23 May

Creating a Clear Line of Sight Through Inputs, Strategy and Execution

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Last week Line of Sight Group delivered a presentation to the local chapter of the Product Development and Management Association (PDMA) entitled, “The Intersection of Strategy and Product Development/Management.” The event was held at Padilla in Minneapolis and attended by 50 product management and strategy practitioners.  Line of Sight Group Founder and President, Steve Schulz, opened with the question, “what do these have in common?” The metaphorical slide had pictures of a dinosaur, a telephone booth and a Blockbuster Video storefront.  All are now extinct, disrupted out of existence by stronger competitors that were better informed and equipped to survive.  Why?

Doug Hedlund, Participating Faculty at the University of St. Thomas Opus School, offered the first part of the answer, a Strategy Formulation and Execution Discipline involving the capture of key factors (an organization’s vision, mission, core values and strategic goals), internal environment factors (strengths and weaknesses) and external environment forces (competition and trends) as inputs.  Next, he walked through how the key factors inform the Strategy (Arenas, Vehicles, Differentiation, Staging and Economic Logic). Finally, he covered the execution levers (leadership, talent, organizational structure, systems/processes, and culture) and scorecard (metrics and dashboards) needed to successfully carry out the strategy.

Next, Schulz presented an interactive case study using the Strategy Formulation and Execution Discipline where the attendees helped to fill in the key inputs that shaped the strategy and execution. Schulz employed three useful frameworks to organize the external and internal data – PESTEL (Political, Economic, Societal, Technological, Environmental, & Legal) Analysis, Porter’s Five Forces Analysis and a Table Stakes Analysis in his presentation of the case.

Finally, Brett Norgaard, Line of Sight Group Principal, bookended the presentation with two stories highlighting the use of timely external environment intelligence leading to successful strategies and product launches under very different circumstances. (See Stealth and Telephone Switch blog entries.)

Starting with external environment research as the first step to creating a clear line of sight, from the inputs to the strategy formation and on through to the execution and measurement, ensures alignment of the strategic and go-to-market functions, including product development/management. Individuals that can identify and understand what is upstream and downstream from strategy formulation will be best positioned to help their organizations prevail and avoid extinction in increasingly disruptive times.

25 Apr

To Increase CX (and Revenue), This Lender Gave Customers a Blank Check

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Line of Sight Group constantly engages in activities to keep abreast of trends in innovation, customer experience, sales methods, service adoption and business model transformation. One trend we have noticed are the parallels in the disciplines of product management, service design and customer experience.  Over the past few weeks, we have attended events and sessions in all of these disciplines and would like to share an observation demonstrating this convergence.

Representatives from the Baker Tilly firm shared an interesting Customer Experience (CX) case at the Product Development Management Association (PDMA) local chapter meeting the other day. It was the case of a lender pre-approving customers for vehicle purchases but then realizing that less than a quarter of the pre-approved customers actually returned to the lender to complete the loan. This was very disappointing to the lender as the process to pre-approve customers took time and effort. After performing a journey mapping exercise along with some current and future state analysis, the lender added one crucial step at the beginning of the process that changed everything.

What was the innovation?  The lender started sending along a blank check valid for up to the pre-approved loan amount with the customer as they entered the dealership to purchase their new vehicle. This gave the lender’s customers a powerful tool that provided them more control over the buying experience, let them bypass the time in the financial manager’s office where they were subject to every conceivable cross-sell and up-sell tactic, and allowed them to drive away in their new vehicle without returning to the lender in advance.

Thus, a CX initiative impacted the nature of the service/product (a blank check was added), the process (avoidance of a trip back to the lender), a much better customer experience (less effort and avoiding the trip to the financial manager’s office), and a boost in business for the lender (fourfold revenue increase). In this case, the CX started with the sales process, impacted the product and service offer, as well as what the customer experienced on their vehicle buying journey.  Understanding the external environment made up of the dealers and competitive lenders along with the customer journey enabled this lender to prevail in several key areas.

06 Mar

Bob and Jerry on Competing in Healthcare

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For the past several weeks, we have been busily reading the myriad articles and forecasts on Healthcare (HC) trends for 2017. There was even an article about all of the other articles.  With trends like a dramatically changing regulatory environment, continued momentum in HC consumerism, advances moving big data and analytics into cognitive computing and Artificial Intelligence, value management, medical device and pharma innovation, mobility, cloud, security, privacy and so on, 2017 promises to be an exciting and challenging year. Not only are things moving fast, but there are a lot of them and the very foundations of the industry are shifting at the same time. If you are feeling a bit overwhelmed and seeking enlightenment, we offer the timeless wisdom of Bob Dylan and Jerry Garcia to make some sense out of the state of HC.

