Where Should Strategy Live? (SDForum)
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The document discusses the nature and location of strategy within different types of companies, emphasizing that strategy is an ongoing process requiring cross-functional collaboration and customer insights. It highlights common failures in startups and the importance of designating a product manager to own the strategy. The content outlines key strategic questions and methodologies for effective strategy formulation and execution in pre-revenue startups, small companies, and large corporations.
Where Should Strategy Live? (SDForum)
- 1. Where Does (Should) Strategy Live in Your Company?Rich MironovSDForum Marketing SIGApril 12, 2010
- 2. About Rich MironovVeteran product manager/strategistBusiness models, pricing, roadmaps“What do customers want?”Agile meets businessRepeat offender at software start-ups“Product Bytes” blog since 2002Chaired product stage at Agile 2009 and 2010
- 3. AgendaWhat’s strategy made of?Where should strategy live in…Pre-revenue start-ups?Small single-product companies?Large divisionalized corporations?Take-Aways, Q&AWhere Does Strategy Live?
- 4. Strategy Is…Disciplined thinking about meeting market needs with products (services) that could make moneyCross-functionalA process of discovery as we interact with markets and segments
- 5. Strategy is Not…A one-time eventProperty of a single geniusMysteriousJust an hour of brainstormingSomething that happens only in a conference roomSomething to delegate to “strategy folks”
- 6. Strategy Demands Multiple Disciplines Our goals/mission?
- 7. Funding?
- 8. Credibility?Company &FinancialsCan we build it?
- 11. Experience?(Product)StrategyTechnology,Skills & DeliveryMarkets & Customers Real, unmet need?
- 12. Will customers pay for this?
- 13. Use cases?
- 14. Competitors?
- 15. Channels, partners?Core Strategic QuestionsNew (product) strategies need to answer…Is this real?Is the market real?Is the product (service) real?Can we win?Can the product be competitive?Can our company be competitive?Is this worth doing?Will it be profitable?Does it fit our broader strategy/plan?After George Day, HBR 12/07
- 16. “But We Don’t Have Time!” Steps for barely sufficient strategyGather handful of key contributorsTalk through and write down assumptions about products, markets, use cases, delivery datesElapsed time: 4 - 8 hoursRevisit monthly (start-up) or quarterly (product line)Decent strategies savetimeIdentify (and usually postpone) strategic issuesDelegate implementation issuesProblem: Who does ongoing customer validation?
- 17. Latest / Loudest ProblemSalespeople and CEOs naturally generalize from their most recent meeting“Our target segment should be regional not-for-profit hospitals”“We need to offer hardwarealongside our database software”Each new idea is just asseductive as the lastA decent strategy lets us ‘buffer’ ideas and compare them against each other
- 18. Discovery vs. TheoriesMarkets turn out to be complex and surprisingYou learn about the world by leaving your office“What’s the pattern?”“Who are the outliers?”“How would a customer fit us in?”Rule of thumb: you need 8 to 20 in-depth interviews to start seeing patternsGood segmentation is a creative process
- 19. How to Learn from CustomersFind prospects not currently being soldArrange 45 to 90 minutes, ideally in personDon’t pitch your productAsk open-ended questions,get the customer talkingListen and take good notesAsk customer to draw itShut up and listen some moreWrite up your notes and share with the team
- 20. Avoid Post-Course CorrectionsWhen NASA wanted to put a man on the moon, they planned a series of mid-course corrections…
- 21. AgendaWhat’s strategy made of?Where should strategy live in…Pre-revenue start-ups?Small single-product companies?Large divisionalized corporations?Take-Aways, Q&AWhere Does Strategy Live?
- 22. Pre-Revenue Start-upsFounding team and early believersUsually very engineering-heavy6-10 in Development, 1-2 in Finance/HR/Ops, 1 in Sales, may have 1 in MarketingTypically no formal product managementStrategy likely to be scattered in…Brains of the foundersAssorted VC pitchesOutdated revenue forecastDrafts of marketing collateral/website
- 23. Typical Pre-Revenue Start-UpCEO/FounderCTO/ FounderMktg?SalesCFOHR/AdminDev’t (6-8)
- 24. Strategic Failures for Start-Ups“We’ll talk with prospects once the product is ready”“Our target segment is every company (or every consumer)”“We’ll figure out how to make money later”“There aren’t any competitors”“Our customers will be smart, technical, and figure out what to do with our product”
- 25. Who Will Play Product Manager?Someone usually fills the product voidTechnical founderMarketing founderSomeone who’s been a PM (or CEO) beforeMust stand up for long-term viability of productMust document and recall previous decisionsMust help sort issuesUrgent tacticalStrategic, needs thought / input / consensus Urgent strategic
- 26. ProductManagementExecutivesDevelopmentWhat Does a Product Manager Do?strategy, forecasts, commitments, roadmaps,competitive intelligencebudgets, staff,targetsmarket information, priorities,requirements, roadmaps, MRDs,personas, user stories…Field input,Market feedbackMktg & SalesMarkets & CustomerssoftwareSegmentation, messages, benefits/features, pricing, qualification, demos…
- 27. Be Informed, Not (Just) SmartOur product ideas are usually simplistic, biasedEvery customer is a special casePatterns need a dozen instancesWhat’s common about use cases?Where’s the real pain? Real savings?What integration or infrastructure is normal?Who (within the customer) is our champion?How would we qualify a customer?Someone needs to talk with lots of prospects
- 28. How To Start a Strategy…Designate someone as “keeper of the strategy”Gather cross-functional leaders for a dayArgue through to a decent shared theoryWhat we’re buildingA few personas or detailed use casesHow customers will justify paying us (ROI)Sales model (direct, channels, OEM)Ship dateAssign someone to test theory with 8+ prospectsSchedule next half-day strategy meeting
- 29. So Start-Up Strategy Lives…CEO/FounderHereCTO/ FounderMktg?SalesCFOHereHereHR/AdminDev’t (6-8)Process and owner are more important than location
- 30. When to Hire a Product ManagerMy personal biasFull-time product manager no later than employee #25Reports to Marketing or Engineering (whichever has stronger PM background)PM probably also covers Product Marketing, technical Business Development for a while
- 31. AgendaWhat’s strategy made of?Where should strategy live in…Pre-revenue start-ups?Small single-product companies?Large divisionalized corporations?Take-Aways, Q&AWhere Does Strategy Live?
