TechnoBrands

This will be brief. I had a great Christmas (my 23 year old son came home for a few days which was great, and we had snow, which is unusual on the wet coast). We had the whole clan – both sets of grandparents, all the kids and the dog at our house on Christmas Day. It was nice.

I got lots of great things for Christmas, although we are seriously winding down on “things” as presents and tending to give more relational and “gifting” gifts (like “special time with one of the girls”, World Vision donations and Kiva gift certificates).

With regard to the material things I was given, there were a number of shirts, a digital camera, socks, and a few winning lottery tickets (courtesy of my lovely wife). I’m not complaining, but I want to make a comment here about packaging. Even with the small number of materials things that were exchanged in our home on Christmas morning, we managed to fill 2 large garbage bags with paper and packing material. Honestly, some of the packing materials are application-specific things that are crafted to hold a shirt in its shape, or to suit a particular model of flashlight so that it is displayed nicely and is guaranteed to challenge bare hands and fingernails to free it from its confines. Last Christmas I received a very cool blister pack cutter that arrived in my stocking and which was excellent for dispatching even the most formidable blister packs. Unfortunately, I couldn’t find it this year (one of Santa’s elves must have absconded with it in a fit of jealousy), so I was back to hacking at blister packs with a pair of scissors and trying not to gore myself or accidentally scar the thing of value I was setting free.

As an example, consider one shirt: 3 tags (carefully branded and bearing a marketing message which went straight into the garbage), a stiff cardboard form (approx. 20 cm by 40 cm), a plastic form inside the shirt collar, a cardboard form outside the shirt collar with a plastic tip glued on each end, 8 metal “clasps” and 6 pins. Note to product managers that are thinking of packaging: where is there value in the packaging that you plan to use? Does the packaging add to the user experience? Is it a nuisance that the unpacker will need to deal with or is it easy to recycle? This is something you really need to think about – the promise you are making to anyone that has purchased your product starts with the unpackaging experience. Is the unpacker thinking “wow, there sure is a lot of needless crap here, what a pain in the neck” or are they thinking “cool, everything is easily recycled – the unpacking experience holds hope that the product itself will meet high expectations”. Are they going to get an impression that you care about the environment? Or will they think that you pay lip service to being green, but demonstrate something quite the opposite through your package design?

In this second installment of the series I want to first provide some background on the Sun Tzu references I am using. The first is “The Art of War” edited and with a forward by James Clavell, and the second is a highly respected translation titled “The Art of War Plus – The Ancient Chinese Revealed” by Gary Gagliardi. For a quick read of Sun Tzu strategy you may enjoy the James Clavell version (especially if you are fan of Clavell’s other work such as Shogun, Tai Pan and King Rat). It is easy to read and you will certainly get the essence of The Art of War. If you desire an in-depth analysis along with a reproduction of the original Chinese characters and their translation then the Gagliardi book is definitely worthwhile. There is also an excellent explanation of guidelines used to get from the Chinese characters to a readable English text, and of the context of the translation (interesting to note that this book won the 2003 Independent Publisher’s award in the category of Multicultural Non-Fiction – nice work Mr. Gagliardi).

Planning An Attack

“Supreme excellence lies in breaking the enemy’s resistance without fighting.” – Sun Tzu, The Art of War

The perfect victory is when a general tells the enemy “put down your weapons and submit”, to which the enemy responds by laying down their weapons without a shot being fired. Apple Inc. says to the world “here is an iPod – download songs from iTunes and be groovy” and the consuming public complies, and is satisfied paying $0.99 per song to fill up their new 2,000-plus song portable entertainment devices. Ka-ching!

The Apple iPod phenomenon is a great example of the battle being won without a shot being fired. Consider what it took to create the success of the iPod and iTunes (the two products resemble the Taoist “yin and yang” in their integration). Apple didn’t invent portability – you may recall the Sony Walkman (That is, if you remember cassette tapes. They were the technology craze just before CDs). Apple doesn’t even have any signed artists on staff (well, actually iTunes has started marketing some music that is exclusively available only on iTunes). I think the root of Apples success is that they took the time to understand what people are seeking to get from a portable music product. A simple extension of that understanding is determining what people are willing to pay for. Having this knowledge allowed Apple to then design a product (relatively quickly) which met the market needs and which empowered people with personal entertainment devices and the capability to easily find, download and categorize the soundtrack to their lives.

The Apple iPod phenomenon is pure marketing genius. It is also one of the best examples of what Sun Tzu teaches with respect to true victory without having to shed blood.

Positioning

“Learn from the history of successful battles. Your first actions should deny victory to the enemy.” – Sun Tzu, The Art of War

I recently attended a gathering of product managers which was convened after the most recent slips in the Toronto and New York Stock Exchanges. The tone around the table was one of concern and uncertainty, but all were in agreement that the smartest money was being invested in market extension of existing products and not in new product development. Understanding the customer problem better, in order to uncover opportunities for product extension and re-packaging of existing products makes more sense in troubled economic times than taking a chance on development of a new product.

