The product is NOT the PRODUCT !

The product is NOT a great piece of software, or hardware for that matter.
Your product is actually the “Business Model”
“A business model describes the rationale of how an organization creates, delivers & captures value”.  Alexander Osterwalder
As an example, here are a few things that are worth considering in a Product Business:
  • What market problem do you solve?
  • For whom? What are the customer segments? (Buyer Personas)
  • Unique Value Proposition. What is the primary reason why buyers will buy your solution? Is it unique?
  • Solution (Usually, but mistakenly, referred to as “Product”): what ie the minimal feature set that can support (together with the other points) your value proposition?
  • How the solution will be purchased by buyers?
  • How to measure progress? What key activity do you plan to measure? Es. how subscribers respond to the solution over time, by using time based cohorts.
  • Cost structure
  • Pricing and Revenue model.  How do you make money?
  • Business Sustainability: how hard to emulate is your Unique Value Proposition? It can be a technology platform, a powerful established channel, a level of awarensss in a segment etc.
  • Customer retention and support strategy: once buyers become customers, how do you make them happy and loyal? How can you turn them into net promoters?

Anything  missing? Anyway, this is closer to “the Product”. Depending on business, there are main factors that describe how an organization creates, delivers & captures value.

Vision, Strategy and Bad Strategy: 5 tips

Too many organizational leaders say they have a strategy when they do not. Instead, they espouse what I call “bad strategy.” Bad strategy ignores the power of choice and focus, trying instead to accommodate a multitude of conflicting demands and interests. Like a quarterback whose only advice to his teammates is “let’s win,” bad strategy covers up its failure to guide by embracing the language of broad goals, ambition, vision, and values. Each of these elements is, of course, an important part of human life. But, by themselves, they are not substitutes for the hard work of strategy.

Richard Rumel, McKinsey Quarterly, The perils of bad strategy

Common Dilemmas around Vision and Strategy

Carla the CEO says: “I know I need a vision but I can’t seem to understand what a vision actually is.”

“I have read a lot of terms like mission, purpose, values, strategic intent, but no one has never given me a satisfactory, clear explanation of what a vision is and what actionable directions it gives me” adds Josh the VP od Sales

On the other hand, Gina, the marketing communication specialist, knows very well what her company vision is. “It’s on my cubicle wall. But how does it actually guide my work?” she says puzzled.

The very assertive Frank the CEO complains: “I do have a Great Vision, but they don’t get it. I’ve given them a memo with all the details. What’s wrong with them?”

Alvin, the sales engineer who travels all week-long, goes: “What? Vision? Again with that BS? You had another of those fancy marketing books for breakfast this morning, didn’t you?  Leave me alone, please. I’ve got work to do, at least I do!”

Vision and Strategy at work

What is a “vision” then?

It is a destination. A desirable business end-state for an organization. It’s about knowing where you want to go. And, where you don’t want to go.

It’s NOT what you want to “do”.

It’s not the “how

It’s the “where

And,  what’s a Strategy then?

It’s the path to get to that destination. How you will get there.

In other words:

  • Strategy: Sounds great! But… to go where? …“I have a map but I don’t know where to go”
  • Vision: We have one! But… how do we get there?   …”I know my destination, now I need a map!”

“If a company does not have a vision of where it wants to go, then any product strategy is likely to take it somewhere. But will they be happy with somewhere when it gets there?”

Michael McGrath

“I can always plan to operate in full market-driven mode, tuning my offering for an army of buyers that want my product or service, using the latest social media and content marketing strategies. But, how can I do that without a Company Vision and a Strategy that oversees the business and guides me there?”

Donato Mangialardo, Director of Product Strategy

5 Tips – Using Vision and Strategy for guiding everything you do

Tip#1 – You need to have both. They need to be fully aligned to provide guidance and focus. As a Top Manager, you want to make sure they are always, consistently aligned.

Tip#2 – The Vision must be extremely clear. It needs to provide focus. What is in scope, what is NOT. What is success like. Ambiguity brings individual interpretations.

Tip#3 – Strategy means what do we intend to do in order to achieve the goals expressed by the Vision. What should we NOT do.  Again, conciseness  and clarity are  a must. Everybody needs to remember it and apply it.

Tip #4 – Establish a Strategy by looking at your distinctive competences, but also acknowledge the challenges your organization faces, including inconvenient truths. Provide an approach to overcoming them.

Tip #5 – Put together Vision, Strategy and Why your organization believes it can be successful in a coherent, 3-sections statement that fits in a page.  It is a difficult exercise, but it works like a charm if well done.

(I see these more as Rules than Tips actually)

Conclusion: Align your business and your teams to understand what is and how to reach your business destination, the Vision you have set for your organization.  What’s the Strategy. This will provide focus, facilitating decisions and avoiding debates of opinions. As a byproduct, it will increase motivation and engagement in your teams.

Then, if you ask yourself …

  • “Right, but… do we have an actionable vision?”
  • “How do we get there?”
  • “Do we have a clear strategy?”
  • “Will we be able to follow that strategy?
  • “What changes will be required?”
  • “Is my company ready?”
  • “How do I know if I have set the right Vision and the right Strategy for my business?”
  • “How do I actually align them?”
  • “How do I know whether I have factored-in all the variables?”

…Then (note, this is a Self-Promoting paragraph) you want to consider investing in this  effective exercise that will direct your business to repeatable wins and eventually success.This is one of the things I like to do the most in my profession at crystal-ize.com, with a solid, proven methodology drawn from a specific experience in International, US-based and Italian companies of various business models and size.

