I used the following text as a base for my presentation at the recent ProductCamp in Chicago on June 19. The presentation is available here.

In the knowledge economy, many of us are responsible for one or several  products, services, projects or initiatives. We are held accountable to get things done, but we often do not have the resources or authority to overcome many of the obstacles thrown our way. No one reports to us. Resources get cut, coworkers have different agendas, and our management is not able to prioritize projects. While you try to resolve these issues, the competition is eating your lunch, and your customers take your product for granted. Nonetheless we must pursue our objective no matter what.

So how does one ensure that things get done under these circumstances? One way I found is to lead other by influence. Driving the though process will enlist your team to do what’s right. Give your team members a purpose and they will follow you. Usually people will support your efforts if you bring sense and logic to them.

How do you get there? I found, based on my readings and experience that just a few principles can make a difference. Pardon me if I am sometimes stating the obvious, but these principles deserve to be presented in detail.

First you need to have a vision of where your initiative is going. Having a well thought-out, step-by-step understanding of where things are and where they need to be and when is absolutely key to influence your team. The beautiful thing is that you don’t need to have that vision right off the bat. The simple fact for being the engine to drive the development of that vision will help you federate the energies towards a common goal.

Another aspect is to consider is the tapes which are running inside your team member’s head. Because of previous past experiences, positives or negatives, your team member hears voices or “tapes” that will affect your initiative, positively or negatively: “this will never work”, “we’ve tried this before” , “this is a fad, if I wait long enough, it will go away”. These are examples of tapes that are hard-wired in people’s mind. As a leader, it is very important that you are aware of these tapes.  Please read Robert Cialdini “Influence, Science and Practice” for more on this topic. Direct contact with team members, ability to listen with an open mind, understanding what will trigger behavioral changes, constant and consistent communication of why and how the team will succeed can go a long way to fight negative attitudes.

Once you have the vision and understand the emotional landscape of your team and your management, you must have the ability to convince.  Tons of books and articles have been written on this very topic but the document I like the best because of its impact is a 1995 article from HBR by Jay Conger, a professor at USC. In his article, he list what works and what doesn’t.  Let me start with what doesn’t because I am guilty of having practiced a lot of what he does not recommend:

1)      Make a case with an upfront hard sell. The “John Wayne” method gives your adversaries the ammunition they need to bring you down.

2)      Resisting compromise:  showing no flexibility to address other constituents’ concerns is a sure way to see your ideas die.

3)      Believing that the secret of persuasion lies in presenting great arguments. It matters, but it is not enough.

4)      Assuming that persuasion is a one shot effort.  Convincing a team is a process, not a one-time event.

Now let’s see what works according to Jay Conger’s research:

-          You must first establish credibility. Things will get a lot easier if you have the credibility to bring the team to a win. That is not an easy thing. Not too many individuals who have been in the same organization for a long time have a pristine track record. New employees , hired to provide leadership are given the benefit of the doubt  for a while, but need to be able to swim in the cold water after a few weeks. If you miss some credibility, you can substitute some of it by ensuring that you have visible management support. Fact and figures will also help you enlist the critical minds.

-          Frame for common ground. Even if your credibility is high, your position must still appeal strongly to the people you are trying to convince. What will be of interest to the individuals who are key to your success?

-          Provide evidence. Still according to Jay Conger, raw evidence won’t do. You need to mix your data with metaphors, examples or analogies to make your position come alive.

-          Connect emotionally. While we all agree that emotion plays an important part in influencing and convincing, it is how we calibrate the emotional component that matters. Too little of it and you do not connect. Too much of it and people will think you are weak. It is repeated contact with your team that will give you a sense of the right mixture. This may sound calculated or not spontaneous, but it not about faking your emotion. It is about channeling them in a way that is useful to your initiative.

The task is much harder for individuals working out of a remote office with no visual cues on a geographically distributed team’s body language. You don’t know if they are listening to you, and they don’t know if you hear them. Any one with hints on how to deal with this situation is welcomed to provide input.

In conclusion, Influence is not a given, but there are many tools and techniques one can use to increase it. It is a complex tool, but that’s why it is so interesting to be a product manager.

Customer pain points are a good way to start an investigation about new products or even a major feature of your new release. Granted, and to paraphrase Henry Ford, customers familiar with horses won’t think to ask you about a car, but it is a starting point.

The sales force is an invaluable source of information on this topic. As part of their sales cycle they will typically manage to articulate the customer’s pain points to the rest of the organization and they will propose solutions to these pain points around the products you and your team manage. Product Managers should use this information whenever possible.

However, Product Managers should not totally depend on the sales organization to understand the customer’s pain points. Instead, they should consider it an important part of their job to go out there (heard that one before?) and spend some time in the field. Direct discussions with the sales force can help but cannot replace direct interaction with a customer.