I’m not knocking new product development – one of the reasons I migrated to product management is because I’m passionate about products (especially technology-based products, and the cool things they do for people). The general wisdom I am hearing from colleagues, however, is that given a choice between developing something from scratch or investing in expanding the addressable market for a product that already exists, the smart thing to do is go with the existing product and try to squeeze more value out of it. If you are already on the path of doing a new product and you need to choose the best marketing approach in a tight economy, then be well advised to stick with the tried-and-true strategy of focusing on a niche market that is easy to access and which exhibits an obvious (and easily understood) pain point. Empower your sales force to go after the low hanging fruit – with a lack of readily available working capital you just can’t count on having enough asphalt available to keep paving the end of your runway. This doesn’t mean that you have to be sales driven, but you do have to be disciplined. Your sales resources can’t chase every opportunity for a sale, but enabling them with focus and a keen understanding of your market will lead your team to say no the wrong sales, and yes to a steadily growing backlog of good sales.

Getting back to product management basics will lay a foundation for defending your existing market position and will also allow you to recognize the right opportunities when they arise. The product manager must stay focused and resist being dragged into either creating the solution (that is the designers job) or closing the sale (that is the job of sales). The product manager must understand the customer and market problem, and must be able to communicate that problem clearly to the designers. In this way, the ranks of your product management army are most effective – all parts of the machine working together to create victory.

*The Battle of Planning and Marketing Products When The Economy Tanks

Times are tough. Wall Street and financial institutions are failing and money is drying up. Nobody wants to spend their cash and credit is difficult or non-existent. Pretty scary. Whether the economy has bottomed-out yet, or not, is anyone’s guess. Even when the things were in good shape, the job of the product manager was an impossible mission in most companies, comparable to hanging wall paper with one arm tied behind your back. The best analogy I’ve heard of product management is “plate spinning” – you may recall the guy on the Ed Sullivan Show that used to get a dozen or so plates precariously balanced and spinning on vertical poles to the frantic music of Khachaturian’s “Sabre Dance”. The markets are looking more and more like a World War I battlefield, with trenches being dug by investors with enterprise and people with any cash reserves hiding out in bunkers until the whole thing blows over. If you are in product marketing or product development, I recommend that you find a copy of “The Art of War” by Sun Tzu (or one of the business adaptations). There are a couple of different versions of translations of the ancient Chinese, but the essence of the work provides the best (and most ancient) lessons in strategy. In the spirit of surviving the war against a shattered economy I find myself asking “what kind of advice would Sun Tzu offer me, as a product manager?”.

Analysis

“We can see our victory or defeat by planning.” – Sun Tzu, The Art of War

A recurring theme in Sun Tzu’s ancient book of strategy has to do with gathering intelligence, analyzing, developing strategy and planning. You must have a plan to win any battle. Unfortunately in tough economic times there is little time to plan and very little money available to pay someone else to do planning. According to the great strategist however, you must make time to plan and make certain that the planning will assure victory.

Although the gut instinct of executives in a recession economy may be to cut costs immediately, it may be wiser to first redeploy resources into planning. Staying in business in a recession economy requires a re-prioritization of spending, and careful management of cash flow (and not a shutting off spending entirely – that would be going out of business). By the way, it is a fact that as time marches on, everything you do in the company has a price attached to it – whether it is a cost in cash, credit, opportunity or relationship. What expenses do you put priority on? That has to be the first thing you plan.

Be creative and open-minded with your planning. There will always be long term strategic costs that you may be tempted to put off. You must give them appropriate consideration in your planning process. Establishing repeatable processes and developing the skills of your workforce are long term investments which lay a good foundation for growth (and may actually have tangible short term payback).

You don’t need to spend a lot of time and money on a plan. Get back to planning basics – write a clear description of what will be done, by whom and by when. Keep your planning simple and clear. Make sure that your planning is realistic, achievable and aligns with the needs of the business. It also helps to develop a plan with execution in mind – it is important to have clear communication from the executive level and unambiguous roles and responsibilities to facilitate efficient execution of the plan. In summary, Sun Tzu advises that you must avoid battle until you have a plan which assures victory.

Going To War

“.. it is the intelligent commander’s duty to feed off the enemy” – Sun Tzu, The Art of War

The wise product manager asks “Why are we doing this? Why are we investing in developing this feature? Will this feature resonate with our customers? Will they pay us for delivering this feature?”. Product releases with lots of “cool” features are great, but they suck up resources during development and they need to be supported once they are released (whether they are profitable or not). Sustainability of the product line is more important than having a bunch of new features that the CTO thinks are cool. If nobody is putting their money on the table for a feature then why is it being done? If the competition has a particular feature, does it mean you need to have it too? Or, if it doesn’t contribute to more sales, does it tell you something about how little the competition knows about the customer?

It is an especially good idea in a challenging economy to get focused on where you add value and what customers are willing to pay you for. Manage your cash and make sure you have enough runway. Have the courage to end-of-life products that are not making any money for you – you cannot afford to keep investing in them. It is better to work with the customers that are still buying those products to enhance your more profitable products with the features they love, and terminate the unprofitable product line with dignity. Narrowing the focus of product offerings and developing “crystal clear” marketing communications will save money and make use of your scarce resources where they matter most. Determine who your best customers are (the ones that love your stuff, of course) and invest in them – invest time to listen to what they have to say and invest in your relationships with them – treat them special. This will lay a good foundation that will get you through difficult economic circumstances.

In summary, Sun Tzu says this “Make victory in war pay for itself. Avoid expensive, long campaigns.”

[note: this is the first two sections - more to come]