Yahoo And Product Portfolio Management

The current issue of Fortune has an article covering Carol Bartz, the new CEO of Yahoo, and the staggering job in front of her trying to turn the company around.

One of the most interesting parts of the article was the historical recap of the early 2000′s where the company was on a buying tear, gobbling up companies left and right.  The strategy seemed to be focused on growth through acquisitions with no attempt to merge and focus the acquired companies.  Of course, it was during this time that Google perfected paid search and the rest is history.

Comment new Yahoo CEO Bartz,

She also wants to prevent more space debris from launching in the future. “Yahoo was amateur hour in the past when it comes to product management,” she bluntly told business partners last month; groups haphazardly released things without a clear sense of whether customers wanted them.

It is always easier looking back, but I think is safe to say that a strong product portfolio management process may have helped avoid some of the missed opportunities.  The key here is to make prioritization decisions on product development that align with the strategic direction of the company.

Portfolio Management for New Products is an excellent resource on the topic.   From PMNP, the portfolio process should be the starting point for evaluation:

• Does the new product fit our business strategy?
• Where is the business currently spending resources and what allocation changes need to be made?
• What needs to be done immediately and what should be postponed?

However, a good process doesn’t guarantee success.  If done right, it will defenitly help focus, but you still need a sound strategic direction to make sure at the end of the day, your products hit the mark.