Month: August 2011
Go to your marketing collateral closet and pull a sales packet of information out. These are the same data/sell sheets, white papers and pretty pictures that you would pull if you are preparing to speak with a potential buyer. (You can leave the pretty folder in the closet – they cost extra money to produce.) If you don’t have a marketing closet, go to your Web site and print out the packet of material.
Now, go through each of the pieces you have pulled together and circle these words (a big red marker works best):
- if you work with a hardware product: reliable, scalable, “stronger performance”
- if you work with a software product: faster, easier, “more productive”
How many occurrences did you find? 5? 10? More? On every sheet or every other? Did you just offer a face palm because you see where this is going?
The sales collateral, marketing artifacts, you use need to speak to the buyer. Words like “reliable, scalable, stronger performance,” and “faster, easier, more productive” speak to your product. They are adjectives that are marketing-speak for how you are trying to illustrate why your product is “different, better, cheaper.” They, however, fail. These words speak to
descriptions of features, not the problems your market is trying to solve.
It’s not the words’ fault
Instead of pulling out a thesaurus and trying again with different words, it would be best if you step back and look at your whole product messaging. Stepping back to look at your messaging begins with stepping back to look at your market’s problems, and that begins with taking a look at your market. Do you really know them? How well do you know them?
If you know your buying market, really know them, you will know what words will matter to them when they read your marketing and sales material. A word like “reliable” don’t resonate the way they used to – in today’s technology world, we all expect and assume that the systems and software we buy are reliable. Software that says “more productive” often has no value to a buyer – doesn’t all business software make you more productive?
Go find out what the real problems are that your buying market is facing every day. Listen to how they describe their problems. Ask why they are seeking new solutions and what are the important elements for them to consider. Listen to their words. Write the specific words down.
When you return to your office, share the notes from the visit with your marketing communication team. Let them know the real words that matter to the buyer. Tell them the emotions you saw, the non-verbal body language that was displayed during your visit. Tell them about the person, and not in generic terms.
Changing the words you use may be subtle difference; but to the buyer, when you understand their problems and speak their language, that may be all the difference you need to gain the trust and credibility – to gain the sale.
Something very fundamental is broken in large corporations. The ability and spirit to experiment as a corporate function. Managers are:
- chasing short term results that improve existing operations with traditional strategies (cost cutting, outsourcing, value chain improvement, and the like) and/or
- designing large 3 – 5 year plans and multi-billion dollar acquisitions, predicting where the markets would move (supported nicely by multi-horizon pictures supplied by management consultants) and/or
- buying their way into successful experiments (=acquiring successful start ups) after the fact, not before – losing the ability to experiment from within.
I have a hypothesis on why experiments have taken a back seat:
The adoption of Henderson and Porter’s work (and by extension traditional management consulting work) negatively impacted experimentation as a strategy discovery tool.
Bruce Henderson and Michael Porter are two of the most celebrated strategy theorists in recent times. Much of corporate America, MBA consultants and academicians revolve around the Experience Cuve, Growth Share Matrix and Five Forces work the two published.
Henderson’s study of experience curves effects on business is about how mass production and the experience of it can give advantages to companies in cost for scaling production. His growth share matrix is a 2×2 matrix that guides how managers should optimize their portfolios – dumping dogs, milking cows and riding stars.
Porter’s 5 Forces is about a static industrial organization theory set in the aftermath of how American companies became dominant industrial organizations – the rest of the world was still catching up after World War II in building a decent factory to compete (See W.E. Deming‘s work for details). Neither theorist embedded the idea of experimentation or learning in their frameworks. But consultants and managers at corporations have wielded their frameworks for much of the last 30 years. The effects are telling.
Don’t agree with my hypothesis? See Ngram below. Note the drop in the experiment line after 1960.
(click to enlarge)
Of course you are going to argue “correlation is not causation”. My response to that is – go ask your executive leadership how many experiments they have conducted in the last 12 months at any scale and how much of management theory from Porter and Henderson they have employed during the same period. I rest my case.
The problem with strategic intent is that you need to know where you are going. The reality is, you can never be certain of that. The experimental/learning school of strategy tells you that your strategy is mostly what you see in retrospection. Not something you can deliberately design and execute, especially for a long period of time.
