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Hammers, Anvils, and Hot Iron - Forging Partnerships (Ananda Chakravarty) product camp boston may 2013
 

Hammers, Anvils, and Hot Iron - Forging Partnerships (Ananda Chakravarty) product camp boston may 2013

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All product managers need to build relationships with internal and in many cases external partners. When engaging with business units like sales or finance or when you engage with partners who are ...

All product managers need to build relationships with internal and in many cases external partners. When engaging with business units like sales or finance or when you engage with partners who are building your products, or (gasp!) who are buying/distributing them - you need to keep everyone on your side. What are some of the key parts of making these relationships work. How do you form the partnerships? How do you build off of relationships handed over to you? What do you do to maintain, build on, and leverage relationships in the product arena when you need them the most? How do you know when the hammer doesn't fit the nail. We'll dissect the ideal and not-so-ideal partners, and engage the group in some real dialogue on the type of partner-smithing necessary to build the next generation of products well. Real-life audience experiences welcome!

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  • All product managers need to build relationships with internal and in many cases external partners. When engaging with business units like sales or finance or when you engage with partners who are building your products, or (gasp!) who are buying/distributing them - you need to keep everyone on your side. What are some of the key parts of making these relationships work. How do you form the partnerships? How do you build off of relationships handed over to you? What do you do to maintain, build on, and leverage relationships in the product arena when you need them the most? How do you know when the hammer doesn't fit the nail. We'll dissect the ideal and not-so-ideal partners, and engage the group in some real dialogue on the type of partner-smithing necessary to build the next generation of products well. Real-life audience experiences welcome!
  • Statistics on partnerships – interesting factsKeiretsu – Vertical supply chains – lifelong, deep partnershipsFranchises – Complete support structure and built in trust for scalability – McD’s, H&R Block to 7-11, and Enterprise, highly successful modelsWalmart achieved success in large part due to the 5000+ supply partnerships it formed to bring all consumer products to their superstores.
  • Agenda page
  • The value of alliancesAll firms engage in some level of partneringProduct managers also partner on usually a smaller scale, but in many cases significant level
  • The value of alliancesDefinition of a partnership – describe the hammer (partner resources), anvil (product manager resources) and hot iron (product)
  • Sales Teams - When I worked at Monster, we developed strong internal partnering channels with dedicated liaisons to ensure that we could bring the sales teams up to speed on innovations in our product line.PR/Marketing – Working with 3rd party agencies for creative, while simultaneously building marketing campaigns and trade events such as webinars and trade show participation, we succeeded in leveraging partners both internal and externally to build word of mouth awareness of the productOutsourcing/Offshoring – Development work was executed through multi-level partnering with contractors and subcontractors to build and execute the technical aspects of our new innovationsSupply Channel – Our customers purchased advertising through us, but we distributed these to highly specific vertical sites to build customer reach and generate sales value.
  • Reasons for partnerships and alliancesOrganizations work together to build economies of scale for their product lines.
  • Partnership Objectives for PMsBuild, Sell, and Manage the product are the key reasons to engage a partner.Case study – Online Procurement Tool – driving value for Typically falls into one of these categories – within each, the product mgr has an objective for the partner to provide a specific service or function. These may tie into a broader set of functions related to the gaps outlined prior.We examine how this impacts the product organization and partner – final decision maker, who will be held accountable, who will be responsible for sharing information, and who will learn from the arrangement
  • Types of partnering
  • Build, Buy, PartnerPartnering enables fast turnaround, and if designed right can be highly profitable.
  • Partnership life cycleBuildSustainTerminate
  • How PMs can leverage partnerships/alliances
  • Ideal Partnership example
  • Nightmare partnership example
  • Key factors for alliance success – Trust – Most Critical of all – the ability to establish and show a vested interest in the success of the partner as well as your organization. The ability to maintain the highest standards ofProfessionalism and integrity. Optimistic attitude and full confidence that partner is working on your behalf.Communication – Regular communication across both parties to keep each other abreast of status, challenges, including transparencyFlexibility – Ability to change, adjust to new circumstances within the relationshipFit – Appropriate contact chemistry, strategic fit, and motivational (financial) fitCapability – Excellence in motion
  • How to manage partnerships that have been handed to youPrincipal Chemistry – Does the new hammer and anvil function togetherStrategic Value – Do you still need to forge ahead, or are pliers sufficientState of Affairs -

Hammers, Anvils, and Hot Iron - Forging Partnerships (Ananda Chakravarty) product camp boston may 2013 Hammers, Anvils, and Hot Iron - Forging Partnerships (Ananda Chakravarty) product camp boston may 2013 Presentation Transcript