“For the times, they are a changin’” pretty well sums up the status quo. Thank you, Bob. For organizations competing in the HC space, it is particularly important to examine the increasingly complex and multi-layered external environment and to ensure that strategic plans are up-to-date, refreshed and aligned with the go-to-market initiatives. Leaders may also find themselves in the circumstance of playing offense and defense simultaneously.  Some built-in flexibility goes a long way when there are well funded start-ups seeking to innovate by employing new, simplified business models and established organizations seeking to do some disrupting of their own. No matter where the threats come from or where the opportunities may lie, it has never been more important to listen to what is happening in the market, connect the dots and then convert this into insight that can be acted upon. There are a lot of factors to consider.  Jerry rightly observes, If the thunder don’t get ya then the lightning will.

While most organizations conduct annual planning and align their go-to-market activities to the current conditions, it may not be enough. When in particularly challenging times, we might feel the need to regroup a bit and as Bob points out, “Come in, she said, I’ll give you shelter from the storm.”  Leading organizations monitor their external environments continuously in order to anticipate market changes and make appropriate course changes. There are many methods to accomplish this that involve primary and secondary research, analysis and the pulling of various execution levers.

2017 presents potentially turbulent conditions. With a good and continuous view of the external environment, a sound and flexible strategic plan in place and solid execution, you will be able to navigate and compete successfully in the HC market. As Jerry sang, “May the four winds blow you safely home.”  Good luck in 2017!

22 Jul

Disruptive Forces in Financial Services

Competition in Financial Services has always been intense amongst industry rivals. Increasingly, firms find themselves competing with Financial Technology (FinTech) start-ups going after a selective slice of the market with a disruptive offer.  Many FinTech firms have billion dollar valuations, are flush with cash, and are leveraging low cost, cloud-based delivery models. While incumbent firms have invested heavily over the years in a combination of technology-based infrastructures like ATM networks, branch office makeovers, online services and mobile apps, they still feel vulnerable to the threat of FinTech firms grabbing market share in specific areas like retail payments or online lending.

When clients share these kinds of challenges with Line of Sight Group, our first inclination is to turn our eyes and ears to the external environment and to connect the dots around what is happening, as well as what is likely to happen.  Thus informed, threats and opportunities emerge and become discussion points for the formation of strategic plans and subsequent go-to-market initiatives.  Financial Services firms have a vast array of levers to pull when it comes to competing successfully.  Technology is but one of these levers. Some firms find that their physical locations can be leveraged if they reconfigure them into optimized networks based on the specific needs of their clients.  In some cases, they may opt for a smaller branch footprint but implement Interactive Teller Machines that match a specific financial expert with a client virtually. Other Financial Services firms are partnering with FinTech firms by bringing new offers into these networks and blending them into a portfolio of offers.  Another tactic is to conduct hundreds of controlled tests annually (AB Testing) designed to gauge and measure consumer preferences and to then create new offers based on the results.

Line of Sight Group Financial Services clients utilize a number of methods to listen to the external environment in which they play. Some firms utilize strategic competitive monitoring on an ongoing basis to gather, sort and analyze value propositions, pricing and customer satisfaction levels. Financial Services clients who position large commercial offers utilize Win/Loss Analysis to understand why they win and lose deals. Firms seeking to enter a new market employ a Competitive Landscape Analysis to gauge the status quo and to look for unmet needs before making the move to invest.

By understanding the external environment on a continual basis, Financial Services firms can better navigate the ever changing mix of consumer preferences, technological advances and business model iterations to make good decisions. Technology is important, but rarely the only factor to consider.

07 Jul

The Challenge of Being Different

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In a past life, I held the position of a product manager for a company that was the leader in a substantial and mature industry. As a product manager, I learned many things:

  • First I learned that the product manager role in any organization is extremely hard work and not for the faint of heart. I mean, who would even want the job of being in the middle of demanding customers, unruly salespeople, tentative engineers, anxious operations managers, out of touch managers and cautious finance and accounting folks? Sounds like a perfect job for a middle child, which I am not. In addition, even though we had good market research, I always felt like I was running in circles, responding to the largest customer or market anecdotes without a good sense of the real market needs
  • Second, I learned that responding to those counter pressures was the safest way to operate. While it was considered ‘customer focused’, in the end, our efforts often resulted in product features and pricing models that looked pretty much like everything else in the market, even though internally we felt we had invented something unique
  • Last, I learned that working to make my product line truly ‘different’ in the market required skill, courage, leadership, and even a little luck.

