SCOTT PROPP http://scottpropp.com Equipping the individual, team and enterprise for growth leadership Wed, 16 Aug 2017 08:00:03 +0000 en-US hourly 1 https://wordpress.org/?v=4.7.5 Finding Product Market Fit Before you Run Out of Resources: The Hero’s Journey of Founding a New Company http://scottpropp.com/finding-product-market-fit-before-you-run-out-of-resources-the-heros-journey-of-founding-a-new-company/ Wed, 16 Aug 2017 08:00:03 +0000 http://scottpropp.com/?p=3834

founderIt’s always energizing to work with company founders, and a recent gathering of Clean Tech Midwest firms was no exception.  I was invited to participate in the event, which hosted more than 20 firms from the Midwest who are in the process of preparing their business plans for both regional and national competition. I shared my work around the Hero’s Journey with them, and as usual, their runway-level questions during our dialogue reminded us all of the need for getting together face-to-face and hashing things out.

The material I shared had two objectives:

  • The first was to help the teams consider whether they had chosen to deploy their hard won IP in the best market landing zone to achieve their goals.  
  • The second was to encourage them to become experts in both the full scope of the market and product fit balance – not just one half of the equation.

Understanding the Path to Growth

I use the acronym STRIDE to label the path from founding to profitable growth:

  • ST stands for Strategy and Tactics.  This is the early work that the initiating team does that becomes the originating work of the proposed business.  This phase includes creating the idea, and then building on the idea with tools like the Business Model Canvas and Value Proposition Canvas.
  • R stands for the reality part of the curve and is where the real IP gets built.  Every firm does its planning based on the best available insights before it departs on the discovery journey.  
  • I is for the integration of rich insights that are developed in the reality phase.
  • D is for deployment, when you have solved the first leg of developing a high-performing delivery system.
  • E is for extend, when the hard work of optimization is done, and the new product or service is fully integrated into the firm’s P&L’s.

To use a real-world example, let’s think about the path of today’s highly-refined mini vans.  Per this New York Times article, Chrysler had been thinking about the idea from the mid-1970’s (Strategy and Tactics).  When the chips were down, Lee Iacocca decided it was time to try and enter the reality phase by commissioning a unit based on a dated car chassis that was very underpowered and had soft suspension.  Once they had found a niche, they quickly took the feedback into the development team (see history here), and developed versions with more room, more power and better suspension.  By 1990, they had a refined Town and Country model (The E portion of the curve), where they had commanding market share that would power the P&L statement for decades.

Getting Much Deeper on the Product

For this group of entrepreneurs, the first piece will be to find a repeatable and sustainable solution to a market and not just an isolated customer.

The journey starts with true empathy for the client’s “jobs to be done.” The jobs to be done framework was pioneered by Clayton Christensen’s team at Strategyn (see link here).  The principle here is that client value is built in layers very similar to Maslow’s triangle, and once these true value elements are identified, they can be built into a foundation of true value for the client, versus the projected value that often conflates competitive elements into the mix and over complicates the solution.  

The Business Model is the Product

Founders are unique in so many regards.  They usually have a successful career in their chosen field, yet are driven by a need to be independent and do it better.  This drive to do it better gets them up early and into the office on weekends to pencil out new methods, products and services even though their friends and family can’t understand it.  Their drive is both a blessing and a curse, as they have an insatiable need to create, as well as business model patterns born from current experience.

This hard won intuition that every founder has from the successes they’ve experienced in the field prior to founding this new venture needs to broken through a platform of learning: every founder has to push themselves beyond the boundaries of their current industry business model.

The key to this journey lies in becoming a “good enough” practitioner on the opposite side of the business model from where their expertise lies.  Every firm I work with is either an expert on the product side of the curve or the market side, but almost no one does the work they need to on the portion of the curve that is not their expertise.  For a great primer on “lean canvas,” check out this link here.

Find the Narrowest Road to a Real Market

The last leg of the founding journey is to choose the width of your path very carefully.  I advise taking the narrowest cash positive path you can find.  Once you have worked up a lean canvas, you can then take time to detail out the risks in each box and assign a red, yellow and green level to each one.  By going to work on the reds and making sure you are focusing there, your path to market will become achievable.

As an example, I had a client that had developed a unique approach to handling waste for those municipalities that were too small to have dedicated processing plants.  Their original approach was a direct sale of units to these municipalities.  Needless to say, they ran headlong into risk averse leaders and a passel of regulatory barriers.  The solution?  Counterintuitively, the client went international first, where they found a white hot need that could be satisfied under local regulatory control.  These successful installations then allowed the firm to build true pilot units that assured others that the technology could deliver. Now the firm is on a strong growth path.

Pulling it all together:

  • Find the underlying, specific white hot problem
  • Seek the sustainable repeatable market
  • Know the market is a living, breathing, moving target
  • Stay on the the narrowest workable [cash positive] path
  • Choose your battles and solve the riskiest portions of the model first
  • Become proficient in the other half of the model and metrics

If you recognize yourself on the STRIDE journey and would like to continue the conversation, please click on this link and set up a 20 minute, “roll up your sleeves” call with me, or call my direct line at 847-651-1014.

 

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Becoming a Complete Growth Leader: Raising the Stakes to Gain Support http://scottpropp.com/becoming-a-complete-growth-leader-raising-the-stakes-to-gain-support/ Wed, 09 Aug 2017 08:00:26 +0000 http://scottpropp.com/?p=3828

founder

 

True Story: Early in my career, the firm I was with had the good fortune of receiving a large windfall tax credit that resulted in both a hiring blitz and an ability to suddenly move forward with a number of programs that had been on the drawing board for a long time.  Naturally, while the development team was suddenly nearly doubled, the supporting teams were not – and you can imagine the backlog not just in the model shop, but on the technical writing, product testing, printing and specifications groups, as well.

I learned quickly that the key to being able to complete the activities I had been assigned was going to be my ability to negotiate with the support team leaders. These individuals were very overwhelmed with the backlog and had no way to rationally make decisions.

