Product Mastery Now for Product Managers, Leaders, and Innovators

How product managers can make innovation everyone’s job Today we are talking about how we design organizations for innovation. Joining us is Dr. Ben Bensaou. He is Professor of Technology Management and Professor of Asian Business and Comparative Management at INSEAD. He has also served in roles at Harvard, Wharton, and Haas business schools. His research centers on innovation and how organizations innovate. His recent book, Built to Innovate, shares a proven system for building innovation into an organization’s DNA.  Summary of some concepts discussed for product managers [1:49] What research led to the innovation framework you talk about in your book? The research started with my teaching and consulting about 20 years ago. I saw traditional companies transformed to be very innovative. For example, the CEO of a traditional company making fabrics for tire companies transformed his company into an innovative solution and services provider, not only to the auto industry but also to new markets in construction and aerospace. I wanted to share that experience of seeing an innovative engine built from the ground up in a traditional company. [5:24] What are your thoughts on designing innovation into organizations when many business leaders have spent years learning how to perfect execution? There’s nothing wrong with execution; it’s necessary for every organization. However, an execution engine tends to stop innovative behavior. Organizations often rely on specialists in R&D to innovate, but innovation is the responsibility of everyone. Particularly, we tend to ignore the important role of middle managers. Bayer, the pharmaceutical and life sciences company, recognized this role in the strategy they developed to make innovation the responsibility and job of everyone in the organization. They trained senior managers to train middle managers in innovation, and then the middle managers trained their teams. Bayer also provided coaches to train the teams, making it easy for middle managers to engage their teams in innovation. They also incentivized middle managers and teams to increase their innovative capability and contribution. Bayer also created an innovation information system where employees can send their ideas. To prevent the system from getting overloaded, they have local innovation coordinators who read the suggestions and send feedback. They also use a system called WeSolve where anyone in the company can post questions or problems and anyone else in the company can contribute solutions or ideas. More than 40,000 people participated, and surprisingly the people who provide solutions are usually not from the same division as the person who presented the problem. These systems give people permission to innovate and create a culture where anyone can innovate. [16:50] Where should innovation live in an organization? Should you start with an innovation group or push innovation to all employees? In the end, the CEO and board are responsible for innovation, but everyone has a contribution to make. Organizations need an infrastructure and process to coordinate ideas. As a typical example, a subcommittee of the board is responsible for innovation, and they give permission for innovation to the whole organization and convince and train middle managers. Once the middle managers understand the importance of innovation, the organization creates a separate unit of coaches who train and support people in innovation. At least one innovation coach is assigned to each unit. The organization gives the frontline employees time to spend with customers and use the tools they’ve learned from the coaches. In this infrastructure, innovation lives everywhere in the organization. Local coordinators pick up ideas from frontline innovators and have a network to move those ideas to innovation committees that culminate to the committee on the board. [20:25] What are your three processes for innovating? Because the traditional execution engine gets in the way of innovation, you need to create a separate but parallel innovation engine, which includes three processes: creation, integration, and reframing. Creation is how the organization creates new ideas. Frontline people play a major role because they face customers and can detect their needs, demands and problems. Integration connects the innovative ideas throughout the organization into a social network that builds innovation capability. It’s a system that selects and moves ideas to decision makers faster than going through a hierarchy. This system can include innovation ambassadors, local innovation coordinators, and coaches. Reframing is reimagining the strategy of tomorrow, rethinking the strategy of today, and challenging assumptions the company is making about who they are and the value they are creating. [24:24] How can product managers take action to help their organizations be more innovative? Innovation doesn’t have to start at the top of the company. It can start anywhere.  People are very innovative; they create new ideas every day. The problem is often employees don’t have permission to innovate. Middle managers can encourage innovation by creating space and time for people to interact with customers, and they can connect their people who have ideas with other people across the organization. People need three things to be able to innovate: Permission Capability Motivation When someone brings you an idea, say thank you. They’re taking a risk and giving you a gift by telling you their idea. Create an atmosphere where people are excited to innovate. Action Guide: Put the information Ben shared into action now. Click here to download the Action Guide. Useful link: Check out Ben’s book Built to Innovate on BTItheBook.com or on Amazon Innovation Quote “Don’t ask for permission; make others jealous.” – Ben Bensaou  Thanks! Thank you for being an Everyday Innovator and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below. Source

Special Episode From the 2020 Summit This is a special podcast episode, sharing an important discussion from The Everyday Innovator 2020 Summit. The Summit brought together 24 experts who spoke on topics for product managers and product VPs. Many of the topics are truly timeless and this is the second time I’ve shared one publically. Our guest is Ash Maurya. He has been a favorite repeat guest on the podcast and also spoke at our Summit in the Product VP track on the topic of continuous innovation. As this was a Summit presentation, the format of the show notes below are a bit different. BIO: Ash Maurya is the author of two bestselling books, Running Lean and Scaling Lean, and is the creator of the highly popular one-page business modeling tool, “Lean Canvas.” Ash is praised for offering some of the best and most practical advice for entrepreneurs and intrapreneurs all over the world. Driven by the search for better and faster ways for building successful products, Ash has developed a systematic methodology for raising the odds of success built upon Lean Startup, Customer Development, and Bootstrapping techniques. Ash is also a leading business blogger and his posts and advice have been featured in Inc. Magazine, Forbes, and Fortune. He regularly hosts sold-out workshops around the world and serves as a mentor to several accelerators including TechStars, MaRS, Capital Factory, and guest lecturers at several universities including MIT, Harvard, and UT Austin. Ash serves on the advisory board of a number of startups and has consulted to new and established companies. INSIGHT: Love the problem, not your solution. Summary of some concepts discussed for product managers [1:19] What is continuous innovation and why do organizations need it? In the past, innovation happened apart from the core business. Now, the world is moving a lot faster and going to the end-user is more critical than ever. It’s increasingly important to think of innovation not as something that happens in a lab, but as something that happens continuously all the time.   [3:37] What can you tell us about each of your six rules for continuous innovation? Speed of Learning is the New Unfair Advantage: Companies that can out-learn their competition win. When you learn faster than your competition, you can continuously build a product that customers want and prevent others from taking customers away from you. Speed is relative; not all industries have to innovate at the same rate. The Business Model is the Product: We tend to focus on the product, but we need to consider the business model. The invention of a product is only a small part of innovation. The solution—how it gets to market and how it’s used by customers—is key. The Lean Canvas is a tool for mapping out the business model. Tackle Your Riskiest Assumptions First: Start with your riskiest ideas. We want to prioritize efforts on the right problems and not waste resources on the wrong things. Be Customer/Problem Centric: Start with a deep understanding of your customers and their needs and wants. Identifying their desired outcomes and obstacles helps you find problems worth solving. The solution becomes clear from there. Innovation is Evidence-Based: When we’re moving fast, it’s tempting to throw stuff at the wall and see what sticks, but it’s much more effective to move ahead based on evidence. Evidence-based decision making is critical because it’s too risky to go down the wrong rabbit hole. Traction is the Goal: Traction is a measure of creating monetization and value or potential in the business model. Traction, not revenue or profit, is the leading indicator of innovation.   [15:01] What can we do to learn faster how our customers are interacting with our product? Running a product without a metrics dashboard is like getting in a car without being able to see where you’re going. There are many online tools that can help with your metrics dashboard. Metrics should generate useful data and be directly related to the ultimate traction, rather than incentivizing employees to create less traction just to meet the metric.   [19:26] How can the Lean Canvas help us collaborate? The Lean Canvas allows you to clearly and concisely communicate your idea to others so you can get buy-in. It helps you deconstruct an idea, share it with others, and look at it from different perspectives. To use the Lean Canvas with teams, have each person create their own version of the Canvas. Then come back together and share ideas.   [22:43] What’s an example of tackling the riskiest assumptions first? If you’re opening a restaurant, the riskiest assumption is that people will buy your food. First, just test that one assumption, perhaps by opening a food truck and experimenting with different menus, locations, and prices. Build something to test your riskiest assumption and start quickly experimenting. Don’t get distracted by the final solution.   [25:44] What are your favorite tools for finding out the desired outcomes of customers? I like interviews. We have a scripted interview method that’s very directed; we talk about specifics but don’t ask customers about their problems. Interviews can help uncover desired outcomes and any inertia preventing those outcomes. We target people who are trying to get a job done. The goal is to understand the existing state of solutions. My book Running Lean includes an interview script that you can use as a guide.   [29:35] What is the process for an evidence-based approach? Throwing out a bunch of solutions without understanding the problem is not effective. When a solution doesn’t stick, customers don’t tell you why; they disappear because you’ve given them something they don’t want. You can keep changing your product little-by-little, but this just creates a build-trap. Instead, before building, make sure there’s enough evidence of a customer pull. Then, design an experiment. Show a demo to a few customers and get their feedback.   [32:58] What is an example of a traction metric? Figure out what the value-creating behavior is and how you can make that usage metric go up. For a photo-sharing app, we measured how many first-time parents were using it to share pictures of their babies. Airbnb tracks transactions of nights booked.   [39:20] Bonus Question: How can product VPs help their organizations avoid obstacles to continuous innovation and gain traction? Like any shift, the shift to continuous innovation is rocky. There may be tension in the company and unlearning of skills. You must rigorously test because continuous innovation is evidence-driven. You have to get outside the building and talk to customers. Everyone may seem on-board, but old habits kick in. To create transformation, you must find cross-functional teams within the company that already have above-average motivation for continuous innovation. Choose a project that will draw attention to undeniable results, such as bringing in a new revenue stream or entering a new market. Actions are louder than words, and results are louder than actions. People will notice results, and that can trigger the adoption of continuous innovation.   Useful link: www.leanstack.com Thanks! Thank you for being a Product Master and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below. Source

Discovery, Detailing, and Deployment for hardware product management Today we are talking about applying Agile and Lean development practices to product projects that are not purely software-based. Our guest is Brian Cohn, who began his career with roles in optical engineering and mathematics. For the last 10 years, he served as the Lean Product Development Specialist at Danfoss and has recently co-founded Aspire Innovation, a group that applies a business acceleration model to help organizations be more innovative. Summary of some concepts discussed for product managers [5:11] What are the issues with applying Scrum to projects that don’t involve only software? Hardware development is iterative, while software development is incremental. Think about making a wedding cake: If you make it incrementally, you make the first layer the first year and the second layer the second year, building up a full cake. But if you’re trying to sell 1000 cakes a day, you need an iterative process; you build your first whole cake and then iterate repeatedly to make the whole cake better. Scrum works well for software because it’s designed to be incremental—you build one piece of code and then another, building up your software. Scrum is also built around the idea of product owner, someone who prioritizes the future of the product and translates that future to project work. In hardware, you have to develop everything together, and the features that the product owner is focused on may be dissociated from the project work. More disciplines are involved in hardware, so it’s harder to move the work from person to person on the team. Finally, the pace of hardware development is dependent on the supply change, buying components, and getting parts manufactured, and that can take a long time. Because of all these challenges, Scrum doesn’t fit with hardware development. [9:52] How can we apply Agile principles to hardware products? We need to be agile in hardware development because there’s a lot of uncertainty in solving a problem and time boxes are valuable. We start a project with an idea about a problem and a lot of things we don’t know. We have to go from a wild idea to a product concept for how we’re going to manufacture, market, and sell the product. We have to make many decisions, and the decision-making process can go on interminably because everyone wants more information before making decisions. We need a model for decision-making. We use Rapid Learning Cycles to make decisions at the right time—after we have the information but not too late. We need to know what knowledge we should have before making each decision. Then, we put our decision-making into a cadence. For example, we investigate a decision