There are a multitude of reasons for this, and as part of this blog, I will limit myself to the top five.

1. The information Sales provides is not packaged correctly for what you need to accomplish. You need detailed, objective information to build your new product. Most of the reports you read in a CRM system contain only a few lines about the pain, its impact and how the customer copes today. Interviews with the sales force may not always help either. Why? Because the data around the business pain must be consistent to be really useful.  In order to draw rigorous conclusions, you need to have a process for interacting with the customer in a systematic fashion. A consistent set of questions will create a systemic approach to generating more data points and to avoiding having your perspective clouded by one anecdote. It will also help you segment the categories of business pain in a more logical fashion.
2. How about the customers and prospects your sales force is NOT meeting?  These constituents are very important. They may not know your solution exists, or they may have discounted it for a reason that you’d love to know. You need to go out there to find out.  Network at conferences; seek introductions thorough alumni and other social networks. That’s part of the value you bring to the table.
3. The customer pain may evolve as you ask questions and sales may not have the time to capture subtle changes occurring as the customer becomes more sophisticated through a lengthy sales cycle. As you and your competitors educate the customer, their definition of the problem becomes more sharp. You and your company must sense that evolution in order to gain and keep the status of a “column A” vendor. Granted it is the account manager’s responsibility to manage the prospect’s expectations, but she may not know as much about the competitors as you do.
4. How many actors experience the impact of the pain? It must be incurred and recognized as an issue by many. If only one actor feels the pain, will they be able to make it a problem that can truly be felt by the rest of the organization and start a sales cycle? Or is it a real but vastly ignored issue that may take a few years to surface as a top issue? If the pain point is well-known and pervasive, it will be a lot easier to sell a product that addresses it as opposed to one where you need to educate a prospect about a problem they didn’t know they had.
5. What are the substitutes? Because your position as a Product Manager allows for an expanded understanding of your industry, you may be able to consider any substitute that your sales force does not. What if that pain is easily solved by some other product in a cheaper way? Does it warrant a new product then? Probably not.

Too many times Product Managers use sales force information as a main source for understanding business pains. In some situations, Product Managers are cut off from their customers for budgetary or political reasons. Sometimes they are just too busy for a trip. Don’t fall into the trap of becoming an order-taker. It may be easy, but it won’t yield homerun products. Take the time to get to the bottom of the issues and accurately define the problems your product or solution will solve. This will increase your chances of success and will help you gain credibility in the process.

I stole this title line from someone on Twitter much more comically nimble than I, but I just couldn’t resist.  As many of you know, the members of the B2B Product Makers team are working on ProductCamp Chicago. I’m on the committee that is organizing the event, Thierry is going to be presenting on leadership via influence and Josh is going to talk about effective pricing practices.  Both excellent topics – I plan to attend and contribute.

I want to take a few minutes and explain why we got this whole thing started. When I joined Twitter and finally figured out that there was a wealth of product management wisdom available by following the #prodmgmt tag, I noticed that everyone was tweeting about something called ProductCamp. I searched the web for it and found that there was a large community participating in this event in many different cities.

I searched for anything related to ProductCamp Chicago and was really disappointed to find nothing.  I tweeted out a request for a link to ProductCamp Chicago and got several tweets back indicating that, by asking about ProductCamp Chicago, I had just volunteered to start up the first one.  When I tweeted out that I was more than happy to found the ProductCamp Chicago community, I received replies from the four other co-founders almost immediately.   So I knew that we had the means and the interest for a great “unconference”.

So that’s how we got this started – but why?  We started this up for the same reason that I joined the B2B Product Makers blogging team –  to discuss product management topics in a forum where people can both contribute and learn.  When I first spoke with Thierry about this blog, he made it very clear that this blog was not about broadcasting our ideas as much as starting intelligent conversations and encouraging insightful participation.  There are no egos here – it’s all about gathering as many points of view as possible and learning as much as we can.

I see ProductCamp as the same concept.  When I present a topic at ProductCamp Chicago, I expect that some in the audience will have strong objections and I want to hear those objections.  I want to learn their perspective on the issue and incorporate their thinking into my point of view.  In my opinion, the worst thing a product manager can do is to close himself or herself off to new ideas and concepts.  Active participation in ProductCamp can save you from this fate – as will active participation in online discussions, such as the ones on this blog.

This concept is furthered by the idea that ProductCamp is an unconference.  We’ll have many sponsors, but those sponsors understand that they cannot influence the topics presented at ProductCamp.  This way we won’t have content that is slanted towards buying a product or using a service. This also helps because this will ensure that we have 100% fresh content.  The content at ProductCamp isn’t recycled content that you heard from the same vendor at a different conference.  Its going to be fresh and relevant content because if its not, people are not going to participate and will probably walk out on it.