HP’s roundabout on Compaq and Palm are examples of how experimentation as a corporate function has been disappearing, and a case of failing big bets and fortune telling gone awry. (HP withdrew TouchPad after just 49 days on the market. See HP’s lack of invention is why WebOS failed on Tom’s Hardware).
Steve Denning writes about how traditional management ideas lead to Why Amazon Can’t Make A Kindle in the USA. If only managers at corporations focused on experimentation as a strategy tool, employees would be on the path of continuous innovation across the entire value chain and not within the bounds of core versus non core activities or a set of disaggregated activities tied together by marketing and sales functions.
When was the last time you placed a little bet (i.e. conducted an experiment)?
NOTE: Originally posted on Prabhakar.me
Tweet this: Strategy, Innovation and the Need for Experiments http://wp.me/pXBON-2Rd #prodmgmt #innovation #strategy
Here’s another question for you. We all like to share don’t we? 🙂 So, let’s open up a bit and share some lessons learned with each other.
We all make mistakes. And honestly, it’s only through mistakes, trial-and-error etc. that we learn lessons we remember. So tell us:
Please answer in the comments below, or email us (email@example.com) and we’ll add your answer anonymously.
The mistake could be anything from your interaction with others, to bad decisions you made on the job, or just something that hit you out of the blue, that in retrospect, you probably should have seen coming, or perhaps something else altogether.
I’ll get the ball rolling.
Mistake: Not understanding and even ignoring the politics, dynamics and reality of a company when taking a PM job
I’ve had a couple of jobs in my past where I was more enamored with the job title and compensation, than with the details of the role, the politics, dynamics and market focus of the company. Neither of those jobs worked out well. 🙁
Product Management can be a transformational role in a company, but the conditions need to be there to allow it to happen. And more so I believe, than any other group in a company, the success of Product Management is tied into the politics, dynamics and culture of a company.
If the company is focusing on a tiny, stagnant (or possibly non-existent) market, there is nothing you can do to make it successful. Likewise, if there are entrenched political factions in the company (e.g. Sales or Engineering etc.) that have significant influence on the CEO, there is (almost) nothing you can do to be successful, unless you have a mandate and support from the CEO to enable change. And even then, it’s an uphill battle.
Lesson: Titles and compensation are great, but go into companies with your eyes wide open and as clear an understanding as possible of the barriers to your success. If those barriers look daunting, think twice before accepting that position or you may find yourself wanting another job, or unfortunately, looking for another job in the near future. I made that mistake twice before it truly sank in.
So there’s my mistake and lesson. Please share yours.
Tweet this: Open Question: Your worst job-related mistake and lesson learned. http://wp.me/pXBON-2Q8 #prodmgmt #prodmktg
A favourite topic of many entrepreneurs, product managers, marketers and executives is strategy. You hear it all the time. People talking about company strategy, product strategy, marketing strategy, sales strategy etc.
Strategy n. a plan, method, or series of maneuvers or stratagems for obtaining a specific goal or result
OK…that’s somewhat obtuse to be honest. In essence, it’s says a strategy is a plan or series of plans to achieve a goal.
From a business perspective, the most common description of strategy seems to be tied to Michael Porter’s 5 forces that shape strategy. You can also see a video here of Michael Porter talking about these forces. Here’s another good video talking about competitive strategy.
And here, embedded for your viewing pleasure, is our own Prabhakar Gopalan, who gave an insightful talk about strategy at the recent ProductCamp Austin. (Make sure you watch Part 2 as well or click here for talk details).
So what exactly is Strategy?
My take is that strategy is more than a plan, and more than a set of guiding principles. A strategy is a framework for decisions and actions, that will help guide a company or organization to success. It’s as much about understanding what you will NOT do (and knowing why), as what you will do. For a strategy to have a good chance to succeed, it has to have 4 essential components:
- A clear set of achievable goals/objectives
- An understanding of the major obstacles that could prevent you from achieving those goals
- The actions needed to overcome those barriers
- A means to measure the success of that strategy as time progresses
Before I explain each of these, let me say that if any one of these are missing from the strategy, it can quickly turn into fantasy.
