When I began my career in product development, I didn’t understand how easy it is to screw up a product line. I had the opposite view. I thought managers of established product lines had an easy job. They didn’t have to worry about developing and launching new stuff. They needed only to manage pricing, promotion, and push on a sales force.
Now, with much experience that’s accumulated into humility, I can see how naïve I was. I’ve learned that managing an established product line is a tough job. Keeping product lines successful is not for the faint of heart. Only with time do you see that every product eventually dies. And you learn that it’s crucial for organizations to create new offerings. Failing this job is risky, both for the business and for careers.
Learning What Matters
My consulting practice and my past role as President of the Product Development and Management Association took me inside some of the “greatest innovators.” In the 1990s, I worked with firms like Kodak, Bausch & Lomb, Polaroid, Motorola and the old Bell Labs that became Lucent. But notice that each of these firms failed, despite being “great innovators.”
It was a badge of honor to work for these innovative companies. They hired the best and brightest.
And every product development and innovation conference had a speaker from one of these companies. They stepped on stage to tell us their secrets. That’s what drew attendees. We wanted to learn from the “best-in-class.” Little did we know that these best-in-class companies would soon fail. Obviously, we weren’t as smart as we thought.
Are We Better Today?
Flash forward to today, and I hear much the same. But now we’re told there are better practices. Seemingly, today’s consultants and academics know the exact approach to keep growth going. Open, disruptive, start-up, lean, agile and intrapreneurial approaches seem to be the solution.
But there’s a problem. Even when companies pursue new ventures and invest in lean start-ups, and even when they support intrapreneurs, open innovation, and design-thinking, the results are seldom enough. Despite the hype of bold and positive innovation methods, innovating your way out of deep product line quagmires is nearly impossible.
Being Late Can Kill
Kodak is a great example. The company hired smart and innovative people. Look at their work into diagnostic blood testing. They developed diagnostic chemistry and placed it on 35 MM slides. The chemistry reagents embedded on slides were different for each blood test. It was creativity and ingenuity at their best. While Kodak sold the business to J&J Diagnostic’s (another of my clients) for $1 billion, the whole venture could not offset all the bad stuff happening to Kodak’s core film product lines. In retrospect, you’d probably find that Kodak did many things you’d hope they could have done, even in digital photography. But Kodak was too late in a needed transformation. It wasn’t for lack of innovation methods. They failed because they were too late.
And that’s the problem. The most important factor in strategy shifts is not a method, an approach, or guru-touted secret sauce. It’s the timing. The post-mortem on almost all failed product lines and companies share statements like “We were bloody smart and knew what to do. Unfortunately, we were too late.”
Mostly, the response to market challenges is to embrace lean practices; to tighten the ship. This makes sense especially when shareholders call for stronger earnings. Unfortunately, lean methods also create inertia that holds back product line pivots and business transformations. Now, with the luxury of hindsight, it’s clear the companies mentioned above should have started their strategy moves earlier, before creating “lean inertia.” If they had, results would be different. As with all strategy moves, timing matters.
In strategy, the key is to do different things or do things differently. It’s not to follow the competition. The problem is that many top managers think their best move is to do the same thing, but only do it better. To them, doing things better is the same as doing things differently. Their strategy move is to double down on current offerings by emphasizing automation or digitalization. It’s a move to improve and streamline their processes and practices. The problem is that doubling down simply delays the inevitable product decline. It doesn’t create new offerings or regenerate and pivot existing offerings. Unfortunately, the delaying tactic, as good as it looks, doesn’t help overcome the bigger strategy issue.
Timing The Right Moves
We’re left with a few big questions. How do companies build an ability to make strong, strategic, and timely product line moves? Should they do it with innovation or with other means? And who should be involved?
These are leadership and governance challenges. Ultimately, it’s the leader’s face that’s displayed on the cover of Fortune or Forbes Magazine when businesses fail. And the inside article will probably call out members of the board of directors. Failure is never pretty.
So here’s my advice to innovators and business leaders. Be proactive. Be very proactive. And if your business is already reactive to customers, markets, technologies, and industry change, triple your efforts. Do it at the product line level, the business unit level, and the corporate level.
Smart strategy moves happen before product maturity pain. And to be successful, leadership must understand the moves and make needed investments. Don’t rest on past accomplishments.
But even good strategy moves for one product line may fail to offset major technology, industry, or economic shifts. A whole business may need to be involved. New product lines, new platform-levers, new markets, radical innovations, and new ventures may be needed. This requires a roll-up of good product line strategies. And it needs these good strategies to combine with, not separate from, new ventures and seed investments. Improving the full business growth portfolio matters much more than maximizing lean-driven project portfolios.
Go Ahead, Screw it Up
Want to screw up a product line? It’s easy. Simply remain reactive and defensive. Such responses invariably become too late to matter. Want to embrace proactive product line strategy moves? That’s harder but doable. First, build an organizational understanding of product line strategies. Then use this knowledge across product lines and your business.
I recommend checking out my white paper on Product Strategies and Roadmaps. Or for a deeper dive, you may wish to read my book The Profound Impact of Product Line Strategy. Remember, a good product line strategy demands urgency before the emergency. It’s up to you and your fellow business leaders to make the right strategy move at the right time.
Whitepaper– Good Product Line Strategy Matters.