The challenge I faced here was becoming a leader that had high integrity and was also influential.  Being every bit the introverted engineer (sidebar – an extroverted engineer looks down at your shoes when they talk), my initial attempts to engage these resource managers was clunky at best.  After lots of trial and many errors, I came to understand that the key to this work was twofold – the ability to be myself and just have the dialogue and the courage to set context.  This led to the development of three skills that every growth leader needs if they’re going to be successful:

  1. Develop an ability to connect with people
  2. Develop an ability to connect the bigger picture to their interests
  3. Use “Thor’s Hammer” very sparingly (but do use it when called for)

Lets unpack these one at a time.

Connecting with people. This may be a blinding flash of the obvious, but you would be surprised at the small number of people who take time to get to know the staff teams at a personal level.  One of the huge gifts of being a card-carrying member of the human race is to be known.  What I mean by this is not just a superficial touch, but to give a sincere effort to connect before making a request.  What is their non-verbal cues telling you about how their day is going?  Have you taken the time to connect about how their weekend went?  Do you know that their niece was just accepted to college? These common courtesies are being lost in our “connected age,” which ironically, is the most disconnected relationally ever.

With some effort, you can find a basis to build relationships on.  I can hear some of you saying you don’t know “x,” she eats our young staff members for lunch.  I’ve had a few interactions that I didn’t think would ever get collegial (one factory supervisor comes to mind), but even though it took a while, I was able to develop a real and lasting connection.  If you take the time to put relational capital in the bank now, you’ll soon be known as the go-to resource.

World-class context setting.  When you show up at the door, it’s easy for the support team to say, “here is Scott, and all he wants is for us to make some chips on the CNC.”  I coach growth leaders to take a few minutes to “set the table” with both internal and external vendors and support teams.  What will it mean to the enterprise when this groovy new product hits the market?  How will it help us serve people better?  How could it impact the profit sharing?  There is almost always a very strong link between the work you are asking for and a very relatable impact that you can both agree is a good outcome.

Everyone wants to be a part of doing great work – so be sure that the work you do is great, and then don’t be bashful about inviting others to be part of it.  If the work you are doing is not part of a quest, be honest about that too, and link that to the pride of a job well done.

Use the override button sparingly.  In their career, every Growth Leader has an opportunity to be on a “gold key” program that gives you license to get the top priority on an as-requested basis.   If you receive this kind of priority service, my advice is to use it as a last result.  While it may seem that you should declare the need and move to the top of the list every time, that is a hugely disruptive event to support teams, who are typically understaffed and over committed already.  When you play the “trump card,” you send shock waves through multiple programs and commitments that have already been made, creating lots of extra logistics for everyone involved.

That being said, when you absolutely need it, don’t back away from using it.  I once had to get a demo done that opened the door literally for millions of dollars of new contracts.  We needed shop support off hours, and it was a holiday.  We made the demo and got the business, and I took the time to make sure that the tech received a share of our bonus pool.

These skills are part of the Complete Growth Leader framework, which I’ve derived from working with hundreds of individuals who have made the investment to become powerful value creators for the firms.  When used together, these skills and competencies allow expertise to flow seamlessly across organizations, and provide a path for significant new value to be generated.  From a development point of view, building this skill base will accelerate careers of those who aspire to a career of breakthrough growth in firms.  For more on this framework, see the posts here and here.

What I’ve shared here is a portion of the practical, runway level coaching we do in the Complete Growth Leader program, either 1:1 or as cohorts.  If you’d like more information about that program, please give me a call at 847-651-1014 (direct) or click here to directly get on my calendar for a no-strings-attached phone call.

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The Secret: Transitioning From Founder Leadership to Professional Management Without Losing Your Soul http://scottpropp.com/the-secret-transitioning-from-founder-leadership-to-professional-management-without-losing-your-soul/ Wed, 02 Aug 2017 08:00:31 +0000 http://scottpropp.com/?p=3818

founder

I was talking with a colleague at a recent summer gathering, and she is seeing the same thing I am: lots of firms that were started by Baby Boomers are being “rolled up” by Private Equity into groups of like companies.  In nearly every case, these vibrant, individual firms experience a huge shock to their systems when they are folded into “professional management.”

With calls out there for regaining the “founder’s voice,” you would think that these firms would have sought after expertise, and be asked to contribute to the group’s goals.  The reality is much different…

Taking a Step Back

In a founder’s firm, growth is not just a goal, it’s a reason for being.  In most cases the founder has paid a steep price for their independence, in many cases bootstrapping their early company while holding down a job.  They have gotten up early and worked weekends for the simple goal of developing something that would provide them with independence.

Once a firm scales, it retains a great deal of the founder’s fingerprints.  When it comes to growth, experimentation is encouraged.  Resources are made available, and once it’s got the boss’ backing, no internal barriers will keep the shiny and new from getting a fair hearing in front of a client or customer.

In fact, every time I visit a firm, and they take me on the tour, I always hear the founder’s story – even if it was 75 years ago.

This isn’t to say that the innovative work goes unchallenged.  The founder or her delegates will ask hard questions about applications, channel fit, and margins.  There will be go/no go decisions, but they will be biased toward experimentation and success.

What it’s Like in the Big Firm World

Once a firm has “made it,” complexity is a fact of life.  Operations has powerful incentives to improve the current offerings and take cost out of the enterprise every year.  Sales and marketing optimize reach and channel to assure that year-over-year market share goals are met.  Stakeholders expect that their equity will see appreciation, and get very edgy when the firm does not deliver.

Rather than embracing new products and services with open arms, processes are established to “protect” operations from onboarding a product or service that will degrade the metrics or tarnish the brand in any way.  These long checklists feel like a trip to the DMV for a new driver’s license for the previously nimble firm.  I once worked with a firm that had a 68-page checklist for their “large project” sales team that needed to be completed before a project would be considered by the group.

Rather than pursuing a project on intuition, new projects are built on deep surveys and data sets, where the “team” sets new product objectives and goals. Multiple meetings are needed to get projects on the “agenda,” These are then pursued by a product manager and a program manager towards completion. In the midst of this, a sponsor is usually “appointed.” Experiments are viewed as risky quickly extinguished.

