Ah, the product lifecycle. Project managers have a unique place in influencing a product’s journey through the three notorious stages of growth, maturity, and decline. John Goodpasture discusses the importance of this well-known triad in his blog, Musings on Project Management.
Cycles, Cycles, Everywhere
Project life cycles are everywhere – in both public and private sectors. And project life cycles don’t necessarily begin and end as expected. For instance, the EPA, an agency created by conservative Republicans, has now become a political domain of the Democrats. Managers often intervene along the project cycle to reinvent dying products or to shelve some that have not quite lived out their natural market lives.
Investment Tells the Tale
Goodpasture argues that the real test of a project’s lifecycle phase depends on its current level of investment. Declining products require no investment, since they are being managed for efficiency and cost control as companies try to squeeze the last drops of value. A mature product will require some investment to find new consumers for the same product. Lastly, a new product will require investment for itself and for marketing to potential buyers.
Cost vs. Investment Q&A
Q: But according to Goodpasture, the real question a project manager must ask is this: When is an expenditure a cost [versus]an investment?
A: The answer is that an investment is geared toward making the future different from the present, what is known in business circles as differentiation. If funds for a product are not busy differentiating the product for new customers or markets, then it is technically a cost to maintain the product into maturity or decline. For a project manager or CFO, people can be seen as costs or investments. If they’re an investment, Goodpasture recommends holding their scorecard against the ROI their work brings.
Read the full blog at: http://www.johngoodpasture.com/2014/11/growth-maturity-and-decline.html