for two weeks and then make the decision. This allows us to learn from each time box and adjust for the next box, so we’re always learning the most valuable things. [15:53] Tell us about your D3 Model for hardware products. Hardware products go through 3 phases: Discovery, Detailing, and Deployment. In discovery, we start with a core value proposition and turn it into concepts for the product, including manufacturing, assembling, marketing, and launch. In detailing, we use engineering to move from concepts to form and function and design the manufacturing system, assembly system, and plan for selling the product. In deployment, we work on commercialization, scaling production, and sales, with the goal of releasing a product that’s easy and inexpensive to manufacture and that customers are ready to buy. [17:20] Discovery We move from an idea on the back of a napkin to well-formulated concepts for the product, process, and launch. We weigh the decisions we want to make and the gaps in knowledge we need to close to make those decisions. We have a workshop called the Market Requirements Event, where we bring people together to discuss the product requirements. We spend time framing the problem. It’s important to diverge and think about many ideas before converging on the problem definition. In workshops, we find people are often not aligned on what the problem is, and they bring important perspectives so we can all get alignment on the customer and problem. [21:58] Detailing We pull the whole product together, using iterations of increasing maturity. We think about the first prototype, the questions we need to answer, and how many iterations we’ll need before getting a design that meets all the requirements we can reasonably test with prototypes. We iterate the whole product in time-boxed cycles that can take months to a year, while also keeping a shorter time cadence to move forward. Back to the wedding cake example, we’re refining our recipe and also thinking about what machines we could use to make the cake. We improve the product and scale manufacturing. [26:07] Deployment We demonstrate how to replicate the product. At this point, there’s less uncertainty and we use a more conventional project management method. We don’t use iterations, although there’s still value in timeboxing. This phase includes waiting for tools to be manufactured and parts to come from the supply chain. Action Guide: Put the information Brian shared into action now. Click here to download the Action Guide. Useful links: Connect with Brian on LinkedIn Visit the Aspire Innovation website Learn more about product practices and process from episode 340 with Steve Stucky Learn more about Rapid Learning Cycles from episode 250 with Katherine Radeka Innovation Quote “Chance favors the prepared mind.” – Louis Pasteur Thanks! Thank you for being an Everyday Innovator and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below. Source

Combatting the forces that pull customers away from your product, for product managers Today we are talking about a key challenge with product innovation—the change innovation necessitates. If there is no change, there is no innovation. Helping us understand change and how to properly navigate it in an organization is David Schonthal. He is an award-winning Professor of Innovation & Entrepreneurship at the Kellogg School of Management where he teaches courses on new venture creation, design thinking, innovation and creativity. He has also been a practitioner of entrepreneurship and innovation for over 20 years, including a decade working at design firm IDEO. Also, one of his early jobs was product manager at Arthur Andersen. Summary of some concepts discussed for product managers [2:39] Out of your many innovation projects, what’s one you’ve found especially interesting? I’m particularly interested in healthcare products because they’re complicated and their positive impact is unambiguous. One program, related to diabetes management, is a great example of design thinking and human-centered design. We recognized people tend to think about chronic diseases at the macro and functional level, e.g., blood sugar levels and HbA1C. When we used design thinking, we realized chronic disease is as much a social and emotional condition as it is a functional condition. The diabetes management programs we designed were about helping the entire person, not just managing the metrics associated with their disease. We aimed to help individuals achieve their goals in life. [5:40] Where did the title for your new book, The Human Element, come from? My co-author, Kellogg psychologist Loran Nordgren, and I wondered why some good ideas fail to get traction in the market. Often, innovators and marketers focus on the product, saying it is designed or priced wrong, but we found the human side of the equation often goes unnoticed. We don’t consider the reaction of individuals whom you are expecting to change to adopt your product. Our book focuses on the human element—the ability for humans to adopt the products we’re creating to benefit them. [8:14] What do you think about the tension in organizations between maximizing operations, which encourages consistency, and innovation, which brings change? In established organizations, there’s always the tension between running the core business efficiently and looking to future horizons for growth. Organizations tend to be optimized for the first part, not the second part. To manage both well, organizations need two speeds or modes, one speed focused on creating efficiency and repeatable, scalable processes, and one speed with an appetite for taking risks and a growth mindset. Organizations often say they want to innovate and take risks, but when the core business needs attention, they lose focus on innovation, leaving it without resources or attention. Managing this tension well has to start at the top of the organization, with leaders recognizing the need for these two modes of function. [13:02] Tell us about your framework for addressing change. We talk about the forces of fuel and friction. Fuel is what draws customers to a product, and it’s where most product managers and developers spend their time. It includes all the features and benefits that make a product desirable, the problem trying to be solved by the new innovation, marketing collateral, and all the tools in product developers and innovators’ toolboxes. Friction is the headwinds that stand in the way of customers’ implementing the change. We identify four headwinds: Inertia—the resistance to move away from the status quo Effort—the energy required to make a change; this can be physical or economic effort or ambiguity about how it will work Emotion—the doubt, anxiety, or concern a change raises in people’s minds Reactance—people’s aversion to being changed, particularly when they feel the change is being imposed upon them [19:12] Can you take us through an example of working through these friction forces? I worked with a customer furniture manufacturer who makes sofas. The two common detractors for people interested in customer furniture are the expense and the long time it takes to get a piece. This company figured out a way to enable people to design custom sofas and get them delivered in 10 weeks or less, and the cost was 70% less than other custom furniture. It was an overwhelming value proposition, and they got a ton of attention from their target market. A lot of people came into their stores or went online and designed the perfect sofa for themselves. Then, just before they were about to purchase it, they walked away. The company wondered what was going on. Clearly, their value proposition attracted people and kept them engaged in the product enough to spend time designing the perfect piece. They learned through interviews that what stood in the way of their purchase was not knowing what they would do with their existing sofa. It was too much cognitive work to figure it out, so they decided to stick