The final reason we wanted to start this is because we need it in Chicago.   Chicago doesn’t have as strong of a Product Management community as does Silicon Valley, Austin, Boston or Seattle, although we have an exceptional amount of PM talent here.   We expect that this conference is going to show the level of talent we have as well as the diversity of Product Management in the Midwest.  We’ll have software, technology and biotech product managers as well as participation from three of the best business schools in the country.  I think we have the ingredients for an incredible experience. We really hope to see you there.

I also just want to give a quick shout out to the four other co-founders – Joshua Steffan, Parissa Behina, Roshan Shankar and Shawn Emery.  When ProductCamp Chicago is a roaring success, it will be due to their intelligence, tenacity, creativity and sheer will.  It’s a true honor and pleasure to work with them.

In my consulting practice, I have been working a lot lately to define a service line for one of my clients.  It’s a strategic content generation service that we are packaging as a standardized, multi-customer offering. I find that it has a lot of the same high-level needs that a product might have – pricing, packaging, definition, release plan, feature/function, messaging, etc…  Seems similar – and it is, but only at the high level. Since a large portion of the knowledge economy is moving to service-oriented offerings as well as transitioning from traditional software to SaaS, I thought that more and more product managers might find themselves in a similar position.

So what are the key differences between managing a product and managing a service?

Features vs. Modules: Products have features – pieces of functionality that we spend our lives trying to tune to the users needs.  Similarly, Services are comprised of one to many modules, which are the value added actions performed to complete the services. Just as product managers have to decide what features go on the must-have list and the nice-to-have list, the same action needs to be taken for the modules of a service.  For example, if you are defining a dental service, teeth cleaning and cavity checks are must- have modules while teeth whitening goes into the nice to have category.

The Product Manager uses the same methods to research the modules as he or she does for the features: what does the customer base need and want, how will they be using the feature/module, what else is out there in the marketplace, etc… He or she should also use the same methods for pricing – the EVC of the feature or module.

That is where the similarities end.

Instead of building a feature, as you do in the product world, in the service world, you have define the module.  Defining the module is a very different process because unlike the feature, the module has to be executed each time the service is performed.  The module has to be designed in a way that is repeatable by the service provider in a cost effective way.  There are several considerations:

• Repeatability – After you design the module, can it be easily repeatable by the service provider?  Service modules with significant levels of complexity may not always be successfully executed even thought they were defined very well.
• Provider – Who is going to provide this module?  How expensive are they?  How skilled are they?  How motivated are they?  Defining a service module that will be provided by a highly skilled and motivated person will need to be less through than one provided by an unskilled person because the skilled and motivated person will take more ownership in the job that they are doing and require less specific directions.
• Cost Structure – Complex modules generally have greater variability in the amount of time they take to perform even with people that have similar skill levels. Furthermore, the recipient of the module may take varying amounts of time to receive it. Using the dental exam again, people with a fear of dentists will take significantly longer to consume the teeth cleaning module. Furthermore, unlike a feature, a module that is sitting idle can be costing you money while a product sitting idle isn’t.
• Audit Processes – Service modules may degrade over time as service providers become bored, lazy or otherwise disengaged.  On the other hand, modules may improve as service providers perform them. Your audit process needs to both ensure that the quality is up to par and quickly assimilate any “lessons learned” into the module definition. (This is similar to developing features with “iterations” except with services you are in an almost constant release cycle for element tuning.)

Sales and Promotion – Assuming that the customer is aware of the business problem and is properly qualified, you must arm your sales team with the knowledge and collateral to convince this customer of the following:

• • The defined service corresponds to the customer’s needs without significant modification. Services seem easily customizable from the customer’s perspective, but customization can drive your costs up dramatically.
  • At the end of the engagement, the defined deliverables will solve their problem.
  • Your people are skilled enough to execute it properly.
  • You are putting the proper structures in place so you won’t have to come back regularly to do the same service. unless your service is a regularly scheduled event.

Financing – Unlike a product that has to be built, a service, once defined, can be ready to perform with minimal start up costs.  It requires less capital investment overall and can be producing revenue within a few days.  Since the sunk costs are a significantly lower part of the budget, you can afford to take greater risks in rolling out a new service than you can with a new product.

However, since you can roll out a service easily, so can your competitor.  Business process patents do exist, but they are not as popular or binding as regular patents.

