Sunday, September 25, 2011

The Marketing Side of Agile at the SVPMA

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Around 60 people attended the September 7, 2011 meeting of the Silicon Valley Product Management Association meeting held at Tech Mart in Santa Clara. Ron Brown presented “The Marketing Side of Agile: 10 Secrets for Success.” 

Ron Brown is a patent holder, corporate spokesperson, and author of the book, Anticipate, The Architecture of Small Team Innovation and Product Success, on promoting creativity and innovation at the team level. Brown is currently the CEO of United Keys, Inc

Ron’s career spans three industries. One third of his career was in the packaged goods advertising industry where he learned principles of professional creative problem solving. The second third he spent in high-tech hardware and software companies, where he learned about supply chains and distribution channels. One third has been within Silicon Valley internet startups. His career includes experience at Nestle, international ad agencies J. Walter Thompson and BBDO. At JWT, Brown managed the HP computers and printers businesses. As VP Corporate Marketing at Wyse Technology, he gained global channels, distribution, and corporate marketing experience. As president at, he built one of the fastest growing consumer internet sites.  

Brown said that the failure rate for new product entries has been increasing. Whereas 50 years ago, most new products were successful, twenty years ago the failure rate was 50%, while it is 70% in today’s business environment. He set out to discover what knowledge leading companies have about new product innovation that distinguishes them from their industry peers. He started by digging through 60 years of industry research about product success, then he interviewed developers and managers from a wide range of companies.  

Brown defines “leading companies” as those that generate over twice as much revenue from new products compared to their industry peers. Specifically, the successful companies generate 49% of sales from new products compared to 22% of sales from new products in other companies. They must always have a fresh flow of “new” products in new categories at any given time. In contrast, most companies lose a tremendous amount of time and money on internal costs that result in poor moral and failed products while their competitors get stronger.  

The successful companies spend much more time figuring out how to be more innovative than the unsuccessful ones, because they recognize that innovation is key to winning in the market. Small development teams must have freedom and resources to be effective. Brown discovered that engineers operating from the Agile manifesto talk to customers regularly, although they may not recognize that customers are fickle and that product management skills are necessary to determine how to convert customer input into features, explicit product descriptions and strategic positioning.  

Brown isolated 10 core strategies of leading companies that are not readily apparent, including the ability to anticipate what customers want and deliver new products by thinking like customers and understanding human behavior and motivation.

1. Leading companies make entrepreneurial teams the focal point of their strategy.  
A major obstacle to innovation is the entrenchment of linear development processes such as Waterfall that result in late stage rework with associated risks. The benefits of Agile are reduced risk, increased product/market fit, decreased time to market.

Brown defines Agile teams as
- small cross-functional teams
- that are self-regulating and
- self-governing, and are
- empowered to make strategic decisions

2. Leading companies push decision making to the edges of the organization close to customers.  
The higher up in the organizational chart of the manager charged with decision making power, the less awareness they have of the day to day issues, patterns of problems, and understanding of the end users’ needs, wants and pains.

3. Leading companies employ development techniques tailored for the “fuzzy” front end.
Early stages of a development cycle are referred to as the “fuzzy” front end. This is the phase when the company is first conceiving and considering an opportunity before determining if it is worth developing. The creative development process takes an idea and works it into a tangible product. However, manufacturing control processes don’t apply to creative thinking. Total Quality Management (TQM) or  statistically based manufacturing techniques developed by W.Edwards Deming are not conducive to pre-revenue activities. Even Six Sigma, although flexible, doesn’t translate well when attempting to formulate an idea properly. Development and manufacturing don’t occur on the same continuum, although they are often depicted visually as if they have the same characteristics and implementation strategy. Development formulates an idea and implements, while manufacturing replicates and scales – each requires unique skill sets, orientations and management technique.

4. Leading companies commit to customer immersion and problem detection techniques.
Seven out of ten product failures result from poor customer input procedures. Customers are not rational and buyers may not know why they buy. Brown cited a 2008 Microsoft commercial featuring Bill Gates and Jerry Seinfeld going to live with “average” people in their homes. When Gates asked Jerry why they were doing it, Seinfeld suggested that they needed to understand what it was like to be a regular person, since they were too removed. This is a literal example of customer immersion, which came from social anthropology and ethnography. Living with customers provides insights into the customer moment to moment experience in their own environment. Direct observation provides insights into customer motivation, pain and behavior.  Once you start thinking like a customer, you can anticipate what they want which provides a strong competitive advantage. VCs ask whether startups are an aspirin or a vitamin. An aspirin kills pain while a vitamin prevents pain. Leading companies solve important problems exclusively by finding the screaming baby and urgently solving the problem.

