Use product launch tiers to allocate launch resources
Prioritize launch resources based on business/market impact
Companies with large product portfolios can face a dizzying pace of product launches. Realistically, not every product update needs the resources of a full-blown product launch so we need a rational way to prioritize resources to more closely match business outcomes.
One method is to allocate launch resources by prioritizing product launches based on a combination of the impact on the market and the impact to the business. Products that are expected to have a larger impact, get more launch resources. Products with a lower impact, get fewer launch resources.
We can do this by establishing launch tiers: Tier 1, Tier 2, and Tier 3 launches.
The x axis represents market impact: how the product launch will impact the market.
The y axis represents business impact: how the product launch will impact the business.
Tier 1 product launches are the highest priority and are reserved for products that are expected to have the most impact. Tier 1 product launches are less frequent and have significant strategic impact. A Tier 1 product launch might include new product categories, introduce an acquisition, or represent a significant change to the business.
Examples would be the introduction of the Apple iPhone or HealthCare.gov.
Tier 2 product launches have mid-level priority and are reserved for products with less market and business impact than a Tier 1 product launch. While still important to the business it can be rationalized that fewer product launch resources are needed. Tier 2 product launches are for products with incremental improvements where we want to make some noise in the market, but not the big promotional effort reserved for a Tier 1 launch.
An example would be Apple iPhone 5S.
Tier 3 product launches have the lowest priority and are reserved for incremental releases where there isn’t sufficient business or market impact. Tier 3 product launches need minimal resources and would typically be incremental in nature, like a maintenance release of a product intended for an established customer base where the changes are minimal.
An example would be Apple IOS 8.1.
Discretion needs to be applied when determining launch priorities. Let’s say we are a SaaS-based company and are planning for future growth. We’ve decided to add instrumentation to our application to provide better customer support. The market impact is low and perhaps the business impact – today – is relatively low as well. We could rationalize a Tier 3 launch.
On the other hand, if our SaaS-based company is having a severe customer retention problem due to issues in the application that are difficult to identify, we may decide to add instrumentation to better identify problems to help reverse the churn. The market impact would be low and the business impact would be high. We could rationalize a Tier 1 launch in that case.
In both scenarios we’re adding instrumentation to the application (the same development effort) but for different business reasons.
In other words, a higher development effort does not automatically imply a higher launch priority. Market and business impact are they drivers that determine the launch priority, coupled with a dose of reality.