Decision making is crisp and machine like, and if benchmarks are not met, the project is ended so the “resources” can be applied to higher probability of success projects.

How the Transition Feels

The transition is bewildering at best and demotivating at the worst.  Formally very contributive individuals feel like they are stuck in a spider web of bureaucracy, and in many cases the best and brightest are at risk of a quick exit.  Having been through this a time or two, I can tell you that the acquiring firm makes it worth your while to stay (usually a year) for a substantial incentive.  It is truly amazing how many people punch their ticket at 366 days and move on.

Having watched this play out in M&A a number of times, the usual outcome is that the product lines that were in place at the time of the roll up transition over, but much of the promise of the “in process” R&D is never fulfilled.

The Secret to Get the Best of Both Worlds

The insight that makes a nightmare into a workable transition is to realize that the issue is the crossing of challenge functions.  By challenge functions,  I mean the positive resistance, aka the homework, an individual and team need that will enable them to access the resources of the firm and pursue new products and services.  These expectations become the benchmarks and define the crucible in which vibrant new products and services occur.

When the founder is in charge, you have one set of hurdles to cross with a new idea, but when a firm has built the scalable infrastructure, quite another.  In the small firm, these hurdles are largely based on  intuition and alignment with leading-edge customer trends.  If it is in the founder’s interest area, the hurdles to getting resources applied to the idea are fairly low.   While this is initially attractive, eventually it results in a large quantity of “misfit toys” – projects that were started and never quite stopped.  The risk here is that new areas outside the zone of the founder will go uninvestigated, and new visionary team members will not have the needed license to develop their own strategic skills, building a brittle group wholly dependent on the founder.

Contrast this with a well-structured large firm where there are typically three zones of challenge functions: the “R&D” team, the “Advanced Development” team and the “Product Development” group.

  • The R&D team is the place for small intuitive bets.  These bets should have great promise and massive aspirations, but be very constrained from a budget point of view.  The entire agenda should be about proof of existence and risk reduction, with leadership that is skilled in supporting and challenging in both.
  • The Advanced Development team is the place to take those items that have shown themselves worthy of a limited beta investment.  The program at this stage is structured around showing true value and manufacturability.  This team has the role of a dual challenge – validating benefits for a client or customer (usually through a joint development agreement) and validating that the process and business model are a match for the firm.  Leaders here are ambidextrous: knowledgeable both in the technology, and also in the business.
  • The Product Development team is the zone where we take the de-risked work of the previous teams (or in market insights) and build scalable products and services for the operations team.  The challenge functions here are all about reliable value creation and scale.  Once this gate is passed, the operations team needs to be able to build these all day long without a glitch.

By parsing its own operations, the larger firm is now a very attractive environment for a company that’s being acquired.  Rather than losing talent, they will likely retain it and allow it to gain in value.  By applying principles from my work on Complete Growth Leader, the value of the product lines, and the talent can be scaled.

The Bottom Line

As stated above, we need both structures (and challenge functions) active in the combined firm.  The best practice is to develop clear boundaries where the intuitive work that founder-like visionaries is applied.  To retain the founding visionary leadership, it needs to be built into the acquisition strategy on day one.  

It is also very challenging to do.  The acquired visionaries are used to roaming untethered and creating a structure that accords them the organizational gravitas and decision making takes some significant work.  My experience is that most acquiring firms give the visionary leader a senior role running a larger part of the firm, which looks good on paper, but is not what they really want or where their true interests lie.  A much better approach is to carve out a significant new zone of growth and resource them with a promising leader or two from the core firm.

Once you’ve gotten good at this, it’s a very big deal to be “the acquirer of choice” by having a well-structured set of teams for the newly acquired firm to work into and become part of.  When you do this, you’ll beat your business growth targets consistently, because of the relatively low valuations accorded the in process R&D.  With the markets betting against you, very substantial returns can be generated (look at the early days of Cisco for instance).

We’ve only scratched the surface here today, and if you are an acquirer or a founder considering an acquisition, we should talk.  The easiest way is to give me a call at 847-651-1014 (direct) or click here to set up a no-strings-attached phone call.

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How Do You Develop New Solutions When Your Sales Team Won’t Help? http://scottpropp.com/how-do-you-develop-new-solutions-when-your-sales-team-wont-help/ Wed, 26 Jul 2017 08:00:59 +0000 http://scottpropp.com/?p=3814

stubborn

I was wrapping up a recent talk on doing growth programs in larger firms, when during the Q&A session, one of the up-and-coming innovation leaders expressed a common concern:

“We sometimes build some interesting things in our product team, but we can never get our sales team even remotely interested in sharing them with a customer.  How can we get our sales team on board?”

My response probably surprised her.

What I told her, is that it’s actually a good thing that the sales team is resistant to casually sharing new features and product enhancements proposed by the product team.  The relationship that is nurtured and watched over by your account team is built on two big foundations: trust and performance.  The customer needs to know that when they place a purchase order, the full weight of the firm will move heaven and earth to fulfill it.  This kind of trust takes time to earn and is very easily lost.  So it’s with good reason that sales is resistant to having casual feature discussions.

The question that will unlock a mutually beneficial discussion is this:

How do we develop sales team members as an integral part of the growth process?

When we ask the question in this way, we set the stage for a very different alignment. By setting up the activities under a new charter (discovery of the best possible new offering), it allows both you and your development partner to contribute time, energy and resources with your eyes wide open.

How does this help create the most value?

  1. It drives senior-level commitment both within the firm and within the client.  To achieve this mutual commitment, you’ll need the endorsement of the product team lead, production team lead and the sales leadership.  This will assure that everyone is informed and fully behind what is being discussed with the beta client so the account team is able to carefully position this work in a new space: high-value discovery work for mutual value.
  2. It allows the beta client to engage its best and brightest.  These kind of activities need to be well sponsored on the client side, as well. After all, it’s one thing to have an interested member or two on the client side, and quite another to have them bought into some type of joint development.  By raising the stakes, you actually improve the probability of a good outcome.
  3. It allows the account executive the freedom to build value and not degrade their commission metrics.  There is a romantic notion that sales exec’s live on the leading edge.  But the truth is that they live in the growth zone of well-vetted solutions that solve big pains for their clients.  The solutions they bring to these need to be bulletproof so they can do the customer development work and not get involved with inventions.  To shift to new solution development will take valuable on the ground time away from making their numbers, so the sales leadership team needs to comp them for this time.

