By Steve Header

strategic confusion

Who needs a strategy?
A product that solves a problem or addresses a concern will sell itself – who needs a strategy? This is true, provided it is the only solution being offered. That certainly can occur, but it’s an extreme rarity. Most likely there will be three, four or more companies offering a viable solution to a customer’s particular problem, which is a business opportunity for us.

If this business opportunity meets general requirements for potential revenue and margin, is an existing product or service, or is defined on a roadmap; the next question usually becomes, “how can the customer be persuaded to choose our solution over a competitor’s?” This question is the catalyst for the need for a strategy.

How common strategies are formulated
Internal to most businesses there are several approaches garnering support for a particular strategy or another. For example, it may have been heard, “we are engineering driven and are developing/promoting products that solve a problem the customer does not know he or she has.” While offering a sense of visionary prophecy, this is hardly a strategy that focuses on the average customer with an urgent need or even a current need, and possibly dictates attention to products that may never, ever, serve a customer’s need. This approach is sure to energized Marketing Communications, albeit sometimes prematurely, and demand strong Engineering, but Sales will probably relegate this type of product to the back burner and focus on lower hanging fruit – as they should.

On the flipside there is the sales driven approach. Concentration is placed on the existing portfolio, the sell what we have advocacy. Essentially the main function of Sales, and again will usually elicit the support of Marketing Communications, but this leaves Development/Lifecycle Engineering with the majority of its function supporting sales. Serving the “here and now” has short term benefits and is without question an intricate part of a healthy organization. Nonetheless, one has to wonder if viewing a strategy only from this perspective overly focuses on the present need of our business at the expense of understanding and addressing the customer’s needs and wants.

Stepping back, it is important to note that every decision ever implemented was based on a strategy to facilitate a particular outcome. Whether that strategy was a conscious thought from a thorough meeting of the minds, a subconscious indoctrination or past life experience. The point is if we do not define a strategy, one is always automatically appointed – and perhaps not the best one. Establishing not only the need for a strategy, but a well-defined strategy mandates a focus on the customer, or in other words, a market driven strategy.

Customers’ needs and wants
What do customers need and want? To some customers cost is a very high priority; subsequently, price is a large determining factor. High on the determining factor list is value add where some customers seek the best value, considering functionality, quality and price. Some may prefer visionary products or the highest possible quality or shortest lead-time, and still others will react more favorably to strong relationships, individual and corporate. It is beyond expectation that one group could properly manage all the different attributes customers seek.

Product, or overall, business management has the unique position of being immersed in and educated through experience with Sales, with Engineering, with Marketing and Marketing Communications, but not bound to any one of these functions. Its responsibilities rest in the “here and now,” the “blue sky” and the “in between.” Its perspective is not solely defined by any one internal group, but by what customers need and want, and shaped by the dynamic continuities of the market.

The eyes and ears
Should Product/ Business Management have a support role in Engineering, Sales, Marketing and Marketing Communications? Absolutely. However, more so Product/Business Management should be the eyes and ears, the “finger on the pulse” for these groups. Communicating the sentiment of the customer, information on market trends, the driving forces of the industry; and offering insight to the various functions.

It is human nature to be most receptive to people more like ourselves. By truly understanding what is motivating a customer we demonstrate these subtle similarities that can nudge a customer to prefer a bond with us and with our products and services, creating greater success for both. So instead of how can the customer be persuaded to choose our solution? The better question is, how can we be persuaded to offer the best solution to our customer? The answer – a market driven strategy.

Lucidity SBM defines itself and its services by the market driven philosophy