Inside Out, Outside In

Concept of idea with colorful crumpled paper

Too often leaders create unbalanced business models that either ignore the market (inside out) or ignore the experience and intuition within the firm (outside in). It is critical to use a holistic methodology to analyze the market from both an outward and inward focus. This strategy will avoid the “not invented here” or “we will build it and they will come” mentalities that too often result in failure, or only listening to the market and missing common sense (New Coke was great during research, but Coke executives missed the fact people were buying Coke for the brand and emotions, not just the taste).

Outside-In tries to understand what’s going on in the real world by asking the following questions:

  1. What’s happening in the marketplace?
  2. How the needs are changing?
  3. What’s causing the changes?
  4. Where are the resulting opportunities?

Inside-out works backward after the above questions are answered:

  1. What needs do we satisfy now? What need could we satisfy now? In future?
  2. What’s the gap between them and what we do now, and how to bridge it?
  3. What advantages and internal capabilities do we have? What advantages and capabilities do we need to create?
  4. What old competencies do we need to de-emphasize?

Using this approach will provide you and your teams with a strong understanding of what is needed and what are you capable of delivering. A clear understanding of the business benefit, risk, and implementation complexities will provide a great starting point to analyze the business potentials.

 

Maneuver Warfare for Strategic Marketing

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Maneuver warfare works on the premise of using deception and ambiguity to disorient your opponent with surprise and shock. This methodology works very well for small forces competing against larger forces. The modern-day theorist, Col. John Boyd spearheaded this theory which was eventually adopted by the U.S. Marine Corps as the modern method for operations. Maneuver Warfare techniques can also be applied within business, especially for product launch planning.

The ability to use agility, flexibility, and surprise during a product launch can disrupt competitors. Using novel methods to deceive and confuse, can cause stronger competitors to focus on the wrong areas of strength and become paralyzed as they cannot anticipate your next moves.

Create, exploit and magnify are a key focus for Maneuver Warfare. The following are key elements of this area of operations:

  • Ambiguity – Alternative or competing impressions of events as they may or may not be.
  • Deception – An impression of events as they are not.
  • Novelty – Impressions associated with events/ideas that are unfamiliar or have not been experienced before.
  • Fast transient maneuvers – Irregular and rapid/abrupt shift from one maneuver event/state to another.
  • Effort (cheng/ch’i or Nebenpunkte/Schwerpunkt) – An expenditure of energy or an eruption of violence—focused into, or thru, features that permit an organic whole to exist.

COG

In addition, the payoff of using these five key multipliers is:

  • Disorientation – Mismatch between events one (seemingly) observes or anticipates and events (or efforts) he must react or adapt to.
  • Surprise – Disorientation generated by perceiving extreme change (of events or efforts) over a short period of time.
  • Shock – Paralyzing state of disorientation generated by extreme or violent change (of events or efforts) over a short period of time.
  • Disruption – State of being split-apart, broken-up, or torn asunder.

Colonel Boyd identified four key elements that the Germans used at the end of WWI and WWII that resulted in the famous (and somewhat successful) Blitzkrieg operations.

  • Fingerspitzengefühl: Intuitive feel, especially for complex and potentially chaotic situations
  • Einheit: Mutual trust, unity and cohesion
  • Schwerpunkt: Any concept that provides focus and direction to the operation
  • Auftragstaktik: Mission, generally considered as a contract between superior and subordinate

Understanding Maneuver Warfare elements and how you can apply them to your business can result in innovative and exciting product launches and market strategies. Using typical product launches results in low morale from employees, lack of excitement for media, and boring moments for customers instead of WOW moments that can excited the market. Remember what Einstein famously said, “Insanity is doing the same thing over and over again and expecting different results”. So if you wonder why your targets are not met or no one is excited about your great new product, rethink how you are launching it. Get your customers excited and confuse the hell out of your competitors. Shake things up!

Business is War – Well, Not Really

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We have all heard the adage, “business is war” – well business is not really actual war. War does not have customers and business does not involve actual killing. However, there have been some great battles over the years in the world of business. The Motorcycle Wars, The Cola Wars, and the The Console Wars.

The Motorcycle Wars resulted in Yamaha attacking Honda in the early 1980s. The president of Honda declared, “Yamaha wo tsubusu!” (“We will crush, squash, butcher, slaughter, etc., Yamaha”). The battle was on! It resulted in Honda bringing out 113 new models versus Yamaha’s 60 within about 18 months. Yamaha’s president publicly apologized after his company almost went under with over 12 months of inventory, while Honda sales skyrocketed with greatly designed products. This resulted in the Japanese government getting involved and all four key Japanese OEMs (Honda, Kawasaki, Suzuki, and Yamaha) seemingly working together to ensure everyone succeeds and the same “battle” never occurs again. We still see that “truce” today.