You may be asking yourself how this really works, because to do a Joint Development Agreement, some informal “dating” needs to be completed first.  How then do you do this without disrupting the sales process?

Using an example from my own work, I can tell you that the best discovery work is done just beyond where your sales team is currently having success.  You can find this space by attending conferences and reading papers written by the leading-edge thinkers that have taken industry leadership roles.  By working with the marketing press, researchers in your field and conference leaders, you will quickly identify the space where solutions are being discussed, but yet to be configured.  This takes some pick and shovel work, but the payoff is well worth it.

In this case, we were looking for leading applications of wireless technologies in transportation.   By using the above techniques of investigating where the growth was, as well as the pressing unsolved problem, we were able to develop a really strong hypothesis for where the intersection of our strengths and the market need landed – all without engaging the sales team.

Once we had the participants in mind, and the outline of a new product, we were able to engage the groups more formally in a discussion that became a joint development agreement.  We were able to work with a leading member of the account team (who is still a friend today) in a win-win structure that got him paid well for his work in client development, and then enterprise a solution that it was able to leverage in lots of applications and locations.

This approach of doing your homework first, and bringing the card-carrying sales team to the table second, may seem like a lot of work.  Truthfully it is, however this method will retain the integrity of your sales and operations teams, while making you a sought after participant in the projects and programs.

If you’d like to go deeper around the tools that underlie the ideas in this post, please give me a call at 847-651-1014 or click here to set up a no-strings-attached phone call.

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Growth Leaders Beware: the Road to Hades is Paved with Good Intentions http://scottpropp.com/growth-leaders-beware-the-road-to-hades-is-paved-with-good-intentions/ Wed, 19 Jul 2017 08:00:06 +0000 http://scottpropp.com/?p=3803

carmen

It’s a common conversation, yet it continues to surprise me.  I was talking with a P&L owner of a smaller, publicly-traded firm, when they raised the issue of how they put themselves in a bind: “I’m not sure what else we could have done. We hit the customer need dead on, yet when we went to scale, we hit the wall.  We have orders with deadlines that I can’t meet and operations is ready to throw me overboard.”

One of the most common patterns I run into is the misprioritization of the work needed to create the breakthrough.  It’s not an issue of total resources or lack of hard work, but more a misplaced overinvestment in three areas (more on this later).  In other words, there is plenty of effort being applied, but it’s being applied to known work to be done – instead of to the major roadblock risks to be eliminated.

The best example of how to take on big things and productively develop new platforms harkens back to the space race.  When you look at each generation of the program (Mercury, Gemini, Apollo), each mission was predicated on the previous one, with the foundation and platform of expertise growing with each cycle.  In each case they removed risk from the ultimate goal – a moon landing.  Mercury was launch and orbit, Gemini the rendezvous and docking, along with the outside vehicle work, while Apollo was moon orbits, and developing lunar module operations.  By building a platform of capability, they were able to take the next step with a limited amount of risk and exposure.

In the same way, we can build a platform of new expertise in new business.  You may not need to go to the moon, but you do need to use your platform and bridge your business to something new.

I get to work with many capable firms that have well-established businesses that have hit the plateau of diminishing returns.  My job is to assist them in assessing their current foundational strengths, then help them target productive (and less competitive) new offerings so we can build an efficient and workable bridge between the two.  (Just because it’s easy to describe doesn’t mean it’s easy to do).

There are patterns that emerge repeatedly that consume these firms’ time, energy and resources. These over investments usually take three different looks:

 

1) Overemphasis of Technical Proof Points

The most common place this occurs is in tech teams, which have a tendency to overshoot the basic requirements of the project with significant additions to scope…in fact, we usually find R&D teams working well beyond the boundaries sketched out by the marketing team.  Secondly, it’s very common to find them working on enhancements to the core product or service before the main platform has been operationalized.

This always results in sub optimization of the investment, as the learning in bringing the first complete version of the solution to market is always profound and impactful.  While the team may build some useful general IP, the utility of that effort could be much more focused.

The anecdote to this is to make the R&D team part of the end-to-end delivery system and reward them for putting a basic prototype in the client’s hands.  Five minutes in the client environment is worth hundreds of hours in the lab.

I once worked on a very costly and detailed device that actually pre-dated the ill-fated Apple Newton by some time.  The issue was that while the device tech worked, the wireless data speeds were measured in kilobits, which made the device slow and unusable for its group.  Technical win – market fail.

 

2) Overdependence on Business Model Proof Points that Align with Existing Business Model Norms

Success in the current business model results in an over confidence that it can absorb the new product with no issues.

Nearly every effort starts with the assumption that the same benchmarks for their current product will apply.  The business is modeled on the same ratios of sales investment, marketing investment and partner development investment.  This is very, very common and these assumptions very rarely hold.  The work of developing the channel assumptions with clarity is amongst the highest priorities the team needs to work on, yet these are frequently not even part of the initial discussion when resources are being allocated.  The result?  We put the new product in the old system and find the business model does in fact need significant work.  

My example here is about a client company that was great in the business-to-business space who decided to do some consumer-based device work.  They were completely unequipped to support the product and provide training for the front-line technical team that needed to equip the channel (which they hadn’t budgeted for).  By doing a more thorough set of work, we were able to efficiently bring a partner in that could offload the consumer-centric channel support so the product come become successful.

For an additional examples of “confirmation bias” examples, check out this post.

 

3) An Over Emphasis on Those Things That Were Hard Won in Their Current Business Model

When the leaders who are currently in place were building their careers, they were rewarded for solving a series of unique problems that they encountered.  Having been promoted and found success in that expertise, these “success imprints” stick with them, and so they continue to assume that the portion of the program is still high risk and hard.  This “fighting the last war” issue can be very compelling, as they have solid experience that backs their interest and curiosity.

