Geoff Anderson, back for a second round. If you recall, last time (after my long winded introduction to myself and my reading list) we talked about a very common issue in the current business environment, pressure on prices from competition, and how to respond without destroying your brand equity and premium positioning.
Geoff Anderson here, and welcome to my slice of marketing and how it applies in everyday actions. Over the next several months I will share many observations, and how you can apply the lessons I learned from the Marketing Technology Products class. I will dive into many of the terms from the vocabulary list with recognizable examples from the real world. I will focus primarily on the B2B space, but will at times veer in to some B2C examples.
Greetings, this is Nick Nichols posting the first in a series of Technology Marketing Center Leaders' Blog entries that I hope will inspire technically-educated executives to constantly look for ways to broaden their business perspective, and to deepen their understanding of internal teams and external constituents as they drive their organizations toward technological innovation. I've spent the last several years of my career thinking through and meeting the educational needs of high tech managers, particularly as they relate to technological innovation. I'll be sharing my experience and my conclusions here with you monthly here in this column. For more on my background...
We hear a lot about the looming loss by the U.S. of its leadership in technological innovation. This trend is particularly alarming because of the great dependence of our economic health on the products derived from technologies developed and brought to market in the prior 4-5 years. And we see increasing pressures to accelerate that cycle time in the face of rapidly emerging global markets.
Bringing technologies to market successfully is a complex process, requiring, not just bright ideas and more invention, but also superior execution employing the skills and talents of numerous individuals to develop the right products, processes, and markets to cause creative change and improvement in the way we do things. Management literature is replete with case examples that identify the many barriers and influences - technology, strategy, market structure, organization, culture, leadership, and people - that have to be aligned to produce a successful innovative product. So what have we learned - and what can we apply today in our professional lives to become more innovative in our work?
The great national technology challenges of the past, represented by the Manhattan Project and,later, by the space program and Apollo, became drivers of broad based national innovation capability through major investments for science and technology and emphasis on science education. Along with those efforts came an expansion of research on and greater understanding of management of technology and innovation. A culture of innovation evolved with a entrepreneurial model based on venture capital, more university commercial spin-offs, and growth of regional university/industrial hubs and incubators.
Many observers point to declining innovation since that era as evidenced by reduced number of college graduates in sciences and engineering, reductions in funding supporting critical innovation at the national and company levels (where are the Bell Labs of today?), other societies increasing investment and infrastructure for building educational and industrial capabilities to compete with U.S. technology products and services, too much emphasis on short term financial business results at the expense of longer term innovative technologies, and other priorities for national attention.
What will it take to restore a robust, sustainable innovative leadership position that dominated prior decades? Will it take another "moon shot" response to a perceived threat to national prestige? How will companies balance the need for operating effectively today, while innovating for the future? And how will technical professionals orient their skills, perspectives, and capabilities to be more innovative? This last question is one that we will be concentrating on in this blog series. For how well individual professional transformation, influence, and leadership for innovation occurs will dictate the pace of progress toward key solutions to future challenges.
How will companies
This is Chris Halliwell, Director of the Technology Marketing Center , excited to introduce two new TMC Leaders' Blog guest-authored series. Each series will be published here monthly.
Nick Nichols, founder and host of the Caltech/MIT Enterprise Forum in Pasadena, and former director of the Caltech Industrial Relations Center executive education program, has dedicated his career to helping technically trained executive develop business skills and perspectives. Nick will focus on what he calls a "personal agenda" for high tech managers who want to expand their influence on the technological innovation of their organization. He'll layout objectives for skills acquisition, and discuss the perspectives that are necessary to drive teamwork and execution in the technology-enabled business toward successful commercialization of innovation.
Geoff Anderson, frequent contributor to the TMC Leaders' Blog in the past, and long time hi tech product manager extraordinaire, will bring his insatiable interest in product/market strategy development to bear here in the TMC Leaders' Blog. Geoff frequently scans business literature and websites (for fun!) and never stops thinking about what high tech business teams need from marketing to define and execute effective strategies for growth. Geoff will bring us a mini-case study from the news each month, commenting on the application (or not, as the case may be) of proven strategic technology tools and processes.
