Lifecycle Management: A CEO's Guide to Exits, Rationalisation, and Simplification

Lifecycle Management: A CEO's Guide to Exits, Rationalisation, and Simplification

As someone who has spent a couple of decades leading complex product portfolios and now as a CEO, I know firsthand the importance of effectively managing product lifecycles. Every product goes through a journey from its inception to its eventual end-use and without lifecycle capability, Ive seen portfolios get complex and clunky. Understanding and harnessing the management of lifecycles from beginning to end is critical for making informed decisions as a CEO.

In this article, I will share my insights and experiences, focusing on four critical aspects of lifecycle management: embracing lifecycle management, product exits, simplification and rationalising portfolios. I deep dive into the factors you should consider in each area and share a useful CEO lifecycle checklist at the end of the article.

By delving into the lifecycle, I aim to provide practical guidance that CEOs like us can leverage to optimise our product portfolios, maximise profitability, address product-level sustainability and stay ahead in today's dynamic business landscape. Let's explore the top 10 factors and summary checklist that will help us navigate the intricacies of lifecycle management effectively.

The Product Lifecycle

The product lifecycle can be divided into five stages:

• Introduction:?This is the stage where the product is designed and introduced to the market. It is a time of high risk and uncertainty, as the product is not yet known to target customers.
• Growth:?This is the stage where the product gains traction in the market or scales. Sales across various channels and profits start to increase, and the product becomes more profitable.
• Maturity:?This is the stage where the product has reached its peak. Sales and profits are at their highest, and the product is well-established, often with many feature enhancements from your innovation plans.
• Decline:?This is the stage where the product loses market share, however it can still be a high margin product. Sales and profits start to decline, and the product eventually becomes obsolete.
• End Use:?This stage is where product leaders consider the impact on the environment and circular economy principles.

Embrace Lifecycle Management

Effective lifecycle management is the foundation of a successful product strategy. Here are some factors to consider:

1. Product planning: Plan for the entire lifecycle of a product from the initial concept and lifecycle stages. Consider factors such as market demand, competitive landscape, product margin, customer experience, regulatory and technology trends, sustainability impact and high level business case. Align your product planning with your overall business strategy and objectives.
2. Product development: Ensure that your agile product development processes are efficient and well-defined embedding lifecycle disciplines and business case. Implement effective high level business case to monitor post launch and target market statements for fair value to your customer and your regulatory requirements.
3. Market research: Continuously conduct market research to gather insights on customer needs, preferences, and emerging trends. Stay updated on changes in the market landscape, technological advancements, and competitor activities. These insights can often come via your sales or customer success teams. Use this information to inform your product reviews, product decisions and adapt to market demands.
4. Product launch: Plan and execute well-coordinated product launches with a company-wide launch-ready checklist. Develop comprehensive marketing and communication strategies to effectively position and promote your product. Ensure your sales channels are prepared to support the launch with the necessary training and resources and meet regulatory requirements.
5. Product growth and maturity: Monitor and conduct 90-day reviews of your product's lifecycle growth and maturity stages. Analyse sales performance, market share, and customer complaints. Identify opportunities for product enhancements, product risks, expansions into new markets, or additional features that can extend the product's life and maintain its competitiveness.
6. Product decline: This stage can still be innovative. Anticipate and manage the decline phase of your product's lifecycle. Monitor sales trends, customer feedback, product margins, market saturation, and competition. Assess the profitability and sustainability of the product in the face of declining demand. Consider strategies such as price adjustments, cost reductions, or product diversification to mitigate the decline or transition to new offerings.
7. Product support and maintenance: Provide comprehensive customer experience, support and maintenance journey throughout the product's lifecycle. Continuously evaluate customer feedback and map to an end-to-end journey map to identify areas for improvement and address any product issues or friction in your customer journey. Include in your 90-day product reviews customer complaints across products and the sales channel.
8. Product retirement: Plan for the retirement or end-of-life phase of your product. Consider factors such as product obsolescence, market demand, and regulatory requirements. Develop strategies for product replacement, end-of-life notifications, and customer transition plans. Properly manage inventory, warranties, and spare parts to ensure a smooth exit.
9. Cross-functional collaboration: Establish effective cross-functional collaboration between different teams involved in the product lifecycle, such as product management, research and development, marketing, sales, legal, risk regulatory and customer support. Foster open communication and knowledge sharing to optimise decision-making and ensure a cohesive approach to lifecycle management.
10. Data-driven decision-making: Leverage a digital platform that centralises product lifecycle, data analytics and key performance indicators (KPIs) to inform your product lifecycle management decisions. Collect and analyse data on sales, customer satisfaction, product performance, and market trends. Use digital tools like Skyjed to set trigger thresholds and get risk notifications in your product portfolios.
11. Continuous improvement: Embrace a culture of continuous improvement throughout the product lifecycle. Regularly review and evaluate your products with monthly, quarterly and annual product reviews, including performance metrics and customer feedback. Implement digital tools for monitoring, workflows and action management. Actions should include risk and growth actions and lessons learned from each lifecycle phase to inform future product development and optimise the management of subsequent products.