The Cola Wars involved Pepsi attacking Coke. The Pepsi Challenge and Michael Jackson vaulted Pepsi to gain large amounts of share as Coke stumbled. Coke, who then made the greatest misstep and rolled out New Coke to a fabulous failure, pulled the new product from shelves within 3 months. Reaction (versus proactivity) and poor market research are not good things. Coke luckily found its way, but Pepsi gained valuable footholds in the market.

The Console Wars was another great story of two companies battling it out for dominance. A great book, Console Wars by Blake J. Harris details how Sega became a market force against Nintendo in the 1990s. As bold, brash and aggressive Sega of America (SOA) went after conservative Nintendo, SOA grabbed massive amounts of market share and became hugely profitable with a combination of great products (Sonic the Hedgehog) and in-your-face marketing that appealed to a wide audience. Only to have Nintendo finally wake-up and eventually crush Sega as Sony entered the battlefield with its PlayStation to really change the game followed later by Microsoft. Hmmm, where is Sega (or Atari, or …..)?

Console wars

Go out and get the book by Harris and read-up on the other two battles that are legendary in the business world. They are great stories of what to do, and not to do.

As new competitors from developing countries enter developed markets with low-cost products and aggressive marketing campaigns, it is a good idea to revisit history. Also, it does not hurt to understand military strategy and tactics to figure out how to potentially adopt the same ideas to business.

OODA Loop – Increase Decision Making Speed

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The OODA loop (for observe, orient, decide, and act) is a concept originally applied to the combat operations process, often at the strategic level in military operations. It is now also often applied to understand commercial operations and learning processes. The concept was developed by military strategist and USAF Colonel John Boyd, as explained below.

“Create tangles of threatening events and repeatedly generate mismatches. Disorient his mind. Disrupt his operations. Overload his system.

Get inside your adversary’s observation-orientation-decision-action loops (at all levels) by being more subtle, indistinct, irregular and quicker – yet appear to be otherwise.

Stretch out your opponent’s time to respond while compressing our own response time.”

It is an excellent tool to ensure a quick and efficient decision making process. It is made up of four areas that continually link back to each other. Similar to the PDCA process, it is based on a looping-cycle for continued improvement and the ability to “get inside your opponent’s loop”.

Observe the environment, which includes himself, his opponent, the physical, mental and moral situation, and potential allies and opponents

Orient to decide what it all means (many sided, implicit cross-referencing) involving the information observed, one’s genetic heritage, social environment, and prior experiences, and the results of analyses one conducts and synthesis that one forms

Reach some kind of decision

Attempt to carry out the decision, that is, act

The same cycle operates over a longer timescale in a competitive business landscape, and the same logic applies. Decision makers gather information (observe), form hypotheses about customer activity and the intentions of competitors (orient), make decisions, and act on them. The cycle is repeated continuously. The aggressive and conscious application of the process gives a business advantage over a competitor who is merely reacting to conditions as they occur, or has poor awareness of the situation. You need to gather the data, analyze it, synthesize it and then make strong decisions. From repeated practice analyzing the markets and competition (through Situational Analysis I, customer visits, etc.) intuition will become a strong asset within this process and allow for quicker decision making.

The approach favors agility over raw power in dealing with human opponents in any endeavor.

Research 101 – Get Close to Your Customers

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As a Product Manager it is critical to spend as much time with customers as possible. The more you understand your customer (and your competitor customers) the better you can create value to develop differentiated products with strong competitive advantages. One important skill all Product Managers must have is a good grasp of all research techniques. The only true way to improve products and understand customer unmet needs is through constant and ongoing research; secondary and primary.

Secondary and primary research is critical to identify customer needs. The goal is to find the “value” that result in the benefits they are seeking and then, and only then, will the features be determined. Understanding the basics of research is necessary to perform research yourself, and manage third-party research vendors. However, if you can do the research yourself, and actually go and watch and listen to customers, this is the optimal way to know your market first-hand. The more you know, the better your products will be.

Secondary research is analyzing and synthesizing existing research. Most often this is referred to as “desk research” and usually is the beginning of an investigation. Understanding all previous research and information (all the market information available) helps to form a strong foundation to then proceed with primary research. Primary research is the collection of original data that you collect (not from a secondary source).

