Not everyone’s strategic and 4 other things to think about before you finalize the company’s 2010 goals
- Image via Wikipedia
‘Tis the season for strategic planning for most of us it started in September and for others they are trying to finalize/solidify their 2010 plans (roadmaps, budgets, hiring plans…). Ok, so maybe this post is a little late for 2010, but bookmark this for next August or 90 days before the end of your fiscal year because the same craziness comes up every year.
I’ve been talking to a bunch of people of late about how their gigs are going, what does 2010 look like and some folks are hiring, others moving to new roles some are still just out looking for a new job and 2010 looks like it could be a crazy year for product managers and software companies in general.
With the job market as it is and the ever increasing pressure for products to perform better than they did last year, product management is already crazy for many. If you have been out there looking for a new job, you know exactly what I mean. Folks have been asking my opinion of this company or that role and honestly, I’m not the guy to talk to, so I’ve been referring folks to a post I really like from Gopal Shenoy on how to evaluate a PM gig. Everyone and every company has different views of what product management does and what they need from a product manager. The same is true about developing the annual plan, team goals and strategic plans.
So as I got to thinking about what folks hiring a product manager should think about, how I’m personally going to set goals for my team and what leaders need to keep in mind when crafting their 2010 plans to make everyone successful, I kinda came to a realization that there just might be a disconnect for some on planning, goals and how to align the product organization to the strategy. I’m not sure how all of these ideas meshed, but for some reason I think they do, since in many organizations Product Management is the carrier of the strategy torch and plan execution in many organizations. Even in organizations where they don’t drive the strategy or even participate in the development of the next year’s plan. Yup, back to that whole “all of the accountability and none of the authority” thing.
Ultimately we all need a baseline to plan from regardless of the role product management has in annual planning or strategy development. We also all need a way to gauge the progress of the organization, team members and leaders, so the annual strategic plan is as good as anything to track effectiveness, I guess as long as it can be tied out to “doing the work” and achieving the goals.
In general, most businesses need to understand what new ideas could be pursued (everyone has ideas), what are the investor/leadership expectations, key areas of functional/tactical ownership and the general product management model needed to successfully execute an annual plan and overall strategy development for a company or product line. Of course, what a company needs varies based on general market conditions and where your product/company is from a maturation level. To that end, here are 5 things to think about when evaluating your organizations 2010 strategic plan, the roles and the expectations for a product and/or a product manager in your initiatives and plans.
Not Everyone’s Strategic
This is an important one. Not just for deciding how to implement product strategies, but also to develop a strategy and execute it. In some businesses, it is hard to identify who owns strategy development and who is responsible for executing the tactics. Not just who is responsible for execution, but how are you going to track the progress and report on it. Regardless of what world view you have, you need to have a stake in the ground on who owns what and what is required to exit with an approved strategy and plan for 2010. Below are some models which we all know exists:
- Product owns strategy
- The CEO/CTO/CMO owns the strategy
- A committee owns the strategy
- No one owns strategy
- Your competitors drive your strategy
No single one of these is worse than an another – well ok – maybe the competitor one is the weakest, but depending on where you are competitively it could be a valid mode to pursue, not sure it is strategy though, just a bunch of tactics which in hindsight has the appearance of strategy. I guess the “no one owns strategy” one sucks too, but that is probably fictional and doesn’t exist, but I had to put it as an option.
No matter what your model for strategy development/approval, unfortunately we often forget someone has to actually execute the strategy and it’s hard to acknowledge one’s activities or contribution is tactical and you need to try and not have folks who have a purely tactical role participate in the strategy development. For some reason I just can’t get a Caddy Shack quote out of my head when this came up in a discussion about 2 months ago (which is when I started this post), here’s the quote:
Danny Noonan: I planned to go to law school after I graduated, but it looks like my folks won’t have enough money to put me through college.
Judge Smails: Well, the world needs ditch diggers, too.
When trying to build out an organization, leaders of companies need to figure out who owns the strategy for what part of the business, because without a clearly defined owner of the strategy, who owns the execution and what are the success criteria it’s probably going fail.
Also, it’s not like everyone enjoys participating in strategy, but some do indeed think being locked down in a meeting room at a semi-local resort is just the best. I had a surprising conversation the other day with a sales guy who had the following to say, which was refreshing: “while I like participating in all of these strategic discussions, I do have to sell the product sometime – I wonder if there is a correlation between the time my team and I are in meetings and quota attainment?”
