- General managers (GMs) of technology products share many of the same goals and strategies. A Gartner survey shows 85% see growth as a top priority.
- GMs expect growth from a core of existing customers and products, with less emphasis on obtaining new customers and launching new products. Winning in 2022 and beyond will take more than that.
- Market leaders are standing out by creating unique sources of competitive advantage that increase both revenue and margin beyond the pack.
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?
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How GMs break away from the pack
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.
No. 1: Using past success to grow beyond their business core
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.
No. 2: Creating competitive differences
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.
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No. 3: Targeting market share and margins
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.
No. 4: Connecting external and internal effectiveness
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:
- See a stronger relationship between revenue and attracting new customers. They prioritize new customers slightly ahead of the existing customer base.
- Build end-to-end connections internally from advanced technology through product development to sales and service. Rather than optimizing each function, breakaways create threads in service of customers and margin.
- Lead with the product or service as the means to revenue growth. Breakaways do more than create new products. They also drive those products into markets via sales teams that do more than sell what customers are buying.
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.