Where Should Strategy Live? (SDForum)

Where Does (Should) Strategy Live in Your Company?Rich MironovSDForum Marketing SIGApril 12, 2010

About Rich Mironov
Veteran product manager/strategist
Business models, pricing, roadmaps
“What do customers want?”
Agile meets business
Repeat offender at software start-ups
“Product Bytes” blog since 2002
Chaired product stage at Agile 2009 and 2010

Agenda
What’s strategy made of?
Where should strategy live in…
Pre-revenue start-ups?
Small single-product companies?
Large divisionalized corporations?
Take-Aways, Q&A
Where
Does Strategy Live?

Strategy Is…
Disciplined thinking about meeting market needs with products (services) that could make money
Cross-functional
A process of discovery as we interact with markets and segments

Strategy is Not…
A one-time event
Property of a single genius
Mysterious
Just an hour of brainstorming
Something that happens only in a conference room
Something to delegate to “strategy folks”

Strategy Demands Multiple Disciplines
Our goals/mission?
Funding?
Credibility?
Company &Financials
Can we build it?
Technical advantages?
Unique talents/IP?
Experience?
(Product)
Strategy
Technology,
Skills & Delivery
Markets & Customers
Real, unmet need?
Will customers pay for this?
Use cases?
Competitors?
Channels, partners?

Core Strategic Questions
New (product) strategies need to answer…
Is this real?
Is the market real?
Is the product (service) real?
Can we win?
Can the product be competitive?
Can our company be competitive?
Is this worth doing?
Will it be profitable?
Does it fit our broader strategy/plan?
After George Day, HBR 12/07

“But We Don’t Have Time!”
Steps for barely sufficient strategy
Gather handful of key contributors
Talk through and write down assumptions about products, markets, use cases, delivery dates
Elapsed time: 4 - 8 hours
Revisit monthly (start-up) or quarterly (product line)
Decent strategies savetime
Identify (and usually postpone) strategic issues
Delegate implementation issues
Problem: Who does ongoing customer validation?

Latest / Loudest Problem
Salespeople and CEOs naturally generalize from their most recent meeting
“Our target segment should be regional not-for-profit hospitals”
“We need to offer hardwarealongside our database software”
Each new idea is just asseductive as the last
A decent strategy lets us ‘buffer’ ideas and compare them against each other

Discovery vs. Theories
Markets turn out to be complex and surprising
You learn about the world by leaving your office
“What’s the pattern?”
“Who are the outliers?”
“How would a customer fit us in?”
Rule of thumb: you need 8 to 20 in-depth interviews to start seeing patterns
Good segmentation is a creative process

How to Learn from Customers
Find prospects not currently being sold
Arrange 45 to 90 minutes, ideally in person
Don’t pitch your product
Ask open-ended questions,get the customer talking
Listen and take good notes
Ask customer to draw it
Shut up and listen some more
Write up your notes and share with the team

Avoid Post-Course Corrections
When NASA wanted to put a man on the moon, they planned a series of mid-course corrections…

Agenda
Take-Aways, Q&A
Where
Does Strategy Live?

Pre-Revenue Start-ups
Founding team and early believers
Usually very engineering-heavy
6-10 in Development, 1-2 in Finance/HR/Ops, 1 in Sales, may have 1 in Marketing
Typically no formal product management
Strategy likely to be scattered in…
Brains of the founders
Assorted VC pitches
Outdated revenue forecast
Drafts of marketing collateral/website

Typical Pre-Revenue Start-Up
CEO/Founder
CTO/ Founder
Mktg?
Sales
CFO
HR/Admin
Dev’t (6-8)

Strategic Failures for Start-Ups
“We’ll talk with prospects once the product is ready”
“Our target segment is every company (or every consumer)”
“We’ll figure out how to make money later”
“There aren’t any competitors”
“Our customers will be smart, technical, and figure out what to do with our product”

Who Will Play Product Manager?
Someone usually fills the product void
Technical founder
Marketing founder
Someone who’s been a PM (or CEO) before
Must stand up for long-term viability of product
Must document and recall previous decisions
Must help sort issues
Urgent tactical
Strategic, needs thought / input / consensus
Urgent strategic

Product
Management
Executives
Development
What Does a Product Manager Do?
strategy, forecasts, commitments, roadmaps,competitive intelligence
budgets, staff,
targets
market information, priorities,
requirements, roadmaps, MRDs,
personas, user stories…
Field input,
Market feedback
Mktg & Sales
Markets & Customers
software
Segmentation, messages, benefits/features, pricing, qualification, demos…

Be Informed, Not (Just) Smart
Our product ideas are usually simplistic, biased
Every customer is a special case
Patterns need a dozen instances
What’s common about use cases?
Where’s the real pain? Real savings?
What integration or infrastructure is normal?
Who (within the customer) is our champion?
How would we qualify a customer?
Someone needs to talk with lots of prospects

How To Start a Strategy…
Designate someone as “keeper of the strategy”
Gather cross-functional leaders for a day
Argue through to a decent shared theory
What we’re building
A few personas or detailed use cases
How customers will justify paying us (ROI)
Sales model (direct, channels, OEM)
Ship date
Assign someone to test theory with 8+ prospects
Schedule next half-day strategy meeting

So Start-Up Strategy Lives…
CEO/Founder
Here
CTO/ Founder
Mktg?
Sales
CFO
Here
Here
HR/Admin
Dev’t (6-8)
Process and owner are more important than location

When to Hire a Product Manager
My personal bias
Full-time product manager no later than employee #25
Reports to Marketing or Engineering (whichever has stronger PM background)
PM probably also covers Product Marketing, technical Business Development for a while

Agenda
Take-Aways, Q&A
Where
Does Strategy Live?