5. Leading companies develop creative problem solving skills at all levels.
Brown cited a study that showed that projects were nine times more productive and quicker to market if managers had proven high levels of creativity as measured by the Myers-Briggs Type Indicator creativity index. Everyone, regardless of inherent tendencies, can be trained in creative thinking skills which improve with practice.

6. Leading companies generate meaningful ideas from the entire value chain.
A supply chain includes the network of vendors required to bring the product to market. Each component in the supply chain has an associated cost which must be kept as low as possible for financial accountability. In order to differentiate, marketing recognizes that each component can be positioned as a source of value to the customer. Porter defined this perspective as the value chain. Leading companies reinforce brand trust at every opportunity in the value chain even bringing suppliers into the action as early as possible to identify potential for innovation.  Proctor and Gamble has a program called “Connect and Develop” which looks outside the company to discover at least 50% of new product concepts. McDonalds added menu items such as the BigMac and Egg McMuffin from franchisee suggestions.

7. Leading companies emphasize superior implementation throughout the organization.
Taking a concept from an idea into a finished project requires an ability to implement well in an elegant way. Innovation is a process, not a chance endeavor, which requires structure. The structure of innovation is comprised of identifying the idea, developing the strategic direction that the idea should be taken in, and executing on that strategy.  Strategy turns an idea into an invention, providing it with form and function.  Execution turns the invention into a product that customers can purchase and utilize. Implementation equals strategy plus execution.

8. Leading companies utilize business models for strategic planning.
Brown referenced management writer Joan Magretta, as the guru of business models. She defined a business model as “the story that explains how an enterprise works.” Peter Drucker described the business model as the answer to the questions: Who is your customer, what does the customer value, and how do you deliver value at an appropriate cost?

Making money occurs one transaction at a time. A business model for a new product is a strategic document focused on transaction level value creation. A transaction is an exchange of value between the company and the customer. A product is a vehicle for a transaction. The dynamics of the business transaction between the company and the customer must be understood and analyzed in order to be enhanced and refined. This focus on transactions is referred to as “unit economics” since it is concerned with value creation rather than production costs. Business models are also designed to generate stories, since stories are what customers buy and fuel word of mouth communications. Business models fail when the narrative isn’t believable and when the numbers don’t add up.

9. Leading companies recognize the importance of precise messaging.
Differentiation is the tip of the arrow and the value proposition seals the deal. The positioning presentation has to be razor sharp and repeated often.  The USP is the unique selling proposition which describes the qualities unique to the product in a tangible way that differentiates it from the competition and motivates a large audience to take action. It must be tangible so the audience can experience the benefit through their senses to measure its performance. Products that demonstrate their value are easier to communicate and sell. The USP = Benefit + Differentiation + Motivation.

The strategic positioning statement defines the target audience, describes character or personality of the brand, and provides the reason why.  The reason why is important because it establishes the credibility and the believability for the benefit claim. Brand character projects an attitude and reinforces the main claim with a feeling. Drama, storytelling and emotional component are effective aspects of the statement. Strategic Positioning Statement = Target + USP + Brand + Why

10. Leading companies measure and track key decisions.
Brown described a simple Audit on a slide with 4 boxes within a square, each box pointing to the next box in counter-clockwise direction. Starting with the Idea in the top left box, pointing down to Critical Success Factors, which points to Audit in bottom right, pointing up to Track in top right, which continues to point to the Idea. Critical Success Factors focus on the most important areas to get to the very heart of both what is to be achieved and how it will be achieved. Feedback mechanisms measure and track progress, provide insights for continual improvement and correction, simplify and speed up decision making, enhance communication and collaboration, consistently include team members disparately located. Identifying rules, best practices, critical success factors, appropriate metrics and feedback mechanisms contribute to design thinking for constantly iterating business models in leading companies.