For those of you with RSS feeds of the Leaders' Blog, these new series promise to intrigue and inform your professional life every month -- for the blog grazers out there, we will work to make it worth it to check back in with us when you get a chance.
Please share your comments, all the best,
Chris
This week marks the end of my tenure as a weekly TMC blogger on the topics of government procurement and building a competitive advantage in this important marketplace. Perhaps I'll be back in future months with reflections on entirely different subject matters. I must say I was flattered to have been invited to contribute as a Technology Marketing Center leader. Hopefully my insights were of some interest or value to those who reviewed my blogs. I found personal value just in gathering my thoughts weekly and focusing, into even some rough form, many of the principles involved and experiences that I have had in this domain. I might add that nothing spurs advancement and refinement of concepts more solidly than vigorous debate, and the concept of the whole product model and ancillary topics was a case in point. My involvement began from just such academic exploration; I have to say it was a lot of fun - perhaps in the long run it will even prove to have been productive for me and others.
In closing out my inaugural blogging experience I was invited to share some thoughts on my current career goals. Well that's always a little self serving and thought I would approach that request from a little different angle and simply reflect on what motivates me in any career pursuit. I have enjoyed the most job satisfaction when I have felt that I was relevant. I am happy when I feel I am able to make a difference in the face of the challenges at hand. Each of us comes with a different tool kit, and it is always gratifying to find oneself in front of a particularly complex undertaking - especially in a team environment - and realize that you may have the unique skills needed to move it forward sucessfully. I think most of us see life and careers in a similar fashion. I'm no different. Thank you for tuning in, and I wish you all the best.
Last week I shared some thoughts on the process of helping the government customer refine their requirements - essentially bringing the worlds of realistic funding profiles together with realistic development schedules and realistic current technologies. This shaping strategy is slightly different for competing companies because different companies have different strengths and weaknesses. To successfully establish a competitive edge, it is necessary to present a persuasive case to the customer of the realities as you see them on how best to meet their capability gaps.
But who is the customer? Who speaks as the single voice of decision in establishing the requirements and aligning budgets. In many cases, there may be multiple opinion leaders, and here's the troubling part . . . they may have different opinions and agendas. Worse still, they may change opinions from one annual requirements conference to the next. Some of the larger and more complex DoD programs will impanel an executive steering group or committee (ESC) to align the key opinion leaders in an effort to stabilize this process. ESCs generally do a good job of reducing priority swings and emotionalism. By their nature they are usually composed of senior command or leadership principals related to the operational or acquisition communities. These may include the requirements officer, the community functional commander, the systems command program manager, the resource sponsor, and leadership from the tactics and intelligence school houses and other centers of excellence. While the names may change from one conference to the next from year to year, the titles usually do not, and perspectives brought in are usually consistent. A major acquisition program ESC may prioritize the overarching requirements and usually has an understanding of the mid term funding realities. ESCs are good organizations to stay in touch with for shaping priorities among program elements on a macro scale - in other words, prioritizing supporting developments or acquisitions within a major program. Each of those elements may come with its own specific capability requirements as well.
What about smaller programs or stand alone systems? These may not enjoy the sort of organizational structure described above. The opinion leaders certainly still exist, but they may not be formally organized and conjoined by an executive committee that unifies their voice. In this case a little more work is required to make sure that all the opinion leaders are informed with your message at the appropriate time to positively influence the requirement boundaries and be unified in their acquisition goals. You are most effective if considered a member of the team - part of the solution. The key opinion leaders and influencers still fall into three main categories - the user ("warfighter"), the buyer (program manager), and the resource provider. In simple terms: your customer must need something, must have a mechanism for procuring it, and must have the resources to pay for it. You may find yourself acting as a "go-between" among these elements for helping the government unify their voice and refine their requirements for small programs or lesser capabilities.
