Many Business People Eye Away from Uncertainty

Editor’s note: The is an edited version of an older post.

Learning about all the frameworks in an MBA education and dealing with all the business cases leads to a situation where business people might feel overconfident in understanding what is going on in the world. More than that: A lot of managers claim to know better and to have a more strategic view than the product managers.

At the same time, the product manager is forced to justify his/her proposal in a situation where proof of evidence is simply not existing. And not only that: Many assumptions are being made. If you forced design thinkers to prove every single of those assumptions, nothing will ever really happen. It is all about intuition and iteration with real customers. It is about dealing with uncertainty. Really dealing with uncertainty – not just pretending to do so.

“The Designful Company” is a great book. It also describes the situation of the earth not being entirely discovered. Maps would only cover part of the globe, many white areas are still left. There are some people who are attracted by those and who are willing to “fight the dragons“. And others shy away.

Digital has created even more white spaces than ever before. The world is full of new opportunities. So why do many business people don´t conquer them? Well, it is because of the uncertainty they would have to admit to being existent.

If you have an idea about your target market and a top-level understanding of what product you want to build you still have the challenge to build it. Building it from scratch is hard. You can copy cat similar products or you can just tweak your existing UI – both feel more comfortable than jumping into the cold water.

And now imagine the product visionary coming in with her/his ideas. Not using what is out there already but trying to build new solutions to existing problems. And now try to figure out your own emotions in such a situation. You don´t understand the solution, it is different from what you have experienced before. Would you leave your framework castle to deal with it or shoot it down from behind your safe (business) walls? Up to you to decide!

Book cover “The Designful Company”

Thinking business – Why it is difficult for product managers

Editor’s note: This is a refresh of an older post from 2013.

Thinking business is a challenge for product leaders. The illustration below shows us why.

Translation from business to product - graphic

Why do founder CEOs with strong product management skills have difficulties when their companies need to scale? Why are product leaders often perceived as the guys who don’t understand “business”? Why is it often so frustrating to manage stakeholders if you are a product manager?

I have asked myself this type of questions pretty often. Actually, at times I felt so far away from business that I was proud of being an idealistic advocate of our users. I found excitement in challenging the business colleagues by presuming I had the better (because of my arguments being user focused) arguments in discussions. And yes, it is true that there are many articles about this topic. One of my employees pretty often asked me to be less “ideologic.” My strategy papers etc. were often perceived as a kind of “bible”. Personally, I believe this has been and still is a defensive move of the function product.

Let´s try to understand the different historical phases of product management better.

TACTICAL MARKETING – Phase I

“Product” used to simply be one of the four P’s in the marketing mix. Product managers got a list of features they had to build and to release. That was all. Nowadays, the solutions have become more complex than ever. Not only technically. Also, customers are expecting solutions tailored to their needs. 

STRATEGIC MARKETING – Phase II

Marketing became more and more philosophy for companies to be truly consumer-centric. It is the moment where marketing started to ask for seats at the executive table.

R&D COMPLEXITY – Phase III

Latest with the arrival of digital, products became too complex to be built based on a top-down specification. The introduction of agile methodologies changed the way R&D needed to be led.

STRATEGIC PRODUCT MANAGEMENT – Phase IV

With all the agile teams led by product managers, a new level of organizational challenge arrived: How to make sure all teams are working towards the same goal? Thinking business became increasingly important.

Traditional general managers often fail to manage R&D because they are not seasoned product leaders. They need “help” in steering those teams. Please also see the following page if you want to read more: Leading product companies without product background. The only way to inspire those teams is to have a clear product vision instead of asking for simple features to be built. There is a translation needed. Otherwise, there will be no real link between general management and R&D and the company will not be successful.

So, if you experience product leaders who are not embracing your corporate strategy, this might be due to the fact that she/he is not willing and/or able to challenge it. However, it might be a comfort zone related issue as well. On the other side, it is always hard to leave the area of your own functional expertise and to broaden your view. 

A big question remains open: How to broaden your view as a product leader? Personally, I have chosen to do an MBA for this. But if you have colleagues with a solid consulting background and openness towards design thinking this might also be very valuable.