  • Hammers, Anvils and Hot Iron-Forging PartnershipsA product manager’s look at alliances and partnershipsA. Chakravarty 5/2013© 2013 Ananda Chakravarty. All Rights Reserved.1
  • What company is this? 29 marquis global partnerships across 6years, almost 5 major partners/year Industries: Smartphones Software Telecom Tech Services Entertainment Consumer Product Goods Building Supplies Education Electronics Social Networking Storage Electronic Goods Merchandising Focused on: Technology Distribution Branding/Marketing Sales Channels2
  • Introduction Average of 5000 majorpartnership deals eachyear. Healthcare has over 550major deals annually Business partnerships havehigh success rates: Examples: Keiretsu Franchises Mega Supplier Networks (e.g.Walmart)1. Business Alliances Guide: The Competitive Weapon. Robert Porter LynchNote: Alliance and Partnership is used interchangeably. However,a Partnership may represent a distinct legal entity with differentcriteria and responsibilities than two independent firms workingtogether. From a Product Mgr perspective, we are using the term tobe a variation on partnering or cooperating with another firm insteadof the formal legal definition.3
  • Agenda Partnering, The Forge, Examples Partnering & Alliances for Product Mgrs So What? Why Should I Care? Partner Operations – Build, Sell, Manage Types of Alliances/Partnering Business Growth – Build, Buy, Partner Partner Life Cycle 5 Success Factors for an Alliance/Partnership Legacy Partnerships – Inheritance Q&A4
  • Partnering Alliances and partnerships are developed to enhanceyour product offering and create a collaborativeadvantage Partnering is the least structured of the three key growthstrategies for business: Build, Buy, or Partner Partnering also supplements your Build or Buy strategyProductFunctionalityProduct Factors at LaunchLogistics,FulfillmentSupplierAccessCustomerSupportTime toMarketCustomerAccessMarketing,BrandingFinance/CostStructureDistributionChannelsOperationalFinancingCompetitiveAdvantageInnovation,TechnologyPartnerships exist to fill gaps such as5
  • The Forge analogyOrganization PartnersIdeas/ConceptFinished Product6
  • Examples of Partnering Examples of key partnerships Sales Teams (Internal) PR/Marketing (Internal/External) Outsourcing/Offshoring (External) Supply Channel (External) Other Examples?SalesTeamSalesTeamSalesTeamLiaisonAgencyMarketingDev TeamPMO/PMPartnerSitePartnerSitePartnerSite7
  • Product Mgrs and Partnerships Why should I care? Product growth New market entry Competitive advantages Reduce cost structure Mitigate risk Access Innovation/Technology Establish market credibility Recruit top talent Financing Build economies of scale (and scope) … Few organizations are large enough and broad enough totackle all markets – even within their own specializationand code competencies8
  • Partnership Operations for Products Example Case: Online SaaS Procurement Tool with a key partner who ownsand manages all access to Customer and Customer Facing engagement.SellBuild ManageDevelopTestSellPositionFulfillmentCustomerService &SupportDistributeMarketDesign9PartnerProductOrg.PartnerProductOrg.Decisions Accountability Sharing Learning PartnerProductOrg.Decisions Accountability Sharing Learning PartnerProductOrg.Decisions Accountability Sharing Learning PartnerProductOrg.Decisions Accountability Sharing Learning PartnerProductOrg.Decisions Accountability Sharing Learning PartnerProductOrg.Decisions Accountability Sharing Learning PartnerProductOrg.Decisions Accountability Sharing Learning PartnerProductOrg.Decisions Accountability Sharing Learning Decisions Accountability Sharing Learning Product Build, Sell, ManageTemplate
  • Types of partneringVisibility• Internal• External• StealthControl• Junior/Senior• 50/50• Consortium• SubsidiaryFormality• Discreet, Non-collusive• Handshake/Verbal• Informal Agreement/MOU/MOI• Formal Contract• SLAs, Addenda, multi-unitEngagement• Collaborative, frequentstatus communications• Dedicated Liaison• Multi-level ownership• Cross-functionaldependencies• Dedicatedfunding/resources• Shared data, resources• Shared customer statusStrategy• Resources• Technology• Customer base• Industry leverage• Logistics/ProcessStage• Brainstorming, startup,NPD• Mature product• Declining value product –revitalization/termination1. Figure 2.4 Business Alliances Guide: The Competitive Weapon. Robert Porter LynchProduct Managerstypically operate here, butsometimes extend to JVs,M&A, and new businessunits.10
