Tuesday, June 3, 2008

Product vs Value Chain

Sometimes product ideas come along that look great in PowerPoint. The concept resonates with customers and executives when pitched by charismatic idea owners. The owners can gloss over the inconsequential or fail to deliver the whole truth whether known or not. But they do it with zeal. The ability to convey propositions with singular exuberance and passion in the quest for victory is why those folks are in sales – not always in product management.

When great ideas converge with solid value chain structure, the fusion of energy and execution can deliver outstanding business results. Unfortunately, when great ideas meet value chain structures which aren’t built for them, contention ensues. And sometimes the contention may only be resolved with a radical change.

Having navigated product management waters in several firms, I’ve seen this contention before. However, in the current case, it appears to be significant. At the moment, a product idea which has been hatched and escaped into the wild looks great on paper. It appears to be customer friendly, comprehensive, integrated, and uses leading technology.

Unfortunately, the idea is not sales order friendly, it’s extremely difficult to deliver in volume, has a disjointed service component and is cumbersome to manage from an upgrade standpoint. Ah-ha! Trade-offs, you say. The stuff of product managers… and politicians. If that doesn’t give you a warm and fuzzy about being a PM, I don’t know what will!

Should a product manager focus on delivering the customer friendly, despite the value chain problems which may be systemic across the global corporation? If you can’t change major value chain components to fit a product, then accept them you must. Venturing down this path includes accepting reduced sales volume and ability to meet targets, but hey, the great idea is still in-tact.

Conversely, would it be prudent to modify the good idea so it’s “less good” from a slide deck perspective, but more value chain friendly providing alternative customer goodies? One might de-feature the product to fit the value chain model, thus delivering other customer goodies. Do swift delivery times, ease of use, and streamlined serviceability for the customer result in a better business if you can push up the sales volume? What of the political ramifications of down-leveling someone’s “great idea”?

Well, if you read my previous post, you would know that I prefer a great business with mediocre technology over outstanding technology and a poor business. With that, I suppose the choice is clear. I wonder how it will work out?

No comments: