Product Management: An Insight

Products are everywhere, some succeed and some fail. To create a successful product, it needs to follow a structured approach which is the product development process. Product development is the process of designing, building, operating, and maintaining a good product or service. Software and Internet companies use a product development process to ensure that they are not just manufacturing a technology, but creating a product that people will want to buy and continue to use. Product development adds things like pricing, marketing, and customer support to the technology to create a complete product. Without a product management philosophy and discipline, an IT organization becomes focused on the technology instead of the customers and is often organized along technology lines rather than in ways that benefit the customer.

This article is dedicated to few common product pitfalls which lead to a product disaster which are listed below:

Confusing product requirements with customer requirements.
Confusing innovation with value.
Confusing yourself with your customer.
Confusing the customer with the user.
Confusing features with benefits.
Confusing building right product with building product right.
Confusing good product with good business model.
Confusing Inspiring features with “Nice-to-Have” features.
Confusing adding features with improving product.
Confusing impressive specifications with an impressive product.

To briefly explain the first point, it’s not always wise to look forward to your marketing team, sales or customer for knowing about the kind of product you are working on. Sometimes, the customers don’t understand or know the kind of similar products available in the market and sometimes they don’t have the expertise on the technology and don’t understand the possibility of developing the product. Hence, Product management is responsible for defining the right product. It is the job of the product manager to deeply understand the target market and their needs, and then to work to combine what is possible with what is desirable, to create products that solve real problems. This is why top product managers often come from the engineering ranks; they understand what is possible, and when they see an unmet need they can often envision new and innovative solutions. Product marketing is also very important, just very different. Product marketing is all about communicating what the product does to the target market, and supporting the sales channel with the tools they need to effectively sell. Good product marketing is difficult and critical, but it is not at all the same thing as inventing the actual product.

Interesting, more in the next post….

The buzzword is CMR more than CRM...

Customer Relationship Management has been the mantra for many organizations now. Though critical, most of the CRM implementations are failure stories. Why?? Probably because, most of the times, the organization wants the CRM deployed quickly and the returns are expected soon, the vision remains unclear, the management of customers appears to be a Herculean task. They fail to understand what the customers really want and how CRM can be a driving force to better manage the relationship. There is a paradigm shift now from CRM to CMR i.e. Customer management of relationships, it’s just not about customer relationship but customer empowerment too. CMR gives the customer the power to tell what he’s is interested in and not interested in.

Every organization is different, so are its requirements. It’s always essential to align the right kind of CRM vendor application with the kind of clients you cater to and the services/ products you offer. More than what you perceive as important in CRM application, it’s important what your client wants in an application. The organization should not try to implement CRM as a technology but as a Sales and Marketing practice. The organization should be ready for a process and philosophy change if required from client’s perspective. It has been observed that CRM is being used to curb the information flow for security reasons because of which the importance of information flow among certain stakeholders is ignored. CMR addresses that companies should encourage information flow not only with customers but also within the organization. A classic example being one organization bidding with two different solutions/offerings and the two teams are unaware of each other, the result being business clash among practices. CMR just not stresses on capturing right kind of customer information but also how that information would be helpful to the organization in return. It’s a two way process of maintaining the relationship. The most important question to ask next is whether your sales force is trained enough to understand the terminologies of the application and enter the correct data. In many situations, the sales force just ignores the meaning of certain terminologies and enter data what they assume and in the process the reporting shows inaccurate results hampering business forecasts. Training and updating the CRM users on the latest functionalities and features should be a continuous process and automation of knowledge transfer should be a key initiative by the organization through CRM. As they say, the first step for the success of CMR is CRM. Interesting, more in the next post…
to be continued)

Ernst and Young’s tips for Business in 2009

One
Focus on Cash, manage it well as it is the most precious asset that businesses hold. Ensure that even if your revenues are dropping, you have sufficient cash to meet your immediate obligations.
Plenty Cash reserve can avoid situations like automobile companies in US.

Two
Pay attention to risk management as unidentified risk can lead to catastrophic results - shown by 2008. Try to ensure that effective risk management is tied directly to business priorities.
Lehman fiasco along with Fannie Mae and Freddie Mac lacked good risk management policies in place.

Three
Be mindful of compensation as pay programmes affect stakeholders in the form of accounting, reported earnings, disclosure and tax implications.

Four
Keep your eyes open for mergers and acquisitions (M&A). Companies looking to expand through M&A should stick to their core services and competencies and ensure they're making smart purchases, including snapping up an underperforming competitor as prices become more affordable.

