One of my most enlightening, bitter, and humbling career lessons was from the release a new product line. I had joined a project where the specifications were already defined with my predecessor. Just before the end of the project, the concurrent development team arranged a showing of one of the prototypes to some visiting and internal staff. This was done partly out of courtesy and also because of our confidence and pride in what we developed. The team was shocked when one of guests reacted very negatively to the aesthetics, specifically the placement of a module, despite our technical, cost, and time explanations and our belief that customers did not care (no particular customer benefit could be perceived). In fact, our previous generation products and those of our competitors had the same placement. Yet, the objector was influential enough to sway the rest of the reviewers to take his side and force a design change. I was livid and felt that, as the product manager, I had let the team down. Relocation meant more costs and delays. The team also felt that they were not empowered to make what they considered a relatively minor design decision.
What were the lessons? You have to know who your stakeholders are and you have to communicate with them as much as and as early as possible. And don’t rely on emails or written project minutes for this purpose. I was unaware that the objector had such influence and sway to sidetrack our project. It did not matter if the team decision was 100% right. It did not matter if it was rather petty (at least to me). It did not matter that there were objections from others later about the new module location when we did another preview of the redesigned prototype. I had to take fault and blame for failing to do my due diligence as a product manager. I assumed too much and communicated too little.
Identify the stakeholders, the influencers. They may be strong personalities, people held in high regard or fear. It does not matter, you need to work with them. Touch base with them early on to understand whether they care or not. Be transparent. Communicate extensively and regularly with those who do care to ensure that you have buy-in. Talk to them. Yes, this will slow things down in the short term and take more effort since everyone has an opinion and perspective, especially when it comes to aesthetics and product names.
Only the likes of Steve Jobs are truly empowered (and brilliant) enough to not worry about others when developing products and making decisions - and we are not Steve Jobs. Some of your stakeholders may think that they are…but that’s another story.
Sooner or later, you have to give presentations so check out the site "Presentation Zen" from Garr Reynolds to learn more about how to give great presentations.
Every company is concerned that customers cannot see how their product and services are any different (better) than that of the competition. If so, the buying decision will be based on the lowest price. If you cannot distinguish yourself, then you have reduced your product to a commodity and in the words of my favorite professor, Dr. Arnoldo Hax, “Commodities exist only in the minds of the inept!”
First, stop focusing on your competitors and base your strategy around the customer. If you constantly look at and compare yourself to the competition, you end up basically copying each other – you may try to “one-up” them with a few new features or offerings but really have no major differentiation. You simply react. That is how commoditization happens. In this way, most Windows PCs have basically become commodities. They can all run Office, go on the internet, etc.
You must understand your customer and their environment. The customer must be your driving force and you create a value proposition that is unique for them, that distinguishes you from the others. In some respects, you are creating multiple niches – what Hax would say is strategy done one customer at a time. No two customers are exactly alike or will use your product in the same manner. Let’s go back to Windows PCs as an example. Panasonic was able to recognize a specific customer persona and market need in law enforcement. Two thirds of the 420,000 patrol cars in the United States today are equipped with the company's rugged Toughbook computers.
Make Love, Not War
So instead of a strategy focused on war (focused on beating the competition), go for a strategy of love (focused on embracing the customer).
Think about strategy on a more personal level. Did you pursue and win your wife or husband by focusing on your romantic rivals? No, you were focused on what your future spouse liked, what she/he cared about, and turned yourself into the most creative value proposition that blew away your competition!
Arnoldo Hax’s Delta Model is one of the best for looking at different customer, centric strategies. The Model shows a wide range of potential strategies – all pointing to the use of technology to promoting bonding (with customers, partners, etc.).
The range of Delta Model potential strategies include:
· Low Cost – Southwest Airlines, Walmart. This is very difficult since you must have the correct infrastructure and operations to sustain it.
· Best Product – best technical features, superior in performance, etc. Apple arguably has a number of products in this area.
· Redefining the customer experience – Amazon (both Amazon.com and via the Kindle), Starbucks, Apple iTunes, Singapore Airlines. This is an appreciable change in the customer value proposition.
· Customer integration – SAP, UPS, Fedex are tied deep into many companies’ IT, manufacturing.and logistics.
· Dominant Exchange - Google, YouTube, Facebook, Wikipedia, iTunes are the defacto paths to browse, see videos, network socially, research, and sell/buy music respectively. Dominant exchange is achieved when a critical mass of collaborating users (“complementors”) is reached and each new user makes the service even more useful (e.g. YouTube, Facebook).
· Horizontal Breadth – Fidelity, Amazon offer “one stop shopping” for financial products and very much all products respectively.
· System Lock-in - Intel, Microsoft very much own the microprocessor and operating systems in PCs. Apple owns the tablet market with Google Android moving in. Amazon is pursuing lock-in with e-content via Kindles and cloud. System Lock-in is the strongest form of bonding and integration among complete industries around a product (e.g. all the software companies developing Windows specific solutions). It focuses in the entire system economics instead of product-centered economics. Success is due primarily to the complementors that create solutions based on your product.
Strategies based on Best Product or Low Cost are the most difficult to sustain. Dominant Exchange and System Lock-in strategies are the most sustainable because they involve the complementors and the whole system.
You can see the Delta Model strategies being used in companies today. Amazon is a dominant exchange in ecommerce and becoming the dominant exchange in e-reading with the Kindle (ultimately, e-media content with streaming & Cloud). Apple is covering many of the strategies with arguably Best Product(s), Redefining the customer experience, Dominant Exchange, and System Lock-in. Google is arguably Best Product (browser and analytics), Dominant Exchange, customer integration (Analytics), and also moving toward System Lock-in with their Chrome browser and Android.
All of the companies mentioned are aggressively using technology to enable their strategies. How does Walmart achieve a low cost strategy? Technology is the foundation of their supply chain. Walmart has the largest information technology infrastructure of any private company in the world. Walmart can accurately forecast demand, track and predict inventory levels, create highly efficient transportation routes, and manage customer relationships and service response logistics through its network.
So remember: Focusing on the competition will have you constantly looking back over your shoulder; a customer-centric strategy will have you looking forward. You must take advantage of technology to employ your strategy.
Successful project or product teams have people who share a common mission, have a sense of ownership, are committed, get along with each other, and willing to fight for the team’s success. As a team member from Marketing and Product Management, I have to be cognizant of the team’s resources and guard against feature creep that will throw off the delivery schedule, yet stay aware of changing market conditions and technology that may require some change in specifications. I also have to defend and sell decisions made by the team to others. Likewise, I expect other team members to do the same from their perspective and function.
How do most teams usually get created and work? One would think that choosing members for new project and product development teams was modeled after the military - the military draft system. Members are usually selected from various departments by their managers based on availability, knowledge and expertise. Sometimes, new members are selected so that they can gain team or project experience. They are almost always a mix who have other duties and objectives.
Due to the process, what’s interesting (and ironic) is that teams usually gain the most cohesiveness and team members really get to know each other personally…at the product or project release celebration – when it’s all over!
It would make a lot more sense to have a team get-together BEFORE the work begins. Have some team building exercises off site, a team lunch/dinner/trip, etc. so that people can gather informally to get to know, understand, and trust each other. It doesn't have to be expensive or formal. Go bowling, play mad-libs...you want the team spirit at the beginning, not just at the end!
Frank Lio is a Product Manager, Strategist, and Change Agent in the Hi-Tech industry. His growing track record of successes include creating 3 winning software products, leading nationwide seminars, and turning around a failing business unit. He is currently serving a dual role as Product Manager and Business Team Support Manager at Instron ITW.
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