Thinking business – let’s discuss together what might be the best way to achieve better translation in your organization! I am looking forward to your thoughts.

Why good product management helps sustainability

During a lunch with Erik we have had a discussion about sustainability. This inspired me to write this post. Good product management means focusing on serving user needs best with special focus on creating tangible benefits. Starting with a problem that is worthwhile solving from the user´s point of view, the emphasis is to iteratively come up with solutions that get users excited. There is no waffling, but pure product in the hands of potential and hopefully future consumers.

Consequent design thinking ensures that no “waste” is being produced. This also avoids that products are being built which serve only one purpose: maximizing the profit of the building company – not the one of its customers.

Real sustainability emerges if the ingredients viability, desirability and feasibility come together. A good product manager focuses on all three and is therefore compliant with sustainability standards.

So, dear product managers: now you have another very strong argument in discussions about how important design thinking is. Think long term, help to improve sustainability!

It is time to clean up the mess between CMO and CDO

BeforeDigitalPush

Yesterday I read an article about the CMO transitioning to a CDO by Ray. It is only one in a series of articles about this topic. In my opinion this is not showing the complete story.

In simple words: many people believe that digital has created the need to make (analog) CMOs transition to (digital) CDOs. As running (digital) promotions has a strong technology impact, the CIO is also put into the play as she/he is the only one to really understand big data & co.

This jumps too short. Let´s take a step back and clarify the different disciplines involved. In “old” times, it was marketing only. They defined the products to be built, they ran the promotions and built the brand. Marketing was perceived as an overarching philosophy about understanding and serving customer needs. R&D was the department to build products based on marketing requirements. “Our market research has shown that customers want their washing powder come as little red balls, so you guys build our washing powder as little red balls.”

This has changed due to the digital push. The complexity of products has exploded. Building the right product solutions has become an iterative and design resp. technology driven process. Now a quote like the one above would look like this: “In intense individual customer interviews we have found that we able to build the big green boxes that customers love to use as their washing powder.”

AfterDigitalPushAt the same time branding is still playing a major role as it deals with the intangible assets of products (that are by definition neither digital nor analog). There is a need for all three areas. Now you could discuss who should “own” the customer. Or one could agree on applying an overarching philosophy (all have the customer in mind with everything they do).

So, where does the CDO come in? Is this the person to ensure that a “digital” philosophy is being applied? This would require to address ALL functions. Today´s discussions around CDOs seem to limit its role to tactical marketing (aka selling products digitally).  In my opinion, this jumps far too short and does harm to the standing of a CDO in a company.

So, either the CDOs are up to the real challenge or they leave the ground to product managers, marketers and brand specialists.

By Jörg Malang

You cannot discuss finance when you are too optimistic

In today´s lecture this quote was made by the finance professor @HECParis. Again, there is this perception that there is a kind of “solid” world ruled by careful and risk averse people. On the other side stand the “dreamers” that don’t see the upcoming dark clouds.

We have gone through a case study of a very profitable company in a heavy growth situation running out of cash due to the increase of working capital. The founder and his wife were still owning >50% of their company but they had to look for either for new shareholders or to borrow more money. The conclusion was that for the founder it would be best to buy himself some time by borrowing money and to use the won time to sell his company.

Let´s imagine this founder was a product driven person (actually his company was in the software business). Let´s further imagine that all his fantasy doesn’t really help his company in the light of the upcoming cash bottleneck. A fantasy about great new products finding many users who are willing to pay. But the original product visionary is busy optimizing his cash cycle. He can´t build great products. Would this be the moment to hire a Product Manager?

In other words: does the CEO have to be careful by nature and the Product Manager is the optimist by definition? How do they come to conclusions? What is best for the company?

The only way to avoid this kind of situation is to plan very far ahead. Observe carefully early signs of issues and react appropriately. And don’t listen too much to the optimists (aka the Product Managers  ) in your company…

By Jörg Malang

Branding is about thinking big

In a great presentation by Jean-Noel Kapferer yesterday @HECParis, I was really inspired to rethink my stereotypes about branding.