In short order, Brown identified the keys to successful leading companies as those that show their teams how to collect and process customer input more effectively, develop creative problem solving skills, use business models to stay on course, and measure and track progress.  

Ron will be speaking at the Global Product Management Talk on Twitter on February 6, 2012. Join in the twitter talk weekly Mondays 4:00-5:00 PM PT @prodmgmttalk  #prodmgmttalk
Global Product Management TalkTM is a weekly mini-product camp Socratic discussion (on Twitter) of pre-posted questions (on Facebook) with live audio of thought leader and co-hosts commenting (on Blogtalkradio). 

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Thursday, September 22, 2011

Recap: Managing Backlog During Initial Development in B2B ISVs w/John Peltier

Please retweet: 9/19 Recap: Managing the Backlog During Initial Development in B2B ISVs w/@JohnPeltier #prodmgmttalk @prodmgmttalk

At our most recent, Sept 19, 2011 Global Product Management Talk on Twitter, John Peltier @johnpeltier led us in a discussion of Managing the Backlog during  initial product development in business to business independent software vendors.  Following is an edited recap of the tweets. Host Cindy F. Solomon @cindyfsolomon was joined by Roger Cauvin @rcauvin as co-host. Use this as a jumping off point to blog your insights and responses.

John says, "I find Roger’s blog to be one of the best-written on the topic of product management, with particular emphasis on agile approaches to the subject, and I look forward to his participation in the talk.  Cindy and I have spoken about focusing the topic of our talk around backlog management during development of the initial release of a product, as that is an area I’ve uncovered (and..caused!) some controversy.." 




