The Four Esssential Competencies to Be Market-driven

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article shared by Rob Krueger. Original source: http://bemarketdriven.com/images/BeMarketDriven_s_4_Fundamentals.pdf

1. The ability to describe your indented customers
2. The ability to gain and use deep customer insights
3. The ability to develop and optimize solution road maps
4. The ability to align the companies resources to customer needs

The ability to describe your indented customers

The desired outcome of Competency #1 is to describe your intended customers with sufficient clarity to enable sound decisions, the development of purposeful innovation, value creation to address their highest priority needs, and messaging that establishes clear differentiation. The most visible manifestation of this ability takes the form of customer-centric, market segmentation. The ability to segment customers enables the purposeful selection of customer groupings that provide necessary growth, while avoiding dead-end alternatives. Market segmentation is not based on your product lines or product types. Your segmentation must be centered on your customers — current and future. While many companies profess to have the skills to develop, validate, and utilize segmentation, our experience indicates that this area requires considerable improvement. Your segmentation must clearly:

• Define the targeted customer
• Their area of application
• Their desired outcome
• The environment where they perform their activities

Note that in the above criteria, your products are not mentioned, it’s all about your customers.

The ability to develop and use market segmentation enables better business decisions in a shorter time frame. Market segmentation enables better deployment of limited resources and the creation of defensible market positions. As a side benefit, market segmentation allows you to prioritize product development programs because everyone in your organization shares a common view of the “playing field” enabled by segmentation. Further, clear segmentation is critical to directing your distribution channels3 to focus on the right customers and avoid “force fitting” products in segments for which it was not designed.

Fundamental Questions

• Is your current market segmentation based on customers, their applications, and the results they wish

to achieve?

• Do you require every product proposals to make the business case based on consistent market

segmentation?

• Do you make all decisions about growing profits based on a valid, customer-centric market segmentation?

Starting Points

• Require every product manager to present the latest market segmentation, assess against a clear criteria, and develop an improvement plan with deliverables within three months ― or sooner.
• Ensure that your marketing team acquires the right knowledge, skills, and motivation to deliver customer centric segmentation schemes that enable solid business decisions.

The ability to gain and use deep customer insights

The desired outcome of Competency #2 to fully describe and prioritize customer requirements to focus your limited resources to develop innovative solutions in order to deliver well-differentiated products — and be able to do it faster than your competitor. Discovering, prioritizing, and using customer requirements to create clearly differentiated products must be a core competency in your organization. Your marketing and R&D professionals must have the skill and ability to develop a deep understanding of your customers. With technical barriers fleeting, this is one of your company’s few sustainable competitive advantages. Understanding customer requirements is not making a list of new features — far from it. Nor is it a casual conversation with a random customer. Understanding customer requirements is the ability to select the right customers to interview, prioritizing the high-value questions to ask, and probing in-depth to uncover unstated or unarticulated requirements. Creating clearly differentiated products rests on your ability to develop deep understanding of the problems that your customers are attempting to solve. It also means you must understand the desired outcomes that drive their behavior, while at the same time doing better and faster than your competitors

Fundamental Questions

• Is your Market Requirements Document (MRD) simply a list of features?
• Do your marketing and R&D teams collaborate to discover and prioritize customer requirements?
• Do your distribution channels say that your products are easy to sell?

Starting Points

• Review and then re-engineer your Market Requirements Document (MRD) so it contains only customer requirements and not a list of features.
• Starting immediately, ensure that your marketing and engineering teams interview customers together.
• Ensure that your marketing and appropriate R&D leaders acquire the skills, knowledge, and abilities to discover, prioritize, and utilize the Voice of the customer (VOC).

The ability to develop and optimize solution road maps

The desired outcome of competency #3 is to identify the vital few solutions you need to develop to ensure profitable growth. This eliminates the watering-down of your limited resources by focusing them on the high-value opportunities, while maintaining your competitive position. Incidentally, a better way to state this competency is the ability to develop, optimize, and use “solution roadmaps.” This is based on the assumption that customers purchase solutions to their problems. We feel “product roadmap” — while deeply ingrained in product companies — may create the impression that you are in the product development business. In reality, you are in the value creation business. You must develop solutions to your customer’s problems — faster than your competitors. Solution Roadmaps are essential. Every organization has finite resources. Thus, the ability to make critical decisions to ensure a constant fl ow of new products/solutions that deliver superior value to the targeted customer groups is indispensable.

Solutions Roadmaps are not lists of projects currently under development, nor a listing of all the activities of your R&D organization. Rather, roadmaps are the result of in depth “market sensing” to understand the direction of your market segments, careful financial analysis and also the courage to make decisions to select and maintain a few vital projects that will be funded, developed, and taken to market.

Fundamental Questions

• Can your product roadmap be mapped against your market segmentation in a harmonized fashion?
• Can you demonstrate that your product roadmap is a clear reflection of your organization’s strategic imperatives?
• Do you review and update your product roadmaps every quarter to ensure they are flexible based on market conditions?
• Do you require all product proposals to make the business case based on customer-centric segmentation and connected to the Solution Roadmap?

Starting Points

• Do an in-depth assessment of the value and utilization of your current product roadmap against a clear set of criteria, including your strategic imperatives
• Transform your Product Roadmaps into a “Solution Roadmap” and require the identifi cation of your offering based on helping customer achieve their outcomes.
• Ensure that your marketing and appropriate R&D leaders acquire the skills, knowledge and abilities to develop, use and optimize product roadmaps.

The ability to align the companies resources to customer needs

The desired outcome of competency #4 is a focused solution strategy which is the product of innovative thinking from all departments, squarely focused on delivering desired outcomes, solving problems and providing a set of positive experiences when dealing with your company. Once the group of intended customers is profiled and the high priority, unmet needs discovered, a plan must be developed with which to capitalize on these opportunities profitably. To accomplish this, the information must be shared across the entire company so each department can begin to contribute to the overall solution.

By having a rich and consistent understanding of the problem to be solved, diverse groups can bring their unique perspective and skills while still being focused on a common purpose and a shared strategy. In order to reinforce the desired behaviors, goals, priorities and resources must support the market-centered planning activities. To maintain momentum and ensure consistency, responsibility has to be assigned to one or several people to represent the intended customers’ perspective internally and monitor external changes. A senior member of the organization must take responsibility to continuously reinforce this market-driven initiative and ensure consistency across all its elements. This is not limited to one or a few departments. Nor is it a single tactic that is executed and everyone goes back to business as usual. Every function, including manufacturing and accounting thinks about how they can contribute to offering a set of products and services that will create a repeat and loyal customer.

Fundamental Questions

• Who in your company consistently represents the intended customer’s perspective?
• Are they consistently monitoring and reporting on successes, failures and changes that the company should respond to in the chosen market?
• Does your company have a systematic — and verifiable — way to share information about intended customers and their needs so everyone is working toward a common purpose?
• Who in the organization makes sure information is being shared effectively and all the company’s products, services and programs are consistent in focus and support each other?

Starting Points

• Assign responsibility to someone (e.g. industry manager, product manager) to regularly research, and update the rest of the company on trends and changes in the selected market.
• Appoint or assign the responsibility for the “whole product” to a senior marketing person.
• Have a senior manager review the highest priority, unmet needs and evaluate if the product development plans, the marketing communication messages and the sales training all address those needs as the highest priority? Or has a disconnect occurred somewhere in the process?