Strategy is about executing within constraints. Those constraints are both internal and external. Internal constraints basically come down to your organization’s ability to execute the plan on time. Do you have the money, the people, the resources etc? If not, then your plan will fail. Similarly, the external constraints come from competitors, the economy, market trends, channel constraints and other factors that are usually beyond your direct control.
The key to a successful strategy is understanding those constraints, and defining the path that will lead you to your goal. And in business, that goal should be sustainable competitive advantage and clear differentiation in the marketplace. This could be by exploiting market trends, attacking competitor weaknesses (or strengths), or heading into new uncharted territory and defining and claiming new market space.
1. Achievable goals and objectives
Everything starts with having clear, ACHIEVABLE goals. I highlight the word achievable because the first mistake that most companies make is to set unattainable targets. These could be related to sales/revenue, market share, time to success or some other major business objective. If the goals are unachievable then the strategy will fail, without question. This is where the fantasy begins with a lot of companies.
2. Understand the obstacles in your path
Assuming the goals are achievable, the next step is to identify where the bumps in the road lie. i.e. the obstacles to success. Conversely, you can also look at what the conditions are for success. i.e. if an obstacle to success is the lack of a 3rd party developer network for your product or platform (in a certain timeframe etc.) , then a condition for success is the existence of that 3rd party developer network (in a certain timeframe etc). How you build it out is a different matter entirely.
You can look at it either way, but you need to ensure that those factors are clearly identified and their dynamics and importance understood. Another part of the fantasy occurs when companies don’t realize the obstacles in their path, or simply choose to ignore the reality of overcoming those obstacles. Most strategies look great when you ignore the challenges you’ll face.
3. Actions for overcoming the obstacles
Tied closely with #2 above, it’s important to articulate HOW the barriers will be overcome. Some people would view this as a set of tactics, but understanding HOW to overcome barriers (and the required assumptions) is still about understanding the constraints and the conditions for success. Using the 3rd party developer network example from #2 above, understanding HOW that network will be created is critical. Some key questions to understand would be:
- What exactly is that developer network? ‘
- Why is it needed?
- What does it look like in 6 months, 12 months, 24 months etc?’
- How will members be recruited?
- Why would people join the network? Why wouldn’t they?
- How will members be retained and grown over time?
These kinds of questions are fundamental to bringing a dose of reality to any key objective tied to a strategy.
4. Measuring success along the way
Let’s say you’ve implemented the strategy. How do you know it’s working? Are you on track for success, ahead of plan, behind plan? How do you measure it, particularly in the face of a dynamic market? Objectives that looked good 6 months ago may be completely irrelevant today because of external issues beyond your control or required changes in assumptions you made.
When defining your strategy, identify a few simple ways to track it’s progress. What are the best (simple) indicators that can be used to track the success of various aspects of your strategy? These will help you identify and address problems quickly, if they arise.
For example, with the 3rd party developer network, simply tracking the number of developers joining the network (and total overall) will tell you roughly how well you are doing against your goals. But tracking their development plans and target dates for releasing applications or products for your platform will give you a much better indication of how successful the network will be.
A real life case study
Now I’m going to pick on HP for a bit, because the recent EOL of the TouchPad and WebOS is a great example of how even the most sophisticated companies can believe a fantasy. Listen to this interview of HP CEO Leo Apotheker, from June 2011 (less than 3 months ago) as he discusses HPs strategy with WSJ’s Walter Mossberg.
As you listen to Apotheker, (key points about WebOS start at about 9:00 & around 24:00 into the video. Also note the answer to the question around 34:30 about lessons learned from RIM’s Playbook experience!!) and given recent actions by HP, ask yourself how much of what Apotheker said was fantasy, and how much was strategy based on an understanding of reality, constraints and ways to overcome obstacles. He spoke about consumers, enterprise, cloud, developers, security, connectivity, WebOS on every PC, on printers, and end-t0-end ecosystem etc.
And finally, here’s a link to an article (posted Aug 19 on ZDNet), where Apotheker and HP CFO Cathy Lesjak describe why they completely changed their strategy just 7 weeks after the launch of the TouchPad. A little more discussion about focus and constraints than the video above.
Tweet this: There’s a Fine Line Between Strategy and Fantasy http://wp.me/pXBON-2Qu #strategy #prodmgmt #innovation