Products that delight or exceed customer expectations are well positioned to succeed in the market place. Adherence to some “design thinking” principles below help Product Managers define and build successful products. With a good grasp of the customer problem, follow the steps outlined below.
1. Great products are built by Product Managers that truly empathize with their customers. In order to do this, get into their skin, walk in their shoes to experience their pain/problem. You can either shadow them or actually do their job. Interview potential customers regarding their tasks – ask them the “why, what, when, how”. Question the complexity or time needed to complete a task.
2. Capture all your learning. Take pictures or videos. Process all the learning. Separate facts from opinions. Get clarification if required. Build “customer journey maps” that tell their story. Capture emotions during the journey map. It will guide you to the focus areas and “key moments of truth”.
3. Ensure that you have a clear definition of the problem you are going after in the customer journey map. Capture the outcomes and align on how success will be measured. Be aware of assumptions, get clarification if needed.
4. Creatively brainstorm ideas to solve the problem. Dream big. Use some brainstorming techniques like “Affinity Diagrams” with post it notes. Unleash the team’s imagination. Be patient and inclusive to diverse ideas.
5. Quickly build a prototype. Use simple tools. Speed and learning is more important than getting it right the first time. At this stage debate, experiment, fail, and learn. Sharpen ideas with feedback, reflection, and adjustment. It saves time and money in the long run.
6. Test the prototype with customers. Get a diverse sample of potential customers to collect a holistic set of opinions. Observe the customer using the product without participating and influencing reactions. Ask open ended questions.
7. Debrief together to share customer responses. Iterate changes in the prototype based on the comments. Take it out for another test drive with a different set of customers.
8. Once you feel satisfied that you have customer validation build the MVP (minimum viable product). Again, don’t wait for perfection. “Go with your gut”. Document all assumptions.
9. Take the MVP for a trial run with beta customers. Perceive customer reactions and learn from them.
10. Launch the product, gather and synthesize reactions, and improve. Repeat the process with another customer problem.
For more information on Design Thinking : http://dschool.stanford.edu/
A Go to Market (GTM) Strategy answers the following 5 questions:
– Whom will we target within the proposed market?
– What will be our product/solution for prospective customers?
– How will we market our products to prospective customers?
– Where will we sell our products to prospective customers?
– How much will we charge for our products for different customer segments?
A Go to market strategy is part of the Product Strategy definition. (See prior post “10 Steps to create an effective Product Strategy”). The scope of the strategy and plan covers all topics that must be addressed to successfully bring a differentiated, compelling and unique selling proposition to the market that will resonate with your target customers. Below are some tips to create one.
- As the product is defined with requirements start a clear and actionable blueprint of a “Go To Market” strategy and plan. Define the KPIs for success of GTM initiative along with revenue projections by location if necessary.
- Segment and analyze the target market. For a new product, use data driven information to decide the customer for initial market penetration. Recognize and understand the persona of the decision makers, recommenders and influencers.
- Build the collateral: digital, and print. Prepare for marketing campaigns.
- If required ensure compliance with legal, and regulatory requirements. Take into consideration any geographical and local needs.
- A comprehensive communication plan covers the Website Launch, Roadshow, and other events depending on the product and location. Don’t forget social media to get the word out.
- Differentiate and position the product from its competition. Have a pricing and packaging strategy that includes discounts.
- Partners need to be ready with training and communication so that they can build awareness, transact purchases, implement and support customers.
- Conduct Sales Training and arm the team with collateral, pricing, competitive differentiation information to close deals. Ensure ready relevant material to support choice drivers in the various stages of the buying process. Prepare Demand Servicing and Deal Closure templates.
- Build the support strategy, requirements, and training. Train the support organization to handle implementation and end user inquiries. Address all aspects of operational readiness.
- After completing the above, measure successes against the KPIs defined and learn using a post mortem exercise to improve for the next one.