  • rcauvin In the old days, #agile dev teams were co-located w/ customers & could more easily manage the product backlog.
  • johnpeltier The challenge: Product managers must represent a market segment, not just a single customer. How to do while in the dev room? 
  • rcauvin Now we have B2B and B2C software product teams doing #agile & experiencing challenges representing the customer effectively. 
  • johnpeltier If the product management and product owner roles are split, will the same product quality result?
  • rcauvin And if the #prodmgmt & product owner roles are NOT split, will product quality suffer? 
  • gander2112 I think that it might be part of the level of skills in the product owner role, at my company, the PO is a very junior role.  (Of course I am both PO and PM), so I get the full picture. I mean, so junior that they pretty much have to ask permission to go to the loo 
  • johnpeltier Geoffrey, I am both also - One element is if the PO has exposure to customer research...
  • saeedwkhan Need to distinguish between Prod. Mgr (role),Prod Owner (role) & #prodmgmt function & goals. Then it's not an issue. :-) 
  • gander2112 @saeedwkhan Agreed, but often not done.
  • jbrett  Is it even practical for a PO to effectively serve the needs of the team AND the market on their own? 
  • gander2112 Yes, if they have enuf skills
  • liz_blink Not sure. I do both and isn't easy! 
  • johnpeltier @liz_blink I didn't say it was easy!  I've done both at once. The challenge is keeping a PM / PO on one product. 
  • jbrett @gander2112  I'm not sure its a question of skills as much as one of capacity. Thoughts? 
  • saeedwkhan @jbrett is correct.... but it's a question of skills, capacity & overall scalability. That's why roles need to be separate.
  • gander2112 Actually, If the product owner role is pigeonholed into a dev interface role only, they will never learn mkt and other skills. I believe that the PO needs to be at some level of participation in the outbound market research 
  • johnpeltier Isn't backlog management intended to meet market needs? If so, that person must get great deal of user input 
  • jbrett @saeedwkhan We've done it both ways at my company. Separating roles seems to be yielding dividends. 
  • saeedwkhan PO should be part of the #prodmgmt team, but with a focus on working with Eng. They don't need to live there though. I call it friends with benefits, and not marriage. :-) daily interaction yes. hourly interaction. Not a requirement. 
  • jbrett @saeedwkhan #prodmgmttalk but isn't that the function of the PO? To sit with the team as a customer proxy? 
  • gander2112 There has to be more than just drive by pushing of priorities and requirements from PM to PO. Can be separate, but close 
  • gander2112 Don't get me wrong, I would love to get away from the Backlog, but it is hard to get the right balance. And right person too… I just fear that the temptation to take @saeedwkhan's input from daily to once per sprint would be too great.
  • saeedwkhan @gander2112 Hi, I didn't say once per sprint. Where did you see that? :-) 
  • gander2112 @saeedwkhan YOu didn't, but once a day, to, "I'm busy, bug me in three weeks" is a slippery slope, and one that is tempting 
  • johnpeltier @gander2112 @saeedwkhan Team / PO will move on if PM doesn't reply fast enough. 
Q1 Is it easier to involve customers during construction of custom software products than it is for B2B or Enterprise products?
  • gander2112 A1: Naturally. You are building it for one customer, so that makes it easier to involve them deeply
  • johnpeltier @saeedwkhan Well, that *sounds* easy!
  • Ycnt_ibdonlyjen A1: am curious... how many people are building custom sftw for one client instead of mkt? 
  • johnpeltier @saeedwkhan @jbrett If PM is out visiting clients / being in the market, PM on multiple products, r they available enough? 
  • gander2112 FOr me balancing different customers in different segments for input is hard. 
  • johnpeltier Clarification: "available enough?" in prior Tweet = "available enough to the Product Owner"? 
  • liz_blink @gander2112 PO needs to be participate in the outbound mrkt research #prodmgmttalk agreed otherwise it just propagates inside out approach. 
  • liz_blink @johnpeltier @jbrett If PM is out visiting clients market, r they available enough?  #prodmgmttalk  good Q. What is enough? To get job done?
  • gander2112 @liz_blink I like to call that "Breathing our own exhaust" 
  • saeedwkhan @gander2112 If a PO goes the once per sprint route, they are not doing their job. Communication  shd be as needed.
  • liz_blink Or is the team lacking some proactiveness to call out to you? 
  • gander2112 @saeedwkhan Not the PO, but the PM becoming less accessible. I have plenty on my plate to keep me away from the daily PO mtg 
  • saeedwkhan @gander2112 In every PM job I've had, the MINIMUM comm interval was weekly. With email/phone etc, it is many times/wk. 
  • johnpeltier @saeedwkhan @gander2112 Can't imagine 1 per week being adequate in any context
  • liz_blink @saeedwkhan must be mine that need a lot of love! Or the combo of no PO that increases the need. 
Q2 Which role is most suited to getting customer input on a sprint-by-sprint basis: product owner, user experience, or product manager?
  • rcauvin Key related question here is the granularity of the backlog. Does it truly contain stories, or are tasks? 
  • johnpeltier A2: Strong UX team member can help bridge the gap, IMO. 
  • ProdMgmtTalk @rcauvin describing the "granularity" of the backlog as a distinction for how much communication is required
  • saeedwkhan @rcauvin Good point. Stories take time to implement. This is different than tasks. 
  • ErikaLAndersen Tasks = features? Stories = ??? Stories = how user interacts with products, reducing amount PM must do?  Still trying to figure this out. Stories come with personas. Developers understand stories, goals, make better decisions 
  • rcauvin User story stands for a relatively end-to-end user interaction that achieves a goal. Nice when dev team can run with these
  • johnpeltier Design personas help
  • ErikaLAndersen If developers understand stories, don't need as much input from PM (or is it PO?) 
  • jbrett @johnpeltier @gander2112 @saeedwkhan If the PM is also a customer seems like a pretty scary idea. (moving on without response) 
  • rcauvin @ErikaLAndersen If the backlog contains user stories instead of tasks, it is generally easier to manage. 
  • saeedwkhan @liz_blink One of my team is in India. They're not crying and they do great work. 
  • Brioneja @ProdMgmtTalk I would think that the right role depends on the type of project and the level of uncertainty 
  • johnpeltier If the stories are well written and capture intent fully, PO job is easier  @jbrett  @ErikaLAndersen  
Q3 What are the benefits and risks of letting customers see unfinished work vs. using vaporware mock-up to gather current-state feedback?

