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.

What I hear often in product companies

Here is what I often hear in product companies. Guess which is the most common one?

  1. I want the confidence that my product goes where we want it to go. I don’have it today.
  2. The product does not sell! What’s wrong? How to fix that?
  3. The product sells but not enough in this segment
  4. Going up (or down)market: what the product should be like? How much it will cost me?
  5. Going global: what the product should be like? How much it will cost me?
  6. Need guidance for the next generation of products. We have a new vision to achieve. We need help
  7. How do I make sure that what we are building is right? We have invested a lot!
  8. Is there a way to tell whether my requirements will deliver against the expected product?
  9. Is there a solid, simple way that is able to tell my company “you are following the right direction” (or  at least the one you have decided to set)
  10. How to build roadmaps that serve business goals? (vs. good-looking, time-consuming slideware with unrealistic, wishful milestones ?)
  11. Marketing people produce tons of sales tools, brochures and presentations. But my sales people say “they are useless” and don’t use them. What’s wrong?
  12. I want that my sales people sell what we must sell, not what it is easiest for them to sell, and I need marketing to support that.
  13. There are a lot of ideas, inputs from sales and pressures from individuals about “top, critical priorities”. Or… “we won’t sell without this or that”. I want to make sure we do the right product for the business. I want clarity.
  14. We spend a lot of time debating features with development. Often it sounds like a war between opinions and I am not able to help much. I want to make sure we have someone driving our offering for measurable benefits for my business. I do not want fights!
  15. We spend way too much energy toward several directions without getting the expected results, our competition is killing us. Time for change. but.. change what? Where do I start from?
  16. Every decision we make is an ordeal. Not to mention fights, politics and internal wars.  I want my line managers to be more aligned, efficient, with clear, shared goals in mind (the same ones).  A sort of “autofocus” mechanism that points to my business’ priorities
  17. I need a methodology that allows me to make informed, intelligent decisions that do not take into account personal agendas and internal politics

What are the ones that are more familiar to YOU?

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.