Tag Archives: customer development

“Stakeholder Development”: Using Customer Development on Internal Stakeholders

In my last post, I introduced the Product Canvas — my iteration of the Business Model Canvas — as a simple and quick way to capture my idea for a product. I’ve also used it as a communication tool to share my product vision and get early feedback, which is critical in the beginning stages of exploring a new product opportunity.

I’ve been sharing the Product Canvas with anyone who’s asked, and early feedback has been encouraging. One of the biggest things that seems to be resonating with folks is the Key Stakeholders box.

Product Canvas - Key Stakeholders

Look, I’ll admit, managing stakeholders is cumbersome, tiresome, and at times a pain. There, I said it. Admit it: you’ve felt that too. In my research on the business case process, a large majority stated that maintaining stakeholder support and alignment is important, but a challenge.

But I’ve learned the hard way that identifying and aligning stakeholders is really important for any initiative. So that’s why I put it in the Product Canvas. The reality is lack of stakeholder support can kill any brilliant idea at any stage.

When I came across Steve Blank’s Customer Development methodology, I wondered if its principles could be applied to internal stakeholder support. In other words, I wondered if it was possible to “develop” stakeholders too?

Here’s the Customer Development process. Steve’s bottom-line advice is to “get out of the building”.

Customer Development

So if apply this to “Stakeholder Development”, I’m thinking the process would look something like this:

Stakeholder Development

In this case, the bottom-line activity is to “walk the building”!

I figured this provided me as good a workable framework as any to identify, build and grow stakeholder support, and then I decided to put it to the test.

Through much trial and error, here are some tactics I’ve applied to Stakeholder Development. I’ll admit I haven’t fully cracked the code, and continue to experiment and learn. By sharing here, I’m hoping others may try as well and share their feedback.

I try to follow a systematic process for identifying my stakeholders, sharing my vision, capturing their feedback, and creating traction. I’ve been experimenting with applying Lean Startup’s Build-Measure-Lean loop for the purposes of doing this, and over time, I’ve developed a basic meta pattern:

stakeholder_dev_loop

So now that I’ve got a workflow I can follow, my first step is to identify who I think are my primary stakeholders, and I capture this in the Key Stakeholders column of my Product Canvas. Sometimes I already know ahead of time. In that case, I simply list them in the Product Canvas. But I have been in situations where I wasn’t entirely sure who were my key stakeholders. In this case, I capturing my hypothesis for who they may be.

I also try to identify a possible executive champion or sponsor – something I’ve learned is practically a requirement in a larger organization to ensure the success of any initiative.

So my Product Canvas could look something like this:

Product Canvas - Key Stakeholders example

I’d have actual names in the box, of course. If I don’t know who my executive sponsor will be (insider’s tip: it’s not always your boss), I don’t put a name, but I definitely call it out so it’s always at the forefront.

Next, I formulate hypotheses to approach my potential stakeholders. Going back to the Stakeholder Development flow above, notice a key question is “What are their agendas?” Remember: everyone has their own set of priorities. Some are visible, like a project deliverable; but some are invisible, like organizational political pressures. (Like it or not, these exist.) The more knowledgeable I can about their priorities, the better I can position myself to either gain their support or counter their arguments. At worse, I’ll have identified a potential detractor early on.

I then “walk the building”, reaching out and setting up meetings. For stakeholders with whom I don’t have a close relationship, who barely or don’t know me, I try to figure out ways to get an intro, just like one would do with customer interviews.

Setting up and conducting these conversations may be time consuming, but they are invaluable to validate who are my real stakeholders, and what I’ll need to do to get their buy-in.

I maintain a simple log to track my progress that I call my Stakeholder Development Tracker:

Stakeholder Development Tracker

There have been times I’ve discovered that someone who I thought would be an important stakeholder, actually isn’t. Great: I just mark their Role and Status as as N/A, and move on. Other times, I discover that someone I originally hadn’t identified is actually going to play a significant role in the approval and/or execution of my project.

Stakeholder Development Tracker Example

As I validate who are my true stakeholders, I update my Product Canvas.

product-canvas-key-stakeholders-iteration

These stakeholders are the ones I really want to focus on, the ones with whom I want to create traction. If I play my cards right, I can convert them from supporters to advocates to where they are actually personally vested in the success of my initiative.

As I said, I’ve been experimenting with this as a framework. It’s a work-in-progress, and I’ve enjoyed some success. Give it a whirl yourself, and let me know what works or doesn’t. If you have an approach to Stakeholder Development that’s worked for you, please share.