  • Brioneja @ProdMgmtTalk I am a big proponent of quickly creating prototypes. But prototypes can also be non functional screens
  • ProdMgmtTalk @johnpeltier A3: unfinish is front end prototype – mockup to me is clickable wireframes / Flash / static HTML 
  • Brioneja @ProdMgmtTalk IDEO has a wonderful example of VOC where they gathered info on an airplane cockpit design using Post-It Notes 
  • ProdMgmtTalk Correction: "Unfinished work" is actual product in progress vs. vaporware has not been developed on back-end
  • rcauvin A3: I've found clickable wireframes can be very helpful, but they require careful expectation setting. 
  • ErikaLAndersen A3: If lots of work already completed, more psych/financially difficult to make changes based on cust feedback
  • saeedwkhan Vaporware is product that is claimed to exist that doesn't really exist. i.e. it's a false statement. 
  • johnpeltier @saeedwkhan Perhaps "vaporware" wasn't the right word for the question :) 
  • ProdMgmtTalk @rcauvin says to tie all major user stories into 1 end-end epic & demo epic which is incrementally fleshed out
  • Brioneja @saeedwkhan I think there is another difference. Vaporware is not even an ongoing project.  
  • ErikaLAndersen Should we use "prototype" instead?  RT@saeedwkhan: Vaporware is product that is claimed to exist that doesnt really 
  • saeedwkhan @Brioneja True. It's a question of intent IMHO. If the intent is to deceive, it's definitely vaporware. 
  • johnpeltier @ErikaLAndersen @saeedwkhan Yes, that's a better word. People, focus! Get over that word! :)  
Q4 How can product managers balance ambiguity of frequent customer input with stable product vision and meeting tight deadlines?
  • saeedwkhan @liz_blink Mature teams know how to communicate effectively. Immature ones need constant feeding. :-)
  • liz_blink Agree.@Brioneja@ProdMgmtTalk I would think that the right role depends on the type of project and the level of uncertainty 
  • Brioneja @ProdMgmtTalk One approach is to talk to the customer's customers and to other suppliers to the industry 
  • ErikaLAndersen A5: Are customers commenting/designing specific elements, or whether product meets goals/ needs?  Not new question; just a clarification 
  • johnpeltier @ErikaLAndersen They'd comment on both, I'm assuming, but what's important is whether root problems are being addressed 
  • johnpeltier @liz_blink @Brioneja @ProdMgmtTalk "Level of uncertainty" is an important element. 
  • Brioneja @ProdMgmtTalk The more you move downstream on the value chain, the more "stable" the signal/ noise ratio
  • rcauvin A4: to address the challenges of ambiguous customer input, ask "why" & "what problem does it solve". 
  • Brioneja @johnpeltier @liz_blink @ProdMgmtTalk I am a proponent of classifying projects by level of uncertainty. Need dif mgmt approach 
  • saeedwkhan A4 That's why #prodmgmt is tough. Need 2 B a good info aggregator & make decisions based on clear goals for product/bizness 
  • rcauvin A4: Focus customer input on the problems they face; group problems & customers into segments.  Choose your problem and customer segments on which to focus.  Grouping ultimately coalesces around a chosen position
  • johnpeltier @rcauvin For rev1 of a product, aim at a small number of segments 
  • Brioneja @rcauvin The Kano model is a somewhat rigorous way to do that 
  • saeedwkhan @rcauvin "Nail it, then Scale it" is my motto on this topic. start small & focused, get it right, then expand
  • ProdMgmtTalk @cindyfsolomon asked @rcauvin about what tool he used to identify grouping of data - he created visual diagram of grouping 
  • Artifacture Communication & facilitation are key. Try to steer strategic at begin of process edging toward details at end 
  • johnpeltier Root cause analysis is the answer to the old Bud Dry ad: "Why ask why?" 
  • johnpeltier RT @ProdMgmtTalk@rcauvin says always focus on 1 segment: intersection of people w/ problems youre addressing= main segment... 
Today's stats: 210 tweets generated 223,214 impressions, reaching audience of 22,677 followers 

Thank you John Peltier @johnpeltier for speaking and Roger Cauvin @rcauvin for co-hosting today! Everyone's participation appreciated! 

  • Join us next week: Sept 26: Everything you need to know about Web Privacy, but were afraid to ask w/ @ShaunDakin
Please retweet: 9/19 Recap: Managing the Backlog During Initial Development in B2B ISVs  w/@JohnPeltier #prodmgmttalk @prodmgmttalk

Global Product Management TalkTM is a weekly mini-product camp Socratic discussion (on Twitter) of pre-posted questions (on Facebook) with live audio of thought leader and co-hosts commenting (on Blogtalkradio).