First of all it is important to note that “a brand is much more than just a name on a product“. Brands also go far beyond driving sales. I don´t know why all the Marketing people I have talked to during my career were not able to make this point to me yet.

If more people recommend a brand than those who are actually purchasing the product, this is a clear signal of a strong brand. The opposite is that some companies have to pay money to be present in films. Jean-Noel calls them “desperate”. There is some magic in putting a crocodile on a shirt despite the fact that this animal is commonly not very much liked.

Second, social media activity is a very good indicator of the value of a brand (“If your brand is not talked about on the web you are not a brand”). Until yesterday, I have thought that counting followers on Facebook is just a way for non-digital Marketers to measure their awareness success (without understanding anything). Now I see that active user participation around brand makes a big difference.

Third, brands can only be authentic if they are considered strategic. It is NOT about driving sales, but much more about building products / companies with a purpose. This purpose lives beyond sales and awareness . This purpose is something that makes our world a bit more worth living. Without leaving “a dent in the universe” there is no real purpose. Product Management is such an exciting place to be in as it helps to build brands. Brands that exist beyond the Marketing department

Thank you, Jean-Noel, for this great inspiration!

By Jörg Malang

Translating between executive and product speak

Working in a senior role as Product Manager is a continuous translation exercise between functional experts. “Show me the revenue” was a quote of one of our @HECParis professors during the last couple of days. And he made jokes about the reactions of the entrepreneurs being asked this unpleasant question.

The big question is: why does it make Product Managers feel uncomfortable? Is it because you run out of explanations? Is it because it is frustrating to leave one´s visionary level and having to go back to much more “trivial” discussions? Is it the mere incompetence of the Design Thinker?

Be it as it is: there is the need to bridge that gap. Companies need senior people who are willing to try hard to make the translation between (absolutely legitimate) business questions and (absolutely critical for survival) radical design thinking.

If this translation doesn’t happen on the right level, two things might happen. Either the Product Manager chases feature after feature without achieving break through and without taking the company to the next (revenue) level or the company dies in beauty because everyone there is living in a dream world.

The ideal situation would be someone in the middle between both worlds having the big picture and being able to translate. That is why we should see many more careers transitioning from product to general management and vice versa. I am asking myself why this is still so seldom. Has it to do with the reputation of product management? Or is it a simple misunderstanding what Product Managers are supposed to do?

Marketing can´t manage every product

Today I have read this article: “The appointment of a chief digital officer is a bad idea“. It has been published on Marketing Week. Obviously, it collects arguments for the fact that a chief digital officer is something the world doesn’t really need. The author @AshleyFriedlein ends with pretty polemically comparing this discussion to a discussion around the need of a “chief electricity officer” back in 1900.

Actually, this came at the moment where I anyway wanted to blog about a topic that is close to the same issue. What is the role of marketing? How should the interface between product management and marketing be defined?

During my last module @HECParis, we also learned about marketing. For many people marketing is simply the operational part (remember the four P’s: product, price, promotion & placement?). We got presented the strategic view on marketing. Marketing as a philosophy. “Marketing is too important to be left with the marketing department.” (David Packard). The idea of completely focusing all employees of a company on their customers. This is pretty close to Ashley´s article. Ashely suggests that hiring a chief digital officer might be a bad idea because all departments need to think “digital” anyway. With the same logic, one could argue that it wouldn´t make sense to hire a chief marketing officer. Everyone in a company needs to think about marketing anyway.

While I understand this argument, there is an insight I would like to share with my readers: products are becoming increasingly digital and therefore technology driven. Technology can address user needs in a way that has not been seen before. @HECParis we have been lectured about the so-called “R&D push” that marketing should also incorporate in its thinking. One could say “today´s solutions to user needs have become too complex to be left to marketing people“.

At the end of the day, this whole discussion around C-Level titles might be misleading. Let´s be really open to new ways of managing companies but let´s not ignore the fact that digital changes business much more fundamentally than electricity might have ever done.