In her book ‘Different: Escaping the Competitive Herd’ Harvard Business Professor Youngme Moon describes the concept of ‘category blur’. Her argument is that once a product category becomes a blur to customers, they start to adopt a consumption posture directed toward the category as a whole, as opposed to the individual brands within it. Professor Moon says, “We [buyers] no longer see the trees for the forest so we cop a stance toward the forest instead.” On the other hand, what she terms ‘breakaway’ products and brands deviate from these stereotypes in such a way as to cast doubt on the validity of the original generalizations.

The concept of ‘different’ implies the ability to compare and contrast one against another – for both customers and product managers. In order to deliver products that are truly different product managers must start with knowledge of his or her own product, production and pricing capabilities, etc. (the internal environment). At the same time they must have deep knowledge of the competitor’s products and capabilities along with buyer needs, perceptions and behavior (the external environment). In addition, since the external environment is constantly changing as customer needs change, competitors change, and technology and other trends drive change, the awareness of differences must be continuous. (Refer to the difficult role of the product manager above).

When we started working with one of our very good clients several years ago, the senior executive told me, “We have launched so many new products and product improvements over the years that have failed.” He added, “They not only cost money but hurt our reputation with customers, and we know that solid investment on the front-end is critical.”

It is the external environment where Line of Sight Group helps our clients. Our approach is to help product management professionals improve their effectiveness by collaborating with them to ‘out-smart’ their competition by identifying the disruption that represents opportunities and threats before their competitors do. We help them benchmark the competition, watch their ever-changing external environment and help them connect the dots. They apply the insight to close gaps to reduce risk and Identify ‘white space’ opportunities to make their products truly ‘different’.

As noted above, sometimes being ‘different’ requires a little luck beyond the leadership and hard work of a product manager. Sometimes that luck comes in the form of additional knowledge and insight – and it can mean all the difference.

31 Mar

Profiting From Change: How Some Health Care Organizations Are Navigating Industry Chaos

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For every industry there is a ‘current state’ and a ‘future state’. The space between them is called ‘change’….and in an industry like health care, the term ‘chaos’ is more appropriate.  This chaos can represent either opportunity or threat, depending on an organization’s ability to understand and respond by making the right decisions and investments. Innovation is happening at a pace never seen before in the health care industry. Political and regulatory change, technology change, demographic and societal change are all driving new market needs for consumers, providers, payors and others. From telemedicine to population health management to connected health, to social patient experience and crowd-sourcing solutions, the pressure on organizations intensifies as they jockey to fill those emerging market needs.

In the midst of all this change, executives are trying to make the right decisions to survive and grow. Product managers and developers need to place bets on new products and innovation, chief marketing officers need to invest in campaigns that position their organizations effectively, and sales executives need to compete ‘in the trenches’ against a dizzying array of competition. CEOs and other leaders need to bring all of these functions together to create strategic plans. Beyond making sense of the chaos, how does an organization gain the confidence to make the right investments in order to grow and not get left behind?

Unfortunately, there is no silver bullet, no single solution.

Although no one can tell the future, some organizations are better at preparing for it than others. How is it that companies like Catamaran (now part of OptumRx), Coloplast and Express Scripts are recognized by Forbes in its latest list of the most innovative companies, while others seem to be paralyzed?

One way in which we’ve observed health care organizations change their mindset has been when they apply their expertise on the clinical side to their business strategy. These organizations are mining data from many sources and analyzing it in a longitudinal, systematic manner. They use the information to identify opportunities to engage directly with consumers, their providers, health coaches and others to close gaps in care. The concept has been applied across the health continuum in wellness, chronic condition management, pharmaceutical safety and adherence, population health management and many others. Optum’s Care Management program, Express Scripts’ Rational Med, Healthways’ TargetTM and Humana’s Gaps in Care programs are only a few examples.

What if this model could be applied to business strategy?

While there are distinct challenges with applying this model to business strategy, the basic model is something we’ve been applying for our customers for nearly 15 years to give them clarity about the changing world around them and the strategic moves that can help them grow their business. They apply this insight to everything from training their salespeople to developing new products and services to making high-stakes technology investments and more.

For health care organizations that are heads down, charging hard and working to meet growth and profitability goals, it can be difficult to take a breath and consider the benefits of applying systematic market and industry intelligence to strategic decisions. Applying the concepts of what they already know gives them a place to start. The basic notion of using empirical data to make decisions and perform interventions that improve outcomes is at the heart of healthcare….and at the heart of strategic intelligence applied to your business to improve growth and profitability outcomes.

If you will be attending the American Telemedicine Association conference May 14 to 17 in Minneapolis, please stop by booth #1325 to say hello and learn more about how Line of Sight helps organizations like yours make sense of, and grow, amidst the chaos.

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