with their existing sofa. The company began removing the old sofas when they delivered the new sofas, and their conversion rate increased dramatically. It had nothing to do with the product; it had everything to do with addressing the source of friction. In the Jobs-to-be-Done theory, the focus is the progress your customers are trying to make. The product is an ingredient in that progress, but it isn’t the progress itself. In this example, the progress the customers were trying to make was redecorating or refreshing their living room. When you focus on that progress, you realize of course it includes removing the old sofa. We tend to be fixated on the product as the catalyst for change. When we understand the progress someone is trying to make, it completely changes our relationship to how we fit into that change. Action Guide: Put the information David shared into action now. Click here to download the Action Guide. Useful links: Pre-order The Human Element at HumanElementBook.com or on Amazon Follow David and Loran Nordgren at the Kellogg School of Management Listen to TEI 335 with on Jobs-to-be-Done with Bob Moesta Innovation Quote “Chance favors the prepared mind.” – Louis Pasteur  Thanks! Thank you for being an Everyday Innovator and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below. Source

What product managers might not know about insights Today we are talking about markets and customer insights. Great product managers understand their customers and know how to gain insights about their unmet needs. Darshan Mehta is our guest to help us explore this topic. He is the Founder of iResearch.com, an insights platform to quickly and affordably extract insights from consumers worldwide, and ConnectQik.com, an app for instant connections and engaging interactions.   In addition he has taught at The George Washington University in Washington D.C., at the University of Gothenburg in Sweden, and at other universities. Summary of some concepts discussed for product managers [2:12] How can we make a human connection between our products and customers? In the past, innovation was more product-focused. Now, people aren’t buying products; they’re buying experiences. The focus of your innovation should be humanizing your product. [4:45] What are customer insights? We often think of insights as facts or observations, but they’re actually a combination of trends in society, emotions, triggers, and motivations. Comedians do an excellent job finding insights. They take an observation and combine it with other elements of human nature and trends to make you say, “That is so funny and so true.” [8:16] How do we get customer insights? The best way to tap into insights is to have conversations. For example, I did a focus group for a clothing retailer in Washington, DC, and a simple insight changed the store’s trajectory completely. They talked to shoppers, most of whom were women, and found these shoppers dropped off their kids in the morning at 9am and would have gone to the store but didn’t want to wait until it opened at 10am. The clothing store started opening at 9:30am, which boosted sales tremendously. [10:31] What’s the importance of an emotional connection? Most successful companies are doing at least one of three things: saving you time, saving you money, or making it easier. If you can do any one of those, your chances of being successful are pretty good. If you can achieve all three, you 3x your chances. If you can achieve all three plus evoke an emotional connection, that 3x is multiplied even more. When people have a positive emotional experience with your product, they’re not only delighted; they also share on social media and promote your product. [14:58] Are there any other ways to get customer insights? With social media, you’re going to get feedback from your customers even if you’re not seeking it. They’ll post reviews and comments. Your choice is to take in that feedback now or later. You’re better off getting it sooner. Keep getting feedback and be prepared that it isn’t all going to be good. You have to listen to the negative feedback because it gives you opportunities for innovation and insights to improve your product or service. Don’t just innovate your product. Also innovate to make your existing product obsolete. You are your own worst competitor. You can’t control your competitors, but you can control your existing product and transition to a new product so you have a sustained future. It can be hard to take feedback when you’re in love with your solution. You want your product to do well, but part of that is tough love. Be open to criticism and set your emotions aside. The people giving negative feedback care enough about your product to want to complain about it. They have the potential to become your raving fans if you listen to what they’re saying. They may be giving you an entry into a great innovation. [22:53] What’s an example of how you’ve found customer insights? We did a project for the State Department, which was looking to hire more minorities in the State Department of Foreign Services. We decided to do a focus group online, which helped people set aside visual bias and give honest feedback. When you have conversations like this, tap into what people are thinking and feeling. You’ve probably been a cocktail party where you’re talking to three or four people and you get on a topic you’re all interested in, and before you know it you’re feeding off each other and getting deeper and deeper into the topic. In conversations like this, you tap into thoughts and emotions you never thought about before and learn a lot about yourself and others. [25:01] How did you set up the focus group for the State Department? First, we invited potential attendees to do a screening survey to see if they fit the right demographics and were in the market for a job. We invited roughly 15 people to participate. This is an ideal number because 8-12 will show up and more than 15 will be too many for a deep discussion. We ran the discussion as an online chat session, so everyone could respond to the questions at the same time and respond to others’ answers. The chat format gave us a transcript full of insights and caused people to better articulate their thoughts. During the discussion, we showed the people ads and asked which ones appealed to them and whether they identified with the stories of people in the ads. We tapped into how people think and feel, which allowed us to better understand their motivators and triggers. From the discussion, we gained useful insights to use in a quantitative survey later to get even more insights. Action Guide: Put the information Darshan shared into action now. Click here to download the Action Guide. Useful link: Learn more about Darshan’s work at iResearch.com Innovation Quote “Today’s insights are tomorrow’s facts.” – Darshan Mehta  Thanks! Thank you for being an Everyday Innovator and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below. Source

What one product manager learned about understanding customers Today we are talking about the journey from software developer to product manager and some key challenges encountered as a product manager. This journey was made by our guest, Liron Lifshitz-Yadin. She is the VP of Product at Tel Aviv-based Lightrun. She enjoys being a mentor to new product managers and has gained vast product management experience. Summary of some concepts discussed for product managers [1:41] Please tell us about your journey from software developer to product manager. I started as a software developer in an intelligence unit in the Israeli army. The army was a very collaborative, connected environment, both empowering and humbling. I did software development for many years but eventually realized I wanted to work more with people and be engaged with customers and the community. I slowly transitioned from development to innovation teams. I saw the beauty of focusing on the problem space and moved to the entrepreneurial space and then to product management. [8:02] What took you from developing code to wanting to understand customers? It was a process as I matured, but one important moment was when I was working at an innovative Israeli startup. I worked there for two and a half years until it closed. We were trying to reinvent the mobile phone, and it didn’t work, but we had amazing people, and it was one of the most hyped-up companies in the country. I was privileged to work there. On the R&D team, we felt like we had a lot of questions about how the product would be validated in the market, where it is going, and why we were doing what we were doing. I wanted to better understand how we did research and how customers would approach our product. I wanted to do innovation, so the next job I took was on an innovation team. [10:57] On the innovation team, where did you get ideas? We tried a lot of products and sent them to conferences. Our customers validated all our concepts, and were in close contact with specific customers. [13:58] How do you get information from customers? The most important way to get ideas is talking to customers. You need to understand their underlying needs, their workflows, and the tools they use. Know how they do things before offering a solution. The specific method of talking with customer varies by company and includes: Phone calls or web meetings Slack channel: At a previous company I worked at, we had a Slack channel with our customers to interact daily, and they felt very free to state observations about our products. Customer interviews Sales calls: In other companies, I’ve gone on sales calls as a product manager, to hear from existing customers and prospects. Design partners: We work with customers as we’re developing products, and they become our design partners. This open relationship gives us tons of ideas. [17:21] Sometimes customers share their own solutions that might not be best way for solving their problems. How do you approach that? Often, you can solve a customer’s pain by doing something very simple. Build in stages—deliver a quick win for the customers, then take time to explore the best solution. You will have to make trade-offs between requests from customers, executives, developers, and other stakeholders. Sometimes you may have to make the tough decision to not pursue a feature customers are asking for because it doesn’t really solve their problems in the best way. [24:23] How do you prioritize ideas and features? We build our strategic roadmap each year and revisit it every six months, making sure it’s aligned with the company’s goals. Then we do a top-down analysis to lay out how we’ll accomplish our goals. Include all your stakeholders—management, executives, sales, and customer feedback. The roadmap will help you make sure every feature aligns with the basic goal of the company. However, you’ll still have customers or management suggesting new features that are off the roadmap. Evaluate them using data, customer feedback, and a transparent conversation throughout your company. You can also use frameworks and models like Value vs. Effort, the Kano Model, the RICE model (reach, impact, confidence, effort), or your own scoring system, which can be validated with surveys, customer interviews, and NPR scores. If an executive makes a request that isn’t on the roadmap, be prepared to discuss their thought process and show your research, data, and validation. Show them if their goals clash with the company goals and what the company will lose by fulfilling their request. If you choose to follow their request, have a clear plan for how you’ll validate it and minimize loss. If you’re saying yes to some features you’re saying no to others. Action Guide: Put the information Liron shared into action now. Click here to download the Action Guide. Useful link: Connect with Liron on LinkedIn Innovation Quote “Any damn fool can make something complex, it takes a genius to make something simple.” – Pete Seeger, Product Director at Docusign Thanks! Thank you for being an Everyday Innovator and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below. Source

What product managers need to know about positioning products to create value Today we are talking about how market segmentation is done and how it impacts product pricing. To help us with the details, a product strategy and pricing expert is joining us, Dan Balcauski. Dan is the founder of Product Tranquility, a consulting firm based in Austin, Texas. He has 15 years of experience in managing multiple products throughout different life cycles, from start-ups to publicly traded multinational enterprises. Summary of some concepts discussed for product managers [2:05] What is product strategy? Product strategy is the art and science of understanding customer problems and aligning your organization around creating desirable outcomes for customers and your business. Problem management is more important than product management for product managers. Be obsessed about your customers’ problems. Strategy defines a current situation, an assessment of that situation, and a path forward to overcome the challenges you face. Product strategy is about orienting the company toward the problems you’ll solve and how solving those problems for customers will positively impact the business. [4:07] How does market segmentation influence product strategy? In customer research, we’re trying to understand what problems our customers face and how much they value solutions to those problems. Imagine you’re a general trying to guide your troops. You have a landscape of different hills you could traverse, and you need to understand the possible advantages, disadvantages, and constraints of taking any particular hill. In market segmentation, you’re trying to understand the opportunity, challenges, and advantages of taking any particular position in the market. Once you’ve outlined the market landscape, product strategy is the process of deciding where you can compete and win. [6:34] What’s an example of a company that does market segmentation well? Tesla’s first car was the Tesla Roadster at a price point of $250,000. Eventually, Tesla created the Model S at a slightly more reasonable $80,000, and now they have the Model 3 at $35,000. This is a perfect example of understanding customer segments and aligning product strategy to sequentially attack those different market segments. Elon Musk understood the electric motor has a distinct advantage over combustion engine vehicles: It can deliver power directly to the wheels. The Roadster could easily beat a Porsche or Ferrari in speed. Tesla found a group of people who were willing to pay for that. Their market segment for the Roadster was very high-end people who wanted their 0-60 speed to be the best in the world. These customers didn’t care as much about an established, long-range, national charging network, which was not in place when the Roadster came out. Elon balanced the segment he went after with the value drivers of that segment. He aligned the benefits of the product with the customers who were willing to pay for those benefits and aligned the capabilities of the company to execute his strategy. [10:07] Where do we start with market segmentation? Start at the top leadership of your company and make sure your executives understand segmentation is important; many leaders think they’re going to capture the entire market. Start early. Proper customer segmentation helps every part of the organization. It’s unsuccessful to build a product without a segment in mind and hand it off to marketing and tell them to position it for a particular segment. Understanding whom you are building for makes the prioritization of features much easier as you’re building. When you’re segmenting, you’re creating groups that have homogenous customer needs within a segment but heterogeneous customer needs between segments, while balancing the ability of the company to manage all those diverse interests. [13:34] Tell