Scenario Gaming: How Resilient Is Your Product Strategy?

Scenario Gaming: How Resilient 
 Is Your Product Strategy?

By JANA PAULECH

Strategic resilience as a topic has been cemented high on every board’s agenda thanks to the pandemic and widespread geopolitical risks (McKinsey global survey, 2021). With the rapid rise of technology, resilience is also key in the planning of technology and digital strategies by CTOs and tech leaders.

However, the topic of product strategy resilience rarely if ever surfaces when talking to product leaders about their product strategies. This is despite being one of the biggest detractors to creating big, bold, long-term product strategy.

One of the most common ailments espoused by product functions is their inability to consider the long term. Why consider that when things change so fast?

“Our market changes, our regulatory environment changes, and our business priorities change. We can’t create a long-term strategy with all this change and, if we try, we’ll just have to throw it out and start all over again.”

This thinking is symptomatic of ‘fragile’ strategy – a strategy that does not consider change in its inception, and therefore really only ever plans to change the plan.

Moving beyond ‘fragile’ strategy towards ‘resilient’ strategy means that product leaders consider change not as a possibility, but as a certainty. Change is our constant companion, and therefore must be included in our strategy along with all the other usual suspects – competitors, market, customers, business priorities, risks etc.

Scenario gaming invites strategy makers to identify and create likely scenarios.

They then ‘game’ those scenarios out to consider what could be done differently. From these insights, we create a strategy that can rapidly adapt to change.

When we consider strategic resilience in our product strategies it will not only help us chart more transformative horizon three destinations, but also elevate the level and gravitas for the discussion of our horizon one and two strategies to the board-level concerns of strategic resilience.

One of the most useful techniques for developing a change-resilient product strategy is scenario gaming.

This technique invites strategy makers to identify and create likely scenarios that may eventuate, and that would have material and rapid impact on the organisation and product. They then ‘game’ those scenarios out to consider what could be done differently.

By combining the insights of many scenarios into the product strategy, we create a strategy that can rapidly adapt to change.

To find out more about scenario gaming and the Brainmates ‘Identify > Game > Adapt’ framework for scenario gaming, you can watch the video below.

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How To Prevent Common Mistakes In Product Development

How To Prevent Common Mistakes In Product Development

By JANA PAULECH

Product development can be a difficult process to get right. Not all products are created equal, and an alarmingly high number of products produced will fail. In fact, around 40% of the products launched by organisations fail to meet their intended objectives.

This happens because something goes wrong in the product development process somewhere between having that great idea and launching the end product into the market.

In a previous insights, we covered The Five Most Common Mistakes in Product Development, which were:

1. A Lack Of Customer Benefit
2. Inadequate Customer Research
3. No Clear Differentiation In Market
4. Poor Design & Execution
5. Ineffective Product Marketing

But what steps do we need to be taking to ensure that we don’t let these common mistakes derail our product development?

Most Lethal Failure Points Occur In Product Discovery

It is important to note that of the five failure points above, some are inherently more lethal to the future of a product than others. If you have a product that solves a deep problem for a defined target market and delivers true benefits, it may be able to outlast some hiccups with execution or product marketing to grow over time.

This assumes that those issues don’t fundamentally debase the customer perception of the product or organisation’s brand.

However, the converse is not true.

No amount of flawless technical execution or product marketing will save a product that solves no problems, provides no benefits, and has no customers.

This means the most critical thing that can be done to avoid these product failure points is to cover the ‘product thinking’ basics every time:

  • Who is the product for?
  • What problem does it solve for them?
  • What benefit does it provide to them?
  • What benefit does it provide to us (e.g., will they pay)?

Validating these basics with real customers rather than assuming that you know what the customers want avoids stacking the case with false data. Finding and talking to customers will help validate if you have the right target market and if the problem is one they want to be solved and would pay for.

Your Product Process Should Focus On Checking
 For Failure Points

If most product failures could be avoided by sticking to the product thinking basics, then why do we still launch so many failing products and fail too few ideas?

The most likely culprit is the lack of a repeatable and structured product process that emphasises the basics of product thinking and embeds checks for product failure points along the way.

A successful product management process should:
1. Test for each of the product failure points during the process.
2. Provide structured decision points when an idea can be culled or continued.
3. Provide a common language for stakeholders to understand how decisions are made.

Dividing your product management process into phases or stages can help to identify failure points and provide a common language for where an idea is in the process.

Ensuring the most lethal failure points are tested early also helps assess more ideas and reduces any sunk cost or anchoring bias.

