TechnoBrands

Since the product manager “owns” the product, especially ensuring that the product meets the expectation of all stakeholders, it is essential that product management leads the way with respect to ensuring that any product being developed is environmentally friendly and is part of a sustainable overall model.

Recent regulatory changes – within the last 5 years –  which are designed to force manufacturers to be accountable for implementing basic environmentally responsible behaviors (RoHS, WEEE etc.) are decades overdue.  Unfortunately the implementation of some of these directives are “knee jerk” and their actual effectiveness remains to be proven out.  Government regulation should only be the last resort – it is up to responsible designers and marketers to think ahead.  We need to integrate a set of best-practices for product management which takes into account the real cost of end-of-life of a product and which looks at not only the whole product, but the whole product life cycle.

I love to watch the CBC show “Dragon’s Den” (based on a BBC show of the same name). Having had some experience with small technology companies that have great ideas and no money, I can empathize with the inventors and entrepreneurs that stand in front of this group of harsh-but-brilliant angel investors and present their best business case. In the episode I watched last night though, I was a bit shocked to hear Kevin O’Leary argue that the “only thing that counts is profit”. This is coming from a guy that calls himself an “Eco-preneur” and clearly practices ecologically sustainable profitability first, rather than a no-holds-barred “profit at any cost” approach. As usual I think he was probably trying to be controversial for the cameras, trying to stir a fight with Arlene Dickinson, one of the other “dragons”. The reason I bring this up is that it is key to where I believe we need to go as a marketing and product management community: we need to be using metrics based on the sustainability of a business for evaluating success. Monetary profit is only one element (albeit an important one) of the measure of a product line’s real success. I would argue that, even in the name of pure capitalism, it makes sense to extend beyond the profitability-only model and to use a balanced score card to measure the success of any venture (and its associated products), in terms of economic, environmental and social benefit to all stakeholders. Economic This is the “normal” Harvard Business School and Bay Street measure of success – cold, hard return on investment. Easy to simplify, measure and provide great motivation (if there is no profit, your family will eventually go hungry and be very cold) this is the classic measure of success for most products. The biggest problem with this measure is that it is often the only measure used – it is not weighed out against and balanced against environmental and social measures. Environmental It is becoming easier to justify environmental responsibility from an economic point-of-view. Many investors will not provide cash for an enterprise that is not “eco-friendly” and government environmental regulators are cracking down hard on companies that violate existing eco- policies. In the same way that radiated emissions compliance has just become part of baseline product development practice, RoHS and WEEE considerations will follow. When will it become accepted business practice to purchase carbon offsets for international travel? We have a long way to go. Social This is harder to nail down – who decides what is best for the development of society? Take, for example, the Internet. The number one technological and economic driver for the Internet from the late 80s to mid-90s was pornography. The Internet would not have grown into the ubiquitous instrument of economic and social change that it is today without the desire to be able to download streaming video. If we temper our investment in products only for those that are for the good of mankind (with some set of moral filters), will we undermine the development of something that will change the world? We need to take a step back and ask ourselves what we really want to achieve with respect to product success. Do we just want to make as much money as possible in the shortest time at the cost of anything else? Or do we want to make the entire world a better place to live for our children and their children after them?

I searched around on the web today to see if I could find evidence that “green” isn’t just a passing fad and that there were signs of environmentally responsible product management programs being institutionalized at the equipment manufacture stage. I am happy to report that I did find some evidence – enough to give me hope that this is a serious direction change for manufacturing. Not long ago, it was only the looming threat of government regulatory changes that offered any hope of industry and enterprise re-directing their product development and product management practices in a sustainable and environmentally responsible direction. Now, many Asian computer and communication equipment manufacturers are adopting “green” product management processes as an extension of their RoHS and WEEE programs. These programs are more than just a ploy to get the regulators off their backs or “green wash” their marketing programs – ever since the initiation of the Al Gore program “An Inconvenient Truth” it seems that there has been an expectation building with consumers and B2B customers around the promise of sustainability and environmental responsibility in the development of new products. As with any other elements of a companies brand, integrity between promise and action and living up to the promise of “green” in tangible, measurable ways is becoming an important part of brand value for technology vendors. It is heartening to see that green is “in” to stay, and that there are more and more product developers, marketers and managers including sustainability and environmental responsibility as key ingredients in the measures of success for their product lines.

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]

As I’ve mentioned in previous installments, I believe that there has to be more to measuring product management performance than only bottom-line financials. A balanced score card has to consist of financials (revenue and profit margin) but must include product planning value (how much do customers love what is being put into the product?) and product marketing value (how easy is it for sales to sell?). Without a balanced view which considers all aspects of the product management contribution, there cannot be a fair reward system put in place for product managers. The financial performance is easy to measure – the figures don’t lie. I think there is a pre-conception that other measures are too difficult to quantify, so companies revert to financials and leave out other important performance measures. I’d like to suggest that with a bit of creativity, any company can develop product management performance metrics which will round out the “score card” and allow product managers to be rewarded appropriately for their valuable contribution.

Product planning performance can be broken down into a number of components which can be measured – feature management metrics (for instance, measure the length of time that a high priority issue languishes in the feature funnel before it gets into a release) and design change request rates (serves as a crude measure of how well a problem was understood and defined before product development was allowed to commence – a high DCR rate may indicate poor requirements definition). Measuring the degree of customer delight with new features should be an integral part of any new product introduction process (surveys, interviews and ride-alongs yield exceptional value).

Product marketing can also be broken into measurable components of value. Is there a gap between product knowledge in the sales channel and the messaging that the product marketing team wanted to communicate? Here’s a novel idea – why not use an old fashioned measure like asking the sales guys to do a written test? Win-loss analysis (if it is done objectively) can serve as the basis for guiding changes to the product marketing process, perhaps more useful than raw revenue numbers – the revenue numbers don’t tell you much about what went wrong or how you can improve the situation.

In summary, I would like to see more “pay for performance” in product management, with a well rounded method of compensating exceptional performance in product management areas of real value. After all, if you are a product-based company, shouldn’t a large part of your performance compensation budget be allocated to the stewards of your products?