  • Product Growth-Build, Buy, or PartnerBuild Buy Partner+ Product Design & Control+ IP+ Higher Margins(depending on product)+ Cutting Edge Tech+ Time to Market+ IP+ Stable platform+ Negotiable arrangement+ Time to Market+ Low Switching Costs+ Stable Platform+ Development Costs+ Negotiable arrangement- Time to Market- Development Costs- Market Forecasting Risks- Unstable platform- Acquisition Costs- Integration Costs- Legacy Platform Risks- Sunk Costs- Product Control- Integration Costs- Typically Lower Margins- Typically Shared Revenue- IP- Non-competeNote: In certain cases, not all these criteria apply. For instance, partnering may not necessarily result in shared revenue if thecontractual arrangement is designed appropriately.Partnering provides a unique path that is often overlooked for most product initiatives.Despite control issues, the rewards, higher capacity for your resources and time to marketmakes up for this and can usually be managed.11
  • Alliance/Partnership Life Cycle Form High ambiguity Objectives and operations outlined Negotiations for revenue share Expectations set and due diligence Partner format established Sustain Optimization of operations Hidden conflicts arise Alignment with strategic goals aretested Realignment efforts and re-negotiation New contracts, Addenda,unforeseen conditions addressed Terminate Performance data shows change instrategic or profitability value to oneor both partners Termination trigger criteriaestablished Contract modifications, addendaintroduced to enable equitable exitstrategyTypical Junior-Senior Partner Alliance Life CycleGrowthTimeGrowth: Increased revenue, operational efficiency, reportingand data sharing increased, co-marketing/branding, andtechnology IP shared. Trust typically increases as well.Time: Partnerships have varying time and length ofexecution, averaging 3-5 yrs. Dependencies on technologytypically result is shorter term partnerships in the US12
  • Leveraging Partnerships Achieve Strategic Goals1 Filling in the gaps in the overall product solution to develop astrategic fit with corporate and product objectives Mitigate Risks Reducing the impact of risks such as financial, competitive, ortechnology factors that can diminish the product or marketpotential – many large companies have perfected defensivestrategies to a science, e.g. MSFT Increase Rewards Expected increase in returns through revenue, profitability or costcontainment – however this may also impact non-financial metricssuch as brand recognition or customer satisfaction. Leverage Scarce Resources Effectively increase the value of limited financial and otherresources (e.g. human) to commit to core competencies, andspecialization. This leverages the alliance to enable more impactin the obligations of the firm1. Paraphrased - Business Alliances Guide: The Competitive Weapon. Robert Porter Lynch, p.21 13
  • The Ideal Partner High integrity Fast response time Strategic fit Experts at what they do Strong, transparent communication Vested interest in mutual success Dedicated liaison and commitment Engaged in operational planning Flexible to change Strong managerial chemistry14
  • The Nightmare Partner Limited vested interest in product organization Develops internal agenda in the name of thepartnership Defames product organization’s brand name withpoor quality customer engagement Focused on a transactional relationship only Limited or poor communication structure Does not commit to spirit or letter of the contractualarrangement Limited integrity, does not honor contract terms15
  • Alliance Success – Five factors Trust Vested interest in your partner Mutual Gain Transparency Communication Frequent Informative Transparent Flexibility Ability to change Adjust to market changes Adjust to internal corporate changes Fit Chemistry Strategic Fit Motivational Fit – (usually financial) Capability Excellence Expertise Specialization Dedication16
  • Legacy Partnerships Assessment of the inherited partnership Principal Chemistry Ongoing Strategic Value Assessment State of Affairs – New constraints, obstacles, or restrictions Action Steps - Initial Review of history to understand past efforts at building andavoid repeating mistakes Re-establish goals, objectives, metrics, and target deliverables Review contractual material and confirm with partner to ensureinterpretations are synchronized Re-establish Routines Revise and re-establish partner operations plan Share new information from relationship in shared venue Communicate and ask for feedback17
  • More Information Business Alliances Guide: The Hidden CompetitiveWeapon – Robert Porter Lynch http://hbr.org/1994/07/collaborative-advantage-the-art-of-alliances/ar/1 Leveraging Strategic Partnerships – Angela S. Calzone,Change & Response Strategies, LLC. http://seangallaghersite.com/yahoo_site_admin/assets/docs/Business_Alliances_early_stage_problems.6013056.pdf Strategic Alliances: Three Ways to Make Them Work(Memo to the CEO) – Steven Steinhilber18
  • Forging PartnershipsThank You!Ananda ChakravartyProduct Director@achakravartyhttp://www.linkedin.com/in/AnandaChakravarty19