Archive for the 'Trends' Category

Can you outsource product management?

Monday, September 29th, 2008

Does that make sense? Alyssa Dyer took on this question in an article I came across while cleaning up. I saved it because I agreed. It depends. It can be a good thing in the right circumstances and with the right division of labor.

When you need a partisan. Some things you don’t want handled by an outsider — for instance, representing your company at conferences or in sales situations.

When you need a mercenary. There are tasks that an outsider may do better. Alyssa cites gathering requirements and prioritizing them. I would sharpen that to include the front-end market research like voice of the customer (VOC) activities.

The key is that you need to hire someone experienced. They will likely be more skilled at asking the necessary “why” questions and they are less likely to hold the biases about your customers that pervade your organization and industry.

She cautions against hiring a telemarketing company because they are typically about asking “what” questions. I would expand this to include many of the traditional market research companies that might hold focus groups and ask “what” people want, “what” they prefer. Gerald Zaltman tears the market research community a new one in the first part of his book about “how customers think” for exactly this reason. Also, because those kind of methods influence the answers you get. They are right for refining your solution but wrong when defining the product and requirements.

Experience also helps you know when you’ve gotten enough information. I recommend Abbie Griffin’s paper listed on our Resources page for more about when your sample is enough.

Obviously it’s an interesting topic to me since clients outsource key product development and product management services to Breakthrough NPD. The things we excel at and do that are on her list include:
# Customer research
# Gathering requirements
# Prioritizing requirements
# Competitive analysis
# Positioning and message validation
# Website review and alignment
# In-depth quality checks with customers
# Setting up and running a customer feedback council

In fact, anything that is best served by a neutral 3rd party, like calling customers or reporting up to management, is a good candidate for using an external party. Outsiders have less to lose by giving management the facts especially when they aren’t pretty.

We do some product management functions that are good for outsourcing if we have the right experience but are likely to engage a partner or provide a referral instead. For example,
o Sales tool development and review
o Evaluating and conducting a release debriefing (lessons learned)

And there are the product management functions she lists that we generally don’t do but we might be able to make a referral.
— Win/loss reporting (it is good to keep sales dept. bias out)
— Pricing
— Planning and managing product launches

So when is this good for your organization? Bringing in help to take on some of these product management functions makes sense at these times:

1. As a stopgap until you can fill the job internally or with a new hire. (Keeping the product moving, cutting down schedule risk, keeping work from piling up).

2. Helping deal with the backlog of PM tasks that built up while searching for your new PM.

3. Bringing in experience to raise the level of your internal PMs.

4.Breaking outside the box created by internal biases. (To make big innovation steps.)

With the economy tightening I think a lot of companies will cut back on new development. Outsiders can help with specific tasks or projects to help you survive with a smaller staff during a lean period. They can also help you manage risks. That’s more important when you have less margin of safety. Furthermore, smart companies know that the lean time is a good time to prepare new products because by the time they are ready the economy will have turned around and you’ll have something new to capitalize on the upswing while your competitors get left behind.

“Is it possible to outsource your product management?” Alyssa Dwyer, Mass High Tech, Feb. 9-15, 2007, p12.

The Voice of the Customer, Abbie Griffin and John Hauser
(scroll to the end of list)

How Customers Think, Gerald Zaltman

Trends You Need to Know

Saturday, July 12th, 2008

The June 2008 PMI Network magazine lists 5 business trends we all need to know about … or else. Future survival gets my attention. The thing that stood out to me was how important the ability to understand needs will be for all 5 trends. To me that means increasing value for the kind of “voice of the customer” skills we practice going beyond customer research. Let’s take a look.

A technical skill shortage is developing across all regions and markets. Even the low cost talent pools in India and China are drying up. Looking forward that means companies need to get better at two things:
— recruiting top talent
— managing talent internally

Well, if you want to attract good people, you need to understand what makes them tick, what they need and want. Then to keep them you also need to understand and meet their needs. So VOC skills are an advantage coping with this trend.

Emerging markets are the part of globalization that is breaking growth records. Most companies don’t do a good job of understanding their domestic customer as it is. Then they hope to develop products for, and sell to, a different culture? Good voice of the customer work is even more important and more tricky in this context.

