THE ESSENTIALS OF STRATEGIC PRODUCT LEADERSHIP
The idea that companies succeed by selling value is all but novel.
What is new however, is how customers define value in many markets. In the
past, customers judged the value of a product or service on the basis of some
combination of quality and price. Today’s customers, by contrast, have an
expanded concept of value that includes convenience of purchase, after-sales
services, dependability, and so on. One might assume, then, that to compete
today, companies would have to meet all these different customer expectations.
This, however, is not the case.
Companies that have taken leadership positions in their industries
in the last decade typically have done so by narrowing their business focus,
not broadening it. They have focused on delivering superior customer value in
line with one of three value disciplines - operational excellence, customer
intimacy, or product leadership. They have become champions in one of these
disciplines while meeting industry standards in the other two. This Article
focuses on product leadership, however, subsequent ones will be centred on the other
two disciplines respectively.
Stakeholders in any given business model are always seeking out methods,
steps or techniques to place their products and services above other competing
or substitute commodities from other organizations. This article seeks to
effectively evaluate organizational standards and best practices for product
leadership and how any organization can establish its product and/or services
as product leaders in their respective markets.
Product leadership basically entails particular products and/or services
of an organization dominating whatever market space they exist in. It generally
aims to build a culture that continuously brings superior products to the market.
Product leaders often achieve premium market prices, thanks to the experience
they create for their customers.
Loads of companies have
outstanding products in terms of performance, technology and features. And yet,
surprisingly, sales do not take off as expected. This article seeks to
explicate how leading products and services captivate the marketplace by having
more than just the functions and features that customers want. Leading products
also inspire and deliver benefits through emotional fulfilment that customers
enjoy and seek out.
In one way or another, every
book on managerial leadership will say that leaders inspire and energize.
Organizational leaders are known to be people-focused, looking to add value to
their followers rather than focusing on building their own power base.
Successful leaders also do not try to preserve the status quo but are willing
to set a direction for change, provided they foresee the change to be for the
better. It may be surprising, but a product leader requires the same
characteristics. To be clear, “product leadership” means much more than market
share leadership. Leading products energize and inspire people. They are
people-focused in that they are developed with the people in mind that want and
need them. Product leaders set the direction for the industry, changing the status
quo and serving as benchmarks for others.
Leading products not only
deliver performance as promised, but, more importantly, they deliver desired
emotions as well, emotions that result in product leadership. Delivering
emotions essentially entails purposefully designing a product in such a way
that it evokes specific emotions in those who interact with it. Emotions are
therefore a planned product benefit just as the product’s performance benefits.
Research after all, shows that the major driving force for decision-making is
emotion. Aspiring product leaders must discover ways to appeal to the emotions
of prospective customers. In any industry where people interact in some way
with a product, emotion matters. This is true not only for consumer companies,
but for those in the business-to-business market; it is equally important for
large global companies and small niche firms. When a product delivers emotions
– emotions such as care, support, joy, respect – that product has the potential
to make people’s lives better.
Companies that focus on product leadership push the envelope on product
development. They create products that change the way the customer lives
and/or plays. They create a culture of innovation, out-of-the-box
thinking and rarely punish failure. Companies like Apple and Sony are
considered to be companies that focus on product leadership. For any company to
institute its goods and/or services as market leaders, there are some basic
principles that must be stringently adhered to. To pursue a strategy of product
leadership involves delivering value through offering leading edge products and
services, creatively adapting services, providing a stream of new and changing
marketing conditions while constantly pursuing new solutions on behalf of its
clients and customers.
Companies that pursue product leadership strive to produce a
continuous stream of state-of-the-art products and services. Reaching that goal
requires them to challenge themselves in three ways. First, they must be
creative. More than anything else, being creative means recognizing and
embracing new and innovative ideas. Second, such innovative companies must
commercialize their ideas quickly. To do so, all their business and management
processes have to be engineered for speed. Third and most important, product
leaders must relentlessly pursue new solutions to the problems that their own
latest product or service has just solved. If anyone is going to render their
technology obsolete, they prefer to do it themselves. Product leaders do not
stop for self-congratulation; they are too busy raising the bar.