You may use these steps after setting your strategy (See prior post “10 Steps to create an effective Product Strategy”). Once you have identified your strategy and assigned resources aligned with your budget, you need the right governance to ensure delivery against plan. Use these to identify, measure, track, and report on KPIs. A KPI is a metric that is used to evaluate factors that are crucial to the success of an organization or initiative.
1. Ensure that a KPI is measured in a given time frame, encourages appropriate action and ties accountability to a team.
2. For enterprises, establish a central team to govern across BUs or cross functional teams.
3. A KPI measures one or more critical success factors for a given initiative/project that is tied to the strategy.
4. It is a good practice to use both leading and lagging indicators. Leading indicators usually measure intermediate activities that drive performance. They are predictive and allow an organization to make adjustments if required. Lagging indicators are historical and lack predictive power as they show results at the end of a time period.
5. For an organization, one may use KPIs using a Balanced Scorecard approach that covers Product, Customer, Learning and Growth and Finance.
6. An executive sponsor is recommended for the success of tracking progress using KPIs. Ensure there is regular cadence of governance with the executive sponsor.
7. If the organization is large and has a number of KPIs covering different perspectives of the Balanced Scorecard, use metadata with ID #s to track and report. This metadata could be in a simple database.
8. Each KPI has an owner/steward who is accountable for all aspects of the KPI; definition, if quantitative, the formula to calculate it, the data source, reporting cadence, and target audience who will benefit from the information.
9. Baseline the current value of the KPI and establish a target to be reached within a given timeframe. Provide a rationale for the proposed target. This target is then mapped to the initiatives/projects that are linked to the strategy. This helps to “connect the dots” between strategies, initiatives, critical success factors, KPIs, and status.
10. After implementing the above, periodically refine and maintain relevance. Establish a change control process to adapt as you learn.
Reading Reference: Key Performance Indicators by David Parmenter
As a Product Management leader, I have pondered ways to measure the effectiveness, maturity, growth and development of a team. Here is what I thought would be a holistic approach for the same.
1 Talent Review – Evaluate the strengths and opportunities for growth for each member of the team based on their grade level. Based on this assessment, craft a training plan by quarter for the fiscal year. Leverage it to build a mentoring program within the team where senior leaders can mentor junior PMs. Perform a SWOT analysis to gauge domain expertise on the team.
2 Leadership Sponsorship – It is a good idea to engage sponsorship from senior management to ensure the success of a Product Management organization. Defined roles and responsibilities also help in ensuring there is accountability and commitment towards achieving results.
3 Processes, Procedures and Documentation – As with any function in an organization, especially as it scales, effective and efficient processes and tools for the product development lifecycle. Use of productivity and collaboration tools to foster team work and sharing.
4 Customer Engagement – Does the team have formal customer engagement forums before, during and after implementation? Do these include cross sections of the customer segment especially the influencers and decision makers?
5 Emerging Technologies Investment – Progressive Product Management organizations allocate time for exploring and prototyping new ideas, and concepts for products. These could include capabilities with growth opportunities in existing products or entirely new product segments. While doing so, sunset products that provide little value to the business.
6 Marketing Processes –Go to Market processes and procedures are well defined and executed. Analysis using sales tools that capture customer interactions during the sales lifecycle. Measurement and reporting of product revenue, pricing effectiveness, and ROI. Marketing mix strategy and plans are in place. Marketing campaigns are governed with ROI calculations.
7 Continuous Learning – A culture of continuous learning from industry peers, organizations, conferences, and competitive research.
8 Operating Rhythms – Well defined and implemented Operating Rhythms that provide the right level of governance for the product’s success. These include Product and Operations Reviews.
9 Metrics for evaluating Effectiveness – Internal and external surveys to collect feedback with areas for improvement.
10 Vibrant environment – One that fosters and encourages collaboration, sharing, growth and having fun. Group events to bring teams together or competitions among team members are ways to build a creative environment.
Use the above list to gauge where you are in the progress and improvement of your team.
This past week, we just completed my first Leadership Team offsite. We have an awesome Leadership Team and I am excited to work with them. We had good sessions on our Mission, Guiding Principles ….
