Fundamental Rules in Managing Products

Over the years, I have learned a few things about managing products from concept to grave. One of the most ignored rules is the three legs of managing products: Cost, Time-to-Market and Quality. The rule is that you can achieve one or two of the three well but can not have all three. One must be sacrificed so others can be successfully accomplished. So, at the start of the project, it helps to prioritize the three in order of importance. For example, if you need to get the market as quick as possible with a good quality, you need to spend the money to do it. There are very few examples of companies whose luck contributed having all three accomplished but over 99% of the time that does not happen.

Once I worked for a division of a Fortune 500 company. This division was a small division with less than 150 people. A new president was hired, who was a Harvard MBA type. We had a all employee meeting and we were invited to ask any questions. I asked the question which of the three is most important for the company. His response was that all three were equally important and we must strive to achieve all three to success. When I disagreed, he gave me the brush off. Well, after a year the division was shut down and everyone was laid off.

I believe that not understanding this important concept was partly responsible for the failure of the division. Many of the startup company CEOs have similar attitude as well. Of course, the startup companies require you to achieve all three or fail to survive in short time. So, the startup companies must try to achieve all three equally well. That’s why 97 of 100 startup companies fail because they were unable to execute to plan. Usually the money is the saving grace for these startup companies that allows them to achieve fast development with high quality. If money is not available, they get creative. However, it’

However, for a mid size company and up, this rule should be taken very seriously if a realistic goals can be achieved.