Product Support vs. Service Support:  Many people consider support a Service and it is, but not in the sense that I am defining Services here because you need Support for a Product or a Service.  (Think you don’t?  How many times have you asked the painter to come back and clean up something he hasn’t done right?) One significant difference that I have found though is that increasing the complexity of the service does not necessarily increase the support cost as it does with a product.  Sounds a bit counterintuitive, but the more complex the service, the higher the level of service provider (usually) which results in a deeper emotional connection between the service provider and the quality of the service.

Even outside the SaaS world, many Product Managers are now finding themselves defining and managing a service offering.  If you find yourself in this position, these concepts will help get you started without making the same mistakes I did, which should save you a lot of time, effort and frustration.

When it comes to innovation, I have been guilty of thinking only in one dimension. I have mostly focused only on new features and functionality changes in my products that differentiate it from the competition. I know I am not the only product manager with this limitation.

However, not envisioning a new initiative as a whole new business process may result in failure. A good product may target the wrong buyer in the right segment, a marketing message could hit the wrong audience, a sales force may react negatively to your new solution.

So it is worth mentioning when a tool is available to help product managers think more systematically at an early stage of their innovation process.

Such is the case with the “Innovation Radar” presented in a complete fashion in “Grow from Within”, a book from Robert C. Wolcott and Michael J. Lippiz published in 2009. The Innovation Radar forces you to look at innovation in 12 different ways and encourages product managers to adopt a comprehensive view of their innovation initiative. The book is tackling a more general topic: investigate what makes an intrapreneur successful and the innovation radar is only a chapter of the book. Great read nonetheless.

The goal of this post is not to extensively discuss the model, as I could not do it as well as the authors.  However, in this post, I will provide a brief description of the Innovation Radar and help you imagine how you can apply the model to:

• Innovate with your existing products
• Build a comprehensive approach for developing new products
• Anticipate avenues that your competitors could take

So in order to discuss the Innovation Radar, please look at the illustration above, which is directly taken from the book. There are 4 major dimensions, Offering (What), Customers (Who), Processes (How) and Presence (Where). The other 8 dimensions are distributed between these 4 dimensions based on their type of impact. For example, the customer experience is obviously between “Customers” and “Process.” Let’s go through each dimension, with a short explanation and a few questions you can ask yourself about it:

1 Offerings: Creating unique products or services that are valued by customers. What unique architecture or feature set can we bring to our customers? That’s the dimension most of us focus on.

2 Platforms: Common components which can be developed and reused for multiple markets or customers. What are the common technologies, architectures and modules which can be shared by my customer base to reduce my costs?

3 Solutions: Customized, integrated set of products and services to solve a customer’s specific business problem. Can I package my offering differently in order to simplify, bring more flexibility, or reduce cost  in order to attract different buyers?

4 Customers: Discover new customer categories, different buyer personas, or unmet/unarticulated needs. Could there be unidentified business problems your customers may be facing?Is there an unserved up- or down-market?

5 Customer experience: Everything each actor in the sales cycle and end users see or feel about your product and your company. What collateral would resonate with my audience? Can I simplify the user interface to address a new segment? What type of support do I need for this new audience?

6 Value Capture: The mechanisms a company creates to earn its share of the market. How can we redesign the sales cycle in increase our margins? What pricing model leads to optimal profit margin?

7 Processes: The configuration of business activities to conduct operations. How can I reorganize support to reduce costs? Can I develop a single methodology which can be reused for a specific class of services?

8 Organization: How the company structures itself to respond to the needs of the customer. Will this new concept benefit from an internal, separate organization that can execute faster? Are the proper incentives in place to ensure that each team member delivers on the strategy?

9 Supply Chain: The method to deliver product and services. What could be automated, or configured by the customer to provide faster delivery, cheaper cost or improved flexibility?

10 Presence: Channels employed by the company to bring the offering to the market. Should I replace my “farmers” account managers by “hunters”? How can I integrate my offering into a partner’s larger solution and use that partner as a new channel?

11 Network: How a company or product can connect to the customer to improve the value of the product. Can different types of users in my installed base benefit from my existing products? What interfaces should I build to leverage a partner’s solution and unleash new value for my customer?

12 Brand: Symbols, words or marks used by a company to communicate a promise or an image to the customer. How can the company’s brand be leveraged to reinforce the new concept? Would my audience feel that the innovation falls naturally within the brand, or would it be considered a stretch?

The true value of the tool is that, when used correctly, it forces you to envision many of your innovative product’s implications upfront.

Gather a multidisciplinary team in one room for a brainstorming session and go through a series of questions which you will have carefully prepared in advance for each dimension listed above. Be careful not to lead your audience or you will kill creativity. Together, in a few hours and under your lead, the team can minimize the surprises your innovation will produce and define what’s needed, rather than forcing you to operate later with a set of options limited by your budget and time-to-market imperatives. That could mean the difference between success and failure. And maybe you may even find new ways to innovate in the process.

