It’s that time of year again: annual operating planning. Hooray!
Jokes aside, successful planning relies on how well everyone understands the leadership team’s vision and their role in making the magic happen. The general approach is to develop an executive vision, followed by departmental plans.
For 2023, most OEMs will continue dealing with booming demand for new products in the face of engineering resource constraints. In response, I hear many OEMs taking a renewed focus on product portfolio management (PPM) driven by the problems caused by ongoing demand for old products.
Almost everyone has some level of PPM capability, but many still experience problems with ongoing demand for legacy products. Why? The answer involves the challenge of translating a vision into reality in the face of a culture that opposes leadership’s vision.
Years ago, I announced that we’d be investing heavily in new tools and resources for the coming year, and I invited everyone to submit a wish list. I was surprised when I got very little response until I realized that the team culture at that time was to do more with less. It didn’t matter if they were offered more resources; it went against their values.
Despite policy and plans, people will operate according to the natural energy streams that flow throughout the culture. This results in heroic and painful efforts that undermine annual planning objectives.
When implementing PPM, it’s important to understand that the natural energy in any company is to accept every customer order request, even when the requested product has been discontinued. Further, it is the natural energy of Operations to help Sales accept orders and it’s the natural energy of engineers to solve problems posed to them—no challenge is too hard.
Therefore, I advise OEMs to review their PPM capability to identify legacy demand use cases with all departments and then explore the various strategies to address each foreseeable situation. This will ensure everyone is on the same page.