The introduction of new product or service lines into an existing customer base is a challenge that companies often face with new business development. Sometimes the opportunities can be readily quantified using traditional financial analysis (e.g., using net present value, scenario, and waterfall buildup methods). At other times, there may be hazards of trying to quantify an opportunity too early in the process before conceptual alignment of the stakeholders. For example, people can simply get stuck “in the weeds with the numbers”.
In this post, I share a method that I have sometimes found useful as a first step in framing and getting alignment among parties (especially when looking at new product development situations involving platforms upon which multiple products or product lines can be built). To be honest, I am not sure if there is a name for the type of chart I describe below, but I call it a “frontier chart” (which is derived from investment portfolio theory from finance).
The basic idea is that there are a set of lower risk projects out on the left side of the chart which have more known (potentially lower) expected returns. In contrast, projects on the right side might have higher risks but also higher, expected returns. So as an example of a project on the left side, a software company may have early customer engagements with a straightforward, add-on product that it directly developed (say a GPS mapping tool). As an example of a project on the right side, that same software company may be looking to introduce new platform capabilities such that indirect, 3rd parties can develop applications (e.g., Apple’s “there’s an app for that”). The later project venture is more risky, but the payoff could be larger than the former project.
A key benefit of using a frontier chart is that it can help to get buy-in on the high-level things and projects that people tend to agree with. There will be plenty of time later to put on our “propeller hats” and get bogged down in detailed numbers and execution tactics.
The ability to facilitate a company’s management team to move forward is priceless, and sometimes facilitation can be more difficult when introducing new products or services (which is outside of the core, day-to-day business). Consider using frontier charts and thinking about platform strategies (the latter which may be topic for another post).
In the past year I ran into a situation (mid-project in the capacity as an independent consultant) where the client was incorporating materials from my deliverables plus information from one of the major, worldwide strategy consulting firms that was also working in the same area as I was. In this case, I think it was beneficial because it is a high-stakes strategy area which requires mutiple perspectives, innovation, and cross-checking.
Yet it made me recall some other situations where other consulting firms had been used in closely-related or overlapping areas. Highlight memories include:
Bringing in a partner consulting firm to round out industry-specific knowledge to complement our functional knowledge expertise
Having an internal consulting group monitoring the progress of a larger, external consulting firm
Having an adjacent room on the client site to a "competing" consulting firm
Getting the consulting firms to work out and remove overlapping work areas by request of the CEO
Having the consulting groups to exchange, provide feedback, and critique the other firm's deliverables and engagement progress
Setting up the upstream consulting firm (e.g., strategy) to complement that downstream consulting firm (e.g., IT implementation)
Although there are many trends by companies to try reduce the number of suppliers (even in the professional services area), there are benefits of using multiple consultants. Some tradeoffs and considerations:
Getting the consultants to cooperate
Inefficiency created by overlapping work
Benefits by factoring in best perspectives from each firm (similar to the way some of the most innovative firms use a larger network design architects to feed ideas)
Keeping each of the consulting teams on their toes
What are your experiences and thoughts about using multiple, management consultants and/or consulting firms?
Competitive intelligence (CI) is an activity done by a wide range of professionals ranging from marketers to product managers to consultants to strategic planners. Now I’ve held back for many years on posting on the subject of conducting CI ethically. I tend to be more on the conservative side, and by posting my thoughts on this subject publicly, I’ve had concerns that some clients and future employers would see me as too soft on the issue. Would a client shy away from hiring me because I was unwilling to go the “distance” to get a job done?
In spite of my concerns, I’ve decided to address the issue here. In my experience with the business world, I’ve seen the topic of ethics (in the context of CI) discussed much less frequently than I would have expected, and that should change. Here I’ll provide some examples of bread and butter methods and more infrequently used methods for conducting CI. People should feel free to comment on other methods they have used. I’ll also provide some examples of activities that I either think are questionable or outright unethical.
Here are some examples of ethical, secondary research methods for performing CI:
Pulling annual reports and shareholder presentations on competitors from the web
Analyzing securities and exchange commission (SEC) filings and financial statements
Gathering marketing collateral information from trade show booths of competitors
Obtaining industry reports from investment banks and/or financial institutions
Reverse engineering the positioning focus of competitors from marketing collateral
Searching through LinkedIn to analyze salesforce profiles and reverse engineer likely go-to-market methods
Analyzing resumes of employees of competitor
Using Google satellite to analyze geographic profile and size of competitor facilities
Using Crunchbase or Techcrunch to analyze private companies
Using Compete, Alexa, and other web services to analyze web traffic
Analyzing advertising copy and positioning
Purchasing third-party reports (e.g., Gartner, Forrester, Parks Associates) to round out research
Looking through job postings by the company on the web
Here are some examples of ethical, primary research methods for performing CI:
Interviewing a distributor that has experience with competitors and asking questions whether client’s proposed offer would be competitive
Asking distributor to describe any non-confidential information that they would be comfortable sharing about either the competitor or distributor’s relationship with competitor
Visiting retail outlets of competitor to infer go-to-market methods, assess general profile of locations, etc.
Directly purchasing a competitor’s service or product
Surveying salespeople within client organization to get their feedback on what they’ve run into with respect to selling against the competition
Conducting focus groups with general customers to get their feedback on competitor’s products versus the client’s prospective offerings
Obtaining general information by calling into a competitor’s call center
Finally, here are some examples of questionable or unethical methods of performing CI (and these topics come up somewhat frequently in my experience):
Misrepresenting oneself as a potential customer of competitor in order to get pricing information not made generally public
Asking a current distributor or employee of competitor to share proprietary information about competitors and violate non-disclosure agreements
Interviewing a competitor’s employees for the sole purpose of gathering competitive information as opposed to intending to consider such people for direct hire
One problem that I see organizations run into is that they can get focused on one single issue. For example, they may say “I must know exactly how competitor XYZ is pricing”. This type of logic can be dangerous because it tends to lead to one solution. It may also tempt one to try to take unethical shortcuts. If the problem statement is reframed around “getting a better picture of whether my client’s market offer is competitive”, then this can lead to more flexible and varieties of solutions. Tools like conducting customer focus groups, surveying salespeople, etc. then become possibilities for solving the real problem at hand.
As a closing note, in a framework I alluded to in a prior post, one way to think about activities are to classify them in two dimensions: (ethical – unethical) & (legal-illegal). The other framework that I use for weighing ethical issues is to determine how I would feel if my activities were plastered all over major press outlets. Would I be embarrassed by my team’s or my personal activities? Posing that type of question is often a nice litmus test for good behavior.
In this session we will explore the implementation of behavioral science initiatives and applications within commercial settings. Topics to be covered include frameworks and key takeaways in leading an organization that implements behavioral science. To make these frameworks concrete, we’ll also cover some detailed case examples of how companies have applied behavioral science to improve outcomes for constituents.
Takeaway Exercise 2: If you have more time and want to spend more time on techniques, it is worthwhile to better understand how to establish the right problem-solving structure. Consider these resources:
McKinsey presentation on problem-solving and decision-making (covers core concepts like problem definition, issue trees, MECE, 80/20 rule): See here.
The McKinsey Way by Ethan Rasiel (especially Part 1, pages 1-45): This book also covers concepts like MECE, issue trees, 80/20 rule, and more. Visit Amazon here.