From my experience, value-based pricing is one of the most often used, yet least understood concepts in product management. While deceptively simple on the surface, most product managers have trouble turning it into something concrete. Sure it makes sense that a good product should provide value to the customer, but trying to get a handle on this is like trying to catch smoke with your bare hands. Luckily, this task is a bit easier for those of us in the B2B space since we don’t typically have to be overly concerned with the fuzzy intangibles so important in B2C like how our brand will help the consumer achieve their personal goals, laddering up to get closer to the consumer’s core values, and all that noise. But even still, understanding how your product can help a customer improve their business does not automatically translate into a price point.

Economic Value to the Customer (EVC), a concept I mentioned in a previous post, can be of great help in this situation – especially when you’re working on pricing a new product and you don’t have the luxury of existing sales data to calculate a demand curve (not that this is exactly easy either). Once you’ve completed the EVC framework for your product you’ll be able to use it to help diagnose why sales are slow, assist sales force personnel in negotiations and even determine which enhancements will result in the largest gains in customer willingness to pay.

The basic premise behind EVC is that consumers buy not just on price, but on the basis of the economic value that the price represents. This means that customers attempt to discern the Net Value of your product. For those that are mathematically inclined, you can think about it like this:

After customers gather information about all the options in the marketplace, they will (quite logically) select your product only if it proves to yield the highest Net Value relative to competing offerings. Reordering variables shows us that the price you charge for the product, therefore, must be less than or equal to the sum of the Differentiation Value (∆V) and the Reference Value (R). The Reference Value is the price of what customers view as best substitute and the Differentiation Value is the value to the customer (both positive and negative) of any differences between your offering and the reference product.

Said another way, a product’s total economic value is the price of the customer’s best alternative (the Reference Value) plus the economic value of whatever differentiates the offering from the alternative (the Differentiation Value).

Of the times that I’ve used EVC, one case illustrates the process extremely well. I was launching a bundle of web services that allow third-party service providers to automate receiving work assignments from their customers. Prior to this solution, the only alternative was a manual process, so in other words, the Reference Value was the cost associated with employing staff to manage the work conducted between the two companies. Through a number of conversations with managers at these firms I was able to uncover the fully loaded cost per employee as well as the ratio of employees relative to work volume on the average. These details unlocked the cost of the manual process and hence, the Reference Value.

The Differentiation Value consisted of a number of components. First, the new system would require an up-front investment in information technology to implement the web service interface. So relative to the manual approach, this was a negative – remember that your product will probably have pros and cons when compared to the competition. Benefits over the manual approach included reduced headcount, improved performance (increased throughput) and improved quality.

Once you have these details, calculating the Willingness To Pay (WTP) is fairly straight forward. Simply sum the dollar value of the cost savings generated from the labor reduction and the value of the productivity and quality gains. This exercise yields the maximum WTP. Note! This isn’t the price, but rather the amount at which the customer would be indifferent between the manual process and the web services. You’ll want to set the price below the maximum in order to share some of the value created with your customer and entice them to make the purchase. Economists know this as Consumer Surplus.

As you can see, the process of measuring your Differentiation and Reference Values isn’t exactly a plug-n-chug operation. Applying EVC necessitates effort and creativity, which requires you to think broadly about the sources of value for your product. Usually, in the B2B space economic value can be expressed as revenues gained or costs avoided by purchasing the product. This means you need to truly understand your customer’s business and how your product will impact it. Only then will you be able to determine if your pricing is doing a good job of getting a piece of the value your product is delivering to the customer.

Congratulations! You now have the opportunity to lead a team of other product managers. Or maybe you want to position yourself as a contender for a leadership position and make a proposal.  What should be your first steps?

You already know about the constraints: your product managers are very busy, so any new team-building effort will have to come at the expense of something else. You are also aware that, when left to their own devices, most product managers will tend to neglect their strategic role and slide towards the tactical, which is not sustainable in the long term.

With this in mind, how can you build a great Product Management team?

Of course you need to carefully listen to all parties, as well as tirelessly communicate your plans. However, here are 5 values which can help you progress tremendously and, if applied carefully, can help you set the tone.

1) Collaboration between product managers: Most product managers work in isolations, ignoring what the other product managers are doing. They may be competing against each other (not a bad thing when kept in check, more on this later) unnecessarily for resources, the customer’s yearly budget as well as the sales force’s attention. Some may have found creative solutions to problems which other Product managers don’t even know they have. Clearly you need to get your Product managers to talk to each other. How can this be done?