Take the Brainmates product management process for example, which occurs over three phases:

Innovate Phase

A structured process for innovation & discovery that focuses on testing many ideas fast. This phase is key to avoiding the most lethal failure points. Structuring product thinking – for who, what problem, what benefits and positioning – into this phase and testing with customer research will help to remove bad ideas early. The majority of ideas should be removed in this phase. Remember, for every successful product, there are about 2999 failed ideas. We need to fail more ideas earlier in our product management process.

Design Phase

A phase focused on deep ‘as is’ current state customer understanding. The aim is to identify real problems for real people, and guardrails to guide solution design and development. Guardrails should be focused on the customer and market needs required to solve the problem, rather than what can be delivered by a specific date. Prioritisation of these guardrails can reduce scope creep in the final phase.

Implement Phase

A phase to focus on preparing for product launch and testing solution readiness against the design phase guardrails. A common understanding of customer and market guardrails across the solutions team means solutions are tested throughout development and avoid poor customer outcomes on release. Product managers spend the majority of their time in this phase preparing for a successful launch in collaboration with their marketing colleagues.

The Brainmates product development process focuses on testing for each product failure point and failing bad ideas throughout the process.

Fail More Ideas To Launch Fewer Failing Products

In summary, failure will happen – but failing where others have failed before doesn’t have to!

Having a process that focuses on avoiding the most common failure points is the best way to avoid making the same mistakes and minimise the cost of failure to your organisation.

Weed out the most lethal failure points early with a process focused on the basic elements of product thinking – who is our customer, what problem are we solving and for what benefit (for us & them). Most ideas will fail the test, which is to be expected with strong product innovation.

The final failure points can then be avoided with strong customer and market-centric guardrails for solution design and development and increased focus across product and marketing on preparing early for launch, because you can never be too prepared.

The Five Most Common Mistakes in Product Development

The Five Most Common Mistakes in Product Development

By JANA PAULECH

New products fail all the time. On average, about 40% of the products launched by organisations fail to meet their intended objectives.

Some quotes put this higher – even up to 95% – but 40% is what empirical evidence indicates (see Castellion & Markham 2013). Even if this is an underestimate, that makes product failure an even bigger issue for organisations.

“Now, hold on a minute,” you might say. “Isn’t product failure just the inevitable cost of product innovation?”

To that, I unequivocally say NO!

Developing and launching a product only to have it fail is the complete antithesis of the ‘Fail Fast’ innovation motto. You have just invested thousands of work hours and millions of dollars in developing and launching this product. In no way, shape or form is that fast.

On the other hand, a high volume of failing ideas (i.e., ideas killed before they are developed or launched) should instead be thought of as the signpost of strong product innovation. Conversely, however, we are not failing enough ideas.

Even if we took the oft-quoted “95% of products fail” (most commonly attributed to Clayton Christensen) to mean “95% of ideas fail”, then that means we’re still taking far too many ideas through to production and launch.

Estimates indicate it takes about 3000 raw ideas to make one commercially successful product (Stevens & Burley, 1997), and in some industries much more. In reality, most companies are reviewing and failing ideas several orders of magnitude less than this.

We are not failing enough ideas, and we are launching too many failing products.

Something is occurring in the broad spectrum of product development between thought and launch, leading us to keep making the same mistakes.

Below is an attempt to categorise the five most common mistakes seen in product failures with the benefit of hindsight (and maybe a sprinkling of common sense).

#1 - A Lack Of Customer Benefit

A product or product improvement needs to provide genuine benefits to a customer. These benefits will come from solving a deep problem a customer has.

Product Management 101 is ‘problem before solution’, but it still appears the message is not getting through, as too many products and product improvements are launched without a real benefit to customers.

Think of the last time someone said “we’ll put AI/ML into this”. A secondary concern is whether these benefits are enough to justify the cost. But no amount of cost-cutting or even a freemium model will solve the failure point of delivering no benefits to customers.

Juicero is a widely mocked example of a product that provides no benefit. A Wi-Fi-enabled juice dispenser that presses juice from single-serve packets is an example of a technology solution searching for a problem.

In 2017, when a Bloomberg article showed the packets could be more effectively squeezed by hand rather than with the $400 machine, this was the last blow in a 4-year journey that saw investors lose over $200 million to this failure point.

#2 - Inadequate Customer Research

A product or product improvement needs to fulfil an unmet need for a sufficiently large group of people who are willing to pay for it.