Any company that intends to implement product leadership should therefore
strive to sufficiently imbibe the following disciplines:
·Creativity (Research portfolio
management, teamwork, innovation)
·Speedy commercialization (Product management,
marketing, cost effectiveness)
·Continuous
improvement and advancement(continual research and procession on existing
goods and services)
The chart below further explicates the fact that any organization
seeking market leadership for its commodities has to be in line with the three essential
traits stated above.
Product leaders recognize that excellence in creativity, problem solving
and teamwork is critical to their success. This reliance on expensive talent
means that product leaders seek to leverage their expertise across geographical
and organizational boundaries by mastering such disciplines as collaboration
and knowledge management. Employees should be encouraged to work in teams for
more effective and path-breaking results. As the popular saying goes, two good
heads are better than one.
Product leaders create and maintain an environment that encourages
employees to bring ideas into the company and, just as important, they listen
to and consider these ideas, however unconventional and regardless of the
source. Incentive systems should be set up for ideas that eventually pull
through and make the company money. Basic economics has proven beyond
reasonable doubt that man, by nature, seeks out self-interest above all things.
Mere knowledge of the fact that there is some form of benefit for bringing
forth utile ideas is inspiration enough for employees to brainstorm and strive
for acute insightfulness.
In addition, product leaders continually scan the landscape for
new product or service possibilities; where others see glitches in their
marketing plans or threats to their product lines, companies that focus on
product leadership see opportunity and rush to capitalize on it. As an
organization reaching for product leadership, it is paramount to always be on
the lookout for fresher, more scintillating and more appealing ways of making
your products and services unique and bankable. This also applies to the
creation of new commodities.
Product leaders avoid bureaucracy at all costs because it slows
commercialization of their ideas. Managers make decisions quickly, since in a
product leadership company, it is often better to make a wrong decision than to
make one late or not at all. That is why these companies are prepared to decide
today, then implement tomorrow. Moreover, they continually look for new ways,
such as concurrent engineering, to shorten their cycle times. Japanese
companies, for example, succeed in automobile innovation because they use
concurrent development processes to reduce time to market. They do not have to
aim better than competitors to score more hits on the target because they can
take more shots from a closer distance. Companies excelling in product
leadership do not plan for events that may never happen, nor do they spend so much
time on detailed analysis. Their strength lies in reacting to situations as
they occur. Fast reaction times are an advantage when dealing with the unknown.
Product leaders have a vested interest in protecting the entrepreneurial
environment that they have created. To that end, they hire, recruit, and train
employees in their own mould.
Furthermore, product leaders seek out cost effective methods of
production. They realise early that majority of the customers for any product
usually seek out products that are of high quality and comparatively low
prices. Their understanding of this concept helps them by efficaciously
creating an avenue for competition even in a somewhat saturated market.
Effective marketing is another noteworthy trait. Product leaders
seek out maverick and prolific marketing strategies to efficiently create
awareness for their goods and services. The fact remains that every product
and/or service has its own specific market space and target consumers.
Marketing should compulsorily be done within the sphere of the prospective
customers or clients. Of what use is it to market a briefcase to secondary
school students or a Lamborghini to a middle-class citizen?
Product leaders are their own fiercest competitors. They
continually cross a frontier, then break more new ground. They have to be adept
at rendering obsolete the products and services that they have created because
they realize that if they do not develop a successor, another company will. In
other words, they are always working at improving the current products and
services before their competitors catch up with them. These companies are never
blinded by their own successes. It is only perspicacious to have a research and
development team, not only to seek out new products, but also, to propose ways
and techniques of improving the existing ones. This, in turn, ensures that said
products are never obsolete, but, are ever ready to compete against whatever
available or prospective competitor.
Another maxim imbibed by product leaders is that they usually
possess the infrastructure and management systems needed to manage risks well. Tremendous
risks are usually associated with developing and launching new products or even
making advancements on old ones. Becoming an industry leader requires a company
to choose a value discipline that takes into account its capabilities and
culture as well as competitors’ strengths.
Any organization that can effect the principles stated herein is
on the right and fast track to becoming product leaders in the different
markets of their respective products and services.
