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Where Should Strategy Live? (SDForum)


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"Where Does (Should) Strategy Live in Your Company?" from SDForum Marketing SIG, 4/12/10. Tackles key cross-functional inputs for a strategy, who needs to participate, and where (in a start-up or small company) this should be located/managed from. Highlights product management as typically missing in small Silicon Valley companies.

Published in: Business

Where Should Strategy Live? (SDForum)

  1. 1. Where Does (Should) Strategy Live in Your Company?Rich MironovSDForum Marketing SIGApril 12, 2010<br />
  2. 2. About Rich Mironov<br />Veteran product manager/strategist<br />Business models, pricing, roadmaps<br />“What do customers want?”<br />Agile meets business<br />Repeat offender at software start-ups<br />“Product Bytes” blog since 2002<br />Chaired product stage at Agile 2009 and 2010<br />
  3. 3. Agenda<br />What’s strategy made of?<br />Where should strategy live in…<br />Pre-revenue start-ups?<br />Small single-product companies?<br />Large divisionalized corporations?<br />Take-Aways, Q&A<br />Where <br />Does Strategy Live?<br />
  4. 4. Strategy Is…<br />Disciplined thinking about meeting market needs with products (services) that could make money<br />Cross-functional<br />A process of discovery as we interact with markets and segments<br />
  5. 5. Strategy is Not…<br />A one-time event<br />Property of a single genius<br />Mysterious<br />Just an hour of brainstorming<br />Something that happens only in a conference room<br />Something to delegate to “strategy folks”<br />
  6. 6. Strategy Demands Multiple Disciplines<br /><ul><li> Our goals/mission?
  7. 7. Funding?
  8. 8. Credibility?</li></ul>Company &Financials<br /><ul><li>Can we build it?
  9. 9. Technical advantages?
  10. 10. Unique talents/IP?
  11. 11. Experience?</li></ul>(Product)<br />Strategy<br />Technology,<br />Skills & Delivery<br />Markets & Customers<br /><ul><li> Real, unmet need?
  12. 12. Will customers pay for this?
  13. 13. Use cases?
  14. 14. Competitors?
  15. 15. Channels, partners?</li></li></ul><li>Core Strategic Questions<br />New (product) strategies need to answer…<br />Is this real?<br />Is the market real?<br />Is the product (service) real?<br />Can we win?<br />Can the product be competitive?<br />Can our company be competitive?<br />Is this worth doing?<br />Will it be profitable?<br />Does it fit our broader strategy/plan?<br />After George Day, HBR 12/07<br />
  16. 16. “But We Don’t Have Time!”<br /> Steps for barely sufficient strategy<br />Gather handful of key contributors<br />Talk through and write down assumptions about products, markets, use cases, delivery dates<br />Elapsed time: 4 - 8 hours<br />Revisit monthly (start-up) or quarterly (product line)<br />Decent strategies savetime<br />Identify (and usually postpone) strategic issues<br />Delegate implementation issues<br />Problem: Who does ongoing customer validation?<br />
  17. 17. Latest / Loudest Problem<br />Salespeople and CEOs naturally generalize from their most recent meeting<br />“Our target segment should be regional not-for-profit hospitals”<br />“We need to offer hardwarealongside our database software”<br />Each new idea is just asseductive as the last<br />A decent strategy lets us ‘buffer’ ideas and compare them against each other<br />
  18. 18. Discovery vs. Theories<br />Markets turn out to be complex and surprising<br />You learn about the world by leaving your office<br />“What’s the pattern?”<br />“Who are the outliers?”<br />“How would a customer fit us in?”<br />Rule of thumb: you need 8 to 20 in-depth interviews to start seeing patterns<br />Good segmentation is a creative process <br />
  19. 19. How to Learn from Customers<br />Find prospects not currently being sold<br />Arrange 45 to 90 minutes, ideally in person<br />Don’t pitch your product<br />Ask open-ended questions,get the customer talking<br />Listen and take good notes<br />Ask customer to draw it<br />Shut up and listen some more<br />Write up your notes and share with the team<br />
  20. 20. Avoid Post-Course Corrections<br />When NASA wanted to put a man on the moon, they planned a series of mid-course corrections…<br />