Exits and Migration

Sometimes, it is necessary to exit a product. This may be because the product is no longer profitable, the market has changed, or the company is focusing on other priorities. CEOs need a process for exiting products to minimise costs and maximise value.

There are a few different ways to exit a product. One way is to sell the product to another company. This can be a good option if the product is still profitable but the company no longer wants to invest in it. Another way to exit a product is to discontinue it and migrate customers. This option can be good if you want to retain existing customers - mainly if the customers are high value - and migrate existing customers to a new offering in your portfolio.

When exiting a product, ensure you have an exit and migration plan.??

Conduct a thorough analysis of the product to determine its current value. Use a template for a comprehensive product review that covers revenue, value, customer impact, regulatory, innovation and sustainability.?

Here are some specific tips on how to exit products: The decision to withdraw a product can have significant implications for your business, so it's essential to carefully evaluate the following factors:

1. Market demand: Assess the current and projected market demand for the product. Consider a 3 year product forecast and factors such as customer preferences, competition, and any changes in market dynamics. If the demand is declining or there are emerging substitutes, it may indicate the need to exit.
2. Profitability: Evaluate the financial performance of the product. Calculate the profitability margins, including revenue, costs, and profit margins. If the product consistently generates losses or has declining profitability, it may be a sign that it's time to exit. Cluster your portfolios into top 20 products according to revenue, margin, customer complaints and the 3 year trend line. Dont forget to identify products that are 'pull-through revenue' ie required for other strategic products.
3. Strategic fit: Determine how the product aligns with your long-term business strategy. Assess whether the product fits within your core competencies, complements your other offerings, or supports your overall business objectives. Exiting a product that doesn't align with your strategic direction can free up resources for more promising opportunities.
4. Lifecycle stage: Consider the product's stage in its lifecycle. If it's in the decline phase, with diminishing sales and market saturation, it may be prudent to exit. On the other hand, if it's in the growth or maturity phase, with strong market potential, you might want to reassess before making a decision. An innovation strategy for a mature product can be a wise move to generate high-margin returns and can be lower risk move than developing a new product.
5. Resource allocation: Evaluate the resources required to maintain and support the product. Consider production costs, marketing expenses, research and development investments, and customer support efforts. Exiting a product that demands significant resources without providing proportional returns can allow you to allocate those resources more effectively.
6. Customer feedback: Gather and analyse customer feedback to understand their satisfaction levels, needs, and expectations. If the product consistently receives negative feedback, lacks customer interest, or fails to meet market demands, it may indicate that exiting or enhancement is the right choice.
7. Regulatory and legal considerations: Consider any regulatory or legal requirements associated with the product. Ensure that exiting the product complies with all relevant regulations and contracts. Assess the potential impact of any contractual obligations or legal consequences of discontinuing the product.
8. Brand reputation: Consider the impact of exiting the product on your brand reputation. If the product's failure or discontinuation could negatively affect your overall brand image, it may warrant careful consideration and potentially a phased exit strategy.
9. Transition plan: Develop a well-thought-out plan to manage the product exit. Consider factors such as inventory management, customer communication and support, employee reassignment or layoff considerations, and potential impact on existing partnerships or distribution channels. A comprehensive transition and migration plan can minimise disruptions and ensure a smooth exit.
10. Future potential: Assess any potential for repositioning or revitalising the product. Consider if viable options exist to pivot the product, target new markets, or explore partnerships that could revive its success. If there is reasonable potential for improvement, it may be worth reconsidering the decision to exit.

