Sense and Respond: How Successful Organizations Listen to Customers and Create New Products Continuously

by Jeff Gothelf

To become more responsive, Pearson is trying to add flexibility to the way it allocates budget, moving to a model that is more rolling in nature. In the new process that they have been deploying, Pearson allocates money to projects throughout the year, a process governed by what it calls product councils. The councils meet quarterly to make investment decisions and convene monthly to monitor the projects they’ve funded. Product councils are distributed, operating within each business unit. They are made up of leadership from those business units, typically director- and VP-level leaders. Each council is cross-functional and includes leaders from technology, product management, finance, strategy, efficacy (responsible for learning outcomes), and other key functions. Notably, the councils do not include senior executives, because they’re likely to be too far removed from the day-to-day operations to be able to make informed decisions. Instead, senior executives set strategy and set the overall goals for the councils to meet. The councils make funding decisions around what Pearson calls its global product life cycle, a structure it’s been implementing since 2013 to provide a consistent, repeatable, and scalable framework for making product investment decisions. This model is not dissimilar to the three horizon model used at Intuit (described in chapter 5). At Pearson, the life cycle has six phases instead of three, but the fundamental concepts are similar. Early-stage ideas a...