How I Document My Product Vision

Over the last many years, I’ve been experimenting with applying Lean Startup andThe Lean Startup Customer Development concepts to product management. I first wrote about this here. Some time ago, I wrote about the challenges I and other product professionals have faced with the traditional approach of writing a business case.

One area where I had always struggled with was finding a simple and quick way to sketch out my product ideas. I used PowerPoint, Word, Google Docs, but they never really worked effectively. Often times my original notes would grow into a bloated morass of detailed thoughts about features, customers, marketing, partnerships, technologies, etc. There was no structure. Worst of all, if I wanted to share them with someone, I’d have to spend time figuring out how to translate them into something readable, since no one would be able to decipher my chicken scratch.

Before writing a requirements doc or business case, what I really wanted was a way to not only quickly capture a product idea in a structured manner, but also use the same format to share it with others to elicit feedback.

So you can imagine my delight when I came across Alex Osterwalder’s Business Model Canvas several years ago.

Business Model Canvas

What’s great about it is since it’s a single page, one can quickly jot down the basics of any business model, and it’s easy to share and more likely to get read than a PowerPoint deck or a Word doc. The single page also forces brevity: there isn’t a lot of space for a laundry list of features – you need to distil down your idea to its most essential building blocks.

Love at first sight, I started trying to use it for my products. But I ran into a few challenges. I found that while it does a good job capturing the key elements of a business, it’s not as customer focused as I would have liked because there was no place to capture the customer problems I was trying to solve or identify potential early adopters. There was also no place to capture my envisioned solution, and I often got confused between Channels and Customer Relationships.

That’s when I came across Ash Maurya’s Lean Canvas, an adaptation of the Business Model Canvas he created for his web startups.

Lean Canvas

Ash has correctly put the focus on customers and their problems. I also like that he calls out Unfair Advantage, which to me means competitive differentiation. This is especially true for a startup that may be fighting bigger, more established players.

So I started using his Lean Canvas, but ran into a new set of problems as a product manager:

Resources: Ash has left this out from Alex’s original version. I can understand this with respect to startups, but as a product manager working in an organization, it was important to me to identify which resources – platforms, systems, departments, vendors, etc. – I would need to make my product idea a reality.

Readability: When walking someone through a product or business idea, my inclination is always to start with the market opportunity, which means customers, their problems, and how we can solve them. I found neither of the above two canvases easily lend themselves to that flow. I’d have to start at the right-most column and then jump back left. This is non-intuitive to most English-speaking readers, and I found I’d quickly lose my audience as I criss-crossed columns.

Two other challenges I ran into as a product manager:

Stakeholders: Product Managers have to deal with internal stakeholders. The larger the org, the more. Often times a new product idea needs an executive sponsor. In my experience, I’ve found that the more I’m mindful of who are my key stakeholders, the greater the chance of internal support for my product.

Non-Revenue “Products”: Some products managers are responsible for initiatives that aren’t directly revenue generating, but do provide tangible business value, like improving CSAT, driving referrals, etc. I’ve lead several like that.

So I decided to create my own iteration that I felt was more suitable to me as a product manager, that I call the Product Canvas:

This version puts the customer and market on the left-hand side, which not only addresses the readability issue but also supports more intuitively how I think through a product opportunity. I can start with the customer and their problems on the left, and work my way toward the right to ultimately figure out how I’m going to deliver on the solution.

Here’s a brief description of each block and the order in which I typically approach them:

1. Customer Segment: Who is the target customer of our proposed product? This could be the company’s entire customer base, a segment, or a new market or vertical. Ash recommends using a separate Lean Canvas for each segment where one has multiple segments in mind, and I think that’s good advice as a starting point.

1a. Early Adopters: For any new product opportunity, it’s important to identify early adopters. There is already a ton written about this. While identifying early adopters is implied in the Lean Canvas, I wanted it called out explicitly, as I’ve found even in existing organizations there is a tendency to think any new product idea is applicable to all customers.

2. Problem: A brief description of the top problems we’re addressing. I try to limit this to at most 3.

2a. Existing Alternatives: How is the customer solving this problem today? This may not be just direct competitors. For example, in the early days, Quicken’s competition was not only other accounting software, but also checkbooks, and pen and paper.

3. Unique Value Proposition: How are we uniquely going to solve our customers’ problem(s)? This is the elevator pitch: the one sentence that clearly states the value we’re providing to our target customers.

4. Solution: What are the most essential features of our solution that will deliver on our UVP? This is not an exhaustive feature list. I try to limit it to the top 3 elements of my proposed solution.

5. Channels: How will we get (acquire), keep (retain), and grow (sell more to existing) customers? What is the marketing and sales strategy?

6. Revenue Streams/Business Value: How will we make money? What’s our pricing strategy? If this is not a revenue generating product, what other business value is it providing? Improving customer satisfaction? Customer lifetime value? Market positioning? Competitive differentiation? Operational efficiencies?

7. Key Metrics or Success Factors: What are the most important metrics that will tell us that we’re successful? Signups? Conversions? Referrals? CSAT? NPS? These are the metrics that are driving #6 above.

8. Key Resources: What are the most critical internal resources we need? These could be platforms, systems, business processes, departments. Are there external partners we need to rely on?

9. Cost Structure: What are the key cost drivers? Software/IT development? Customer acquisition? Account management? Hiring and talent development? This is also a good place to capture a back-of-the-envelope break-even calculation.

10. Unfair Advantage: This is the distinctive competence or advantage that your product has over other solutions in the marketplace. It’s something your product does better than any other, something that can’t be easily copied. It could be intimate knowledge of an industry, personal authority or brand, a business process or competence, a patent, or some other intellectual property.

After experimenting with using this Product Canvas as a product manager, I started sharing it with folks, asking them to use it, and the feedback has been very encouraging.

Feel free to download it here.

Guidelines For Conducting A Customer Conversation Session

By Prashanth Padmanabhan

There are some basic principles that you can follow while telling your story to your customer.

1. Show up at the customer’s office, if you can.

It shows respect. It tells them that you care for their thought. It is money well spent. As a product manager or product designer you are the voice of the customer and that is your only advantage over every other function. So customer visits should be your number one priority. Nothing else is more important than that.

2. Always show a prototype or draw a picture on the white board.

Don’t show a set of slides. This forces participants to think differently, look at the prototype and imagine rather than go into a passive finger-pointing mode. The prototype must include a list of concepts that you want to confront them with for feedback. Organize those concepts in the form of a story you can tell by going through the different screens in the prototype. Pause for a few seconds after each concept is outlined and let the interviewees share their thoughts. Acknowledge any interesting thoughts that come up and move on to the next concept in the story.

3. After introductions, ask them what they plan to get out of the session, and write that down on a flip chart.

If the crowd is large, ask everyone they plan to participate or if they are merely there to observe. Differentiate between the participants and observers and direct the conversation to the participants.

4. Listen more. Speak less.

You should be talking for about ten percent of the time and listening for the reminder of the time. If you have a hard time keeping quiet, take on the role of the writer on the flip chart. This will help you talk less and listen more. It will force you to keep quiet and will nudge customers to think aloud and direct you writing.

5. Write or draw on a flip chart.

Don’t sit down in a chair and write in a notebook where no one can see what you are writing. Writing on a flip chart, conveys to customers that you are listening, synthesizing and are open for comments. They can see your thought process, point out gaps in your thinking and, if necessary, correct what you write. So take notes publicly. Not privately.

Tip: Avoid total silence when in a conference! If you are running a workshop via conference, while taking notes, please avoid silence. Tell the customer you’re taking notes so they know you are listening.

6. Display all the flips charts all the time.

Do not flip the chart over and go to a new page. Tear the paper you wrote on and tape it to a wall. Don’t worry. Customers do not mind you posting 4-5 flip charts on the walls of their conference rooms. Pausing to tape the flip chart paper on the wall will give you a logical break after about 15-20 minutes of conversation. If your colleagues are present, it will give them an opportunity to chime in. It will also give you a minute to collect your thoughts.

After your paste the flip chart on the wall, underline the key words in the notes, recap the conversation, point out who said what, and ask participants if you missed anything. It gives participants an opportunity to point of simple errors that are bothering them.

7. Document while at the session.

Not after you come back to the office. Use a (phone) camera to take a picture of all the flip board charts. That is you documentation. You don’t have to write elaborate notes after you come back from the session. Post the pictures to a collaboration site, such as Streamwork, SuccessFactors JAM, Yammer or SharePoint, along with the notes and share it with customers.

8. Capture customer quotes and share them with colleagues rather than writing elaborate reports. Your colleagues will appreciate the quotes from customers and users.

Prashanth Padmanabhan is an entrepreneur, product designer, collaboration enthusiast, product manager for people and work management software, and SAP mentor. He’s co-authored two books, SAP Enterprise Learning and Look & Flow, a book on product innovation using design thinking and storytelling. His blog is Journal on Product Design and Development.
This post was originally published on Look and Flow, the blog site for his book. It is reprinted here with permission.

The Case Against The Business Case – Part II

Note: This is part of 1 of a two-part series. Read part 1 here.