us about methods for segmentation. There are two methods we use: a priori (before) and post-hoc (after). First, we use a priori because it allows us to have an easy conversation about segmentation and leverages expertise of those on the team. A priori segmentation uses existing research or segmentation schemes like customer geography, company size, and industry vertical. One advantage of this method is it groups customers who are alike. It is fast and cheap because it uses publicly available or easily accessibly data. One drawback is that it doesn’t help you understand why customers buy certain benefits; also, existing segmentation schemes may not fit your exact business context or purpose. This method is useful for surfacing assumptions and areas of disagreement or risk. Next, we do post hoc segmentation. We dig into the underlying customer value drivers. We start with the customers’ view of the world to understand what drives them to make purchasing and usage decisions. We use tools like Jobs-to-be-Done, external market research, and customer interviews, and do a quantitative assessment based on research and statistical analysis. We arrive at personas based on how customers look at value. This approach is better than a priori for a particular business outcome because it’s contextualized to how the segments will be used. However, it is more costly and time-consuming and may require special statistical tools. We approach segmentation by focusing on common problems customers need solved, and less on the demographics of each segment. [20:19] Tell us about the data you use in segmentation. I categorize data as general or product-specific and observable or unobservable. General data don’t change based on the product; e.g., company size. Product-specific data do change; e.g., the target end user. Observable data include characteristics like company size and geography. Unobservable data come from interviews and help you understand situations, context, motivations, and relevant competitive alternatives. A priori segmentation uses observable data, while post hoc segmentation uncovers deeper unobservable data. [27:12] How does segmentation impact pricing? Price defines how a buyer and seller divide value in a transaction, so all pricing conversations center on an understanding of value. However, as we saw in the Tesla example, different segments perceive value differently. They have different relevant competitive alternatives, which are important because the only value you can price is differentiation value. Pricing also includes packaging. Good packaging reduces sales friction, decreases sales cycles, and makes it easier for customers to understand your product and self-select the option that’s best for them. Packaging needs to be aligned with segments as well. [28:39] What do you mean by packaging? Packaging doesn’t have to be a box. Packaging is putting together features in a way that resonates with your audience and doesn’t make them choose from a thousand items. For example, most SaaS tools have good, better, and best packages. Don’t overwhelm customers with value or they’ll leave. Give them a set of choices—not too many and not just one. Understanding your segments first really assists packaging. [30:43] Why do we need packaging? The goal is making the company’s go-to-market motion as efficient as possible by reducing drag on marketing, sales, and customers. You want to maximize how fast customers grasp the idea that your product provides value for them. LinkedIn packages well. They provide a basic social network for business, but they also have LinkedIn Premium Business, Recruiter, Job Seeker, and Sales Navigator. They’ve identified the different segments that use LinkedIn, and made customers’ buying choices easy. Action Guide: Put the information Dan shared into action now. Click here to download the Action Guide. Useful links: Connect with Dan on LinkedIn Check out Dan’s website, ProductTranquility.com Learn more about segmentation from Dan’s article Innovation Quote “If you’re not thinking segments, you’re not thinking.” – Theodore “Ted” Levitt Thanks! Thank you for being an Everyday Innovator and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below. Source

Create change as a storyteller of the future – for product managers Today we are talking about how organizations can better support innovators and improve their innovation capability, taking a systems perspective. The work product managers and leaders do is the life blood of organizations, creating innovations that drive revenue and contribute to a sustainable organization. To help us do this even better, we have an expert guest, Dan McClure.  He is a systems strategist and agile product manager who helps organizations envision and create high impact innovations. He has over 30 years of hands-on experience shaping systems-level initiatives that combine business and technology. Summary of some concepts discussed for product managers [3:5] You’re an innovation strategist and architect. What do you mean by that? I strategize about a solution in an interconnected system. Instead of improving just one piece of the current system, I think about reinventing the entire system. For example, instead of improving a taxi service by putting charge card capabilities in the cabs, innovation strategists reimagined the entire industry and created Uber and Lyft, changing not just one piece but all the pieces. An innovation strategist sees a big, complex problem and makes all the changes necessary to imagine an entirely new way of working. [6:40] Why do so many organizations struggle to create impactful innovation that matters? The challenge is usually not getting innovation done but making the innovation big enough to matter strategically and over the long-term for the company. It’s difficult to get the entire organization to embrace a big, complex change. Innovators need to imagine how to create big change that works. [9:05] What needs to change in the product leader role to support systems innovation? A lot of people think that product work means identifying a user, selecting a user need, and delighting the customer by creating an effective product that satisfies the need. This model helps you focus on what you’re trying to do and whom you’re trying to do it for, but imagine a more complex real-life situation: You’re planning a holiday party for all your extended family. You have to satisfy every family member, and there’s no single user. You have to design that party not to delight one person but to provide value to satisfy the needs of everyone. We call this “everyone needs to get a pony.” There has to be a solution in which trade-offs are recognized and balanced and all the pieces come together so everyone walks away satisfied. In the business world, similar challenges occur. Imagine you need to integrate a new technology into a hospital’s operation. You need to create value for the administrators, doctors, nurses, vendors, and trainers. The system solution is not about delighting one person. It’s about seeing how all the pieces fit together and how we make a whole, functioning solution that is complete, sustainable, and scalable. People are an integral part of these types of systems, and these types of problems are complex and messy. Systems thinkers have called these “wicked problems,” which sound impossible to solve, but the systems tools are also incredibly powerful, and that’s exciting. [14:40] What kind of work does a leader do to help an organization be successful in system innovation? We call this role of system innovation leader a choreographer. Choreographers see the whole problem, not just one stakeholder or function but the entire interconnected web of challenges and opportunities. Next, they imagine a future system that’s better than the existing system. In the past, many innovators would see the whole problem and start chipping away at individual pieces. That doesn’t necessarily lead to a future system that’s better. A