To create success in your product development and manufacturing business, the product strategies you use must be aligned with each aspect of your company’s operational strategies, and then with your markets’ needs.
You can create a powerfully successful product strategy when you combine the strengths of your corporate strategy with the needs of your ideal customers.
Corporate strategy
Authors Benjamin Tregoe and John Zimmerman state there are nine forces that serve as decision-making mechanisms for all companies, and each company has one of these nine as the driver for its strategy. This “Driving Force” of can be determined by answering a simple question: “When decisions are made about products or markets, which one of the nine criteria is most heavily weighted?”
The nine driving forces are:
- Products offered
- Markets served
- Technology
- Production capability
- Method of sale
- Method of distribution
- Natural resources
- Revenue/Growth
- Return/Profit
Once you are clear on the single driving force for your business, your product experts can develop product strategies to grow their business unit. While corporate strategy has a single driving force, a product strategy must address most of these driving forces to be successful.
Leave product strategy to the experts
Executives and product experts have different, yet equally essential roles within the company, and neither can succeed without the other. These two distinct roles are very different in most respects, but the fundamental differences are in their scope of authority, and in their expertise.
The product manager or product leader is the expert responsible for developing the product line strategy. She is the product and market expert, and has the knowledge needed to guide the product line. This knowledge and experience comes from:
- talking with customers,
- frequent, detailed discussions with sales personnel,
- an in-depth understanding of the technology arising from closely working with the R&D department,
- continual competitive analysis, and
- the ability to take both broad and deep views of the product’s fit in the market, company strategy, and how it will continue to perform in the future
Executives employ the product experts to know these details, develop the best possible product strategies, and then execute on the plans that create the results. Executives’ primary role is to manage the high-level functions of the business — guiding it through the ever-changing economy, and making resources available to the experts for executing the functional plans of the business.
Involving executives in the minutiae of a product line is not normally productive and can damage the process, and final product. Their involvement can sideline a product manager while she explains the details to the executives. The productivity of the executives is reduced because learning these details to prevent partially informed decisions takes time. The business suffers because those responsible for running these two key areas are not doing their jobs.
The following is the best division of product management responsibilities.
Product managers are the experts. They know more about their overall product, market, and capabilities than anyone else in the company. Their role is orchestrating and/or consulting on all issues dealing with their product, its business performance, and the related markets. The best product managers can simultaneously consider the strategic and tactical aspects of their products and make good decisions quickly.
They are the masters of their domain, because they:
- are close to the customers and the products
- know the technology better than all, but the R&D department
- know the competitive landscape
- know the suppliers and the supply chain
The C-suite has the responsibility to guide the entire company. They are responsible for the overall functioning of the organization’s various departments, setting company strategy, and empowering their staffs to make progress on the initiatives assigned to them.
The executives are responsible for creating the following:
- creation and management of anything affecting corporate strategy
- business models
- channel strategy or geographical expansion/contraction
- organizational structure to support overall goals
Executives and product experts have different — yet equally essential — roles within the firm. Neither can succeed without the other; neither group is equipped to conduct the other’s role. Major problems arise when they attempt to do so.
Develop products for your customers, and their customers
I’ve seen too many product strategies start with today’s product and use them as the reason, or excuse, for the next product. It is inherently safer to make incremental changes to a product than it is to innovate. Safer, at least, until your competition breaks with your conventional thinking and creates your demise.
The best method for dramatic business growth is to develop products for your customers and for theirs. This is what separates successful companies from their competitors.
The only way to succeed at this is to know the people in these groups. You get to know them by doing the following:
- Talking to them
- Listening to them
- Shopping their stores and businesses
- Calling their customer service
- Buying something from them
- Return something, or attempt to
- Interviewing their executives, managers, and front-line employees
- Talking to their customers
- Shopping their competitors’ and their customers’ businesses
Be radical. Go beyond the standard voice of customer interview and competitive analysis that everyone does. If you want to be dramatically better, then you must think, and act dramatically differently.
The value you provide
At some point, prospective and current customers will ask themselves, “What value will I get from this product?” You must have an honest and outstanding answer, or future business is likely to be lost.
Listed below are three questions that your sales team should be able answer immediately and without hesitation. These answers must not only be memorized but they must be believed. If your team members do not believe in your product and messaging, then customers won’t either.
The questions are:
- Why should your customer care enough to be interested in your product?
- Why should customers choose your product over another? What makes your product or total offer special?
- Is your value proposition compelling enough?
No one with any credibility will say that corporate or product strategy is not complex. Both are complicated by their mutual dependence and the continual change in the business world. However, the creation of a product strategy need not be mysterious, or even complicated. Addressing in detail how the products will support the corporate strategy is elegantly simple, and pragmatically effective.
Doug Ringer helps small and mid-sized firms exploit growth opportunities and stanch any bleeding. Contact him at 502/509-9746, doug@dougringer.com or www.dougringerconsulting.com.
©2018 by Doug Ringer. All Rights Reserved.
