Product management in an era of disruptive innovation

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[Made at SP Jain, Mumbai. Aug 2012]

We live in an era of massive disruptive innovation. More than at any other time in history of industry, we are witness to the massive upheaval of established incumbents – and their replacement by aggressive upstarts. Depending on your point of view this sea change provides massive opportunity – or a terrifying existential threat.

This new reality places substantial burdens on managers. Historical tools of product management are obsolete – and there is an attendant critical need for new practices.

Product management doctrine was based on a core principle best described as “Big up-front design”. The assumption was of a predictable future that could be analyzed – and planned for. Emphasis in this paradigm was on executing according to the plan. However, an analysis of the historical success rates for new business innovation has demonstrated that this process has been, at best, an abysmal failure.

New practices have emerged to enable product managers to adjust to a world of uncertainty. These are based on the premise of fast response to change rather than big up-front planning. They are predicated on documenting business models and conducting focused experiments to validate key assumptions. New practices and concepts have emerged: Customer Development, Business Model Canvas, Lean Startup, and Minimum Viable Product.

In this presentation, we introduce these new concepts – and describe how they can be integrated into new practices of product management that are effective in dynamic and disruptive environments. We provide an overview of the structure and application of these practices and their associated tools.

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  • This deck is a tool for facilitating a discovery conversation between a ThoughtWorker and a prospect.The idea is to draw the prospect into conversation as soon as possible, and get them to share their challenges. This means the ThoughtWorker should spend a good deal of the time asking questions and listening to the answers, i.e. “Does this sound familiar to you?”, “How is your Agile adoption going?”, “Are you doing weekly/monthly releases?”, “How is experience design incorporated into your process?”, etc.The goal is to discover whether or not there is a basis for a potential future relationship (cultural compatibility, good overlap between their needs and our capabilities, etc.) and identify the next steps.
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  • Product management in an era of disruptive innovation

    1. 1. Product Management in the era of Disruptive InnovationKrishnan & Nag at SP Jain, Aug „12
    2. 2. The product manager is the product‟s CEO Executives Product Sales (+ Marketing)R&D Management Markets + Customers
    3. 3. The product manager is the product‟s CEO Executives budgets strategy staff forecasts targets commitments competitive intelligence MRD, roadmap, market feedback priorities, personas Product Sales (+ Marketing)R&D Management Markets + Customers product segmentation, messages pricing, roadmap, demos Source: Rich Mironov
    4. 4. Once upon a time inProduct Management land…
    5. 5. Product Management („70s-‟00s) Build product Big-BangDevelop concept Build product Alpha /test Alpha beta Customer test Launch after Shipment Get funding and offering Market test 3-5 yearsWrite business plan Build the product Test / fix Ship / fix Planning / collateral PR / plan launch Launch / Demand gen. Initial sales rep Build sales team / selling
    6. 6. Cautionary taleSource: Steve Blank
    7. 7. 1998: Bankrupt1987: 1990: SpunIridium out offounded Motorola 1997: Launch $5.2b investment 15 rockets 72 satellites
    8. 8. Viable price: $0.5/min Actual users: 30,000 1998:Target price: $7/min BankruptTarget users:42million1987: 1990: SpunIridium out offounded Motorola 1997: Launch $5.2b investment 15 rockets 72 satellites
    9. 9. “Big Up Front Design” Build product Big-BangDevelop concept Build product Alpha /test Alpha beta Customer test Launch after Shipment Get funding and offering Market test 3-5 yearsUnbridled False sense of Rude Resetting Predictableenthusiasm security awakening expectations disaster
    10. 10. Disruptive change is becoming commonplace
    11. 11. Dramatic change of fortunes
    12. 12. Source: Innosight – “Creative destruction whips through Corporate America”
    13. 13. Source: Innosight – “Creative destruction whips through Corporate America”
    14. 14. Agony and Ecstasy
    15. 15. Launched: 2007 Founded: 1975 $22b / qtr $17b / qtr
    16. 16. Reasons for increasing pace of disruptive change
    17. 17. The old ways of Product Management aren‟t working 90-95% of new ventures fail to meet projections
    18. 18. Adaptive Product ManagementLimited planning, more experimentation and exploration
    19. 19. BUFD Build product Big-BangDevelop concept Build product Alpha /test Alpha beta Customer test Launch after Shipment Get funding and offering Market test 3-5 years Front-end planning & design Back-end execution
    20. 20. When does BUFD work?product Existing market New marketNew Lowest success rateExistingproduct Highest success rate
    21. 21. BUFD is unlikely to work for… Start-up companies New products in established companies Major new features/markets for established products
    22. 22. Visionaries Steve Blank Martin FowlerCustomer Development Agile Methods
    23. 23. 2 stages of Customer Development Search ScaleFocus on Focus onExperimentation ExecutionSource: Steve Blank
    24. 24. Iterative model – with checkpoints Search ScaleCustomer Customer Customer Businessdiscovery validation creation expansion Pivot / Course correct Source: Steve Blank
    25. 25. Search Principle # 1: Business Model Canvas KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS PROPOSITION KEY RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMSSource: “Business Model Generation”, Osterwalder & Pigneur
    26. 26. iTunes market place
    27. 27. Search Principle #2: Minimum Viable Product
    28. 28. Minimum + Viable Fertile area for new products• Demonstrate value • Gather feedback Minimu Viable m Too-basic products Incumbent no one wants products Source: Start-up Chronicles
    29. 29. If you‟re building an Excel competitor, what‟s the MVP?
    30. 30. Minimum Viable ?
    31. 31. Minimum Viable ?
    32. 32. Minimum Viable Product for Google Docs Value prop
    33. 33. Search Principle #3: Focus on exploration Ideas Learn Build Minimise the total time through the loop Data Offering Measure
    34. 34. How it all fits togetherAgile software development
    35. 35. Predictive (BUFD) | Adaptive
    36. 36. If da Vinci was an adaptive painter… Source: A Series of Tubes
    37. 37. Questions? Comments?knataraj@thoughtworks.comnag@thoughtworks.com

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