If a comprehensive history of corporate entities is ever written and published, it will be littered with anecdotes of firms that were forced to make challenging decisions when business was difficult. Were they ready for an economic recession? Had the firm relied too long on the products that made them famous and allowed innovation to stagnate?
Of that population of firms with difficult decisions to make in difficult times, some will emerge triumphant, stronger than ever before with a new strategic vision and full sails from compelling product innovation finding untapped or underserved market needs. Lou Gerstner at IBM in the early 90s decided to keep the band together at IBM and shift the focus to solutions and services, leveraging the full weight of Big Blue’s portfolio. The approach was followed by HP and Dell two decades later with the acquisitions of EDS and Perot Systems, respectively. And when one speaks of technology turnarounds, the best example may be Apple. After trailing its competitors in the PC market, Apple was revitalized by the return of the visionary leadership of Steve Jobs following the NeXT acquisition. In the following years, a steadfast commitment to creating products that make people’s lives better put them on pace to becoming a trillion-dollar company.
For as many successes, there will be as many or more failures. Companies that could not adapt fast enough, could not find the next great product, or could not separate themselves from a cornerstone product as it became the weight that pulled them under. Then there is another group of firms entirely that were able to identify and make tough decisions before business became difficult thanks to a structured product management process. You want to deploy a product management process that makes you one of these companies, and utilizing SBI’s product sunsetting tool can help drive these conversations before it’s too late.
Finding the Courage to Transform
Nutanix is one such example of this group of companies that made a transformation decision prior to suffocating business conditions. Interestingly, deciding to disrupt their own business model and move to a software business did not receive a warm reception from investors. Still, it did not dissuade management from following the strategic direction they believed in.
By transitioning away from a legacy of hardware and focusing on the true value that their software creates for customers, Nutanix has found a new and more stable growth trajectory. Nutanix maintained a leadership position of the hyper-converged infrastructure market, all while shifting KPI focus from hardware ASP to subscription-based ACV. A once doubting stock market has rewarded the firm for its commitment to transformation, and the share price has recovered by over 80% since the low threshold at the start of their journey.
Using a Continuous Research Approach to Validate Prototypes and Market Potential
Successful transformations start with a product development process that focuses on customer listening and customer experience. Uncovering a new market need and having a rapid mechanism in place to validate and vet the outputs of product ideation is critical. By adopting CX focused design principles, companies can focus on deploying faster, smaller changes effectively decreasing the time it takes your customers to extract value from product enhancements.
This research-based market listening approach is especially relevant to companies that rely on an integration ecosystem to maximize the utility of a product. There is often a tendency to tackle integrations conservatively based on the effort or ease of completing the integration. However, a market-driven approach focuses on integration opportunities with the highest potential in terms of value creation for customers and prospective customers.
Don’t Undermine the Importance of Your Own Data
Waves, ripples, quadrants, and hype trains abound in the world of industry analyst research. A CMO once explained that industry analysts are the mirror through which companies see themselves and their competitors. While analysts do much of the heavy lifting in coordinating the aggregation of the industry view, what they receive from companies is curated, and information from customer interviews is normally blended across many personas and segments.
All too often, companies overweight the importance of third-party data and underweight or ignore their own data that could unlock a competitive advantage. In fact, less than half of an organization’s structured data is used in decision making, and less than 1% of unstructured data is touched at all. Early in a product or company’s lifecycle, clear data governance may take a backseat as growth accelerates and strains the organization in other, “more important” ways. However, there are compelling benefits for those companies that commit to a rigorous data collection and analysis regimen early in a product’s lifecycle.
Over the lifetime of a product, adequate data will allow management to make more informed decisions on strategic direction, alleviate the strain of loss of tribal knowledge from turnover, and provide an early warning system that indicates when it’s time to start sunsetting portions of the portfolio.
Deploying a New Product Management Process
There is not a one size fits all answer to the selection of a product management methodology (Agile, Waterfall, Lead, etc.) and it is imperative that organizations select an approach that optimizes the time to validate and commercialize new products. More important than the specific approach is the application of the methodology and incorporating data-driven decision making at every stage from ideation to sunset.
Are you looking to implement a research-driven approach to improve your product management process? Take the first step by using SBI’s product sunsetting tool to evaluate the current state of the portfolio.