What’s Different Now?
Single product company has…
A shipping product
Revenue
Sales and Bus Dev tackling live accounts
Lead generation programs from Marketing
A couple of reference customers
Some lost deals

A Bigger Functional Organization
CEO
CTO
VP Eng
VP Mktg
Sales
CFO
Dev/QA Team (8)
Lead, Web (2)
Finance (2)
Direct (4)
Dev/QA Team (8)
Product
Channels
Support /Ops (2)
HR /Admin
Channels
Int’l
Arch, UI, Docs (3)
Bus Dev
Sys Ops

Organization-Level ‘Strategies’
Every group has its own local strategy…
Build & Test strategy
Product roadmap
Lead Gen strategy
Channel Sales strategy
Financing plan
Sales forecast
These don’t necessary fit together

You’ve Hired a Product Manager
Your product manager should
Gather and evaluate useful customer input
Different from “hot pursuit” selling
Own the requirements and roadmap
Own the use cases and personas
Co-own pricing and revenue forecast
Provide content for Sales and Marketing
Manage (but not own) the strategy
Defend the strategy

New Failure Modes
Confusing early wins witha segmentation plan
Making promises about new versions without a commitment
Growing sales staff/channels ahead of repeatable sales processes
Assuming exponential growth
Underestimating competitive moves
Mistaking success for strategy

So Strategy Should Live…
CEO
Here
Here
CTO
VP Eng
VP Mktg
Sales
CFO
Lead, Web (2)
Finance (2)
Direct (4)
Dev/QA Team (8)
Here
Product
Channels
Support /Ops (2)
Dev/QA Team (8)
HR /Admin
Channels
Int’l
Arch, UI, Docs (3)
Bus Dev
Sys Ops
Process and owner are more important than location

Who Drives Strategy Now?
Executive team is still responsible for success
Can delegate strategy process to Product Management
Continuous gathering of market facts (with Sales and Marketing)
Continuous gathering of technical facts (with Engineering)
Pipeline updates (from Finance)
Executives still own the strategy

Agenda
Take-Aways, Q&A
Where
Does Strategy Live?

Big Companies, Big Org Charts
Multiple product lines or divisions
Complex sales/channel model
Deep functional organizations
Silos of information, expertise
Product strategies, portfolio strategies,vertical strategies,solution strategies, M&A strategies…

A Classic Divisional Organization
Board of Dir
CEO/Chairman
Corp Strategy
VP/GM, Div #1
VP/GM, Div #2
VP/GM, Div #3
Corp Marketing
WW Sales
Finance & Ops
Eng’g
Finance
Mktg/PM
Mfg/Ops
Support
HR
Eng’g
Finance
Mktg/PM
Mfg/Ops
Support
HR
Eng’g
Finance
Mktg/PM
Mfg/Ops
Support
HR
PR/Adv
Lead Gen
Events
Mkt Strat
Research
Creative
US Direct
US Channel
Intl Direct
Intl Channel
Bus Dev
Sales Ops
Planning
Acct’g
IR
Facilities
HR
Training

Formal Strategy Owner(s)
Corporate Strategy team
Reports to CFO, CEO or CMO
Divisional strategy teams
Report to GM/Divisional VP
Product-level strategies
Product Management reporting up to GM/Divisional VP
Corporate strategy reviewed annually
Typically tied to annual budget cycle

New Failure Modes
“Ivory Tower” strategists
Disconnected divisional strategies
Sweeping (but meaningless) corporate mission statements
Poorly communicated cross-dependencies
Expensive search for ‘synergy’ and ‘leverage’
Strategies that don’t exclude anything

Big, Pricey Assistance Available
Big corporate strategy is a big organizational problem
Specialty consulting firms aggressively market their paradigms
Out of my league

Agenda
Take-Aways, Q&A
Where
Does Strategy Live?

Take-Aways
Strategy is an ongoing process, not an event
Must include participation from key functions
Product Management is a natural coordinator
Customer insight comes from customers
Rapidly changing strategies are usually not strategies

Contact Information
+1-650-315-7394
rich@mironov.com
www.mironov.com/articles/
feeds.feedburner.com/RichMironovProductBytes
@RichMironov
www.linkedin.com/in/richmironov

http://mironov.com	45
http://www.mironov.com	18
http://www.lmodules.com	3
http://www.slideshare.net	1

Where Should Strategy Live? (SDForum)

by Rich Mironov on Apr 13, 2010

Accessibility

Categories

Tags

Upload Details

Usage Rights

4 Embeds 67

Statistics

Where Should Strategy Live? (SDForum) — Presentation Transcript