Simplification

Finally, CEOs can improve their company's performance by simplifying its product lifecycle processes and products. This can be done by reducing the number of steps in the process, automating tasks, and using agile methodologies. Simplification can help to reduce costs, improve time to market, and increase quality.When simplifying a product portfolio, you aim to reduce complexity and streamline your offerings. Here are some additional factors to consider:

1. Market segmentation: Analyse your target market segments and identify if your product portfolio caters to distinct customer needs or overlaps too much. Simplify your portfolio by consolidating products that serve similar customer segments and have overlapping features. This allows you to focus your resources and messaging more effectively.
2. Distribution channels: Evaluate how your products are distributed and consider the impact on complexity. Determine if certain products require separate distribution networks or can be consolidated within existing channels. Simplifying distribution can reduce operational costs and improve efficiency.
3. Production and supply chain: Assess the complexity of your production processes and supply chain management. Identify products that require unique or complex manufacturing processes, specialised equipment, or multiple suppliers. Simplify by optimising production methods, standardising components, or consolidating suppliers where possible.
4. SKU rationalisation: Examine the number of Stock Keeping Units (SKUs) within your product portfolio. SKUs represent different product variations, such as sizes, colours, or packaging options. Streamline by eliminating SKUs with low sales volume, poor profitability, or high production complexity. Focus on maintaining SKUs that offer the highest value and meet customer demand.
5. Brand coherence: Evaluate how your product portfolio aligns with your brand identity and positioning. Consider whether certain products or product variations dilute your brand message or confuse customers. Simplify your portfolio by eliminating products that don't align with your brand values or by repositioning them to better fit your brand strategy.
6. Customer experience: Consider the impact of a complex product portfolio on the overall customer experience. Determine if customers find it challenging to navigate through numerous options or if they struggle to understand the differences between similar products. Simplify by offering a more streamlined product selection that enhances clarity and simplifies buying decisions.
7. Pricing and profitability: Analyse the pricing structure and profitability of each product. Identify products with complex pricing tiers, excessive discounts, or low-profit margins. Simplify by rationalising pricing structures, eliminating unprofitable products, or adjusting pricing strategies to ensure a more straightforward and profitable portfolio.
8. Scalability and growth potential: Assess each product's scalability and growth potential with a 3 year product forecast. Identify products that require significant resources or customisation for scalability, limiting their potential for expansion. Simplify by focusing on products that can be easily scaled and have higher growth potential without excessive operational complexity.
9. Internal capabilities: Evaluate your organisation's internal capabilities and resources required to support each product. Consider factors such as specialised skills, training, and support infrastructure. Simplify by aligning your product portfolio with your internal capabilities, ensuring you have the expertise and resources to effectively support and develop each product.
10. Customer feedback and demand: Continuously gather and analyse customer feedback to understand their preferences, pain points, and demands. Identify products that consistently receive low customer satisfaction or have declining demand. Simplify by removing or improving products that no longer meet customer expectations or have limited market relevance.

Rationalisation

Another vital aspect of lifecycle management is rationalising product portfolios. This involves reviewing a company's products and determining which ones are essential and which can be eliminated. Rationalisation can help a company to focus its resources on its most critical products and to reduce costs.

There are a few different ways to rationalise a product portfolio. One way is to conduct a comprehensive annual product review and use portfolio or category product clustering. This tool can help companies assess their products' value and decide which products to keep and which to eliminate.

A value-based pricing approach is another way to rationalise a product portfolio. This approach involves pricing products based on their value to customers rather than on their cost to produce.

When rationalising a product, you evaluate your portfolio to streamline and optimise it. This process involves eliminating or consolidating products to focus resources on the most profitable and strategically aligned offerings. Here are some factors to consider when rationalising a product:

1. Financial performance: Assess the financial performance of each product in your portfolio. Review metrics such as revenue, profitability, costs, and profit margins. Identify products that consistently underperform, generate losses, or contribute less to overall revenue. Prioritise products the top 20 products - with strong financial performance for retention and consider eliminating or consolidating those not meeting financial goals. Often 80% of product margin comes from small % of the overall portfolio - even more if you havent implemented lifecycle disciplines.
2. Market demand and potential: Analyse each product's market demand and potential using a product health check score in Skyjed. Identify products with high market demand, growth potential, and sustainable competitive advantage. Consider market trends, customer preferences, and competitive landscape. Use health-check dashboard to monitor products and report side-by-side comparisons.
3. Strategic fit: Evaluate how each product aligns with your long-term strategic objectives and core competencies. Assess whether a product complements your overall business strategy, supports your brand positioning, or leverages your unique capabilities. Prioritise products that fit well with your strategic direction and consider their health-check score over time, risk and growth actions.
4. Portfolio overlap and cannibalisation: Identify products that significantly overlap your portfolio's features, target audiences, or value propositions. Assess whether this overlap leads to cannibalisation, where multiple products compete against each other instead of capturing new market segments. Consider consolidating overlapping products to reduce complexity, optimise marketing efforts, and increase focus on differentiated offerings.
5. Resource allocation: Evaluate the resources, including production, marketing, and support, required to maintain each product. Identify products that demand disproportionate resources to their contribution to overall revenue or strategic value. Streamlining resources can improve operational efficiency and reduce costs.
6. Product lifecycle: Consider the lifecycle stage of each product. Evaluate products in the decline phase with diminishing sales and market saturation. Determine whether it's worth continuing to invest resources in products with limited growth potential or being overshadowed by newer offerings. Focus on products in growth or maturity phases that offer better prospects for revenue and profitability. Adopt 90-day product reviews to consider each product and report via lifecycle stage.
7. Customer feedback and satisfaction: Gather customer feedback and assess customer satisfaction levels for each product. Identify products with consistently low customer satisfaction, high return rates, or negative reviews. Prioritise products with a loyal customer base, vital positive feedback, and meet or exceed customer expectations. Consider using trigger thresholds to get notifications when reach threshold and set actions to address.
8. Complexity and scalability: Evaluate the complexity of managing and scaling each product. Identify products that require extensive customisation, specialised infrastructure, or complex supply chains. Assess the scalability potential of each product and prioritise those that can be easily scaled up without significantly increasing costs or operational challenges.
9. Regulatory and legal considerations: Consider each product's regulatory or legal requirements. Ensure that rationalising a product complies with all relevant regulations and contractual obligations. Evaluate any potential impact on existing agreements, partnerships, or intellectual property rights. Seek legal advice to navigate any legal implications of discontinuing a product.
10. Impact on brand reputation: Assess the potential effects of rationalising a product on your overall brand reputation. Consider whether discontinuing a product might negatively affect customer perception of your brand or damage customer trust. Develop a communication plan to manage customer expectations, explain the rationale behind the rationalisation, and provide alternative solutions or product options.
11. Competitive landscape: Evaluate the competitive landscape and assess how your products compare to competitors' offerings. Identify products that face intense competition, pricing pressures, or have limited differentiation. Consider whether it's feasible to enhance competitiveness through product improvements or cost.

How Skyjed's Product Lifecycle and Governance Platform Helps Product Leaders Achieve This

Skyjed's Product Lifecycle and Governance Platform is a cloud-based solution that helps product leaders manage the entire lifecycle of their products. The platform provides a single source of truth for product information, automates tasks, and helps teams collaborate more effectively.

Lifecycle Management

Skyjed's lifecycle management features help product leaders manage the entire lifecycle of their products, from ideation to retirement. These features include:

• Product design:?Skyjed provides a suite of tools to help product leaders design and develop products that meet the needs of their customers. These tools include product and regulatory requirements management, user story mapping, and high level business case.
• Launch readiness:?Skyjed helps product leaders to ensure that their products are ready for launch by providing a ready to use 'checklist' for product or partner launch.
• Monitoring workspace:?Skyjed provides a central workspace for product leaders to monitor the performance of their products. This workspace includes features for tracking metrics, workflows, threshold triggers, scheduling, identifying trends, and generating reports.
• Risk management:?Skyjed helps product leaders identify and mitigate product risks. These features include risk assessment, impact analysis, and contingency planning in product level risk dashboard.
• Reporting:?Skyjed provides a suite of tools to help product leaders generate ai- based reports on the performance of their products. These reports can track progress, identify trends, and make informed decisions.