• Share what works and what does not. Have each product manager present to the group their  successes and a failures
• Improve usage of and proficiency in company tools such as CRM, SharePoint, marketing portal and internal blogs to facilitate the exchange of information
• Share important analyst/industry data to ensure the group shares a common view of your industry
• Improve product linkages: Brainstorm on how your team’s products can leverage or integrate with each other or new possibility for creative packaging.
• Encourage Product managers to review each other’s important documents, such as business cases, market positioning or even requirement specifications prior to releasing them outside the group.

No doubt this requires a big time commitment, and not everything has to be implemented on day one, but the productivity improvements will be compelling.

2) Inside/Outside Accountability: It is important that your product managers know what is expected of them and what is not. Similarly the rest of the organization must be realistic and crystal-clear about what it can expect from the product management organization. Constant sales support may be acceptable for a new product during a specified period. However when a product manager performs sales support for a mature product, it is a symptom of organizational dysfunction. Here are some actions which you can take:

• Have each PM time their activity in strategic vs. tactical buckets so they come to their own conclusions.  Identify the tasks which could be handled outside of the group and define obtainable goals to outsource them.  Pre and post-sales activity as well as product support should be good candidates for an owner outside of the team.
• Prioritization of resources and communication of the choices internally and externally.
• Define what product management does and does not do and negotiate with outside teams how to handle a transition. That’s the hard part since many organizations think of product management as the place that does whatever is not accomplished by the rest of the company. You can use this as a first step.
• Foster healthy competition between product managers by establishing fair rules and creating a climate of internal coopetition.

You should expect strong resistance from other groups who may not understand why all of a sudden you stop helping them. Your ability to focus on the strategic depends on your ability to convince them that it is not the role of your group.

3) Consistency of interfaces via process improvement: By enforcing a consistent interface between the product management team and each other department, the rest of the company will know over time what to expect when they interact with any member of your team.  Because your Product managers use the same types of documents, the same tried-and true-processes to accomplish well identified goals, the trust in your group‘s professionalism will improve. Here are some items which can benefit from better consistency:

• All documents using a similar format
• Rules about when and how to engage with sales, finance, billing, support, corporate, R&D, product marketing and customers
• Business case process
• Partnership management
• New project prioritization process
• Launch process and associated metrics
• Requirement/Prototyping process
• Obsolescence process
• Win/Loss
• P/L Tracking and Management

Basically, the concept here is that you want a consistent brand, brand message and brand delivery for product management.

4) Preparation: The crisis of the day is what makes you waste time. Anticipating crises is what will make your team get their heads above water and focus on the strategic.  By measuring what your Product managers do today, you can probably identify tasks that could benefit from preparation. Typical examples are:

• Support, customers or Pre-sales FAQs
• RFP: Database of answers to the most current questions
• Product status reporting which includes risk and mitigation
• Updated roadmaps and strategy presentations
• Relevant industry and Customer data to present against non-fact-based opinions.

5) Innovation. Your Product managers are paid to be thought leaders who push the company forward. How can they do so? Here are several initiatives which you can drive with your team to be ahead of the curve:

• Strategic Roadmap process
• Win/Loss process
• Idea management/prioritization/business case.
• Innovation Off-Site Discovery sessions (basically a way to separate yourself from the office hassles to concentrate on innovation.)

Of course, much more is needed to run a group. However, these foundational values: collaboration, accountability, consistency, preparation and innovation should guide your group toward a better future.

In this economy, you spend so much time trying to find and land a Product Management position. So what happens when you get an opportunity?  How should you decide if you are going to take a job or not?  There are a few factors that we consider when we look at a possible position.

Respect: When you join, you will get the benefit of the doubt for a while but you will need to earn the respect of your co-workers and this may take a while. But this may never happen if the product management organization is not respected in your company.

P/L Ownership:  The holy grail of Product Management – everyone wants it, but only the senior guys get it.  If you get P/L ownership, then you know that you will be playing a key role in the product and the company.  But what if, like most of us, you don’t get it?  That doesn’t necessarily mean that you should skip the position. You should, however, question seriously how much influence you are going to have on your product.  Are you going to be the one developing the product budget for executive review?  Are you going to be the one proposing prices and sales incentives?  If so, while you don’t own the P/L, you really have a significant influence on it.

One other factor to consider for the P/L: Many companies may not have the data available or accounting processes in place to deliver on the promise of P/L control.  Be sure you understand how they track costs and revenue before you accept a promise of P/L control.

Process: Does this company use any type of process in their Product Management discipline?  This is going to tell you two things:  First, how mature their Product Management organization is.  If they have been around for a while or have some experienced people, they are going to have a process of some sort.  Second, how seriously executive management takes PM.  Process creation and execution is expensive and only pays for itself in the long run.  The only way that you can get a solid process in place is with executive sponsorship.

