Shift your focus from"Doing Things Right" to "Doing the Right Things"
Over the past decade, industries have gotten very good at building products. However, they still have a high failure rate for new product initiatives. Just being good and efficient at building products is not enough.
Each industry has implemented product and development frameworks. They’ve adopted user-centered design principles. Certified project managers have helped them better manage projects and programs across companies. These have improved the output and efficiency of the development organizations.
This has allowed them to align their efforts and ensure the timely delivery of their projects.
We have become very good at “doing things right.”
We need to shift the focus from doing things right to doing the right things…
… Because the products we’re building are not seeing success.
In The Innovator’s Solution, Clayton Christensen quoted research that 60% of new product initiatives are scuttled before they ever reach the market. Of the 40% who make it, 40% of those fail to become profitable.
That is 76% of new product initiatives that never make a profit.
Those numbers align well with the research that shows that 75% of venture-backed start-ups never return money to their investors; 30-40% are liquidated, losing all of their money.
We are building things—and building them better and more efficiently. But based on these numbers, we are not always building the right things or chasing the opportunities with the best chance of success.
How does this happen?
Inside-Out Companies and Products
“Inside-Out” thinking is one of the most common reasons product initiatives fail. Many or most companies start with “ideation”—ideas that originate from inside the building.
It’s a belief that “We know what customers want.”
It’s the belief that “If we build it, they will come.”
Sometimes these are technology or engineering-driven initiatives — building “something cool” or using new technology simply to use it. (Generative AI, anyone?) Or ideas based on an outdated understanding of the market or a single customer anecdote.
“I talked to a guy” isn’t a completed research study. Neither is “I read it in a magazine.”
Inside-out ideas do not come from a deep understanding of the market. These are the initiatives in search of a market. And too often, fail.
Sales-Driven Companies and Products
Another reason product initiatives fail is that many companies are sales-driven. Sales-driven leaders dictate the product roadmap based on the needs of a few prospects or a few big customers and not on the needs of an entire market of customers.
One VP of Sales said, “If a company asked us to sell them forks, and the deal was big enough, we would sell them forks.”
Luckily, his leadership never let him put silverware on the product roadmap.
Product Leadership vs. Product Management
Stephen Covey shared a story in Seven Habits of Highly Effective People:
An exploration team was cutting its way through a thick forest until someone climbed up a tree and realized something was wrong. They called down, “Stop! We are going the wrong way.” And someone down below called back, “Yes, but we are making good time.”
That’s the difference between leadership and management. Leadership is about going the right way, while management is about making good time.
Warren Bennis, author of Why Leaders Can’t Lead, captures this perfectly:
Managers are people who do things right, and leaders are people who do the right thing. Both roles are crucial, and they differ profoundly. I often observe people in top positions doing the wrong things well.
The Product Leadership Imperative
Does anyone have more resources than they have ideas or opportunities?
Every company has more ideas and opportunities than they have resources. Even unicorn companies with hundreds of millions of dollars have their limits.
In a world with more ideas than resources — in a world where 76% of new product initiatives never make it to market or make a profit — the major problem to address is not continuing down the “doing things right” path.
Rather, our biggest problem is this need to shift our focus to “Are we doing the right things?”
This is the Product Leadership Imperative — focusing the product industry on the leadership aspects of doing the right things.
Doing a better job of aligning our corporate strategies, market and product strategies, and go-to-market strategies to ensure we are not spreading ourselves too thin or “peanut buttering” our resources and making tough decisions in portfolio allocation and product lifecycle management.
Choosing to focus on specific market segments where we can deliver tangible value to customers and markets rather than trying to be all things to all people and not delivering much value to any of them.
Product Management as a Profession
What’s needed is a focus on product leadership beyond simply building products right.
The concept of product management, for all intents and purposes, was created in the 1930s. The idea was for one person to guide the business strategy for one product. In the 80s and 90s, most technology companies embraced this concept of product management. However, during the growth booms over the last two decades, product management began evolving from a business to a technical role.
