Saturday, July 3, 2010

Why Have A Strategy?

At the May meeting of the Silicon Valley Product Management Association, Barbara Nelson presented an interactive session demonstrating the vital necessity of developing and executing on a product strategy even in a climate of rapidly changing market influences and survival mode conditions. Drawing upon more than 20 years of experience in the software industry, Ms. Nelson speaks as an evangelist for market-driven products. Prior to joining Pragmatic Marketing as an instructor in 2000, Barbara served in product management and marketing positions for an enterprise accounting and finance software company. As vice president of product marketing, she worked closely with product managers, marketers and developers, showing the value of using market facts over opinions. She attributes her success to actively listening to the market in order to build products people want to buy.

Refreshingly, Barbara began with an allegory about a friend returning from their uncle’s funeral with boxes of pictures from his life. Her friend was in a quandary about what to do with the pictures. None of the pictures were labeled. The friend tossed all the boxes of pictures as they had no meaning to her and no one in the family could identify the people photographed.

Ms. Nelson suggested that the issue of organizing photographs from a lifetime has not gotten simpler with the availability of new software and technology – rather it has gotten easier to capture photos in an unwieldy fashion and store them in a myriad of digital locations. She suggested that solving the problem of organizing pictures is a real life dilemma requiring product management skills. Start with identifying themes in the pictures. You could take a waterfall approach to proceed in a sequential manner from the bigger “picture” assuming that all the pictures are quality and worth keeping, then break down the problem into smaller projects, identify the method for determining where the pictures will be filed, the file names, and then proceed to label and place the pictures appropriately. Or take an Agile approach by organically sorting pictures based on the themes and subject matter, quality, sentimental value, frequently adapting filenames and organization choices as more pictures are reviewed and recurring patterns are recognized.

Transitioning from this universal issue, Ms. Nelson inquired “What is your personal strategy?” Is it “I have a vision: our product is for anybody, anywhere, anytime.”? She stated emphatically that product management requires both strategies and tactics. But faced with deadlines, what is the need for strategy if progress is being made? The market changes so rapidly it’s impossible to execute on a strategy. We’re in survival mode. We take every deal that comes along. The executives don’t agree on a strategy so how can we execute one? Our developers think the strategy is flawed so they have stealth projects. Strategy takes time that we don’t have. Connecting the detailed tasks to the strategy slows down execution. We can’t afford to stop executing for a minute because we have limited time, money, and resources. During these tough economic times, our philosophy is to just do it!

Ms. Nelson’s overall message is that PMs don’t have the luxury of working on the wrong tactics. Good strategy helps you filter out bad tactics so you can focus on what is most important to your long-term viability in the market. The PM is the President of the Product, although in reality a PM may experience being the janitor of the product. A company’s original vision created income for the founders, who solved a problem that they experienced firsthand. The challenge is to figure out how to get to the next product, and the CEO has to transition to strategizing for the company and away from tactical details.

Strategy helps you figure out what NOT to do. Research into companies identifies that only 5% of employees are familiar with the company’s strategy. How do they know what to do to move the company forward? Things change when you move from strategy to execution. You must determine where you are trying to go, what mountain you are trying to climb. The work being done is the defacto strategy – does it connect to the vision? Every level of planning MUST connect to the strategy: Vision, Product, Release, Tasks. Find a problem in the market for which there is no solution and make sure it fits with the overall company direction.

A good PM is involved in the release and feature set of a product. Prioritizing backlog is tactical. Prioritizing themes is strategic and guides tactics. Do the detailed tasks connect all the way back to higher management? PM requires communication at the executive level and trust between layers of management. You must identify if there is a gap between strategy and execution, or worse between the executives and the sales, marketing and development functions. Product Management falls between strategy and execution and must provide simultaneous interpretation within that gap or risk becoming “demo boy”.

At this point, Ms. Nelson broke the audience into groups to do a “Force Field Analysis”. The instructions were to come up with two to three driving forces that have positive impact in closing the gap as a product manager, and two to three constraining forces that prevent product management from operating successfully. The product managers, product marketers, engineers, entrepreneurs and other interested parties in attendance were quite vocal and animated in this discussion. The small groups came back together to share results of the discussion.

A list of what works included:
1. Involving the team with users and use cases including UI and QA for buy-in from the beginning
2. Providing rewards and incentives to the developers to acknowledge and reinforce desired contributions
3. Ongoing market sensing activities
4. Clear goals and milestones that the entire team understands

Other positive driving forces were;
• a culture of honesty, integrity, transparency and trust
• good executive leadership, internal communication and technical skill set
• clear understanding of market trends and opportunities
• customer input without intermediaries

The list of Constraining forces included;
• Not having a common language in the vernacular of doing business
• Outsourcing challenges that don’t always save money – even if it appears that it does on paper
• Customer requirements confused between key customers versus markets of customers

Ms. Nelson was adept at reframing the constraints into the constructive opportunities for the product manager to provide given pervasive problems, such as:
• Identify patterns that are repeatable for customized features
• Distill down commonalities to figure out how to deal with nuances
• Challenge engineers to build tools, APIs

Regarding constraints on time:
• Cut features
• Present value calculations, tradeoffs
• Utilize conjoint analysis

Recognize that the product manager is the messenger for the market and must bring market data to enable the executives to make the right decisions. The PM must consistently stay on course and communicate often with management. “You can’t do everything. You can’t even do the compelling many.” Therefore the PM must focus on the vital few. The closer you are to the sales process, the more difficult it is to make product tradeoffs. Sales depend on individual deals and ultimately want products the market wants to buy, so the PM must provide a higher view of sales to many. The PM must assess the market as big enough and teach sales to recognize the right fits to stuff their pipeline.

The PM articulates the distinctive competence of the company’s unique, sustainable value. PMs figure out drivers in market segments using data, not opinions. “Your opinion, although interesting, is irrelevant.” PMs identify the market segment that values what you do that the competitors don’t do well. Delight user personas by solving their problems – figure out why the customer wants to buy. Regularly use Win/Loss Analysis to validate why your product is winning and losing. Continuously connect strategy to execution with post mortem corrections and quarterly road map reviews.

Perform Agile retrospectives by questioning:
• What did we say we would do?
• What did we do?
• What’s next?
• What are the barriers?

Ms. Nelson’s bottom line education for a PM is to be consistently immersed in high value activities that
• Provide market feedback to help you adapt and improve along the way
• Drive alignment between executives and workers
• Communicate the strategic vision to marketing, sales, development
• Show leadership by bringing market expertise to the strategic planning process.
• Align your team around a strategic vision to drive execution towards building products people want to buy.

“Management is doing things right. Leadership is doing the right things.” Peter Drucker
Post a Comment