Fifth
Retain high performers in tough times. For companies searching for quick ways to reduce costs, labour may seem like an obvious expense. But retaining top talent during crisis time can help companies stay afloat and reduce costs in the longer term.

Sixth
Always look beyond here and now. While navigating current challenges, businesses should not forget about the future.

Seventh
Make your non-financial metrics count. In the current state of the global economy, many will argue that economic reality will kill the budding green industry. But investing in clean technology can give you competitive advantage in the form of cost cuts, efficiency, compliance with new regulations and the creation of new products and services.

Eighth
Get ready for International Financial Reporting Standards (IFRS). Soon public companies will be expected to provide securities administrators with a detailed implementation plan and quantify the conversion's impact on their business, more precisely.

Ninth
Be smart with tax strategies to save you money. Talk to your advisor and do it early. Implement tax strategies to improve cash flow or minimize taxes.

Tenth
See the lemonade, not the lemons. Use the heightened scrutiny caused by the current financial and economic challenges to identify ways to improve and grow your business.

According to Ernst & Young, a climate of fear and risk aversion creates real opportunities for investment and innovation if firms are able to step back and see beyond the current turmoil.

It's 100, Way to go STRATEGYAAN

Dear Readers,

It gives me immense pleasure to announce that this is the 100th post of STRATEGYAAN. A blog which started on Feb 2007 succeeded in gathering a religious group of readers who not only enjoys BLOGGING but every bit of STRATEGYAAN. STRATEGYAAN just not believe in talking something new but always been in the forefront of sharing knowledge. STRATEGYAAN has always valued KNOWLEDGE and will continue to do so in the future too, that’s why I call STRATEGYAAN, just not a BLOG, but a “KNOWLEDGE BIBLE”. “Strategyaan” got its name from the combination of two words i.e. STRATEGY+GYAAN (which means KNOWLEDGE in “SANSKRIT”). I really thank to all my readers making STRATEGYAAN a blog worth to read.

Ashutosh

Laws of BRANDING a CONSULTANCY

Most consultancies are good at selling, but not at branding. In other words, they do a very good job of rounding up prospects and making presentations to sell their services. On the contrary, they do an abysmal job of branding. To build a brand, Consultancies have to stand for something in the mind and need to position them in such a way that they differentiate from others. Advertising could be a good way of branding your firm, but its importance comes only after public relations. The big 4s don’t differentiate from each other; all of them claim to be the best accounting firms but nothing more than that. More than the service you provides, it’s your credibility of service that matters in the market. Position something which is unique to your organization only. Similarly, take the case of Wipro, Infosys, TCS or Cognizant, everyone has a catchy punchline but that doesn’t reflect the kind of work they do or position themselves unique to each other.

PR is generally a more effective branding strategy to establish a position in the mind. After that position is established, and then you can switch to advertising to maintain the position. To build a successful PR strategy, consultancies need a unique position that they can use to try to get into a prospect's mind. They might, for example, pick out a segment of the market that they are the leader in and then position themselves as the leader in that category. If they are not the leader, they need to position themselves as the “alternatives” in the market which can give them the best services as good as the leader. Good publicity requires a lot of time on the part of internal people and sometimes the hiring of expensive PR firms. The major cost of PR, both internally and externally, is the cost of the people involved. Most of the other expenses are relatively minor.

Naming a consultancy is a critical area which has lot of importance in branding the consultancy. Ernst and Young, Mc Kinsey, Bain consulting, do these names trigger an alarm bell?? Yes, you are right; they are named after the owners of the company. That’s the way you brand your company and yourself too. Bigger names are a disaster, so use smaller ones to brand them.

CONSULTANCY PRACTICE

In my earlier post, I have highlighted BCG’s approach to proprietary approach to consultancy. So, what exactly is a Consultancy Practice, how to build it, what are the key elements of this practice? Well, this post answers all such queries. Consultancies whether big or small require certain elements in place to be managed successful. And, practices look to balance consultancy delivery to the customer against the need of developing new propositions and services. A consultancy practice may therefore be outward facing i.e. market facing or inward facing i.e. business facing.

Outward Facing:
Clients, their sectors, markets and business trends.
Knowledge of technologies and how those trends and technologies would enable or differentiates business strategies.
Alliances with key suppliers in order to gain an understanding of their products and services to provide new innovative business models to deliver business benefits.