For example, Breakthrough NPD supports foreign clients but with a catch. Unlike the U.S. & Canadian markets where we will do everything if requested, we only do certain parts of VOC work overseas. We train our foreign clients in VOC methods and we will coach them, even being in the room as they conduct customer interviews. The key difference is that a native familiar with the language and culture must conduct or lead the customer interactions. They must ask the questions and interpret the answers. Keeping bias out of the process is hard enough and would be much harder with the filter of outsider bias in the way as well. We can provide a neutral and unique perspective that ads value to the interpretation but should not be driving the work.

This boils down to using Web 2.0 tools to incorporate customer needs into your business at every level. That is, from core business strategies and project goals to testing new product concepts and getting feedback on your existing products and services. Examples are having your own internet forums, blogs, social networks, on-line communities, customer advisory boards and so on to better understand customer needs. This essentially means expanding what we do now to define new products and their requirements to also help guide the business and improve operations.

This is taking responsibility for the impact of company actions on communities, stakeholders and society. Social responsibility is going from a “nice to have” PR stunt to standard operating procedure for good business reasons. This involves a wide range of things from labor practices, living wages, health and safety, civic infrastructure, environment, etc. I’ll admit that the link from VOC skills to this trend is weaker but they still will give you clearer vision of your impact on everyone else.

Globalization has pushed companies into 24/7 schedules and operations. With this comes the push for quicker returns on investments. Obviously this is about running faster. Less apparent, it is about being more clear on what you need to achieve. You can do more with less if your goals are clearly defined. That means continuously tracking the needs and goals of the end user, establishing methods that allow your teams to react to changing business needs, and prioritizing what can or should be done in view of the larger context. The best way is to involve customers, stakeholders, and advisors throughout your projects. Again, skills to acquire input and understand your customers will be invaluable.

A medical device case study in the article illustrates that this goes beyond getting the specs right. I think this quote from the company involved makes that case well, “customers jumped at the chance to participate once they saw we cared about their needs.”

Let me emphasize the “we cared about their needs.” The bottom line folks is that it is all eventually about the people. It is about the individuals whose lives are benefited or burdened by your offering.

Do you believe these trends are real and will affect your business? If so, you should also see that getting better at understanding the voice of the customer, (broadly defined), will be important to benefiting from rather than being buried by these trends.

For more on the trends:
“Pay Attention,” Sarah Fister Gale, PMI Network, June 2008 ps 35-41.

Hey, why not let everyone help develop your products?

Friday, June 27th, 2008

Another way companies are breaking down the barriers between themselves and their customers or other folks outside is via “crowdsourcing.” That is a way to get people on the outside to provide value to the organization on their own time. It is essentially the open source model applied to more than just software.

The best example I know is the Goldcorp story. Their president put all their proprietary geologic data for a mine on the web and held a contest. The winners with the best ideas of where to drill would share half a million dollars. The diversity and originality of ideas they received was far beyond anything they anticipated. Years later they were still drilling sites suggested by contestants. They were mining so much gold they were the only gold mining company that was stockpiling for better prices in the future. Furthermore, their stock price went up thirty fold. (See Taylor’s book referenced below.)

The internet and the decentralization of expertise has enabled crowd sourcing and it is typically used to develop solutions. That is at the back end of the product development process. Companies can gain key advantages via crowd sourcing.

achieving goals not possible with a limited fixed staff

This is the advantage of scale. For example, large companies experience many more customer demands for new products than they can keep up with. Some have formed external networks to act in an advisory role or even do project work directly (as in the Goldcorp example) to develop more new products. NASA has used volunteers to process enormous amounts of data making images available months earlier and freeing up researchers to concentrate on higher end work. Google essentially uses crowdsourcing in the way it ranks pages for its search engine.

access to a larger number and far more diverse range of ideas than possible in-house

I think William Taylor says it best in this chapter title from his book Mavericks at Work: Ideas Unlimited: Why Nobody is as Smart as Everybody.

Inviting people from other boxes to work on your problem is a pretty easy way to get real “out of the box” thinking.

I see parallels to the kind of work we do at the front end to understand the problems you should be working on in the first place. You can use crowdsourcing methods to find out what the most important problems are for you to solve, as well as to craft solutions. That is, from voice of the customer to voice of the collaborator. We have actually done both here.

For more,
“On the Edge,” by Tim Gilchrist, PMI Network, May 2007, p32.
Mavericks at Work, William C. Taylor and Polly LaBarre, Harper Collins, 2006. (See Chapter 4.)