In part 1, I talked about the problems of pursuing a new product idea in an organization, which traditionally starts with preparing and selling a business case. I shared research that I conducted in which I spoke with a number of product management professionals across the country in companies large and small who resoundingly shared their distaste for the process.

The response was amazing. It seems my post touched a chord!

Some interesting stats:

  • Within one week, the post became the 3rd most viewed on my blog.
  • Tweets, likes and positive comments on my blog and LinkedIn groups where I shared my post totaled 31. In other words, 31 additional people were in agreement with the original 24 with whom I had spoken.
  • On the flip side, there were a 6 disagreeing comments posted on the same LinkedIn groups.

Now, if there were any other detractors (because many more viewed the article), they either didn’t agree, didn’t comment, or didn’t care.

Still, with 83% promoters and 17% detractors, this would give an NPS-style score of 66%.

So it seems I’m on to something here.

Here’s something interesting. According to the Pragmatic Marketing’s 2013 Annual Product Management and Marketing Survey, 50% of respondents indicated they spend at least half a day per week preparing business cases.

part-of-job

Do the math on this, and that’s 17.6 hours per month or the equivalent of 1 month and 3 days per year spent preparing business cases.

So on average, a product manager is spending over one month of an entire year preparing business cases. Surely there should be some ROI to spending that much time? Yet, we all know the rate of failed products is sadly high.

To be clear, I’m not saying a business case is not necessary. Indeed, one needs to have a robust business case to ask for a commitment of resources and/or investment.

I’m saying that while well-intentioned, somewhere along the way, the process by which we’ve gone about preparing the business case has become wasteful.

[optin-monster-shortcode id=”tjtsmjhkd0zsxede”]

 

Several months ago, Steve Blank wrote a column in the Wall Street Journal that talked about the need for a startup to begin not with a business plan, but with building and testing a business model.

Three years prior to that, he blogged about how Customer Development is more effective than the traditional product development process in helping startups raise VC money.

“In a traditional product development model, entrepreneurs come up with an idea or concept, write a business plan and try to get funding to bring that idea to fruition. The goal of their startup in this stage becomes “getting funded.” Entrepreneurs put together their funding presentation by extracting the key ideas from their business plan, putting them on PowerPoint/Keynote and pitching the company – until they get funded or exhausted.”

It seems to me the same logic can be applied to pursuing new product ideas in established organizations.

Just like entrepreneurs typically jump right into writing the business case and seeking funding, product managers (or any visionary employee) often go direct from coming up with a concept to writing the business case and seeking its approval.

traditional-biz-case

Here’s another quote from that WSJ article:

“Entrepreneurs treat a business plan, once written, as the culmination of everything they know and believe. All they need to do is add money and magically that five-year forecast in Appendix A will simply happen if they execute to the plan.”

I’ve found the same with business cases. There are two key problems with the traditional approach to preparing a business case.

One is, like with startups, pursuing a new product idea in an organization is also fraught with uncertainty. The assumptions that go into the financial forecast need to be tested.

The other is that when seeking approval, your goal and your execs’ goal may not necessarily be aligned.

You still have a lot to learn and prove in your model. But the execs are ultimately interested in only one thing: ROI. Perfectly understandable, given the financial responsibility entrusted upon them.

problem-with-biz-case

This often leads to wasteful execution. The focus becomes hitting an arbitrary delivery date and trying to hit a promised ROI.

The product manager is caught between a rock and hard place: learning from customers and launching on time. It often leads to delivering bloatware or crapware.

What was that stat again about the rate of failed products?

So it seems to me that to build a robust business case, it’s important to validate that you’ve truly understood your customers’ problems, that they’ve bought into your proposed solution, that the problem is worth solving, and that it fits with the company’s overall corporate strategy.

For extra credit, you need to identify some early adopters, or “earlyvangelists,” as Steve Blank calls them.

These insights can help you identify key metrics that will drive your financials, making for a much more solid business case, and increase the chances for more efficient execution.

To add to this, product managers face a unique challenge that entrepreneurs don’t, which is gaining and maintaining internal stakeholder support.

This can be especially true in larger organizations where there are simply more people to manage and placate. Lots of opinions. Capturing and addressing concerns. Following up. Competing agendas. Finding an executive champion. Lots of approvals.

These are real challenges with which the bold product manager has to deal.

How to address that? Perhaps there’s a way to apply Customer Development concepts to internal stakeholders…?

In fact, there is.