Primary research is critical and must be done on an ongoing basis. Only by “going to the spot” (genchi genbutsu) can a Product Manager truly understand what the customer needs and how the organization can deliver it. There are many ways to do this but the most effective is visiting customers and observing how they use the product. There are three types of primary research.

There are three main types of primary research, qualitative, quantitative, and mixed methods. Qualitative is less structured and focuses on exploring and understanding new information to gain insights. Often this is called “ethnography”; it is the most time consuming and costly, but the results can uncover valuable “nuggets” for new competitive advantages. Quantitative research methods use empirical investigation to develop and use mathematical models to statistically measure data to gain an unbiased result. Most surveys are typically quantitative. Mixed-methods is a combination of qualitative and quantitative methods.

It is critical to visit customers (both yours and the competitors), retailers, and various events to truly understand how the customers use the products and to find under-served areas where you can improve products and services. This needs to be done not only during formalized research events, but also throughout the year. This is also a great time to go out first-hand while monitoring the post-launch of new models to see how the market is reacting. As a Product Manager it should be part of your toolbox to understand the three research methods and be able to employ them to gain market insights and develop actionable plans.

Lean – Not Just For Manufacturing

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Business consultants and leaders throw around the latest fads with little understanding or follow through. Lean, the process focusing on customer value and eliminating waste, was developed by Toyota and provided the foundation of the Toyota Production System (TPS). The methodology focuses on creating more value for customers with fewer resources. The mindset is continuous innovation, or kaizen.

Focusing on optimizing the flow of products and services through all value streams allows the identification of waste and its elimination. Most think that Lean is only for manufacturing; however, Lean is an excellent process for product development, services, and other types of knowledge work. Lean is not a tactic or program; it must be a way of thinking, doing, and the basis of corporate culture.

As marketers and Product Managers, the adoption of Lean can provide strong benefits. Focusing on purpose, process, and people, Lean allows teams to standardize, systemize, and employ problem solving to improve customer value and eliminate waste to drive-down costs. The adoption of Lean creates the ability to develop systematic innovation that is driven from facts, not opinions. Teams can learn Lean and employ the techniques in small steps.

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Teams should take workshops on Lean or read the wide variety of literature, starting with the book Lean Thinking by Jim Womack. Then, focus on one small project to practice the Lean tools and techniques. Utilizing PDCA, mapping value streams, utilizing 5S, using systematic problem solving, codifying repeatable jobs, and leveraging data for buy-in, will slowly allow team members to get comfortable with Lean and realize its benefits. The more problems are eliminated, processes are standardized, and waste is found, teams will have more time and energy to focus on ideation for innovative solutions and not just putting out fires. A proactive mindset to solve problems quickly, share information and knowledge, and ensure everyone has a say in the business will create a competitive advantage that is incredibly hard to develop and beat. A properly developed Lean culture provides an empowering work environment and long-term loyal customers.

Personas – Become a Customer-centric Organization

Persona

To clearly articulate who the target customer (to both internal and external stakeholders) is the Product Manager must become adept at creating visual personas. In marketing and user-centered design, personas are fictional characters created to represent the different user types within a targeted demographic, attitude and/or behavior set that might use a site, brand or product in a similar way. Marketers may use personas together with market segmentation, where the qualitative personas are constructed to be representative of specific segments. The term persona is used widely in online and technology applications as well as in advertising, where other terms such as pen portraits may also be used.

Personas are useful in considering the goals, desires, and limitations of brand buyers and users in order to help to guide decisions about a service, product or interaction space such as features, interactions, and visual design of a website. Personas may also be used as part of a user-centered design process for designing software and are also considered a part of interaction design (IxD), having been used in industrial design and more recently for online marketing purposes.

A user persona is a representation of the goals and behavior of a hypothesized group of users. In most cases, personas are synthesized from data collected from interviews with users. They are captured in 1–2 page descriptions (or as simple paragraph or bullet points) that include behavior patterns, goals, skills, attitudes, and environment, with a few fictional personal details to make the persona a realistic character. For each product, more than one persona is usually created, but one persona should always be the primary focus for the design.

Remember, the hierarchical path is:

  1. Segmentation
  2. Persona development
  3. Positioning

These all must support and define the value, wants, needs, benefits and features that the customer wants.

It is also recommended to give the persona a strong name or “catch phrase” so the entire team can rally around that and use it for reference. For example,

  • Worrier
  • Frequent flyer business executive
  • Stressed out perfectionist

Once the base persona is developed, a more detailed persona should be developed to clearly communicate who the target is.

