Every summer my family goes camping with another family, and each evening we end the day telling ghost stories around the camp fire while we roast marshmallows. We tell old stories about the hook-handed man, the man with the golden arm, and the disembodied voice from within the decrepit house. After a while such stories get repetitive, and so a couple of years ago I began to intersperse them with tales adapted from one of our family’s favorite movies – stories of black knights, wooden badgers, and horrible Frenchmen. It’s in that spirit that I present my next blog posting:
Bring out your dead (http://www.youtube.com/watch?v=dGFXGwHsD_A)
Last week our pricing team celebrated the death of one of our most useful and innovative pricing models. We built it only a few years ago to price financial instruments that couldn’t be correctly valued by any of our existing models. For the past four years or so this useful tool allowed us to provide our clients with accurate prices when they needed to buy, settle, or report on some of their derivative values. The model had been well tested, regularly enhanced, and confidently utilized during the turbulent financial markets of the past few years. And it still works adequately; it’s not dead yet on its own.
So if the model worked so well, why did we celebrate its demise? Why in fact did we choose to kill it and replace it with something else? Because as helpful as that model has been in the past few years, we have found better ways to solve the problems that this older model was designed to handle. One thing good product owners need to pay attention to is when it is time to retire even a good product and move on to something new. What are some of the key signs to watch for?
- The market has evolved. The industry in which I work is constantly in flux, buffeted by global market forces and impacted by regulation. For our business, and for me as a product owner within that business, these new circumstances generate a regular need to adapt. When we build new products or enhance existing ones, we want to make sure that they address real market issues in the way active market participants expect, and so subtle shifts in market practices have to be reflected in our products for us remain at the forefront of our industry.
- Core technologies have improved. I am fortunate to work with a strong team of developers who keep abreast of technological advances that can positively impact how we do business. From new user interface standards to faster processing algorithms, this innovative team regularly suggests ways to improve our products and to take advantage of increased opportunities for automation. As a product owner, I help our product manager weigh these technological advances to determine when we can enhance existing offerings and when it is time to replace them.
- Clients’ needs have changed. No one wants to pay for even the best solution to a problem that they no longer have. As a product owner I rely heavily on the product manager – along with the sales and consulting teams – to make sure that our products address real and pervasive market problems that clients will pay us to help them solve. When client needs change our product offerings have to change as well, which means sometimes we retire perfectly good models that solve last year’s issues so that we can make room for new models to address today’s concerns.
There are many reasons why it may be time to ‘kill off’ a product even when it still appears to be successful. Good product owners working with an innovative team of developers and with product managers who listen well to current market needs should pay attention to the signs. That makes it possible to know when to phase out existing product offerings and when to roll out new ones. Of course in truth it’s not that simple.