Helping the Chronically Overworked Find Life Balance

What Happens When Features Are Dropped To Make a Launch Date?

Chapter 9: Paint Your Environment Part 6

Ever been on a project that is under time pressure to make a launch date?  One common solution  is to drop features from the product.  For example, when Apple launched the iPad mini in November  2012, it did not have the retina display.  I have no knowledge of how that decision was made, but I can easily speculate that this feature was not included to bring in the launch date.

“Sabina” was a product manager working in lifescience industry who was part of a project that had to make that very choice.  She was working on a new technology to detect and quantify a particular RNA within a sample.  When the original product was scoped, it was designed to meet a set of unmet customer needs, and she created a healthy revenue forecast to justify the expense of development.  Sabina explained the difficulty of creating a forecast for a new technology.

“When you build [mathematical] models, you try to make an intelligent metric,” which was based on sizing the market, and estimating the market share based on what the product could do relative to the competition.  Sabina explained that she felt “pressured to show there is value in doing the project, a positive NPV.  I never felt that I wasn’t being truthful, [but] with a brand new technology, it’s sticking your finger in the air and making the best guess you can.  There was equal pressure from myself and others.”

A forecast is built on assumptions. One key (although often unstated) assumption is that the product will meet the customer’s needs.  Notice how the impact of the assumptions as  Sabina continues her story.

“When I did the original model [at the start of the project] there were assumptions of what we could commercialize.  [As the project progressed,] we had to cut out 2/3 of the features.  Do I want to cut the revenue model?  At that point if I had cut it as much as I should have, the project may have gotten killed.  Yet I believed in it enough longer term, not just first release.”  Sabina made a quiet internal assumption that it would take multiple iterations to get it where the customers really needed it to be.

Unfortunately, the organization was very tied to the forecasts, which came in at 25% of the pre-launch levels.  This in turn meant that additional development resources were not allocated to help the product grow.  And life was difficult for Sabina, with lots of questions from her management team.  “I felt like a failure because [the forecast] was so off.”

In the next post, I will explore Sabina’s options, through the filter of corporate idolatry.

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The Accidental Lie In My Forecast

Chapter 9: Paint Your Environment Part 5

I used to agonize over my revenue forecasts.  I’m sure the scientist in me was holding me back, or rather was driving me to make them incredibly precise. But that didn’t make them more accurate.  I used to get advice from people in the know like “be confident” and “just list your assumptions.”  But I never really got it until my very last product forecast.

I presented the forecast on the phone, using hard copy of the slide deck.  It was a routine launch review for a small product, and I had nudged up the numbers since the previous checkpoint due to favorable market conditions.  I got a surprising amount of pushback from the executive review committee, but I confidently defended the numbers, citing “changing market conditions.”  I was really surprised at how excited the execs were as they signed off.  The next day I discovered why: finance made an error in the last minute slide preparation, such that the revenue was one hundred times higher than it should have been.

I should have caught the mistake, and earlier in my career I would have been panicked and mortified.  But that day, I laughed out loud and never said a word to anyone.  The bar graph was absurd: one huge bar on the right, and a bunch of tiny pancakes to its left.  But I was a hero for my rosy prediction of the future.

I finally got it.  I was so hung up on finding the truth, but there is no truth to be had in a forecast.  Predicting the future is impossible.  And by changing assumptions, a forecast can be made to say anything.

What has been your experience with forecasts?

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Why The Right Thing To Do Is A Business Case For Good

Chapter 9: Paint Your Environment Part 3

In 1994 Massachusetts had a statewide referendum that would have required companies to reduce the amount of product packaging. I lived in Boston and there was a raging debate between the environmentalists and the business community.  One side said that excess packaging is bad for the environment and costly to the public. The other side claimed that the costs of packaging reduction would be astronomical and cost jobs.  The measure was defeated 65% to 35%.

Fast forward to today – many companies cannot reduce their packaging quickly enough. The difference is the business case. Less packaging brings lower costs, a green brand, and in some cases more ease of use.  If you can deliver a better product at a lower cost, why wouldn’t the company do it?

Corporations are in business to make money, and it is very hard to argue that a company should make less money for any reason. It is far more effective to make a Business Case for Good.

If your company must decide between doing the right thing (A), or doing the wrong but less expensive thing (B), the worst thing you can do is to argue for “A” based on ethics. Instead, use your creativity to create a business case. For example, argue that A will differentiate your product in the market, and allow the company to command a higher price.  Or, argue that “B” will have higher support costs, or bring a legal risk.

Whatever you do, don’t EVER mention an ethical justification for A, not even as a fourth bullet point.  I’ve used a Business Case For Good on several occasions, and invariably someone else said “of course we should do A.  It’s the right thing to do.”  This is a test. If you agree, someone on the other side will use your agreement to bring the argument back to ethics, and you will lose.  Instead, be coldhearted, and say “That should not be a factor in the decision -we need to do what is best for the company.”

You want this to become a contest of who has the best numbers, and in the next post, I’ll show you how to properly buffer a revenue forecast.  If you make up better numbers than the other side, your company will start doing the right thing in spite of themselves.

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