You can see this clearly in groups that continue to pour money into extending a product line after the utility has passed.  Each significant new wave is preceded by an overly engineered version of the last wave.  An example that has played out in front of us is the PC microprocessor “competition.”  Intel and AMD were continuing to push cores and speed long after the true competitive sphere had shifted to mobile and battery life.

 

How do we Avoid These Issues?

So how do we go to work on these three areas?  It comes down to using holistic analysis and letting true risk to solution delivery be the guide.  In using the “Right Project, Right Team, Right Plan” methodology, we build a solid plan that traces the arc from current strength to new business as a system, sussing out both business and technical risks.  These risks are then sized and worked sequentially until the Minimum viable value chain has been established.

If you would like to know more about the tools and processes we use to support the creation of efficient projects that deliver, please give me a call at 847-651-1014 or click here to set up a no-strings-attached phone call.

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How to Avoid Innovation Theatre http://scottpropp.com/how-to-avoid-innovation-theatre/ Wed, 12 Jul 2017 08:00:45 +0000 http://scottpropp.com/?p=3799

carmen

It’s very common in mid-sized firms and larger: when a big review is coming up, particularly with the analyst community or a larger customer, there is a need to have a few slides that position the firm as a leader.  The R&D team is tapped for “some content” and many times a project is dusted off and the slideware refreshed and presented as evidence of innovation leadership.

These “sizzle” decks are very common and make the rounds inside most firms.  Usually commissioned for larger events, they then cascade through the firm, and eventually become content for department meetings and perhaps recruitment.

The issue comes in when the sizzle deck gets to the people who are charged with making it happen, and everyone realizes that they’ve inadvertently been a participant in what we have come to call “innovation theatre.”  This happens when the gap between actual commitment and the lofty vision come into sharp contrast.

The danger here is two fold: first is the eventual disappointment in the external community when they realize that the vision they have been sold was only partially committed.  Secondly, but perhaps more importantly, is the layer of cynicism that appears when later the leadership needs to rally the group, and everyone waits to see if the move is “real.”

While it seems simple to close this gap (as Nike says,  Just Do It), there is a deeper issue that deserves to be unpacked.  

Just how do we make sure we mean what we say and commit to putting it in motion?

The pace and the distraction level of the modern firm creates a huge undertow for those leaders that work hard to find new organic growth.  Constant requests from SlackTM, texts and deadline constrained work leads to focus that is equal parts needed and in self defense.  

While many new ideas come forward, it takes a substantial commitment to move them from PowerPoint to something that has gravitas and learning associated with it.  Short of that, and well it’s easy to be the unwitting director of a one-act play of innovation theatre.

So how do we short cycle this loop and make real progress?

#1:  Joint Agendas

One of the first things a group can do is to step back and take a look at the bigger picture.  In operations, the context and paybacks are well understood, so there is no need to agree on the domains and underlying assumptions.  But in the world of building growth, trying to make selections at the project level often leaves the team with significant passive resistance that will quickly be discovered when the work needs to move from the lab to scale for a client or customer.

When I had the opportunity to facilitate joint agendas between R&D teams and product groups for a large public firm, one of the biggest breakthroughs was the understanding that it was impossible to “push” R&D into the product team.  The learning was that the op’s team would only get behind those projects that had voice of customer “pull.” This shift in thinking caused us to invest in joint sessions to identify key offering gaps and domains for innovation across the teams.  Setting the R&D agenda and getting “tech transfer” became seamless.

The investment in time to agree the domains and boundaries for the new services and products work paid for itself many times over as deep commitments were made.  For more on this, check out the articles here and here).

#2:  Play as a Team

Many growth teams are cross-functional committees instead of teams.  When a group plays as a team, the only measurement that applies is winning as a team.  Committees on the other hand are always playing as independent practitioners first, with allegiance to their home function, rather than making sure that their team mission comes first.

Once you have a mission, things begin to come into focus, and the next big event is to structure the group for success – this includes both the end objective and meaningful mid-term objectives that allow the group to measure itself on more than breaking the tape at the end of the race.  I have seen teams use proof of concepts, production of IP and completion of first paid beta as useful mid-level objectives.

Some of the truly powerful teams I have had the privilege to work with had the most selfless individuals on them.  Several times when key beta demonstrations and commitments were on the line, senior specialists rolled up their sleeves to do hands-on work, sometimes giving up sleep and time with their families so that the larger program milestones could be achieved.  This “surge” is one of the marks of a committed group, and while you cannot overuse it, the camaraderie established is powerful.

#3: Build the Bench

A remarkable number of firms don’t realize the long-term dividends from investing in promising mid-senior leaders who can sense early customer needs and organically develop projects and programs.  By providing developmental paths (programs and projects are by far the best tool), and along with cohort learning groups, significant progress can be made in months.

The most memorable personal example I have of recovering from “an empty bench”  was launching a full suite of new products with a lab full of new hires, one experienced tech, one amazing member of the technical staff and myself.  We met all the program milestones, and I still run into many of those new recruits who are now senior leaders across the industry – and part of the reason they are, is  because of their experience and early empowerment (out of sheer necessity).

Pulling it All Together

It’s that simple and that hard: the Right Project, Right Team and Right Plan.  When you are faced with a bout of innovation theatre, ask yourself which piece is missing or out of sync.  If we are unable to get behind this project, have we chosen wisely and as a team?  If we can’t field a team, and the group we have working on it makes only sporadic individual progress, have we been unable to establish a mission with good intermediate and risk-adjusted goals?  And lastly, if we are just not getting enough organic formation of new project ideas, have we let our bench strength sag?

If you would like to know more about the templates and diagnostics we use with growth program leaders and teams, please give me a call at 847-651-1014 or click here to set up a no-strings-attached phone call.

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4 Ways to Overcome Resistance and Turn Your Growth Strategy Inside Out http://scottpropp.com/4-ways-to-overcome-resistance-and-turn-your-growth-strategy-inside-out/ Wed, 05 Jul 2017 08:00:04 +0000 http://scottpropp.com/?p=3791

car stalled

Which is more challenging: the internal organizational resistance or market resistance?

