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I’ve shared the concept of the CoreX (developed at Electronic Arts) in previous posts at the Product Development blog at DevDigital. The basic idea is that a project is best served when the team identifies a CoreX  (the “Core Experience”) to guide them through development. Here’s a recap:

A CoreX can be broken down into two key parts: The Razor and The Slogan. The Razor defines the product internally (the way the team defines it) and The Slogan presents the visceral essence of the product to your audience (how the audience experiences it). If you’re familiar with Simon Sinek’s “Golden Circle” concept, The Razor is somewhat analogous to the How, the Slogan to the Why.

The Slogan keeps the team focused on how it wants the audience to feel about the product, but internally, it is imperative to have is a solid Razor. This means that you a predominant and measurable standard by which to define the product’s DNA. If your team can nail a meaningful Razor, then you can continuously define any new feature, addition, and solution as you develop your product.

The Razor Is the Best Tool to Cut… Feature Creep!

A great Razor helps your team to avoid feature creep in your project, thus creating a cleaner, more efficient development process that gives the team a far better chance of getting done on-time and on-budget. To use a different metaphor, if the team is Michelangelo, they will use the Razor to cut away anything that is not part of the David Project until only David remains. Features that fall outside the definition are cut away clearly and objectively.

For example, a team building a new person- and eco-friendly bicycle might have a Razor along the lines of: “A two-wheeled, human powered vehicle made entirely of recycled materials that supports an ergonomic posture.”

If the team then gets a great new feature idea, such as using a new synthetic material, adding an engine, developing an upright seating posture, or exploring a tricycle design, they can ask if those features support a product that is “a two-wheeled, human powered vehicle made entirely of recycled materials that supports an ergonomic posture.” If not, those features don’t belong in this product.

A CoreX Can Also Be Developed For Your Business.

Let’s think about a CoreX for a business. What might that look like?

Think about a business that has a Razor such as “a fast-food franchise model enabling independently managed and operated locations which are leased from corporate-owned real estate.” The Slogan for such a business might be, “I’m lovin’ It.”

Whether this fits your business or not (and whether they think about it as a CoreX), it has done pretty well for McDonald’s.

Portfolio Management in New Product Development and Project Selection

I recently read a cross-industry study that researched how businesses can use Portfolio Management techniques to inform their new product development and project selection.* Portfolio Management is a dynamic decision-making process wherein a business’s list of active new projects and R&D projects are constantly updated, revised, and evaluated. The projects are then accelerated/decelerated, resources allocated/reallocated, and Go/No-Go decisions are made in order to take advantage of new information, opportunities, goals, and business strategies.

When engaging managers, researchers found the most common complaint cited was is an over-abundance of short-term, low-risk projects in their development pipeline. The managers explained how this reality leads to significant resource allocation towards a number of projects that tend to steal cycles from the very projects that their company might otherwise be able to develop into its next big winners.

On the other hand results from the C-Suite suggest that the top brass is looking to get more of those bread-and-butter projects in and out the door in order to mitigate the risks associated with a more forward thinking (read: risky) or high-profile project.

Clearly, this is a divergence of priorities which is bound to cause some friction. So how do the top performing companies address this?

Distinguishing the Best Performing from the Worst Performing Businesses

The study found that the best performing business have developed strong portfolio management systems with clear guidelines, which are consistently applied, with managerial buy-in, that treat all company projects as a portfolio. As a result, they do significantly better than those businesses that use more arbitrary methods, a single method or, worse, none at all.

When asked why a portfolio management approach to project selection was so critical, eight key factors were cited:

• FINANCIAL – to maximize ROI, R&D productivity, and reach financial goals
• COMPETITIVENESS – to increase market share
• EFFICIENCY – to better allocate resources
• STRATEGY – to link business strategy with project selection
• FOCUS – to choose ‘great’ projects not ‘any’ projects
• BALANCE – to ensure a balance of project length, project risk, and industries served
• COMMUNICATION – to increase horizontal and vertical awareness of business priorities
• OBJECTIVITY – to maintain objectivity in selection and weed out “bad” or “time-sink” projects

Amazingly, and, blow-your-mind counterintuitive, is that those business that rely on financial modeling methods as their principle means of portfolio selection end up with the worst and poorest performing portfolios! In fact, only 36 percent of the best performing companies rely on financial models as their principal method. Compare that to the worst performing companies where 56 percent use financial models as their principal method.

Simply put, the best performing companies have developed specific and clear methodology for portfolio management with transparent rules and procedures. Management, from top to bottom, has bought into the method and supports it through their actions. Lastly, these companies consider the totality of their projects and treat them as a portfolio, applying the same methodology across all their projects.

CoreX Principles for Portfolio Management Style Project Selection

The study points out that to be a top performing business, the first step is to make a commitment to installing a systematic, formal, and rigorous portfolio management system or process. How you find the right system for your business entirely depends on your business’s goals, vision, and strategy – in other words your business’s CoreX.

By using your business’s CoreX to determine which tools you should prioritize over others, you’ll be able to rate your projects in a way that closely aligns to your business’s values and strategy. Sticking to your CoreX will keep your goals, vision, and strategy clear, defined, and objective and help you to make objective decisions that will put your business on track to be a winning business.

Take another look at McDonald’s… a quick glance at Wikipedia suggests the McDonald’s slogan has been updated nearly 50 times since 1960. Yet their Razor remains sharp and consistent. I would not suggest that there are not moments where it’s wise to pivot. In other words, you might have to find a new way to sell your product/services from time to time. However, the way you define your business – what characterizes the essence of what your business is – ought to remain consistent.

Avoiding feature creep in your projects creates a cleaner, more efficient development process that has a far better chance of getting done on-time and on-budget. Avoiding feature creep in your project portfolio keeps a clean, efficient and well-defined business process that will give your business a better chance for improved results in less time and with more opportunities for a win.

So take the time to turn your project backlog into a product portfolio in three easy steps:

1)     Define your business’s CoreX

2)     Develop a diversified method for evaluating what projects get into your product portfolio

3)     Get to work evaluating and building out those projects that will make up an enduring product portfolio.

* Cooper, R., Edgett, S. and Kleinschmidt, E. (2001), Portfolio management for new product development: results of an industry practices study. R&D Management, 31: 361–380.