Risk Profile: You may assume that companies with a well-defined process make product decisions quickly and efficiently, but this isn’t necessarily the case. Each company has a different level of comfort with risk which usually plays out in the speed of their product investment decisions. If the executive team is risk averse and uncomfortable pulling the trigger, you may find yourself in a never ending cycle of information gathering and approval meetings.

Marketing:  What type of marketing department does this organization have? Are they the “entertain customers and drink martinis” type of marketers or are they the “number crunching, graph making, ROI generating” type of marketers?  If they are the former, you are going to be guessing a lot about your product direction, which is going to be a miserable experience.  If they are the latter, then you can bet that a partnership for success is underway.

Chain of Command:  Who do you report to – the head of Marketing or the head of Product Development?  Reporting to the head of marketing tells you that you are going to have a customer focused experience while reporting to the head of Product Development tells you that you are going to have a technical/engineering focus to your position.  Either one is fine, but you want to be sure that you have a solid understanding of which one plays to your strengths. You may also want to consider which parts of the organization hold the most power. Did the CEO rise up through the technical ranks or was he a sales guy? Obtaining some perspective on the corporate power structure will provide you with some insight on whether you will be operating from a position of power or as an underdog.

Idea Generation:  Where do the ideas come from in the company?  Are they generated from the Executive Suite?  Do they come out of Product Management?  Or do you get the standard answer of “Ideas can come from anywhere…” which directly translates to “I have no clue where our ideas come from, they just kind of show up…”  That isn’t to say that innovation is limited only to the geniuses in Product Management, but that is the whole reason that product management exists – to generate and implement product ideas.  If the company’s ideas aren’t mainly coming out of product management, they either (a) aren’t listening to them or (b) hired lousy product managers.

Customer Profile: Does the company have a wide range of customers from a diverse set of markets and industries or is a large percentage of revenue dependent upon one market? One customer? This has a huge impact on the sort of product manager you’ll be able to be. One of the differences between being a consulting organization and a product organization is the ability to produce products that appeal to a large number of customers – not just one particular customer. When a company is dependent upon a handful of customers for its livelihood, it is difficult if not impossible to say no to their enhancement requests. This is proves to be a vicious cycle since the more attention you pay to your key customers, the fewer resources you have available to build a market solution.

Solid Product Suite:  Would you buy the products the company sells?  If not, are they good products that are poorly marketed?  Are they built with quality, but they don’t meet the needs of the end user?  Or are they just bad products?  I wouldn’t necessarily turn down a company with bad products – that is a fantastic opportunity to help a company turn itself around.  However, you really need to understand why the products are failing so that you can properly assess if you can fix the problems and right the ship.

So what if the products are very successful – then you take the job, right?  Not necessarily.  They might be looking for a caretaker product manager to ensure that nothing goes wrong as their product suite matures and sunsets.  That might not present the growth opportunities and challenges that you need.

Culture and Ethics: This is a difficult attribute to consider, but you’ll be doing yourself a favor by doing a little soul-searching to make sure your personality and beliefs are aligned with the company you’re going to join. This may be an obvious for some industries like alcohol and gaming, but some business plans and practices fall into a grey area.  Every company and industry has different set of norms that you must be comfortable with in order to be successful.

These are a few things that we consider when evaluating a possible product manager position.  We would love to hear your take on the subject – what do you use evaluate possible positions and more importantly, what do you wish you used to evaluate a position in hindsight.

Thanks for all your comments on our Product Manager Wanted post. This topic really struck a cord with the product management community – in fact, the good folks over at Pragmatic Marketing are including it as part of their monthly newsletter. With new articles for technology product managers and marketers each month, it’s definitely worth a read.

On a side note, feedback and support such as this helps ensure that our posts remain timely and relevant. Consider this a “Call for Topics” if you will. Help us out by dropping your suggestions into the comments section of this post. Thanks!

It is a well-known fact that new ideas come from your customers, partners, analysts, competitors and other industry influencers. Like it or not, your company looks upon the product management organization to organize these ideas.

But how can a very busy product manager transform the “idea machine” into a fast, fair and simple, yet transparent process?

Remember this bright engineer who came to you last week with starry eyes and started the conversation with “wouldn’t it be great if we had a product that…”?

Chances are that if after a few weeks she does not feel you are taking her idea somewhere, she will share her future creative ideas with someone else.

This post will not provide a turnkey solution to such a process, as every company is different. It will, however, help you group and select ideas using a consistent framework that does not let your legacy products and company limitations get in the way of your thinking. In addition, the framework may help explain to that engineer why her idea needs to be further refined.