Every Functional Group is not Created Equal
Emotions, Anecdotes and one-off Sales cycles have no place when rebranding, repackaging or creating the next year’s plan. Each of these may make for compelling discussion fodder, but market trends, sales velocity and product competitiveness should be the key things you look at as you look into 2010 and beyond with your strategy.
Just as product managers have no business writing code, creating logos or setting sales quotas other groups need to understand that good product managers aren’t building a product for the next sales cycle, but the next 3 years of sales. It’s always the time horizon thing which is the toughest to understand when it comes to strategy. Some strategies just might take 3 years and most businesses don’t take that into account – I digress.
Remember the Market
No question the market is changing – the race to free, the full on emergence of WOA/SOA and the ever growing value available via open source are challenges for every product manager. For many of us, this just isn’t a lot of fun and it is impacting pricing, profits and customer retention for many a software company. Revenue and profit are always one of the most interesting parts of product management for me, but there seems to be a trend in businesses becoming increasingly Top Down in their business plan expectations. Putting in place strategic plans and revenue goals which aren’t acknowledging large scale market dynamics, historical execution or competitive pressures which is becoming the norm for many folks out there. I like optimism, but only if it is tempered by facts.
Warning the Objects in the Rear View Mirror only Look Like a Good Idea for a New Strategy
Recent successes in sales cycles are often the most salient thing organizations remember and often create the basis for the next big thing. If in the last 2 quarter you successfully closed deals of a given type, it doesn’t mean that should be your strategy moving forward. Could just mean you closed some deals and sometimes it’s just the sales leader or a given sales person with the right skills and Roledex to sell a given type of deal and not a market signal.
I worked on a deal once worth ~$26M in contract revenue for a SaaS offering and once that deal was done it became the strategy to win more of those. Actually I think the CEO quote was “See if we can win 1 $26 million deal we should be able to win 5 or 6 a year” To that end, we did in fact we divert all resources to better support that type of deal.
While every company wants 7 or 8 of those types of deals a year to change/improve the revenue arc, it may not be possible. No really. You just need to think about how many of those transactions exist in the marketplace to come to that realization and need to understand why did you actually win the deal and how beneficial are those types of deals to the bottom line before you pursue a strategy which search for the market anomaly.
Don’t get me wrong, killing whales is exciting, organizationally motivating and just a great experience to have, but it is also the least non-repeatable for most companies. Blind squirrels do find nuts every now and again afterall.
It’s not just sales execution anomalies which appear historically and look like proof points for how to move forward, analyst write ups, press clippings and repackaging events can have significant near term and mid-term impact for a business, but they often don’t have the staying power to position a company for success over the long term. The other item which also confuses some folks are strategic aqusitions with crazy exit valuations in an adjacent segment or a segment which have no relationship to your current market. At the end of the day it doesn’t matter because some executive read about it on the airplane or talked to someone at dinner the other other night and now your CEO just can’t get it out of his or her head that a 4X revenue multiple is a realistic exit valuation in the next 3 quarters when your spinning off 12% EBITDA.
I can only add that Cisco or Google are probably not going to buy you, so don’t use their recent acquisitions as the central proof points to drive your 2010 strategy and exit plan.
You Might Just Want a Product Generalist for Your Plan
In the spirit of not everyone’s strategic, this may also apply to product managers (sorry Steve Johnson). Sometimes product just tows the line, hits the delivery schedule and executes the launch – not exciting, but reality. For example, I’ve heard folks from at start ups that product management washes bottles, does demos, creates sales presentation and just about any other menial task another department doesn’t want, but could loosely be associated with a product.
For some organizations this is spot on for what they need – a product generalist. This is important to know when you are looking to hire a new person, align your organization to expectations or just to execute your 2010 plan.
While I don’t subscribe to the generalist approach, I do know that PM’s do in fact serve a general role at times and it is required, but for some company’s this is all they expect from a product manager and that’s ok since after all the world does need ditch diggers and people that can create pretty product roadmap slides and do demos.
If you are in one of these companies or if your plan requires more generalist skills you need to make sure you find the right person to fill the bill. The best hire for that type of role is the really articulate support guy/gal who gives good demo while staying on top of a great deal of random tasks while interfacing with customers.
There is always the more important question if you are looking for a generalist – Do you have enough Solution Consultants, Support personnel, Facilities people and Development Managers?
Hopefully you have your plan in place, it’s rational and y’all are ready for execution in the new year, if not there’s always 2011!
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
No comments yet.
Leave a comment