Every executive who has sat through presentations by eager product managers touting hockey stick growth curves for proposed products knows that financial projections alone may not provide a meaningful assessment of a product's potential market success. Yet, given no viable alternatives, most will either shoot from the hip or resign themselves to simply going by the numbers, using metrics such as projected market share and growth, net present value, and cost/benefit analysis even when such economic measures involve an uncomfortable amount of guesswork.

There is a better and simpler way. The key to choosing products that contribute to sustainable profitability lies in changing the business focus of portfolio management from financial metrics to customer value. Paradoxically, by putting aside financial data and giving more weight to customer value data when making product portfolio decisions, companies can in fact improve financial performance by identifying products with the potential to delight customers. Customer value, defined as the customer's perception of how well a solution meets his or her needs, is the only proven course to drive profit: The greater the value of the solution to the customer, the more likely the customer will buy it and pay a premium price for it. And, unlike many financial projections (and contrary to the beliefs of many executives), customer value is based on something real, which you can accurately measure to yield trustworthy results.