choreographer imagines an entirely different system where all the pieces fit together in a new way. Choreographers are centipede-shaped—they have many legs in lots of different areas of specialty that often don’t relate to one another. Because they can see across many domains, they can work with many different types of users. They tend to be boundary-breakers and are often seen as rebels within traditional companies. Finally, choreographers are great storytellers. They help people imagine a new future. [18:57] Is the choreographer role usually filled by an individual or a team? Choreographers often come in pairs. One is a visionary who imagines the future, and the other is more practical and shows how to get to the future. [21:42] Some product managers see that their industry is headed toward disruption; they’re concerned with what the future might bring; and they have some ideas about what to do. What should they do to get their organization to pay attention to the problem? First, find your natural allies—people who resonate with the story and bring the skills and capabilities you need. Find a choreographer or realize you can be that person yourself. Choreographers tell stories. Rabble rousers march into their boss’s office, say the world is coming to an end, and march out. That doesn’t move people forward. System innovators show the problem and how ugly it is and then present a vision of how things could be. They imagine the future and that becomes the path forward. [26:06] How do we deal with organizational resistance to change? The “frozen middle” refers to middle management who is very dedicated to preserving the systems of the status quo. You’re not going to persuade someone whose job is defending the status quo to embrace the level of change you want. You may need to work around those people instead of making them supporters of the change. Don’t try to change everything across the entire organization all at once. Instead, look for a vertical slice—a senior executive, some middle managers, and people on the ground who all want to take the adventure of creating a new slice of the system. Execute a portion of the total vision, moving you in the right direction and answering key questions like, Is there really a market? Will this really work? How will these people collaborate? This method positions you to make adaptive choices that move you toward the future. Action Guide: Put the information Dan shared into action now. Click here to download the Action Guide. Useful link: Learn more about system innovation at InnovationEcosystem.com Innovation Quote “Make no little plans; they have no magic to stir men’s blood and presumably will not be realized. Make big plans; aim high in the hope and work, remembering that a noble, logical diagram once recorded will never die.”  - Daniel Burnham, 19th century innovation architect Thanks! Thank you for being an Everyday Innovator and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below. Source

Special Episode From the 2020 Summit This is a special podcast episode, sharing an important discussion from The Everyday Innovator 2020 Summit. Two weeks ago Grant Hunter discussed what is product management. I am sharing this episode now because Steve Johnson, who is also a business partner with Grant, did a masterful job at the Summit, describing the real nature of product management.  As this was a Summit presentation, the format of the show notes below are a bit different. BIO: Steve Johnson is an author, speaker, and transformation coach on product methods from idea to market. His approach is based on the belief that minimal process and simple templates result in a nimble product team. Steve has been working within the high-technology arena since 1981 with experience in technical, sales, and marketing management positions at companies specializing in enterprise and desktop software. His market and technical savvy allowed him to rise rapidly through the ranks from product manager to the executive suite. A founding instructor at Pragmatic Marketing and product coach with Under10, Steve has been a long-time advocate for product management, serving as an advisor to a number of technical product organizations and industry associations. INSIGHT: As many as 50% of professionals (of any kind) cannot clearly state what is and is not their role and how they contribute to the success of the company. If one team doesn’t do its job, other teams must fill the void. Just as you never want your goalie to be your top scorer, you want each team member focused on their primary job. Use the tool in this presentation to help clarify who does what and how each group will be held accountable. COMPANION ARTICLE: Steve’s graphical framework and article with more details on this topic are available here.   Summary of some concepts discussed for product managers [0:55] What is product management? Product managers often spend time putting out other people’s fires rather than putting out products. We wonder if we’ve planned the right products. Our titles are a mess—what one company calls a product manager, another calls a program manager or a product marketing manager. We are involved in too many activities. [3:10] Peter Drucker said, “In a well-run organization each role has a single orientation. They either support customers…or they support the market.” Of the activities that support the market, they focus on either problems or solutions. The activities that support customers focus on delivery. And some of the activities focus on what we’ll offer in the future, while some focus on what we’re offering now. [4:34] Each department has a different goal. Development and engineering focus on building solutions for the future for the market. Marketing focuses on the solutions we have now for the market. Salespeople deliver the solutions we have now to the individual customers. [5:36] Product is responsible for understanding both the market and the market’s problems, both now and in the future. Product management is about identifying problems in the market that we can solve in the future with new products. Product marketing is about identifying problems in the market that current products can solve. [7:56] Win-loss analysis is a useful tool for finding problems in how we sell, market, and deliver. [9:53] There are three roles within product: product strategy, product planning, and product growth. Product strategy is led by the product manager and focuses on products to create in the future. Product planning is led by the product owner and focuses on products to build next. Product growth is led by the product marketer and focuses on products we have now. Many product managers are doing things they should not be doing; they have stopped being product managers and are now development managers. Product management should not be a support role. Product management should focus on strategy, planning, and growth. [13:32] Write down all the activities you currently expect from your product team. Then cross out those related to single customers. Prioritize the ones that are left—those related to market problems. Those activities help us support the products we have now and define the products we should build next and in the future. [14:40] Should we be problem managers? Some people think product managers need to know everything about the product. Maybe we should talk about problem management rather than product management. Bonus Q&A [18:16] How can product managers reduce the time and energy they spend putting out other people’s fires? Product managers spend 47% of their time on unplanned activities. Imagine the increase in productivity if we could focus just 10-20% more time on the actual role rather than firefighting. Years ago, I declared Thursday to be International Productivity Day for product management and product marketing. I encourage every product manager and marketer to work from home on Thursday to get more work done. [21:17] What are some tips for helping us know we are on the