 

 

PDCA for Systematic Improvements

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Plan Do Check Act (PDCA) is a framework that provides a methodical approach to problem solving and continuous improvement. It’s not just a multiple step cycle, it’s a way of thinking! Plan Do Check Act (PDCA) is a framework that provides a methodical approach to problem solving and continuous improvement.

PDCA was created by W Edwards Deming in the 1950’s as an easy to follow Problem Solving Cycle. Deming was tasked with helping Japan rebuild its economy in the 1950’s. His purpose was to use PDCA with a Continuous Improvement process to help rebuild Japanese industries so that they could compete in the world market in the future. In addition, PDCA is an excellent tool for project development and management for ongoing continuous improvements.

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Human nature is to jump directly to solutions, fight fires, and not understand the true problem. Using PDCA provides a structured process which allows time to plan, define the problem, involve the proper team members, and to test and monitor solutions to ensure goals are met.

When to Use Plan–Do–Check–Act

  • As a model for continuous improvement.
  • When starting a new improvement project.
  • When developing a new or improved design of a process, product or service.
  • When defining a repetitive work process.
  • When planning data collection and analysis in order to verify and prioritize problems or root causes.
  • When implementing any change.

Plan–Do–Check–Act Procedure

  1. Plan. Recognize an opportunity and plan a change.
  2. Do. Test the change. Carry out a small-scale study.
  3. Check. Review the test, analyze the results and identify what you’ve learned.
  4. Act. Take action based on what you learned in the study step: If the change did not work, go through the cycle again with a different plan. If you were successful, incorporate what you learned from the test into wider changes. Use what you learned to plan new improvements, beginning the cycle again.

Remember, you cannot manage what you cannot measure. The benefits of using PDCA is applying metrics to gauge how effective and/or successful the plan is. The adoption of SMART (specific, measureable, actionable, realistic, and timely) can provide the foundational metrics to drive any process or project.

Marketing Strategy – Developed by PMs and Driven by PMs

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So you work in marketing? What is your role? Do you handle public relations? Buying advertising? Creating advertising? Writing copy? Yes, the term marketing is used for a variety of roles within the organization. Unfortunately, most “marketing departments” are marketing communication teams. Yes, they are vital to effective communication; however, they are not the true marketers.

Marketers are the developers of strategic direction for the firm. Many times these are the product managers who are the experts in the competitive landscape, the consumers (both firm and competitor), and work to develop optimal product positioning based on the product development. And as the true marketers, it is vital to be an expert in strategy development and providing clear direction for the sales and MARCOM teams to engage within the market.

Business is not war, but lessons from the military and war can be applied to strategy and tactical development within organizations. In addition, you cannot manage what you cannot measure. Therefore, strategy and tactics must be based on strong foundations of metrics. Ignore the cries that advertising, PR, etc., cannot be measured. Anything can be measured and must have defined metrics for clear goals.

The following are five great books to help develop strong strategy and tactics for product introductions. Without a clear differentiation, positioning, and goals/objectives based on metrics, most plans will not achieve success. The best plans are developed with cross-functional teams, but driven by the product managers. Remember the 7Ps, map everything out, and expect the unexpected.

22 laws of branding

22 laws of marketing

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Marketing Warfare

Positioning

Pugh Matrix for Idea Decisions

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You and your team have worked hard to create a great new idea for creating improved customer value. The concept has been prototyped and shown to user groups for ongoing feedback. Now it is time to determine where your key differentiation points are and how they compare to competitive offerings, and which to focus on for further development.

The Pugh Concept is a matrix of the concept and competitive offerings along with key features. The matrix helps determine which features are more important or better than others. It is typically used after gaining customer feedback on prototypes and what drives value.

The Pugh Concept is a matrix of the concept and competitive offerings along with key features. The matrix helps determine which features are more important or provided higher levels of value compared to others. It is typically used after gaining customer feedback on prototypes and what consumers feel drive critical value.

This criteria-based matrix allows teams to score the concept features relative to critical criteria determined from voice of the customer (VOC) research. Scores are consolidated to allow the best features to go into development.; thereby, assisting which options to select. The tool provides a systematic process that can be quantified to help justify feature selections.

Voice-of-the-Customer

The Pugh matrix allows an individual or team to:

  1. Compare different concepts
  2. Create strong alternative concepts from weaker concepts
  3. Arrive at an optimal concept that may be a hybrid or variant of the best of other concepts

A key benefit of the matrix is large amounts of quantitative data is not required for concept finalization. Usually, at this stage of innovation the team has a lot of qualitative data but limited quantitative data. Therefore, the team can use knowledge gained from qualitative research and intuition to move the project further along.