Besides these topics, I really wanted to have a frank and open dialog on how we work together to build a High Performing Team. The presentation on slideshare (link below) was provided in advance of the discussion and the team was asked to come prepared with their thoughts. Each member contributed to each one of the tenets, why they felt it was important and how they could foster the same on their teams.
Next step, each member of the Leadership Team holds a similar exercise with their respective teams.
I am optimistic that we can together build a High Performing Team.
Link to the presentation: http://www.slideshare.net/raoanita/hiperfteam
Reading Reference : The Five Dysfunctions of a Team by Patrick Lencioni
Networks have a purpose; could be any of the following – share information, learn and grow, or benefit life, either personal or professional. With the advent of the internet and social media there are various options for networking. Successful networking empowers an individual and opens up opportunities never imagined. Below are some tips on effective networking.
10. Make time to network constantly; not only when you need something. Invest the time and effort if you want to see results.
9. Before you ask for something, offer something of value to the other person. Keep your word and follow through on commitments. Remember to thank someone for their help.
8. Attend networking events related to your profession/area of expertise. Never under-estimate the power of meeting in person to build relationships.
7. Cultivate your network by being visible. Online networking sites have made this more accessible.
6. Be honest and authentic; don’t hesitate to show your vulnerabilities. We all have them.
5. Share content that reflects your mastery and skills that also benefits the recipient.
4. Ask genuine questions to learn; listen, explore and enquire. Use this information to make connections in your circle to help others. Add value by becoming an information exchange.
3. Your reputation matters; work on building and maintaining it. Earn the trust and goodwill of your relationships.
2. Be crystal clear of your purpose, goal, plan, outcome, and evaluation criteria for networking. Assess your progress and make changes if required.
1. Continuously work your connections. While you add new ones, nurture and strengthen your existing ones.
Remember “Anything that is of value in life only multiplies when given” – Deepak Chopra
Reading Reference: The start up of you by Reid Hoffman http://www.slideshare.net/reidhoffman/startup-of-you-visual-summary
Masters of Networking by Ivan R. Misner and Don Morgan
While evaluating initiatives/projects, it is important to evaluate the financial impact of the investment. There are numerous financial metrics out there. Here are some of the common ones used. It is recommended to take into account the time value of money metrics.
ROI (Return on investment) – While comparing two or more investments using this method, consider the risk. The higher the risk the higher the expected return. Benefits can come from reduction of costs, increase in profits or additional value.
Calculation: (Total cost of the investment – Total benefits) / Total cost of investment
Note – Its use is limited. It ignores the time value of money.
Payback Period – How long will it take for an investment to pay for itself?
Calculation: Total amount of investment/annual savings expected
Note – Its use is limited. It ignores the time value of money.
Break Even Analysis – How many units one needs to sell in order to break even with the fixed cost cash investment?
Calculation: Breakeven volume = Fixed Cost/Unit Contribution Margin
Unit Contribution Margin = Net unit revenue – variable costs per unit
Note – Its use is limited. It ignores the time value of money.
Economic value added – It is used to evaluate investments and operational business performance.
Calculation: Net Operating Profits after Taxes – (Capital Used x Cost of Capital)
Note – It analyzes the cost of capital in investment decisions.
NPV (Net Present Value) – It is the value today of a future stream of cash flows discounted at some annual compound interest rate (or discount rate). It is a more sound decision making tool as long as the assumptions utilized in the analysis are relevant.
Note – Use a financial calculator. NPV is a more accurate value of an investment opportunity. It takes into consideration the time value of money.
IRR (Internal Rate of Return) – It is the discount rate at which the NPV of an investment equals zero. If the IRR is greater than the opportunity cost of capital required the investment is a good one. The opportunity cost is the expected return on a comparable investment. Again, assumptions used in the analysis should be pertinent.
Note –This method is preferred as it takes into account the time value of money.
Reading Reference: Finance for Managers – Harvard Business Essentials
Financial Intelligence by Karen Berman and Joe Knight, Harvard Business School Press