A portion of my work is spent with cohorts of upwardly mobile, mid-senior leaders who are developing their growth programs as part of their commitment to professional development.  One of them asked me this question during a recent coaching session, and as usual, it was a question from the white hot, front lines of a growing organization that led to great insights.

The inconvenient truth is that many growth initiatives that would fare well in the external market are prematurely extinguished inside firms when caught in the complex web of internal politics, barriers to resources and budget turf wars.

I recall specifically a time when I was pitching a growth program for resources when the then COO of our firm told me quite clearly that if this didn’t work out, I would be on the outside looking in.  It’s this kind of resistance that we need to be able to push through if we’re going to thrive.  (PS – it did work out)

Helping Growth Leaders develop their skills in both dealing with inside the company resistance and marketplace pushback is critical to not only their career success, but the organization’s success as well.  

This set of skills in our Complete Growth Leader competency system are taken from the “influencer” and “challenger” branches of the model.  Influencer relates to those skills of lateral and vertical influence, where the Growth Leader can make a confident and effective case for the work needed to build a new product or service in the face of powerful organizational resistance.  Challenger skills allow the Growth Leader to have the persistence and critical thinking skills to drill down into those areas of disagreement and find a path forward that balances discovery and risk reduction.

So what does building these skills look like in a day-to-day sense for leaders?  Let me share a couple of key areas along with some short experiential applications:

1) Play the long game – When you are a growth leader in a firm, you are always on the prowl for talented, cross-functional team members.  Just as a pro golfer keeps notes on each golf course, you need to keep notes on people who impress you both inside and outside your firm.  When it comes time to make the case and press through the resistance, you’ll have the rolodex and the relationships that can help you pull together teams that carry the day.

To this day, I still keep in touch with key members of the breakthrough teams I had the privilege to lead.  By periodically checking in to see if you can help, you are setting yourself and your firm up for long-term successful execution.  When you need the extra nudge or insight, this network of top 10’ers always comes through.

2) Develop great sponsor relationships – Great internal work always requires sponsorship and air cover.  This too is best put in place well in advance of need.  Do not underestimate the power of having a great upward relationship with so-called staff roles such as legal, IT, HR and the like.  When it comes time to find a wise person, you can gain a great deal of insight from members of the senior leadership team who are not core P&L owners.  That being said, it’s also important to develop some “across the aisle” contacts with sales and operations, as well.  

It’s very important to learn the cycles of your firm so you know when you can ask for risk-related capital…and when it’s off the table.  Your ability to judge well and have great timing will come from your casual senior-level contacts.

3) Flirt – Be provocative, push the boundaries of the status quo and see how people respond.  Every leader I coach does this in his or her unique way,  but all of them are able to “move the boundary back” to get room for themselves and their team to be able to do the work of experimentation that leads to growth.  This delicate balance of earning freedom through performance is key to managing up and getting the freedom you need to do some of that early validation of your new and useful hypothesis for growth programs.

4) Keep your powder dry – Doing the heavy lifting of growth leadership is hard work, so before you put all your chips on the table, do what I call a Phase 0.  Use your intuition and your contacts to put together a back of the envelope business case and test it.  You can do this with a series of coffee conversations that tease out benchmarks, timing, customers who might be open to a beta event, etc. By doing this work beforehand, you can avoid using up your political capital on ideas that just don’t have the legs to move forward.

There is an old saying in the aircraft design community: “If the politics don’t fly, neither does the airplane.”  The same is true for our work to grow our firms from the inside out.  If you want to see your ideas flow to the market, you need to develop a skillful inside game.

So what’s the answer to the question I posed in the opening?  You might glean from my emphasis on the internal organization that that’s my bias…and you’d be right.  It’s the not-so-subtle internal resistance of many firms that keep them from looking for the new jobs to be done that would allow them to form products and services in higher-margin niches.

If you would like to know more about the tools and processes I use to diagnose and coach growth program leaders and teams, please give me a call at 847-651-1014 or click here to set up a no-strings-attached phone call.

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Three Reasons 60 Percent of IOT Projects Stall at Proof of Concept http://scottpropp.com/three-reasons-60-percent-of-iot-projects-stall-at-proof-of-concept/ Wed, 28 Jun 2017 08:00:02 +0000 http://scottpropp.com/?p=3785

car stalled
I received some interesting notes back regarding the post (here) from SCPD, particularly on the 60 percent of IOT programs that don’t make it past proof of concept.  For those of you coming from outside the tech world, IOT refers to the “Internet of Things.”

I wasn’t surprised, as the Gartner Hype Cycle for IOT has been consistently showing various elements of IOT in the “peak hype” portion of the curve for several strategy cycles.  For those unfamiliar with this curve, it builds on the common observation of new-to-the-world technology undergoing a massive boom of expectations, before sinking into a deep trough of disillusionment, and then finally emerging on a solid platform of costs and benefits.

There are deeper reasons why this technology has had such a stubborn battle with moving from expectation to delivering on its promise.  And these reasons all pivot around one truth: the end customers don’t want IOT solutions.

Let’s unpack why this is the case.

IOT has been around for a couple of decades now in various forms.  The current wave was put in much stronger motion coming out of the ‘08 economic crisis primarily due to semiconductor firms needing to generate demand for devices that could put their huge fixed investment in fabs back to work.  What better way to do this than to go to the “bottom of the pyramid” where the number of nodes needing connection was nearly infinite.  By picking up on some existing trends in products and manufacturing, they were able to develop some early successes (smart cities, connected vehicles, smart home, retail tags, etc). Great marketing was created that pointed us toward the “future.”

The truth, however, is that these use cases had been along well before IOT was a thing, and the most successful of them are not looked at as IOT programs at all.  Smart cities have their roots all the way back to the mid 70’s and very high quality work has been going on in the transportation industry for decades, as illustrated here and here.  The same can also be said for Smart Grids, which you can read more about here and here.

What is really going on here is much bigger.

