March 23, 2022
March 23, 2022
Contributor: Mark McDonald
To win as a general manager of a technology product portfolio today, you need to break away from relying on past success in distinctive ways with both customers and products.
After faring relatively well during the pandemic, many high-tech companies continue to focus on standard growth strategies. The result is a pack of companies competing from similar playbooks for similar customers. Imitation may be the sincerest form of flattery, but it is a lousy growth strategy.
The more successful tech-product GMs, those that outperform the competition, do things differently. We call this group the breakaways, as their companies report growing faster than their peers and have differentiated strategies to grow revenues from new sources.
In analyzing this group, we surfaced that breakaway GMs expect to generate growth from outside of their current core customer and product base. They are going to grow share by differentiating themselves in ways that customers notice and value.
How does this differ from the mainstream?
Download eBook: The Top 3 Strategic Priorities for Technology General Managers
Breakaways represent the top-quartile GMs indicating that they were significantly more effective than their peers at generating revenue. Outperformers capture these successes through differentiated execution. These four capabilities are among those that distinguish them.
Rather than resting on past results, breakaway GMs use market momentum to go for more. As a group, they seek to grow revenues outside of the core of current customers and products by creating tangible competitive differences externally, while strengthening internal connections.
Competitive advantage in high-tech products rests on being distinct from others in ways that customers notice and value. Breakaways report having a competitive advantage over their peers across a range of differentiators, especially:
Better use of advanced technology. Breakaways do more than adopt new technologies like analytics and artificial intelligence (AI). They adopt tech in ways that raise functionality while lowering acquisition and total cost of ownership. Being different by being “better and less expensive” sets the terms of competition in their favor.
Superior sales experience. Breakaways recognize that the customer experience starts with the sales experience. This requires actively engaging sales teams with more than product talking points. A superior experience from the start wins more often and grows relationships over time.
Lowest total cost of operations and ownership. Breakaway GMs believe they have a long-term cost advantage over their peers across the board from lower initial acquisition and total costs as well as easier solution integration and customization.
Watch our experts discuss: How Leading Technology & Service Providers Engage Buyers and Drive Growth
Breakways use competitive differences to grow outside the core while raising margins. While the “pack” expects 43% of their 2022 revenue to come from current customers and products, breakaways seek to grow beyond that core (32%). Breakaways know that to grow the business at scale, they need to move beyond the core.
Breakaways know that growth without margin is self-defeating. Not only do they expect to grow through attracting new customers and launching new products, they are also using these strategies to expand margins. This contrasts with the “pack,” whose reliance on growing core revenues increases margin pressure. As evidence of this pressure, the “pack” sees internal cost cutting accounting for 18% of planned margin growth, compared to just 4% for breakaways.
Market success requires more than luck, it demands effective connections externally with customers and internally across the company. Organizations that are breaking away give their GMs the necessary authority to drive decisions and actions. GMs at these companies do not program-manage a product; they are recognized leaders in driving revenue. Beyond authority, breakaway companies align themselves across the organization to achieve revenue and margin goals. In doing this, they:
These characteristics require addressing not only customer and market needs, but also internal structures and relationships that bring together product, sales, finance and other areas to execute these strategies.
Highly effective tech-product GMs view success as a process rather than a product. They create a virtuous cycle in which the organization invests in new customers and products. That cycle attracts and retains top talent based on consistent achievement rather than heroics. The result is higher revenues and margins, and an increasing advantage over the rest of the field.
Join the world’s leading IT and business leaders to get an update on accelerating tech growth in a new era of transformation and technology trends.
Recommended resources for Gartner clients*:
Breaking Away From the Pack — The 2022 General Manager Survey
General Manager Insight: Analyze Market Dynamics and Competitive Landscape When Making Growth Bets
Quick Answer: What ‘Digital Transformation’ Means Now for TSPs — A Guide for the General Manager
*Note that some documents may not be available to all Gartner clients.