  21. 21. Agenda<br />What’s strategy made of?<br />Where should strategy live in…<br />Pre-revenue start-ups?<br />Small single-product companies?<br />Large divisionalized corporations?<br />Take-Aways, Q&A<br />Where <br />Does Strategy Live?<br />
  22. 22. Pre-Revenue Start-ups<br />Founding team and early believers<br />Usually very engineering-heavy<br />6-10 in Development, 1-2 in Finance/HR/Ops, 1 in Sales, may have 1 in Marketing<br />Typically no formal product management<br />Strategy likely to be scattered in…<br />Brains of the founders<br />Assorted VC pitches<br />Outdated revenue forecast<br />Drafts of marketing collateral/website<br />
  23. 23. Typical Pre-Revenue Start-Up<br />CEO/Founder<br />CTO/ Founder<br />Mktg?<br />Sales<br />CFO<br />HR/Admin<br />Dev’t (6-8)<br />
  24. 24. Strategic Failures for Start-Ups<br />“We’ll talk with prospects once the product is ready”<br />“Our target segment is every company (or every consumer)”<br />“We’ll figure out how to make money later”<br />“There aren’t any competitors”<br />“Our customers will be smart, technical, and figure out what to do with our product”<br />
  25. 25. Who Will Play Product Manager?<br />Someone usually fills the product void<br />Technical founder<br />Marketing founder<br />Someone who’s been a PM (or CEO) before<br />Must stand up for long-term viability of product<br />Must document and recall previous decisions<br />Must help sort issues<br />Urgent tactical<br />Strategic, needs thought / input / consensus <br />Urgent strategic<br />
  26. 26. Product<br />Management<br />Executives<br />Development<br />What Does a Product Manager Do?<br />strategy, forecasts, commitments, roadmaps,competitive intelligence<br />budgets, staff,<br />targets<br />market information, priorities,<br />requirements, roadmaps, MRDs,<br />personas, user stories…<br />Field input,<br />Market feedback<br />Mktg & Sales<br />Markets & Customers<br />software<br />Segmentation, messages, benefits/features, pricing, qualification, demos…<br />
  27. 27. Be Informed, Not (Just) Smart<br />Our product ideas are usually simplistic, biased<br />Every customer is a special case<br />Patterns need a dozen instances<br />What’s common about use cases?<br />Where’s the real pain? Real savings?<br />What integration or infrastructure is normal?<br />Who (within the customer) is our champion?<br />How would we qualify a customer?<br />Someone needs to talk with lots of prospects<br />
  28. 28. How To Start a Strategy…<br />Designate someone as “keeper of the strategy”<br />Gather cross-functional leaders for a day<br />Argue through to a decent shared theory<br />What we’re building<br />A few personas or detailed use cases<br />How customers will justify paying us (ROI)<br />Sales model (direct, channels, OEM)<br />Ship date<br />Assign someone to test theory with 8+ prospects<br />Schedule next half-day strategy meeting<br />
  29. 29. So Start-Up Strategy Lives…<br />CEO/Founder<br />Here<br />CTO/ Founder<br />Mktg?<br />Sales<br />CFO<br />Here<br />Here<br />HR/Admin<br />Dev’t (6-8)<br />Process and owner are more important than location<br />
  30. 30. When to Hire a Product Manager<br />My personal bias<br />Full-time product manager no later than employee #25<br />Reports to Marketing or Engineering (whichever has stronger PM background)<br />PM probably also covers Product Marketing, technical Business Development for a while<br />
  31. 31. Agenda<br />What’s strategy made of?<br />Where should strategy live in…<br />Pre-revenue start-ups?<br />Small single-product companies?<br />Large divisionalized corporations?<br />Take-Aways, Q&A<br />Where <br />Does Strategy Live?<br />
  32. 32. What’s Different Now?<br />Single product company has…<br />A shipping product<br />Revenue<br />Sales and Bus Dev tackling live accounts<br />Lead generation programs from Marketing<br />A couple of reference customers<br />Some lost deals<br />
  33. 33. A Bigger Functional Organization<br />CEO<br />CTO<br />VP Eng<br />VP Mktg<br />Sales<br />CFO<br />Dev/QA Team (8)<br />Lead, Web (2)<br />Finance (2)<br />Direct (4)<br />Dev/QA Team (8)<br />Product<br />Channels<br />Support /Ops (2)<br />HR /Admin<br />Channels<br />Int’l<br />Arch, UI, Docs (3)<br />Bus Dev<br />Sys Ops<br />
  34. 34. Organization-Level ‘Strategies’<br />Every group has its own local strategy…<br />Build & Test strategy<br />Product roadmap<br />Lead Gen strategy<br />Channel Sales strategy<br />Financing plan<br />Sales forecast<br />These don’t necessary fit together<br />
  35. 35. You’ve Hired a Product Manager<br />Your product manager should<br />Gather and evaluate useful customer input<br />Different from “hot pursuit” selling<br />Own the requirements and roadmap<br />Own the use cases and personas<br />Co-own pricing and revenue forecast<br />Provide content for Sales and Marketing<br />Manage (but not own) the strategy<br />Defend the strategy<br />
  36. 36. New Failure Modes<br />Confusing early wins witha segmentation plan<br />Making promises about new versions without a commitment<br />Growing sales staff/channels ahead of repeatable sales processes<br />Assuming exponential growth<br />Underestimating competitive moves<br />Mistaking success for strategy<br />
  37. 37. So Strategy Should Live…<br />CEO<br />Here<br />Here<br />CTO<br />VP Eng<br />VP Mktg<br />Sales<br />CFO<br />Lead, Web (2)<br />Finance (2)<br />Direct (4)<br />Dev/QA Team (8)<br />Here<br />Product<br />Channels<br />Support /Ops (2)<br />Dev/QA Team (8)<br />HR /Admin<br />Channels<br />Int’l<br />Arch, UI, Docs (3)<br />Bus Dev<br />Sys Ops<br />Process and owner are more important than location<br />
  38. 38. Who Drives Strategy Now?<br />Executive team is still responsible for success<br />Can delegate strategy process to Product Management<br />Continuous gathering of market facts (with Sales and Marketing)<br />Continuous gathering of technical facts (with Engineering)<br />Pipeline updates (from Finance)<br />Executives still own the strategy<br />
  39. 39. Agenda<br />What’s strategy made of?<br />Where should strategy live in…<br />Pre-revenue start-ups?<br />Small single-product companies?<br />Large divisionalized corporations?<br />Take-Aways, Q&A<br />Where <br />Does Strategy Live?<br />
  40. 40. Big Companies, Big Org Charts<br />Multiple product lines or divisions<br />Complex sales/channel model<br />Deep functional organizations<br />Silos of information, expertise<br />Product strategies, portfolio strategies,vertical strategies,solution strategies, M&A strategies…<br />
  41. 41. A Classic Divisional Organization<br />Board of Dir<br />CEO/Chairman<br />Corp Strategy<br />VP/GM, Div #1<br />VP/GM, Div #2<br />VP/GM, Div #3<br />Corp Marketing<br />WW Sales<br />Finance & Ops<br />Eng’g<br />Finance<br />Mktg/PM<br />Mfg/Ops<br />Support<br />HR<br />Eng’g<br />Finance<br />Mktg/PM<br />Mfg/Ops<br />Support<br />HR<br />Eng’g<br />Finance<br />Mktg/PM<br />Mfg/Ops<br />Support<br />HR<br />PR/Adv<br />Lead Gen<br />Events<br />Mkt Strat<br />Research<br />Creative<br />US Direct<br />US Channel<br />Intl Direct<br />Intl Channel<br />Bus Dev<br />Sales Ops<br />Planning<br />Acct’g<br />IR<br />Facilities<br />HR<br />Training<br />
  42. 42. Formal Strategy Owner(s)<br />Corporate Strategy team<br />Reports to CFO, CEO or CMO<br />Divisional strategy teams<br />Report to GM/Divisional VP<br />Product-level strategies<br />Product Management reporting up to GM/Divisional VP<br />Corporate strategy reviewed annually<br />Typically tied to annual budget cycle<br />
  43. 43. New Failure Modes<br />“Ivory Tower” strategists<br />Disconnected divisional strategies<br />Sweeping (but meaningless) corporate mission statements<br />Poorly communicated cross-dependencies<br />Expensive search for ‘synergy’ and ‘leverage’<br />Strategies that don’t exclude anything<br />
  44. 44. Big, Pricey Assistance Available<br />Big corporate strategy is a big organizational problem<br />Specialty consulting firms aggressively market their paradigms<br />Out of my league<br />
  45. 45. Agenda<br />What’s strategy made of?<br />Where should strategy live in…<br />Pre-revenue start-ups?<br />Small single-product companies?<br />Large divisionalized corporations?<br />Take-Aways, Q&A<br />Where <br />Does Strategy Live?<br />
  46. 46. Take-Aways<br />Strategy is an ongoing process, not an event<br />Must include participation from key functions<br />Product Management is a natural coordinator<br />Customer insight comes from customers<br />Rapidly changing strategies are usually not strategies<br />
  47. 47. Q&A<br />
  48. 48. Contact Information<br />+1-650-315-7394<br /><br /><br /><br />@RichMironov<br /><br />