right track when planning products to build? Research is key. Once you have a plan, engage with customers about how that plan would solve problems for them. I’ve always had a customer advisory board—three to five users whom I could share my secrets with confidentially. Having continuous feedback from the market is critical to knowing that you’re planning the right product. [28:07] What do product managers need to focus on? Product managers shouldn’t be doing product support. They should be doing activities that require strategy. It’s easy to get pulled in lots of directions and not do the work we’re hired for. Our help in other areas should be the exception, not the rule. Product managers need to be clear that they’re the expert on the problem. Let the solution people find solutions, and let the delivery people deliver. [43:07] Tell us more about, “One sentence from an executive can mean a month of time for the product team.” I was at a company where the president believed development was terrible. After talking with development, I found out that senior leadership was dumping them with way too many new ideas every week. Development had decided to not work on any new idea until it had gone through a few senior leadership meetings. I told senior leadership to bring their new ideas to me first. I prioritized the ideas and put them on the roadmap so that development could be the factory it needed to be. Ideas need to be vetted so that we’re not wasting Development’s time.   Useful links: Under 10 Consulting Steve Johnson’s and Grant Hunter’s free community of Product Growth Leaders Steve’s framework for problem manager Thanks! Thank you for being a Product Master and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below. Source

Prepare for the unexpected as a product manager Today we are talking about change. Innovation itself means making change happen. Changes also come from external sources, with the COVID pandemic being an example of a huge cause of change. Our guest, Jonathan Brill, is here to tell us how to survive through and profit from radical change. He was the futurist at HP, making strategy recommendations, and continues to help organizations prepare for the impacts the future brings. He also has written about the framework he uses in his book Rogue Waves. Summary of some concepts discussed for product managers 5:17] What are business schools not teaching about strategy? Business schools teach people to use a formulaic recipe to solve problems, but a recipe only works if the environment stays the same. A lot of business schools teach tools like Six Sigma or Extreme Programming; the founders of those frameworks understood a problem and created a recipe to solve it, but when a disruptive event like COVID, a financial crisis, or a new technology happens, the recipe doesn’t work anymore. I call those disruptive events rogue waves; unmanageable, huge waves that pop up out of nowhere because multiple, individually manageable waves combine in the same time and place. When that happens, your recipe isn’t going to help you unless you know how to cook. To innovate in times of radical change, you need to understand three things: awareness to identify rogues waves coming; behavior change to prepare people to respond to the unexpected; and culture change to design processes and incentives to exploit change. [9:02] Tell us more about Awareness. Awareness means thinking about the social, economic, and technological changes that will overlap to create rogue waves, impacting your organization. Think about what could impact your financial, operational, or strategic performance or your external environment (the four foes). Product managers tend to focus on financial and operational impacts, but strategic and environmental issues are far more likely to occur. [13:50] As an organization, how do we become aware of the trends that are shaping the future? We need a culture shift. We make assumptions about what the future will look like based on the past, but it’s unlikely the low-volatility environment we have now will continue. We can’t assume our cookbooks will still work. To prepare for a changing future, consider having a future unit in your organization, like we have at HP. In the future unit, we look at the social, economic, and technological changes and what they mean across our functions. We report our findings annually to the C-suite and look at risks associated with the four foes (financial, operational, external, and strategic). As a result, we were prepared to respond to the rogue wave of the pandemic and HP’s revenue and earnings were stable over 2020. [17:50] How does recognizing trends create a catalyst for new opportunities? Recognizing trends not only helps us prepare for rogue waves; it also helps us find and exploit new opportunities. As an example, at HP we use microfluidics, moving very small dots of liquid on a page to make inkjet prints, a technology relevant for disease diagnosis. We had identified this application as an opportunity, and we knew a pandemic would be an accelerant. Just before COVID hit, we had funded a business unit that develops technologies for pandemics and medical issues. To find opportunities, you can look internally at threats associated with the four foes, and externally at threats your customers are facing. The more you can alleviate your customers’ pain, the higher the value you’re creating for them. We can apply some rules from Game Theory to innovation. First, make a dynamic threat into a static threat. This is what insurance does. I had two grass fires at the bottom of my hill, so the threat of my house catching fire is incredibly dynamic, but I pay $99 a month to turn that into a static threat. Move a threat from symmetric to asymmetric or vice versa. In 2011, a nuclear power plant meltdown impacted Toyota’s supply chains and production for months. They added a 6-month buffer of semiconductors to their supply chain, and in 2016 during the Taiwan earthquake and again in 2020 during COVID they rolled right through the threats. Move threats from synchronous to asynchronous. The goal is to make the threat hit you asynchronously, so you have more time to respond. Finally, move threats from permanent to temporary. Truly disruptive companies like Amazon, Facebook, Uber, and Airbnb have flipped all four of these switches. [24:12] What are ten major trends that may change the world in the next couple of years? The populations of the top 20 economies around the world, including the U.S., are aging. Although we’re getting richer, we may not have the labor to support increased consumption. The Data Economy has enabled companies like Airbnb and Uber, but often we may be extracting value rather than creating value. Automation saves money but decreases the cost of the labor. China trades with more countries than anyone else and is becoming a major innovation leader. Emerging technologies like AI and the Internet of Things have a social impact that must be managed and balanced. Faster innovation means the value of innovation decreases if you can’t capture it immediately. Disruptive innovation is more challenging when the value of innovation drops quickly. With new technologies, we must have a conversation about digital trust and cyber crime. We need to consider a new social contract, defining rights and regulations related to digital technology and the consolidation of wealth. You don’t need to focus on any one of these trends, but consider what will happen if multiple trends converge to create a big impact. Action Guide: Put the information Jonathan shared into action now. Click here to download the Action Guide. Useful links: Learn more on Jonathan’s website Check out Rogue Waves on Amazon Innovation Quote “If I had to pick one piece of advice, it would be to understand the game you’re playing before you choose your strategy.” – Jonathan Brill  Thanks! Thank you for being an Everyday Innovator and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below. Source