How do we create product leadership that ensures companies and teams are doing the right things right?
There are three key competencies that are critical to enabling Product Leadership.
Culture and Organizations that Support Innovation
The culture and organization of a company is the biggest factor when it comes to enabling success. You may have heard the old adage, “Culture eats strategy for breakfast.” But culture and strategy need to be partners; they enable each other.
You can have all of the best intentions in the world, but if your culture and organization do not support innovation, you will not succeed.
You need a culture that helps you “know and understand the customer so well,” as Peter Drucker defines marketing. A culture that continually looks for new ways to create value and innovate.
Every organization needs to align its growth across three interrelated strategic lenses:
The Corporate Lens looks at the purpose and vision of the company, sets the boundaries and focus for growth, and is the foundation for all growth-related decisions.
The Market/Product Line Lens looks from a macro view at opportunities across market/product lines within the company, both those where we currently have products and need to manage product lifecycle and new opportunities to pursue.
The Opportunity Lens looks at the market dynamics and business case for a specific opportunity.
The Lenses across this Continuum and the four key strategies within the Lenses create a strategic planning foundation, with each strategy informing and guiding the next, while each strategy serves its own purpose.
Corporate Strategy provides focus on the company and the other strategies.
It provides boundaries for markets and products, defines the differentiation and competencies available to use to drive success in the market, prioritizes the strategic focus, and sets financial thresholds and goals.
Portfolio Strategy focuses on opportunity prioritization for the company and growth opportunities.
Portfolio Strategy is where the Market/Product Line Lens and the Corporate Lens align, building on the foundation of the Corporate Strategy. To do this, it is key to develop a framework for prioritizing and optimizing growth opportunities across existing products and new opportunities, helping identify investment priorities, both organic and inorganic.
Market/Product Line Strategies identify the best growth strategy for the current situation in the company and the market.
Market/Product Line Strategies build from Corporate and Portfolio Strategies and is where the Market & Product Lens align with the Opportunity Lens.
This is the place to review the current situation in the market and identify the specific growth opportunities for each Market/Product line with the best chance of success.
Following this review, define more specific market segmentation and product concepts for the growth opportunities, and score each objectively, leading to a prioritized roadmap for realizing these opportunities.
Go-to-Market Strategy optimizes execution.
Go-to-Market Strategy focuses on ensuring alignment across the company in executing the strategies for product launch and beyond.
It focuses on execution efforts through a clear value proposition and definition of differentiation, enabling marketing and sales to focus their efforts on the right customers with the right message.
Additionally, it ensures the enablement of the sales channel to succeed with a full understanding of the buyers, their journey, and how their lives will be improved.
Objective Innovation Process
Objective Innovation Process is where Product Leadership meets Product Management.
A company whose culture and organization support innovation will identify more innovation opportunities than they have resources to deliver on.
To do this, an objective, fact-based methodology like the Quartz Open Framework is needed.
This framework guides you through each phase:
Discovering and prioritizing the opportunities
Committing resources through a business planning process
Describing the context of the opportunity to enable product delivery and product marketing to create and deliver the right product and messaging
Connecting the dots to enable your sales channel, marketing, and services organization to realize the innovation opportunity.
All of this builds on the core of continual learning.
Throughout this methodology — from phase to phase — market facts will provide the foundation for transparent, objective decisions informed through the Strategic Growth Alignment.
Strong Product leadership comes when each competence is operating at a high level.
When this happens, companies will have an ever-growing queue of potential opportunities to explore and be able to focus resources and efforts only on the best opportunities — the right opportunities.
Those opportunities will align strongly with the corporate strategy, large market opportunities, and the best odds for success.
Through strong product leadership, we will prioritize the right opportunities; through strong product management, they will be done right, and the entire organization will succeed together.
This is the Product Leadership Imperative.
Our free eBook, “The Business Role of Product Management,” shows how to improve the business performance of your products.