product context entails „bets,“ activities, and resources to be consciously selected and prioritized based on (strategic-) goals, context, and learnings. Consequently, constant or at least frequent decision-making on portfolio and feature levels is required.

This elevates developing innovations and products from managing and optimizing a process to a true leadership role. (In alignment, recent scientific research shows that progression in management roles goes along with increased goals focus, while the importance of process is reduced.)

In recent years evidence-based heuristics have emerged to support product leadership with innovation portfolio management and feature discovery and -prioritization beyond the incremental „Core“ horizon. If you’re interested, the links below provide you with the starting points.

Managing Your Innovation Portfolio

The HBR article by Bansi Nagji & Geoff Tuff introduces the 3 innovation horizons

Click to view!

How Companies Should Manage Their Innovation Portfolios

Alexander Osterwalder’s intro to his innovation portfolio management concept

Click to view!

The What & Why of Continuous Discovery

Teresa Torres’ video explains how ensure you’re making and improving the product your customers want

Click to view!

All the best from the Bavarian Fünfseenland,