Business cases in flux – why frequent re-evaluation fuels successful launches
12 Feb 2024
New product and service introductions have always required extensive planning, development, and launch coordination – but now businesses need to be smarter in managing such projects.
Most organizations create detailed business cases to justify and guide these projects, assessing market needs, costs, resources, and projected profitability. However, these foundational analyses often need to be revised for years while teams focus on execution.
When launch day finally arrives, organizations risk finding their carefully constructed business cases, created multiple years earlier, now fail to match drastically altered market realities.
Worryingly, I have witnessed such problematic scenarios numerous times through my consulting work – and increasingly so, which is likely to do with the pace of change and the quickening speed of customer demands.
For example, one client had diligently prepared to launch an innovative offering across three international markets. Yet on the eve of the big launch, two target countries declared the product no longer served their needs amid shifting customer preferences. The entire endeavor suddenly became a costly misstep – with teams wasting energy and resources – instead of a competitive differentiation opportunity.
Unfortunately, such stories are all too commonplace. In my experience, few organizations regularly revisit and update their new product business cases frequently enough to confirm that launch activities remain justified and relevant. This ongoing, regular re-evaluation is the secret ingredient for ensuring successful market introductions that fuel portfolio growth. For this reason, Oliver Wight recommends a frequent cadence to check the validity of projects and treat them as living documents rather than the finished design.
Hazards of outdated assumptions
When organizations first assemble business cases driving new product decisions, they devote extensive effort to validate their underlying assumptions, rightly. Proposed value propositions are tested with target buyers. Supply chain partners assess production feasibility. Revenue projections incorporate competitive offerings, pricing analyses, and adoption rate modeling. By thoroughly doing their homework upfront, teams gain confidence to pursue ambitious innovation investments.
Traditionally, the main push would end once executives flash the green light for the projects, and budget is secured. The meticulously crafted business cases collect virtual dust even as market conditions evolve. And that’s foolhardy in 2024.
Customer needs shift in response to economic trends or emerging substitute products. New regulations require functionality alterations. Competitors unexpectedly adjust their own offerings or pricing structures. Supply uncertainties drive production delays or budget overruns.
While overseeing complex launch implementations, cross-functional product and service teams rarely pause to recheck original business case hypotheses. Yet these foundational assumptions form the bridge between development activities and assumed outcomes. When alterations happen silently beneath the surface, suddenly whole projects risk catastrophic collapse.
Counting the cost of outdated priorities
Beyond jeopardizing individual new product launches, lagging business case re-evaluations distort organizations’ broader innovation investment priorities. Initial assumed revenue potential commonly determines which proposed initiatives secure funding support. But if project rankings fail to adjust dynamically to changing profitability expectations, resources will be wasted on lower-value propositions.
For instance, another client shared they were actively working on over 25 new product and service development projects simultaneously. Yet historical performance indicated they only successfully launched around two to three new offerings annually. This progress meant less than a quarter of ongoing activities would likely reach customers within Oliver Wight’s typical three-year strategic planning time horizon.
By re-evaluating business cases, teams can realign efforts around the highest potential opportunities expected to launch soonest. In this situation, the leadership team reprioritized resources to around a dozen projects with a focus on overall strategy and near-term sales impact. As a result, they could accelerate and smooth market deployment rather than spreading capabilities so broadly.
Continuous iteration and prioritization
Organizations must institute reliable business case re-evaluation mechanisms to avoid misguided commitments, just like how engineering teams use testing to catch blueprint deviations early. On at least a quarterly basis – preferably more frequently – product and service leaders should reexamine critical assumptions across launch project portfolios.
Key areas and questions include:
- Customer segment needs – have buyer preferences shifted due to new use cases, economic trends, or competitive environment changes?
- Market size models – do total addressable market assessments require adjustments based on updated segment understanding?
- Competitor offerings – have rival propositions transformed to alter relative differentiation advantages?
- Regulatory impacts – have new legal, safety, or compliance demands been introduced necessitating functionality or messaging changes?
- Production uncertainties – has geopolitical instability, or other volatility increased supply chain risks that may delay launch timing or budget needs?
- Adoption pace – does updated customer feedback suggest sales cycle assumptions should accelerate or decelerate?
- Revenue models – do lifecycle cost, pricing strategy, or recurring income stream calculations need revisiting given the above shifts?
Product and service leaders must take responsibility for re-answering these core questions regularly, not just when proposals are first approved. Cross-functional project teams focused on execution often lack sufficient perspective to notice assumption changes threatening end goals.
Ultimately, by proactively identifying external or internal adjustments early, organizations can pragmatically reboot development efforts to maximize customer value and commercial potential.