- 32. What’s Different Now?Single product company has…A shipping productRevenueSales and Bus Dev tackling live accountsLead generation programs from MarketingA couple of reference customersSome lost deals
- 33. A Bigger Functional OrganizationCEOCTOVP EngVP MktgSalesCFODev/QA Team (8)Lead, Web (2)Finance (2)Direct (4)Dev/QA Team (8)ProductChannelsSupport /Ops (2)HR /AdminChannelsInt’lArch, UI, Docs (3)Bus DevSys Ops
- 34. Organization-Level ‘Strategies’Every group has its own local strategy…Build & Test strategyProduct roadmapLead Gen strategyChannel Sales strategyFinancing planSales forecastThese don’t necessary fit together
- 35. You’ve Hired a Product ManagerYour product manager shouldGather and evaluate useful customer inputDifferent from “hot pursuit” sellingOwn the requirements and roadmapOwn the use cases and personasCo-own pricing and revenue forecastProvide content for Sales and MarketingManage (but not own) the strategyDefend the strategy
- 36. New Failure ModesConfusing early wins witha segmentation planMaking promises about new versions without a commitmentGrowing sales staff/channels ahead of repeatable sales processesAssuming exponential growthUnderestimating competitive movesMistaking success for strategy
- 37. So Strategy Should Live…CEOHereHereCTOVP EngVP MktgSalesCFOLead, Web (2)Finance (2)Direct (4)Dev/QA Team (8)HereProductChannelsSupport /Ops (2)Dev/QA Team (8)HR /AdminChannelsInt’lArch, UI, Docs (3)Bus DevSys OpsProcess and owner are more important than location
- 38. Who Drives Strategy Now?Executive team is still responsible for successCan delegate strategy process to Product ManagementContinuous gathering of market facts (with Sales and Marketing)Continuous gathering of technical facts (with Engineering)Pipeline updates (from Finance)Executives still own the strategy
- 39. AgendaWhat’s strategy made of?Where should strategy live in…Pre-revenue start-ups?Small single-product companies?Large divisionalized corporations?Take-Aways, Q&AWhere Does Strategy Live?
- 40. Big Companies, Big Org ChartsMultiple product lines or divisionsComplex sales/channel modelDeep functional organizationsSilos of information, expertiseProduct strategies, portfolio strategies,vertical strategies,solution strategies, M&A strategies…
- 41. A Classic Divisional OrganizationBoard of DirCEO/ChairmanCorp StrategyVP/GM, Div #1VP/GM, Div #2VP/GM, Div #3Corp MarketingWW SalesFinance & OpsEng’gFinanceMktg/PMMfg/OpsSupportHREng’gFinanceMktg/PMMfg/OpsSupportHREng’gFinanceMktg/PMMfg/OpsSupportHRPR/AdvLead GenEventsMkt StratResearchCreativeUS DirectUS ChannelIntl DirectIntl ChannelBus DevSales OpsPlanningAcct’gIRFacilitiesHRTraining
- 42. Formal Strategy Owner(s)Corporate Strategy teamReports to CFO, CEO or CMODivisional strategy teamsReport to GM/Divisional VPProduct-level strategiesProduct Management reporting up to GM/Divisional VPCorporate strategy reviewed annuallyTypically tied to annual budget cycle
- 43. New Failure Modes“Ivory Tower” strategistsDisconnected divisional strategiesSweeping (but meaningless) corporate mission statementsPoorly communicated cross-dependenciesExpensive search for ‘synergy’ and ‘leverage’Strategies that don’t exclude anything
- 44. Big, Pricey Assistance AvailableBig corporate strategy is a big organizational problemSpecialty consulting firms aggressively market their paradigmsOut of my league
- 45. AgendaWhat’s strategy made of?Where should strategy live in…Pre-revenue start-ups?Small single-product companies?Large divisionalized corporations?Take-Aways, Q&AWhere Does Strategy Live?
- 46. Take-AwaysStrategy is an ongoing process, not an eventMust include participation from key functionsProduct Management is a natural coordinatorCustomer insight comes from customersRapidly changing strategies are usually not strategies
- 47. Q&A
Editor's Notes
- #8: http://hbr.org/2007/12/is-it-real-can-we-win-is-it-worth-doing/ar/1 Is It Real? Can We Win? Is It Worth Doing?: Managing Risk and Reward in an Innovation Portfolioby George S. Day, professor of marketingat Wharton
- #17: Root cause: lack of quality market analysis / customer input
- #25: Sales view of win/loss analysis?