This week, some thoughts on requirements shaping. The concept is simple enough, and I've discussed it in some depth previously. The core shaping principle is to present the customer with strong reasons to discard capability requirements that would be weaknesses in a potential offering and embrace capabilities that are strengths or discriminators specific to your company's profile. As a refresher, at the foundation, the government establishes an operational requirement, which may be highly conceptual at the beginning. The customer depends on industry to enter dialog with them to help bound the requirement in terms of technical complexity, cost, or development schedule metrics. This dialog may be formal, as in the case of a request for information (RFI), or informal, as in the case of visits and briefings. An emerging need may indeed be real, but available technology may make development or acquisition impractical without establishing limits on specific elements of the required capability. To be sure, there is little that can't be done in the technology domain given enough money and time. We proved that we could go to the moon if cost was not to be considered a limiting factor. Modern acquisition programs don't generally enjoy that latitude however. Identifying for the customer the areas where cost, schedule, and performance may introduce risk to their acquisition plan is an expected and necessary element of defense and the broader government acquisition process. The other side of the shaping coin involves advertising a capability (that you have) relevant to the operational need that perhaps hasn't been clearly recognized by the customer. If this is a company discriminator, the shaping strategy at its core is to present this to the buyer as a value added element of their basic requirement with the goal of incorporating it in the performance specification. Although conceptual briefs taken on a road show to decision makers is a common tactic, nothing succeeds in this domain like good old hard test data, and to the extent that the capability can be shown to actually exist and perform, one will find far stronger customer interest and willingness to take action in modifying the capabilities description.
So how about the actual mechanics of shaping. Who do you visit and when? There are two primary stovepipes in the acquisition process and tiers within them. First, operational requirements begin with operators. Interaction with the actual "boots-on-the-ground" war-fighter is the best way to understand the real operational need and environment and to start a bottoms up campaign. If the operator embraces your capability and absorbs the art of the possible, he or she will carry that message up the chain. Dialog should then occur at intermediate levels up to key operational and theater commanders to ensure transmission and continuity of this message. This should also include the warfare requirements officers who are the primary government bridges to the second stovepipe which is the system command. The systems command is where it is appropriate to advertise development challenges. The acquisition work force is charged with taking the capabilities documents from the operators and building an executable program. Accordingly, the right initial interface is with the government program manager and program executive officers. They invariably understand programmatic risk and the concept of cost as an independent variable.
Lastly, I'll provide an old axiom from the acquisition world: Follow the money. More about that next week!
This is Chris Halliwell, from the Technology Marketing Center, chiming in to fill the gap as Bob Rutherford takes a must-do-real-work break from his terrific series of posts on government marketing. He will be back to finish his series in October. I would have posted sooner, but I was stumped for something interesting to say.
Another confession is that I haven't read the Innovator's Dilemma and the follow up books closely enough to provide a riff on the key themes, so even if what I am about to comment upon is useful, it's certainly no substitute for Christensen. Ok, moving on...
A client recently presented a puzzle: we built our initial (very) new technology product for the first-to-adopt (confusingly referred to in adoption cycle speak as Innovators) but now the market is moving to the next-to-adopt, the Early Adopters. For several reasons we must design a new product platform, but every time we talk to our current customers they give us a laundry list of new features that we don't think will be relevant to our growth opportunity among Early Adopters. We don't have relationships right now with very many potential Early Adopters and our market is extremely fragmented, so how do we know who to talk to about the NEXT product?
This is a common problem, especially in start-ups and new business ventures. I see it as a mini-version of the innovator's dilemma -- it is a market research/VoC sample strategy problem. The sampling strategy for a market research project is supposed to answer the questions: who is the relevant interview target, why are they the best target, how do I get to them, and how many of them do I need to speak with?
Here are some hints on VoC sampling strategy for disruptive technology, and/or for the NEXT market you want to reach in order to grow:
Any other ideas out there?