Inward Facing:

Inward facing aspect emphasize that the consultancy practice’s key element is people. The consultancy should focus on enhancing consultant’s skills and competencies. Inward facing aspects includes:

Consultant skills and competencies including credibility, integrity, creativity and ability to influence customers.
Knowledge of markets, sectors, technologies and business trends and how to continually innovate new business models with enabling technology.
Products, models and services that allow consultants to deliver value of their customers.

I will give more insight on practices and some case studies. Keep reading.

DIVERSITY: The new FORMULA for Business Opportunity

“Diversity” is the mantra for business and seen as an opportunity to cash in. Diversity drives innovation and not only that, it drives creativity too. A culture of diversity across functions helps business to strengthen the bottomline in terms of capturing new and diverse markets. By working together, a diverse team of customer service representatives can more effectively understand and meet the needs of customers with a range of backgrounds. A diverse product development team can find ways to expand the use of a product, and ways to make the product more effective for a wider customer base.

According to IBM, workforce diversity is the bridge between the workplace and the marketplace. People tend to do business with people they believe can understand their unique needs. Companies that demonstrate an ability to meet those unique needs are going to win customers in any market. A corporate culture that fosters diversity and inclusion can support recruiting and retention efforts as well. Employees choose and remain in jobs at companies where they feel welcome and comfortable. A company that embraces diversity can offer that kind of work environment, and as a result, can attract and retain top talent with diverse backgrounds. For a successful corporate diversity initiative, sometimes, the corporate culture needs to be changed to suit the lifestyle and working style of people from diverse backgrounds. It’s a proactive and slow process which needs to be tailored accordingly and tied to the company bottomline. These initiatives should be widely focused, leverage technology and should be receptive to change. These corporate diversity initiatives should have a benchmark set and the progress should be continually monitored to check whether the organization is at a right path. Top management must ensure that the commitment to diversity has buy-in at all levels of the organization by making diversity an integral part of company success. It should be taken care that these initiatives are not single handedly responsibility of some particular department. Companies that relegate diversity to a single department miss out on opportunities to improve and integrate the diversity initiative that are offered by other areas of the company. For example, a communications department has the expertise to effectively communicate the initiative company-wide. A purchasing department that already has vendor diversity can offer insight.

When there is a diverse group of people with varied background and knowledge quotient, it gives rise to diverse ideas, and sometimes those vague ideas turn out to be innovative enough when brainstorming occurs and thought process is given. The diversity ranges from people to subjects, knowledge, and creativity, level of thinking, analytical skills, research abilities so on and so forth. That’s why a company like IBM which has a global presence and gives importance to diversity boasts of INNOVATION. So, are you ready to embrace diversity in your work culture????

Building a PRACTICE:A Boston Consulting Group Approach

For a Consultancy firm, a good proprietary approach promises real and different benefits to the clients that hire the consultancy. It is easy to see the attraction of this for the consultancy as well- that is able to offer something that is uniquely the intellectual property of the firm. The Boston Consulting Group is one of the best examples of a firm that founded a substantial international reputation and business on two original concepts, which were linked to provide a powerful consultancy approach for the first time. The first was its approach to Portfolio Analysis with the terminology of dogs, cash and cows which still remains a part of the management vocabulary. And, the second being the Experience Curve, a phenomenon whereby costs fall by a constant percentage everytime cumulative production of an item doubles. This phenomenon is widely used in Manufacturing Industries.

The Boston Consulting Group did enough research to be able to extend this thinking to the total cost of the firm, enabling consultants to calculate the experience curve effect for any given company. So, the business started with these two powerful and effective tools for strategic decision-making that fitted the strategic issues of the day at a time when little was on offer to aid the systematic analysis of strategy. After Porter’s Competitor Analysis and Value Chain Analysis were accepted by many other firm of consultancy, BCG slowly released its methodology, although the basic concept of portfolio analysis became known quite early on, many of the essential details of how to make its analysis system work only became widely known after the original technique had become outdated. Most Consulting firms that build a business on proprietary methods move on as time passes to avoid the danger of being dependent for too long on something that could lose its value. Thus, the Boston Consulting Group today has a business that has developed new techniques and is not dependent on the success of portfolio analysis. The firms should take care they are not hooked too much to the original concept, so that it is used after its sell-by date has expired, or the technique or approach is used in situations for which it is not particularly appropriate.

