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March 22, 2009

Product Roadmaps - Transforming Strategy into Growth

Premise – (1) Strategy by itself only defines the destination and the basic means of travel – there is no growth engine without value added products and services since they provide the means to capture market share and earn superior margins.  (2) Given this situation, organizations need a mechanism to provide the substance behind the strategy.  (3) The development of Product Roadmaps provides such a mechanism.


Note that I said the development of the roadmap provides this linkage between strategy and product development.  This is because the Product Roadmap (the end result of the road mapping process) is nothing more than a graphical tool to visualize a time phased sequence of projects that represent marketing’s best guess on what is needed to expand market share and profitability.  Although the roadmap is rather simple, the roadmap development process involves a significant amount of analysis and decision making.


The analysis steps include a thorough understanding of market trends; in-depth knowledge of customer needs and business constraints; analysis of competitive offerings; and assessment of internal development capabilities.  This information creates a foundation for the development of new product concepts.  These concepts don’t appear from the analysis alone but evolve over time as product and customer experience is coupled with the intuition and innovation of strong product managers and creative technologists.


The decision making kicks in as these new product and service candidates are evaluated and refined – searching for a combination of features that provide unique value to customers at an appropriate price point.  This tradeoff of product features versus cost, risk and lead-time results in a condensed project list.  Inevitably, there are more concepts for new products, feature enhancements and cost reduction than there are resources to develop these into viable products.  As a result, the list of product candidates must be rank ordered based on their potential impact on market share / margin, timing versus market opportunity and resource utilization.   Projects near the top of this list and within overall resource constraints are selected for the roadmap and subsequent funding.


Given this sequence, the roadmap becomes the means to an end – the product line plan to implement the business unit strategy – and its primary value is not in the graphical output but in the analysis and decision making embedded in the road mapping process.  For additional details, see my white paper at:


http://www.strat-edg.com/files/Product_Roadmaps.pdf

March 03, 2009

The Art of M&A Integration

M&A activity is often biased toward closing the deal.  Company executives review strategic implications, define expected results and analyze financial projections.  Consultants and functional experts perform due diligence.  Brokers and bankers model business synergy and valuation.  The legal team works out contractual details.  When the deal finally closes, the vast majority of these people move on to their next challenge – leaving a business unit manager and corporate staff functions to actually engage with the new group, ensure functionality between business systems and, most importantly, deliver on the promised results.


There is often no formal integration process – this is typical of less sophisticated acquirers and acquisitions which claim no anticipated changes in a “merger of equals”.  Unfortunately, this initial independence is short lived as various corporate functions start expecting information in the format used by the acquiring company.  Next, these same well intentioned staffers expect compliance with corporate policies and procedures.  This will likely impact budget and hiring approvals and may extend to more critical business processes like customer terms or credit approval.  While all these changes seem reasonable to the various staff groups - the cumulative effect on the acquired company is at least a diversion of resources to deal with non-value added administrative tasks and at worst a direct violation of their expectations and trust.  The most destructive changes occur when organizational decisions and HR policies combine to impact reporting relationships, titles and compensation.   Coupled with the more benign administrative issues and an information vacuum – the intended synergies of the acquisition are quickly forgotten – replaced by uncertainty about levels of authority, long term job security and outright mistrust.


It is never wise to assume or communicate that business will continue as usual for the acquired company.  The reality is that many things will change with an acquisition and this needs to be communicated and planned well before the deal is signed.  The most critical elements of an effective integration plan include:

  • Common Objectives
  • Early Integration Planning
  • Resource Allocation
  • Fast Decision Making
  • Effective Communication
  • Strong Working Relationships
  • Expect Problems
     

For additional details on these elements, see my white paper at:


http://www.strat-edg.com/files/The_Art_of_M_A_Integration.pdf


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