I am sure you may have questions: please leave your comment. I will surely reply and assist your cause.

Market-Driven? Cosa Significa?

Una Storiella* …

Un giorno un brillante ingegnere ed architetto del software, Paolo, lascio’ il suo lavoro per lavorare a tempo pieno sulla sua idea innovativa. Paolo creo’ un prodotto di cui ha profonda certezza che a molti interessasse.
Paolo aveva ragione.
L’azienda cresce, assume ex colleghi come VP di questo e di quello. L’azienda cresce ancora
Un giorno Luigi, VP of Sales disse: “ma noi siano Technology-Driven. Dovremmo essere Customer-Driven!”
La cosa suono’ bene,  e cosi’ si fece.
Eccetto che… per ogni nuovo cliente bisognava fare un progetto speciale e sviluppare/mettere in roadmap 10 nuove funzionalita’ richieste dallo stesso. La voce del’ultimo cliente dominava sempre il piano del prodotto. In altre parole: Customer-Driven = latest-customer-driven
“Ma no, cosi’ non va! urlarono in molti.
Un membro illuminato della proprieta’, Enrico,  tuono’: “Siamo diventati una Sales-Led company. Basta. Dobbiamo essere Marketing-Driven!”
Venne quindi deciso di assumere un Top Marketing Executive. Fu presa Amelie come VP of marketing. Ed ecco un nuovo scintillante logo, tradeshows con un booth impressionante,  eventi spettacolari con gran folla ed awards, brand impeccabile, grande raccolta di collateral, brochures, logo su ogni t-shirt etc.
Un anno e 3 mesi dopo…zero incremento nelle vendite. “Eh, il brand! Te lo do io il Brand” era la battuta ricorrente. [Niente da dire su Amelie ed il Brand. Le e' stato chiesto l'impossibile. Lo vedrermo in un altro post, ndr]
Allora il CFO, che fino a quel momento era stato zitto, sussurro’ nell’orecchio del CEO: “non e’ ora che controlliamo un po’ i costi?”
Quindi l’azienda divento’ Cost-Driven
Vennero tagliati viaggi, cene premio, supporto, bonus etc.
E il marketing? Cosa fanno esattamente?” Chiese il CFO al CEO
Nessuno ebbe una buona risposta e quindi tagliarono tutto il team.
Alla fine il presidente e Paolo il fondatore dissero:
Siamo partiti engineering-driven
 Poi Customer-driven
  Poi Sales-Led
   Poi Marketing-Driven
    Poi Cost-Driven
Le abbiamo provate tutte!
… E’ ora di tornare Engineering-driven!
E cosi’ fecero …

Finche’ un giorno qualcuno disse:

Ma perche’ non diventiamo Market-Driven?

Cioe’ perche’ non ascoltiamo il mercato invece che solo noi stessi?

Questo e’ quello che Market-Driven significa:
  1. Definire soluzioni basate su quello che il mercato vuole acquistare perche’ tali soluzioni rispondono ad esigenze urgenti, pervasive e critiche. Sintonizzatevi sul mercato!
  2. Per Buyers (che hanno tali esigenze e potere di budget). Sintonizzatevi sui buyers.
  3. Non e’ essere guidati da cio’ che gia’ abbiamo in casa. Spegnete Radio Prodotto (almeno per un po’). Spegnete “Radio Meetings”
Le aziende di successo sanno che il marketing non e’ solo promozione e pubblicita’. I leaders di settore prima si focalizano su problemi irrisolti del mercato che possono essere risolti tramita la loro tecnologia (non partono dalla tecnologia!)
Questi leaders sono orgarizzati secondo un flusso entrante (inbound marketing) cioe’ capire problemi che il mercato ha e chi sono i buyers, e anche uscente (outboud marketing) che e’ la parte piu’ tradizionalmente vista come “marketing”che include sia su strategie di “go to market” e di comunicazione ma che verte su un modo di comunicare e vendere che risuona col buyer.
3 Errori classicissimi:
  1. Supporre che dipendenti e collaboratori interni conoscano meglio  dei buyers quello che i buyers stessi vogliono.
  2. Basare prodotti e servizi solo su quello che chiedono gli attuali clienti invece di andare fuori dall’ufficio a capire quali sono i problemi irrisolti che altre persone reali sono disposte a pagare per vedere risolti.
  3. Cercare di creare un bisogno nel mercato attraverso il reclutamento di un esercito di spietati venditori e di costose campagne pubblicitarie.

Uscite dall’ufficio e imparate a conoscere i vostri buyers ed i loro problemi e modellate il tutto tramite la chiave di tutto: Le Buyer Personas – ok questo richiede competenza e abilita’ particolari, ma ve lo posso insegnare io :) “…Ma non e’ facile staccarsi dal prodotto ed andare fuori ad ascoltare, intervistare, filtrare, sintetizzare, iterare. E poi chi lo fa?”

Market-Driven e’ la scelta piu’ pratica e funzionale per il successo di qualsiasi iniziativa che ha a che fare con un mercato
Modellare business, prodotti e soluzioni tramite Buyer and User Personas rende le cose semplici ed immediate.

Non c’e’ mica scelta! I ruoli che tipicamente hanno tale responsabilita’ sono Product Marketing e Product Management. Almeno nelle aziende ben organizzate.

Ma se non li avete non temete. Qualcuno sta gia’ facendo quello che avrebbero dovuto fare loro. La domanda e’: “Come?” oppure “Con che risultati?”.

*  Storia liberamente tratta da un articolo di Steve Johnson, Pragmaticmarketing.com