First, it is absolutely true that we have made huge strides in technology.  Moore’s law, cloud storage, sensors and open source software and hardware have opened an enormous amount of potential for connectivity and data gathering.  What we are just beginning to get our arms around is that our current view of supporting devices is inadequate for this huge explosion.  We simply cannot treat billions of devices in the same way we think in traditional enterprise IT security (see article here).

Secondly,  in many cases we are taking devices and architectures off the shelf that were purpose built for the previous applications, and mapping them to this new world.

Every significant wave of new technology has gone through this cycle and there are always some very strange artifacts on the path from one paradigm to another.  For example, consider how persistent the physical keyboard was in the evolution of the smart phone.  We consistently demanded that each device be a mini typewriter until 2009, when the iPhone smashed through that wall with a touch screen that changed how we all use devices and ended our need to move a mechanical key.  Do you recall the “hybrid devices” that had both? 

Whenever new business models are born, there is a predictable path that occurs.  I’ve roughed out a six-step process that captures this pathway:

  1. A hypothesis of benefits for a select group of clients based on a “new” application
  2. Build out crude prototypes using off the shelf elements from the last generation of technology
  3. Furious experimentation to solidify the reality of the benefits established
  4. Reference architectures emerging that provide a reliable platform for those benefits
  5. Customized elements of those architectures being built to improve cost, performance and refine the experience
  6. A long and robust cycle of adoption and scale

In many ways, IOT as a category skipped the first three steps and proceeded to step 4, i.e reference architectures and solutions looking for a profitable application.  What this means, is that we have things that worked well in one application, being sold as general purpose items for the “IOT” industry.  In doing this, the success ratio of new projects drops (in the case to 6/10 not working), and the whole cycle needs to start back at stage one.

Which leads us to the third key issue, the programs that are “failing.”  When you are undergoing a shift like we have described above, the temptation for firms is to create a scenario, rooted in their current business paradigm, where each project or program results in a financially contributive line of business.  This results in programs that are wrongly structured.  When these shifts occur, the business case needs to be looked at as a hypothesis to be tested, and the primary outcomes being the learning and insight that can be gained.  The reason this is so extraordinarily hard, is that the value narrative of these core businesses are shifting.  Just as value migrated from AOL as Google became popular, value migrates during successful IOT projects as well.  Programs need to be set up to derisk and discover these powerful new value shifts.

I’ve written about the STRIDE framework here and here.   IOT projects find themselves in the “R” trough, where the real learning occurs that is going to become the core intellectual property of the offering.  Recognizing this, savvy leaders structure programs with risk identification and reduction as the primary outcome, rather than initial financial success. (financial success is a lagging indicator in these transitions)  In this way, you can make prudent investments in risk reduction and learning, guided by the longer term vision of the business case outcome.  I can’t overemphasize how important it is to get this thinking “right side up.”  When taken to extremes, upside down thinking here will lead to catastrophic damage to P&L’s and careers (see article here)

So, to my opening premise, the shocking truth is that your customers don’t want IOT. Rather, what they really want is your core products and services benefits served in the most efficient way, which is highly likely to use all the technology bits combined with hard won IP that your firm develops while doing the hard work of hypothesis testing.

I’m working with several clients through this process right now, and it leads to some much deeper insights and breakthroughs in two areas.  First, by starting with the “Why” and the hypothesis, “if we do this, then the end customer will receive X, X and X benefits,” it leads to much crisper and specific understanding of the real needs, areas of risk and clarity in specifications.  Second, this allows us to look at building blocks that are much better suited to what the need is from a cost and quality perspective.  It allows us to spend value on the right elements to support learning and discovery on the path to real benefits.

I’ve covered a lot of ground with you today.  If you’d like to talk more about this first principles approach it all starts with a 20-minute virtual cup of coffee.   To get started, give me a call at 847-651-1014, or click here to set up a no-strings-attached phone call.

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From the Practitioners: Five Takeaways from the SCPD Conference http://scottpropp.com/from-the-practitioners-five-takeaways-from-the-scpd-conference/ Wed, 21 Jun 2017 08:00:05 +0000 http://scottpropp.com/?p=3776
scud

Augmented reality was one theme at this year’s conference


Picture a group assembled under one mantra: accelerating innovation.  It would be an eclectic group of industry leaders, thought leaders and others who make their living building value.  Mix in equal parts of dialogue, interaction and new experiences.

That’s what the SCPD (Society for Concurrent Product Development) conference is all about.  Set each year at the 3M Innovation Center in St. Paul, Minnesota, the event brings together leaders from around the world to hear challenging talks, listen to provocative panels and build new insights at the intersections of their work and the insights of others.

Given this background, let me share five provocative takeaways from this year’s 16th annual event:

1) We have reached “peak accelerator.” In their zest to become home to (or retain) their best and brightest, many communities have invested in the creation of new business incubators.  Included in these is a combination of collocation, mentoring, network building and investor exposure.  Through his research, Brian Abraham pointed out that we have more of these than the market can absorb, and in fact the real metric of sustainable businesses being created is going the wrong way.  In other words, while acceleration experiences are useful, they are not preparing groups for the long road ahead – much like a conveyor belt with a gap in the middle.

This teed up some insightful dialogue from later participants about their journeys, and how they used a combination of their day jobs, early contract wins and the shrewd use of scarce resources to get across this no man’s land.

panel2) Those best sellers are not helping. In a fun moment, Santiago Vallejo put up a slide with a number of the innovation best sellers on it and did a hand raise on who had read what.  The punch line was: “and none of these is useful to the corporate innovator.”  His point was that while books are filled with ideas and stories, it’s in the hard work of integrating and applying them that the real value is created.  

3) Your job is to edit your team. Mike Bollinger did a great job of sharing with us how he has built a great culture at LiveFront, with the insight that it is up to us to be constantly shaping, releasing and focusing our teams.  So many times we tend to dive deep, when what we really need to do is step back and make sure we have the right focus, the right team members – and have set the context up well.

4) Visual capture need not be pretty to be effective.  Jeremy Kriegel walked us through a number of exercises designed to prove those of us wrong who say we can’t draw.  The truth is that simple sketch visuals are the key to releasing lots of energy and new ideas in a team.  By stepping up to the whiteboard, we can bring order to chaos and represent the conversation in a very useful and transportable way.