If PM 101 is ‘problem before solution’, then PM 102 must be ‘who will pay and why?’
This lesson is still frequently forgotten, as evidenced by the most common answer to the question “Who is your product for?” still inevitably being “Everyone”.

General purpose products rarely succeed, and product managers need to do the research upfront to identify whom they are solving a problem for, whether are there enough customers who want this solved, and if they will pay to have it solved.

A recent survey estimates that less than half of product development ideas are validated with customers at all, which still doesn’t guarantee that the right questions are being asked to identify a suitable target market or willingness to pay.

Segway is a well-known example of a general purpose product that no one actually needed. Most people’s transportation needs were already sufficiently solved by the current methods of transport – foot, bicycle, motorcycle, car, etc. – yet Segway touted it would solve all individual transportation needs.

In other words, this is a target market equalling ‘everyone who moves’. In reality, its use was relegated to low-volume, niche transportation cases in urban settings like police, postal services and tourists.

#3 - No Clear Differentiation In Market

A product needs to be sufficiently different enough in a buyer’s mind to sway them to purchase.

In a world where your product is never the only solution to a problem, you are asking a customer to choose you over another solution that may provide similar benefits.

It may be that even if your product has no direct competitors, the competitor is customers ‘doing things the way they have always done things’, which offers much less activation energy to change than ‘doing things with your product’.

One final consideration is how your product will differentiate within your own product portfolio.

Coca-Cola C2 was a costly lesson in product differentiation within a portfolio. It was marketed as having the same Coke taste but with only 50% of the calories, and was targeted at a young male demographic concerned by calories but not interested in the perceived femininity of Diet Coke.

As it turned out, the benefit of fewer calories wasn’t distinctive enough from the current Coke offerings to sway behaviour. Low sales – primarily the result of the cannibalisation of Coke & Diet Coke sales – led to the discontinuation of the product in less than 12 months.

A year later, the more differentiated “zero calories, full flavour” product, Coke Zero, was launched successfully, making C2 a short but costly lesson in product differentiation.

#4 - Poor Design & Execution

A product or product improvement needs to be ready to meet customer demand & expectations at launch.

Untested or faulty products diminish the product’s reputation over the long term, and it may never recover. Worse yet, faults may do long-term damage to the organisational brand if it goes against a customer perception of brand quality, safety or security.

Unlike previous failure points, a successful launch can precede a product failure if a product fails to scale to demand. Performance issues or delivery delays can harm a product’s commercial success even if the original product is not faulty.

Windows Vista is a well-known punchline for how not to design and develop a software product. A host of compatibility and performance problems lead to a revolt in even their most loyal customer base.

This discontent even allowed their competitor, Apple, to monopolise – making the situation appear even worse with their advertising campaign featuring “I’m a Mac… and I’m a PC”.

While some issues with Vista were able to be solved, the Vista product never recovered its reputation and arguably cost Microsoft some of its reputation too.

#5 - Ineffective Product Marketing

A product or product improvement needs to create positive sentiment & awareness in the customer’s mind at launch.

There are about 30,000 products launched every year, so getting mindshare at the critical time of launch is imperative. The most common issue here is a lacklustre launch due to a lack of forward planning and support.

A poorly planned launch is unlikely to make the news (in fact, that is the point), but worse yet is product marketing launches that make the news for all the wrong reasons.

Launching products at the wrong time or with the wrong message may cause reputational damage. The saying “no publicity is bad publicity” doesn’t hold if significant customer loyalty, positive sentiment or goodwill is lost.

Airbnb’s campaign for ‘floating world’ stays launched amid Hurricane Harvey, which flooded large swathes of the USA. This is a great example of poor timing.

Sony launched the PSP white console with a print advertisement featuring an angry-looking woman dressed in all white grabbing the face of a terrified black woman alongside the words “White is coming” – never a good message.

How To Avoid Making These Mistakes

So, now that you’re aware of the five most common mistakes made in product development, how do you avoid making these mistakes?

It all comes down to having a process that focuses on addressing these failure points before they can derail your product development.

We’ll cover this in more detail in our companion piece on How to Prevent Common Mistakes In Product Development.

Product-Led vs Customer-Led? It’s About Balance

Product-Led vs Customer-Led?
It's About Balance

By JANA PAULECH

It’s no secret that at Brainmates we see product management as the engine of growth in every organisation. This means that we see a ‘product-led’ direction as the path that modern organisations should follow to achieve sustainable and innovative growth.

