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January 2011

Will Your Product Development Portfolio Over-Deliver on Customer Benefits?

Written by Steven Cristol, Founder and Managing Partner
of Strategic Harmony® Partners

Steven Cristol

It's a notion counter to everything in our marketing bones, but sometimes our obsession for delighting customers can actually be too much of a good thing. From a product portfolio perspective, I wouldn't go quite as far as the recent Harvard Business Review article, "Stop Trying to Delight Your Customers" (Jul-Aug 2010 issue). But this is a serious product development issue: with limited resources, every time a product or service over-delivers on one customer benefit, it increases the probability of under-delivering on another. And lurking in that resource misallocation is vulnerability for your brand.

At the simplest level, over-delivery is providing any customer benefit in excess of what is required to attract and keep customers. So how do you know -- before the product is built (and long before customer satisfaction research sometime after launch)? The answer is quite straightforward if you already score your product development projects in terms of alignment with specific customer benefits (drivers of brand choice that define ideal customer experience -- e.g., easy to use, reliable, etc.) and if you know your current competitive standing on each benefit (e.g., superior to competitors, inferior, or parity).

Armed with those basics, you can look at how all product features on a roadmap (or headed for it) are aggregately aligned with each benefit. When doing this, we often see that the bigger product improvements are on one or more benefits where the company is already the clear leader. Meanwhile, that same roadmap is under-delivering on benefits where competitors are at parity or even ahead. Analyzing total roadmap delivery by benefit also helps prevent over-delivering on, say, the #4 most important benefit to your customers while under-delivering on #1 -- another all-too-frequent outcome without such analysis. 

Human nature: we love doing things we're already great at. But when this happens in excess in product development, the brand often ends up extending its lead on customer benefits that it's already comfortably superior on while opening itself to competitive attacks on other key benefits. So by all means let's delight customers with next year's new products. But let's do it in proportion to the relative importance of each customer benefit and where your brand needs the most help competitively.

By Product Pros, For Product Pros: Another Successful Product Camp in the River City

Saturday morning in Austin, Texas started out rainy, cold and dreary. However, once I stepped foot into to the AT&T Conference Center at the University of Texas for Product Camp Austin 6, it was clear it was going to be a great day nonetheless. More than 400 product management and product marketing pros had braved the weather for ProductCamp. I saw familiar faces from this volunteer-run organization including Mark Suchanek, Colleen Heubaum, Melissa Muckenthaler and Mike Boudreaux. I also had the pleasure of meeting new attendees and by the opening session at least 3/4 of the attendees were first-timers.

There is simply no other group out there quite ProductCamp. It's always inspiring is to see hundreds of people who work as Product Managers and Product Marketers spend a Saturday to come together with their peers and share best practices, case studies and tips.

One of the most exciting features of this "un-conference" is there is no set agenda. The topics are posted on a wall and attendees vote for the sessions they want to see. While not all proposed topics make the cut, within the first hour the agenda is set and attendees scramble to decide which sessions to participate in.

Faced with this challenge myself, I opted for Jose Briones' session, "Quantifying Uncertainty in Innovation Project Management". I met Jose last year at the Open Innovation Summit in Chicago and was familiar with his work on "Beyond Stage-Gate -- A New Approach to Innovation". You can find him on Twitter here: @brioneja.

Nothing like a little controversy to stir the pot!  Jose's content was very refreshing and well thought out. The foundation of his argument is that Stage-Gate is a linear process that works well for incremental innovations and product enhancements, but for truly disruptive and highly impactful innovation, he recommends a different approach.

His session was an open discussion, and he walked the group through how a Probabilistic Decision Analysis can be used in the management of innovation projects with high levels of uncertainty. Probabilistic decision analysis, when combined with the right management processes like Discovery-Driven Planning is a highly effective approach to evaluating and managing the risk and potential of product innovation projects. He used a case study from the company just about everyone holds up as an innovation model, Apple, with a focus on the iPad. It was definitely not a 101-type of session, but one much deeper that really got me thinking.

We all know the Stage-Gate path, and recognize the value it can drive as well as the investments that large product development organizations have made in that well-established process. Jose's presentation of a fresh perspective, with a three-dimensional approach to innovation management -- the Spiro-Level™ 3D Approach to Innovation -- is definitely something to consider. Rather than steal Jose's thunder I invite you to check out his presentation on Slide Share.

If you're interested in innovation, better product management and marketing, I strongly encourage you to participate in a Product Camp near you. Just go to the ProductCamp Web site and look for a chapter near you. If you're in Austin, I'll keep an eye out for you at the next ProductCamp!

Raising the Innovation Bar to Raise Success Rates in 2011

Happy New Year, Product Pulse Peeps!

At the end of last year, I was lucky enough to attend the Stage-Gate® Innovation Summit 2010. In addition to getting some quality time to swoon over my professional crush, Dr. Bob Cooper (I even got to get my picture taken with him -- he looks less excited than I do), I was fortunate enough to hear Dr. Scott Edgett speak on raising the bar in product innovation. As always, this dynamic duo got me thinking.

Carrie Nauyalis, Dr. Bob Cooper, and Dr. Scott Edgett
Carrie Nauyalis, Dr. Bob Cooper, and Dr. Scott Edgett
at the Stage-Gate® Innovation Summit 2010

Similar to the 2010 Product Portfolio Management Benchmark Survey sponsored by Planview and presented at Pipeline 2010, Stage-Gate recently completed a study to determine how businesses are doing in the product development innovation arena. One dataset that struck me was this one:

  • Average business' rates of commercial success = 52.3%
  • Average business' rates of failure = 26.5%
  • Average business' rates of "kill prior to launch" = 21.2%

The curious point about this: Stage-Gate reports that this 52% success rate (higher than what I've seen reported from some other research and analyst groups) is actually a bit lower than what they've seen in the past. The reason for this decrease, according to Dr. Edgett? In 2010, companies invested less in innovation. Very interesting, Dr. Scott.

For me, a prime take away from this study is that we must raise that bar if we're going to raise the commercial success rate of our product development efforts. 2010 was a year for retrenching and rethinking. 2011 invites us to raise the bar on innovation.

So, what are your goals for driving innovation in 2011 and for increasing your company's success rates? Click on the Comment link above and share your company's grand plans for 2011! (Dare ya!)