Top 7 Lessons Product Managers Can Learn From Lean Startup Machine

A few weekends ago, I participated in the Lean Startup Machine workshop held in Washington DC. For some time now, I’ve been thinking about how Lean Startup principles can be utilized to drive product innovation and if they can help product management become more efficient in driving product development and delivery. The Lean Startup Machine (LSM) workshop offered an opportunity to gain hands-on learning in applying Lean Startup techniques. The workshop proved to be an unforgettable experience.

Here are the top lessons I learned from the workshop and how they’re applicable to product management.

1. “Lean Startup is about running the simplest experiment to validate a business assumption.” – @SargeSalman. As I’m learning myself, there are many misconceptions about Lean Startup. Chief among them is that lean means cheap. It does not. Lean means not being wasteful. And the way it’s applied to business problems is by challenging you to think critically about the assumptions underlying your business or product idea, and then to systematically and rigorously test them to prove them true or false.

build-measure-learnLean Startup challenges the traditional business practice of using product releases as the as the metric of execution by espousing learning as the metric of progress through the use of validation/invalidation of one’s assumptions through testable hypotheses. As a product manager, this makes sense to me as one of the things I should be doing is thinking critically and analytically about my product solution.

2. Go talk to your customers. Constantly. Lean Startup starts with Customer Development, a method Steven Blank introduces in his book The Four Steps to the Epiphany. Customer Development asks entrepreneurs to “get out the building”, which is another way of saying, “go talk to your customers.” This exactly what product management should be doing.

As such, this should come intuitively to product management, because product managers should always be focused on the customer. What the Lean Startup movement has done, though, is provided a methodical way to think about and approach how to conduct customer research. At the LSM workshop, we were forced to continually go find and talk to customers. LSM goes beyond theory by providing its participants with a tool called the Validation Board to capture one’s assumptions, create experiments, document learnings, and make the next pivot.

3. Traditional product development is wasteful. On the surface, this systematic way of hypothesizing, experimenting and learning can seem slow, because it’s not visibly tangible. Whereas a requirements document is. And code is. So both business management and even product management get trigger happy to start getting some code written, as its a way of showing demonstrable progress and makes us feel good that the product is getting developed. After all, the sooner the product is out there, the sooner we can make money!

Unfortunately, this traditional approach gives us a false sense of progress. The LSM workshop was a valuable reminder that if you don’t spend time upfront understanding your customers and their needs, you will build products no one wants. I learned this the hard way from first hand experience when I built a first-of-its-kind web product that cost a lot of money and took 6 months to launch only to achieve a miserable 2% registration rate two years after its initial launch. Ouch.

4. You must have a strong team. Now, granted, product managers can’t always choose their team members. Yet, what LSM got me to think is how many product managers think critically about the kinds of team members they’d like and then actually ask for them? And even in the case where one cannot choose their team members, as the leader of that team, how many actually spend time cultivating team unity?

5. Leadership is always, always required. This falls from the above point. The LSM workshop groups participants into teams and each team pursues an idea that received the most votes from the participants themselves. My experience reinforced the need for strong leadership by the team lead. This not only means building strong team unity of purpose, but also being able to effectively arbitrate discussions and be decisive. Exactly what a product manager is supposed to do.

6. LSM will test your influencing skills. Leadership is about influence. Product managers need to be strong influencers and negotiators. At the LSM workshop, you are working with people you’ve never met before on a team, and under a stringent timeline all of you need to come together as a team and demonstrate progress. I found my influencing skills were strenuously tested during the workshop, and it was wonderful.

7. Your solution, while interesting, is irrelevant. Sounds familiar, right? A riff on the traditional product management mantra of “your opinion, while interesting, is irrelevant”, though this takes it to the next level and targets the proposed solution itself.

Customers don't care about your product

Entrepreneurs love their ideas. They love their solutions. And so do product managers. While I’m not saying entrepreneurship and product management are the same, like entrepreneurs, product managers are natural problem solvers and we’re passionate about our solutions. Heck, I get passionate about my product ideas all the time! But the sobering truth is that it’s infinitely more important to first be crystal clear on who is your customer and what is their problem. Because the customer does not care about your product.

The LSM workshop forces you to think about the customer and their problem first. During the workshop, I saw first hand how many people struggled with staying out of the solution zone, including, I must admit, myself. By validating your customer and problem hypotheses, you’ll be in a better position to provide a real solution that solves actual customer problems.

I would definitely encourage you to attend a Lean Startup Machine workshop near you. I’ve written a recap of the one I attended on my blog and explain why I recommend product managers should attend LSM.

Have you attended an LSM workshop? What was your experience like? Have you tried applying Lean Startup principles in your work? Please share!