5) 60% of “IOT” programs stall at proof of concept.  Jen Nowlin of Accredent delivered a great talk where she exposed a lot of the unspoken truth about doing Internet Of Things business case work in established firms.  The powerful insight is that if the business case is not compelling and very strong, when it is time to put real
weight into the work (i.e. Proof of concept and beyond), the work stalls.  This is a good note to all of us who practice in this area to not underestimate the need to create powerful momentum around these programs.

I’m hoping you have some provocative conferences on your agenda this year.  We can all learn from one another, and the need to create value has never been higher.

If you’d like to talk through how to improve your enterprise, team or individual strategies, it all starts with a 20-minute virtual cup of coffee.   To get started, give me a call at 847-651-1014, or click here to set up a no-strings-attached phone call.

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Becoming an Amazing Growth Leader: Building Strong Connections with Your Peers http://scottpropp.com/becoming-an-amazing-growth-leader-building-strong-connections-with-your-peers/ Wed, 14 Jun 2017 08:00:18 +0000 http://scottpropp.com/?p=3767

coupling
It’s that moment.

It’s among the hardest things that growth leaders need to do.  After discovering and validating a new product or service (which seems like the hard part), they need to bring the people on board that can help scale and integrate the offering.  This is the point when many strong and well-built new services wind up getting put on the “technology shelf” while we “make the quarter.” 

It turns out that the internal sell is actually harder than developing external demand.

Why is this?  When you are doing something new in the firm, when you approach anyone with a need or an ask, it looks like an absolute side road that is at best a distraction.  It’s on you to be able to set the context and make the case of what’s in your mutual interest.

If you are the project sponsor, there is a delicate balance to be struck: you want to keep the team sheltered from heavy and restrictive demands that the larger firm puts on business units, but also have those same business unit leaders accept the new offering when it’s time.

A Surprise

In my coaching work with growth leaders, I use a term called the “connection fraction.”  My working definition is how much customer value is produced for every dollar spent in R&D.  It is not uncommon for firms to leave 40% of the R&D spend on the table by not getting the full cycle complete – that is getting that validated product and service all the way through their firm and into customer’s hands.

In my own product leadership experience, I was privileged to spend years taking projects from R&D and forming the connection through the firm to an appropriate market.  In getting several major wins, and some equally painful misses, I was able to hone some tools to complete this work, which I have now built and shared through my consulting business.

The surprising part of all this is that, while technical and product market fit issues abound, they are almost always solvable.  

What isn’t obvious at the outset, is that organizations are connected horizontally with weak forces . Click to Tweet

The introduction of new products and services stretches these weak forces and in many cases, progress stalls.

Leading Growth is all about Forming Great Lateral Relationships

There are four essential competencies of a Growth Leader.  Even the strongest growth leaders usually fall short in two of the dimensions, and by doing the work to shore up those areas, we are able to improve their ability to move the work forward.  

When you are getting ready to scale, the competency that is tested is what I call the Champion, and specifically, the role of influencer and diplomat.

Let’s drill down on three skills that help us release our hard-won research into customer hands:

1) Bridge Building – Growth Leaders who get to scale have the most unlikely relationships.  If they have a background in research, they may be best friends with the technical operations or manufacturing team.  By taking the time to invest in getting to know their upstream and downstream peers, many practical issues of scale are completed with much less  friction.

The fundamental, but usually missed in practice skill here, is that these relationships have a subtle and unseen mutual agreement.  That agreement is that the work we do is high value and serves our firm in a bigger way than our individual or functional agendas. By forming this agreement and routinely honoring and creating value in it (R&D on call for a production issue, Manufacturing creating some “beta prototypes”) these weak bonds get strong.  When it’s time to do a heavy lift, the pathway already exists.  True story: our team was once challenged by a client to deliver a fully-integrated system on site in ten days (which through normal channels would have been months).  By having these relationships in place, we were able to get it done.  More on that here.

2) Understanding we all have unique pressures and expectations.  Each function in the firm has different languages and sub metrics that can make this very challenging.  Sales has a number to beat, marketing gets paid to source qualified leads, production gets measured on everything, but primarily on the value delivered per day against cost it consumed to deliver that value.  The key to forming these great relationships is to take a walk in the other person’s moccasins.  Knowing that it’s impossible to get something into the production line the last week of the month is only possible when you know what kind of pressure your peers are under.  By doing this you can avoid asking for a heavy lift, when with a little planning, you can make it work smoothly.  

Second true story: early in my product development career, I had an engineer come in over the weekend to make some updates on some “special” customized units.  What I didn’t know is that he broke protocol badly by climbing the stockroom fence, making the changes to the units and then returning them to stock – with no paperwork.  Needless to say, I had a very interesting voicemail  with lots of adjectives and adverbs on Monday – along with a coaching session for my associate.

3) Being really clear in our communications.  When you work across the firm, you need to up your game in asking and listening.  Each group develops its own communication protocols and vocabulary, and anytime you make a request or set and expectation, you need to use the practice of asking for exactly what you need – no more no less.  A common area of contention is on budget – who is paying for the labor, materials, commission, shipping and a host of other items with P&L impact.  By developing the insight to have these specific items decided and ready to go, you won’t inadvertently throw your colleague under the bus by having them do you a “favor” that puts them in their boss’s office.  The second point here is to be clear that this is “early stage” and we expect some gaps.  By giving everyone a heads up, you won’t tarnish the reputation of your fledgling product or service.  

Final story about the impact of doing communications well: we had completed at great expense, the run of a new-to-the-world device that needed to be halfway around the world in a few days.  When it came time to pack them, both teams realized that no one had revised the packaging to be able to use our very robust logistics channel.  Long story short, those units had their own airline seat, and one of our production leaders got his first trip to a new country.

It’s in the white spaces, between boxes on the org chart, where the real work of bringing vibrant product and services to the customer is done.  If you’d like to talk through how to improve your “connection fraction,”  it all starts with a 20-minute virtual cup of coffee.   To get started, give me a call at 847-651-1014, or click here and set up a no-strings-attached phone call.

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