(2016-06-15) Wilson Complexity In The Product Portfolio

Went to a Product Management MeetUp about Complexity in the Product Portfolio (Product Management)

• Stephen Wilson, consultant with books (old one 2009, new coming September) Waging War on Complexity Costs ISBN:0071639136
• mixing complexity and complicatedness
• 3 varieties product, process, and organization
• typically grows exponentially (Super Linear) with increase in products, Best Practices CheckList-s, committees, etc. (OverHead, complexity debt)
• worse than Pareto: 20% of products make 300% of profit, the rest Lose
• benefits are local, costs are distributed: commons/pollution
• slowing growth
• substitutability opposite of cannibalization - dropping products doesn't lose 100% of that revenue
  • even applies to big sellers (top 100)
• square root costing: allocate complexity cost to smaller products by using square-root of revenue ratio, instead of straight-line ratio. This isn't perfect, but Good Enough, much more practical than Activity-Based Costing.