We talk about product-led thinking, we have a Product-Led Program, and we even advocate to senior executives and boards across Australia and New Zealand that being product-led is the secret sauce of growth.

But, as many executives have in the past, you may ask yourself why product-led?

Don’t we want to be ‘customer-led’?

This gets to a fundamental misunderstanding. Product-led does put customers at the heart of decision-making, but customers are only half of the equation.

Product-Led Is About Balance

Product-led is about balancing customer and organisational value. Creating great outcomes for the customer and delivering great outcomes for the organisation.

This balance avoids the pitfall of solving the wrong customer problems – ones that aren’t really valuable for the organisation to solve.

If you have ever asked the question “why are we building this”, and the only answer was “because XYZ customer wants it”, you would understand what happens if we don’t have balance when considering customer needs. It makes for products with no realisable market potential as they are built for one customer who yells the loudest.

Balancing both sides of this equation necessitates you knowing a LOT more about your customers than you may think.

Not only do we need to know their problem, but also how painful the problem is.

How many other similar customers (in our realisable target market) have this problem?

Is it sufficiently painful that they will exchange something of value with us to solve it for them?

How much would they exchange?

How often?

Being a product-led organisation means your whole organisation aligns around this balance of customer and organisational value. At a more tangible level for product leaders, it means your teams have the skillsets of customer research and commercial acumen in balance as they discover and communicate product opportunities.

Less than 50% of product teams actually engage with their customers.

Engaging with customers directly, continuously and meaningfully is still the best way to gain a shared understanding of their needs, and is essential to being truly product-led.

Product-Led Is About Customer Research

‘Know your customer’ – or some version of this – is the core tenant of many product practice theories, and most product teams think they do indeed know their customers.
 
In a recent study, over 50% of product teams believed they had a shared understanding of customer needs. However, 69% of them also said that the products and features they released were not consistently well received by customers.
 
This may have to do with the fact that less than half of product teams actually engage with their customers.
 
Engaging with customers directly, continuously and meaningfully is still the best way to gain a shared understanding of their needs and is essential to being truly product-led.
 
But how do we do this?
 
The three best ways are:
 
• Directly – Actually talk to them! Using product analytics, A/B & multivariate testing and other indirect, quantitative measures is important but not a substitute for actually talking to them. The old adage that numbers can tell you ‘what’ but not ‘why’ only scratches the surface of this – the colour and empathy you get from 5 minutes with an actual customer can never be expressed in numbers.
 
• Continuously – Make talking to customers a habit, and part of your weekly process. This ensures you are walking the talk and truly understanding the needs of customers. It also means you aren’t only talking to one or two customers, but many, to not skew research to the ‘best’ or ‘loudest’ customers.
 
• Meaningfully – being considerate of how you engage customers, and being planned and structured is essential to getting meaningful insight from customer research. Unstructured research is good, but a few minutes of effort to put together a research objective and a few questions will make it even more meaningful. Better yet consider an evergreen research plan that harnesses interactions all team members have with customers to gain meaningful insights for all.

Product-Led Is About Commercial Acumen

If ‘know your customer’ is a core tenant of product practice, ‘know your commercial models’ is the poorer sibling sitting in the corner.

It’s no good to generate customer insight without being able to translate that into a commercial model which the organisation can then benefit from.

Unfortunately in many organisations the commercial potential of a product-led approach is never leveraged or harnessed. This may be as simple as a lack of a baseline understanding across the organisation of the numbers that drive it (costs and benefits). It may be a lack of process for making commercial decisions using robust frameworks and commercial value models. Or it may be a fundamental lack of trust in product to make sound commercial decisions.

In a recent study by the Association of Product Professionals which interviewed over 50 non-product (CEO, CTO, VP, GM, EGM, COO) and product leaders, they found that senior executives “doubt the commercial skills of product managers [and therefore], define the scope and solution before handing over”.

Product-led organisations place an emphasis on all areas of the organisation, including product, being bi-lingual – speaking the language of customer value and organisational value.

They balance their assessment of investment opportunities on two fronts:

• Market Assessment – Focusing on who the target market is in detail and what compelling and painful problem we will solve for them.

• Commercial Assessment – Focusing on the value model for achieving organisational benefits, how we will achieve value for the organisation, how much value will be achieved (revenue & cost) as well as the business risks involved in securing those benefits.

Finally, product-led organisations gain alignment across the organisation more easily to sound opportunities (and see-through vainglorious ones) as they are all speaking the same two languages in balance.

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