The framework consists in three principles:

1.All ideas must be aimed at solving a specific business problem. First it allows you to gather ideas around a customer-centric theme. Second it forces you to step down and look at what is truly needed, versus a your-product-should-let-me-do-this” type of input. Do not limit yourselves to your existing customers, as the new concept may also attract a different segment of customers

2.It is important to envision solutions to the problem as a “business system” that includes not only a possible new product, but also specific sales channels, support, implementation, training and services.  Granted, you most likely will never need a separate organization to serve this new idea, but at least you need to investigate what is specifically required to address the problem without the limits imposed by your company.

3.All ideas must go through the same set of questions in order to be qualified and further refined. This is what ensures consistency and transparency.

Let’s examine this last step in further detail. I usually stick to 20 questions, 10 for outside (customers, analysts, influencers) and 10 for inside the company. The reason is that you essentially want to assess the business problem, look at your company’s capabilities and see if the mixture is a good fit. It is tempting to add as many questions as possible to the list, but remember, we want this process to be fast and simple. These questions can of course be adapted to your circumstances. Finally, the order of these questions was set to evidence red flags as early as possible.

Outside:

-    Is the problem formulated correctly or is its definition too restrictive? A restrictive problem definition could make you miss an larger opportunity or waste your resources.

-    Which actor is feeling the pain? . Who do you need to sell to? (no one at this point, my buyer, someone else? ) The answer to this question may impact the duration your sales cycle as well as what sales channel is required.

-    Is the business problem pervasive in this industry? In other industries? Is this a one-customer issue or is this problem felt by a larger group?

-    What is the best possible way anyone could solve this issue in the eyes of the customer? You need to get away from the “when you have a hammer, everything looks like a nail” philosophy and think like an entrepreneur starting with a clean slate.

-    Would that solution require an organizational or process change for the customer and would they eventually agree to make it? If a new product requires too much change in order to be accepted by the customer, it could slow the adoption of the product or the new product may be flat-out rejected.

-    Is the pain felt by the customer likely to get worse in the near to medium term? If the problem becomes more acute, then time is working for you. Nice to know.

-    Could a solution be sold up-market or down-market? In other words is this problem likely to be felt by more demanding, or less demanding segments, each with different price points?

-    Could a substitute help solve this business problem? Reaching out to outside the company is important here to identify unorthodox potential solutions to this business problem which your company may not have thought about and would negatively impact your efforts.

-    Can the problem be quantified in terms of lost revenue, productivity or customer satisfaction? While it is impossible to identify the revenue opportunity of a market which does not exist yet, it may be possible to quantify the savings that a solution may generate, to help customers justify their decision, and you to estimate a first-cut price point.

-    How much would the customer be willing to pay for a solution? Remember that this customer may not be your existing customer.

Inside:

-    Is there any certain indication at this point that the solution envisioned would be considered attractive? Think ROI, margin, volumes, but also market share, new markets, barriers to exit.

-    Would the best possible way to solve this issue involve an existing or a disruptive solution? A disruptive technology may involve a different sales cycle, lower margins, more risk, and a different launch plan. You need to acknowledge this right off the bat.

-    What is the extent of internal organizational changes required to best fill this customer need? Does your company own the appropriate skill set, would management be willing to accept a lower cost structure, what is the latitude to adapt the sales channels? How open is your organization to process changes required to accommodate a new product?

-    Can a solution be completed in-house or would a partnership be required? Granted, with enough resources, your company can go at it alone, but would a partner facilitate market entry and share the risk?

-    What is the likelihood of finding a corporate sponsor willing to fight for the solution internally? Let’s face it, only lucky product managers or geniuses get it right the first time. Anyone working on a new idea requires air cover to defend it against “resource realignments” and also to set the correct expectations with executives. No one can go at it alone.

-    Does the solution envisioned fit with my company’s strategy? Is it OK to find many small ponds for an existing product or a large pond with a new one? Can you make your idea fit with one or several existing business objectives?

-    Can the problem be solved by offering a new solution recombining existing products or services? If you fail, it is better to do it early and cheaply. A first try with existing technology can help you achieve that.

-    Is a solution for this problem included in my existing product’s roadmap? If yes, do you need to reconsider the timing? If no, what should be taken off to accommodate a potential new effort?

-    What is the likelihood that my company will execute in a quality and in a timely fashion? Execution is key. What is the impact of the idea which you are considering coming to the market late or with a smaller set of benefits?

-    What would be the competition’s response to a move? Could this idea already be on any of your competitor’s radar screen? Is there another company out there who could have its eyes on the same opportunity?

This set of questions can and should be modified to your environment. Also, most of the answers are not black and white; you may need a sliding scale to account for the various shades of gray. Finally please remember Henry Ford’s famous quote: “If I’d asked my customers what they wanted, they’d have said a faster horse”.