...I'll try to get another post done before Bob Rutherford returns, Cheers, Chris
When we last checked in I had drawn the parallels between Levitt's whole product model and the government strata for articulating requirements in a capabilities description document - the source document for weaving requirements into a DoD request for proposals (RFP). I made note that the outer ring in Levitt's model is called potential product and that it has a definite crosswalk to the government's frequent need to be able to support growth in the form of expanding capabilities to meet future requirements, or to allow fielding a system with some capability early and provide a pathway for expanding to meet full requirements as time and budgets permit. Specific requirements for growth potential are sometimes stated and sometimes not. A clear vector of discrimination is one that provides for seamless adaptation and integration of additional capability while meeting the current requirements. Such a system is seen as providing perhaps intangible "value" to an offering and while the common belief is that government contracts go to the lowest bidder, the fact is that most sophisticated weapons systems procurements are awarded on a "best value" basis. The best value may of course also be the lowest bid, so they are not necessarily mutually exclusive!
If the government does not specify the growth requirements in the RFP, this represents an opportunity for a bidder to differentiate their proposal from the competition by incorporating unique company discriminators - to the extent that they are considered valuable by the customer! This assumes such innovation is invited by the government, which is usually the case. If the RFP sets the basis of award on best value, then the door is open. Frequent and repetitive dialog with the end user of the product - in this case, the war fighter - is the tactic of choice for developing full understanding of not only the basis and subtleties of the stated requirements, but more importantly, the capabilities that are of value to the end user, but for any variety of reasons may not have been included as explicit requirements.
A distinction is worth making here. A compelling case exists for communicating unique capabilities to a customer with the goal of having these incorporated as requirements. Company discriminators featured as requirements in an RFP have the effect of creating significant competitive advantage and this is certainly an effective and commonly used strategy. Once adopted and published by the government as a requirement, however, the capability is no longer in the category of "potential product" or growth potential. All competitors will see it and be expected to design to it. The subtle difference here is seen in a proposal that meets the specified requirement (KPPs, KSAs, AAs) and yet offers additional value that will resonate with the source selection board and technical review committee in a way that makes it clear your company understands the real needs of the mission and the operational environment. To the extent that a proposal provides mission enhancements while meeting the basic requirements, an offering will be in a very strong position, even though it may not be the lowest cost.
Greetings all! discussion tonight on the parallels between Levitt's concept of the whole product model and the strata that the defense department uses to articulate specific requirements for an acquisition program (read: product). First a little tutorial on the latter: The DoD writes system capability requirements in voluminous detail when they publish a request for proposals (RFP), however, when preparing such a document a few select non-negotiable generally quantitative (read: measurable) performance specifications are listed that are considered essential and critical to the operational effectiveness and suitability of the given system. These are known as key performance parameters (KPPs). Examples for an airborne platform might be maximum speed or turn rate, or perhaps radar cross section. A proposal is generally expected to be able to meet these performance standards or be deemed "non-compliant" and essentially disqualified from competition. A softer standard is found in a second list called key system attributes (KSAs). These may often be qualitative in scope and while important, and can be a discriminating weakness if not incorporated or complied with, they are not generally disqualifying if unmet. KSAs are considered implementers or foundations for meeting the performance requirements. They are frequently also quantitative performance requirements that are not quite as critical as KPPs and are listed as a second tier requirement to allow some trade space in system development. The government may be faced with the reality that achieving 100% of the requirements creates a geometric increase in cost as the desired capability end state is approached. To be sure, failure to meet a KSA requirement is considered a significant weakness in a proposal and should be avoided, but is probably not a showstopper. Finally, DoD procurement standards include a tertiary category called additional attributes (AAs).These are simply just what they sound like: additional capabilities that are desired, and will render a proposal weak if not considered, but again, not disqualifying.
With that quick background let's take a look at how these concepts map into the Levitt whole product model. Levitt identifies his own strata of product capabilities beginning with a base article called the generic product. An analogy can be drawn to the government category of KPPs. If KPPs define the core and non-negotiable product baseline, then we can call that the commercial equivalent generic product. In similar fashion, KSAs map into Levitt's definition of the expected product and AAs, the augmented product. Both of these models can be graphically depicted as concentric circles expanding outward from the core product. Levitt includes as his outermost domain the area called potential product. This is where the government would include their desire for a product to demonstrate growth potential. And we will save an in depth discussion of that category for next week. It not only represents an area for incorporating discriminators, but also an avenue to show viable pathways for follow-on development if initial trade offs were made to get a product into the field with some if not all the desired capability.