DO’S and DON’TS of EVENT Management

Event Management is a tough task and can get on your nerves when the plan is not clear and precise. Here, I would be specifically highlighting Corporate Event Management. It could be in the form of seminars, workshops, or a cluster of miscellaneous events organized for more than a day. The situation can get gruesome if the communication among the event owners is not clear and the owning of responsibility is not defined. Below are some do’s and don’ts of Event Management.

Do’s of Event Management:

1.Define the Hierarchy: The biggest flaw in the failure of any event is the improper communication flow and reporting. Before the start of event management, select the event owners and specify a clear cut hierarchy of how the communication should flow and who will report to whom. Once it’s done, assigning of tasks is done.

2.Assigning Tasks: How do you assign tasks?? A verbal communication and assigning of tasks always proves to be a reason of confusion in the later stage of Event. Have a plan ready for each event and if there are different event owners assigned, they should take the responsibility for their event right from preparing the plans, listing the pre and post events, allocating tasks to volunteers, communicating their plan to other event owners etc.


3.Allocating Volunteers: Finding and allocating volunteers for each event is a Herculean Task. This should be done even before you plan is ready on papers. An estimation of volunteers should be completed before your concrete plan is ready. Instead of running around the bush during the event, its better to get your volunteers ready and prepare them for the tasks.

4.Handling Volunteers: Once your volunteers are finalized, the immediate action is to communicate your plan with them and allocate tasks to them. Always keep buffer volunteers ready incase some of your volunteers don’t turn up during the event for any reasons. Ask your volunteers to include the updates and prepare a MOM for every meeting that is organized pre event so that the volunteers are responsible for their tasks and everyone included in the event are aware of the proceedings.

5.Handling the Event Owners: The Event Head should be prepared to handle the event owners. Sometimes, there are so many tasks to do that there are heated discussions and arguments which occurs among the event owners. That’s the time when Event Head should play a pivotal role in stabilizing the situation. The success of an event always depends on the coordination among the event owners, event head and the volunteers.

Interesting?? Well, I will post the Don’ts of Event Management in my next post. Till then, keep reading STRATEGYAAN!!!!

Reconceptualization of ACAP

If Firm 1 has a low efficiency factorcompared to Firm 2, it is still possible that Firm 2 may have a higher RACAP than Firm 1, in spite of Firm 1 having a higher PACAP. Firms that achieve or maintain a high RACAP-to-PACAP ratio would be well positioned to gain value. This point underscores the importance of separating potential from realized ACAP in order to account for the contributions of this construct. Thus, distinction between potential and realized ACAP provides an explanation of why certain large firms, in spite of their greater investments in developing their ACAP, may lose out to smaller firms that can more efficiently convert their potential capacity to realized capacity. This discussion suggests the following two propositions:

Proposition 1: A firm's absorptive capacity is composed of potential and realized
capacities wherein PACAP is a function of acquisition and assimilation capabilities, and RACAP is a function of conversion and exploitation capabilities.

Proposition 2: A high realized-to-potential absorptive capacity is positively associated with future value creation.

It has been observed that companies do not always foster the sharing or integration of knowledge. Structural, cognitive, behavioral, and political barriers may stifle the effective sharing and integration of knowledge. Integration can take place informally (e.g., communication) or formally (e.g., use of coordinators). Informal integration is useful in building bridges and exchanging ideas. However, more formal ways to integrate knowledge have the advantage of being more systematic. They can be more useful in distributing information within the firm, gathering interpretations and identifying trends. Firms that use formal integration are, therefore, likely to be better equipped to make their members aware of the types of data that make up their PACAP. This can expedite the process of converting and exploiting knowledge and make it more efficient. Sharing and integration of knowledge can increase efficiency factorby reducing the gap between PACAP and RACAP. These observations suggest the following proposition:

Proposition 3. Knowledge integration reduces the gap between potential and realized ACAP, thereby improving the efficiency factor.

Exploiting technologies (or technological knowledge) requires different skills from those that constitute ACAP. These skills are termed “transformative capacity,” defined as “the ability to continually redefine a product portfolio based on technological opportunities created within a firm.” This capacity centers on selecting different technologies, nurturing and developing these technologies over time, and synthesizing these technologies as needed to accomplish the firm’s strategic goals. These activities differ from the acquisition, assimilation and conversion of externally acquired knowledge.

Proposition 4: A firm’s transformative capacity reduces the gap between potential and realized ACAP, thereby improving its efficiency factor.