Creating project plans to focus product development

In a Harvard Business Review article, Steven Wheelwright and Kim Clark explain the benefits of an aggregate project plan. This plan will help you manage a portfolio of projects and make sure no single project defines your company's future. Projects are classified according to five categories. Here are three:

Derivative: Incremental changes to existing products.

Breakthrough: Major changes that create new products and markets.

Platform: Fundamental improvements in cost, quality, and performance over previous generations of products.

Companies with little vision may resort to pursuing only derivative projects to create incremental revenue from customers. This approach often results in disaster because the foundation of the products tend to become shaky.

Companies like Amazon and Google, however, have a history of investing in breakthrough or platform projects so when there's an upswing in the economy, their products and services respond at the speed of business.