Governance and Administration

Skyjed's governance and administration features help product leaders ensure that their product lifecycle processes are efficient and effective. These features include:

• Workflows:?Skyjed provides workflow tools to help product leaders automate product monitoring by setting thresholds. These tools include notifications and setting risk or strategy actions when hitting the threshold, e.g. 100 customer complaints.
• Scheduler:?Skyjed provides a scheduler to help product leaders set one-off or recurring product reviews or events and track and manage their product timelines across the lifecycle.
• Notifications:?Skyjed provides a notification system to help product leaders stay informed about the status of their product lifecycle and risks. These notifications can be sent to individuals or groups and customised to include specific information.
• Collaboration:?Skyjed provides a platform to help product leaders work together effectively. This platform includes features for product design, monitoring, reporting, file sharing, messaging, roles and permissions.
• Reporting:?Skyjed provides a suite of tools to help product leaders generate reports on the performance of their product lifecycles. These reports can track progress, performance metrics, risk and strategy actions, governance reports, distribution and supply chain product information.
• Approval controls:?Skyjed provides a suite of tools to help product leaders control the approval process for their products. These tools include role-based access control, audit trails, and version control.
• Record keeping:?Skyjed provides tools to help product leaders keep track of their product lifecycle records. These records can be used to comply with regulations, resolve disputes, knowledge management and improve future products.

Customer Success

Skyjed's customer success team is dedicated to helping customers get the most out of the platform. This team provides training, support, and guidance to help customers implement the platform and achieve their goals.

The average time to onboard with SkyJed's customer success team is 5-7 weeks, including data integration of sales and customer complaints. Skyjed is used by more than 100 clients across 10 industry sectors for product leaders who want to improve the performance and profitability of their products.

Summary Checklist for CEOs: Lifecycle Management

Here is a summary checklist for CEOs to share with your leadership team for effective lifecycle management:

Embrace Lifecycle Management:

• Align product planning with business strategy and objectives.
• Streamline product development processes and project management.
• Continuously conduct market research and adapt to market demands.
• Plan and execute well-coordinated product launches.
• Monitor and review product growth, maturity, and decline stages.
• Provide comprehensive customer support and maintenance services.
• Plan for product retirement and end-of-life phase.
• Foster cross-functional collaboration and data-driven decision-making.
• Embrace a culture of continuous improvement.

Exits:

• Evaluate market demand and profitability of the product.
• Assess strategic fit with long-term business goals.
• Consider the product's lifecycle stage.
• Evaluate resource allocation and customer feedback.
• Consider regulatory and legal considerations.
• Plan for a smooth transition and develop an exit strategy.
• Assess the future potential for repositioning or revitalising the product.

1. Simplification:

• Analyse market segmentation and consolidate products.
• Evaluate distribution channels and streamline operations.
• Assess production and supply chain complexity.
• Streamline SKU portfolio and align with brand coherence.
• Simplify the customer experience and pricing structures.
• Evaluate the scalability and growth potential.
• Align internal capabilities with product offerings.
• Continuously gather and analyse customer feedback and demand.

Rationalisation:

• Review financial performance and market demand.
• Assess strategic fit with long-term objectives.
• Identify portfolio overlap and cannibalisation.
• Evaluate resource allocation and product lifecycle stage.
• Consider customer feedback and satisfaction.
• Assess complexity and scalability.
• Evaluate regulatory and legal considerations.
• Assess the impact on brand reputation.
• Evaluate the competitive landscape.

How Skyjed's Product Lifecycle and Governance Platform Helps:

• Provides a single source of truth for product information.
• Automates tasks and enhances collaboration.
• Offers features for product design, launch readiness, and monitoring.
• Helps identify and mitigate product risks.
• Generates reports on product performance and governance.
• Supports workflow management and scheduling.
• Facilitates notifications and collaboration.
• Provides training, support, and guidance for customer success.

Thank you for taking the time to read this article on product lifecycle management. I hope you found the insights and factors discussed valuable for your role as a CEO.

If you'd like to stay updated on the latest trends and best practices in product management and sustainability, I invite you to subscribe to my Product&Planet newsletter. It's a resource where I share actionable strategies, industry insights, and innovative approaches to help you drive sustainable growth while considering the impact on our planet.

If you have any questions or want to discuss lifecycle management best practices further, please don't hesitate to reach out. I'm here to support you and your team in optimising your product portfolios, improving customer experiences and achieving long-term success. Feel free to message me, and I'll gladly engage in a meaningful discussion.

Remember, effective lifecycle management is a continuous journey. Let's work together to create a sustainable and thriving future for your products and business.

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