In today’s business landscape, leaders face constant uncertainty from geopolitical, economic, technological and regulatory market shifts. These shifts, or “turns,” manifest in many forms, such as changes in customer expectations, data breaches and laws that redefine entire markets. World events guarantee turns in one form or another, but how an organization responds depends on how well it prepares.
Lead and lean into the forces of change rather than be led by them
Consider the path of a race car driver. To most, the turns in the track are a dangerous place and the temptation to brake early is strong. But to others, the turns are an opportunity to outpace competitors. The winners brake late and accelerate into the turn to win in the end. These drivers are not taking blind risks — they trust the skills and plans they have developed.
For many organizations, choices made during a turn can mean the difference between winning or losing the race. Many leaders adopt a wait-and-see approach to turns. That means by the time they act, it’s too late. Others attempt action and take on risks that they do not fully understand or without being prepared.
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A select few follow their beliefs about the future, make the tough decisions and mobilize their organization for success. “The most successful companies anticipate, detect and accelerate market turns,” says Michele Buckley, Sr. Director Analyst, Gartner.
Lead and lean into changing forces
Consider how organizations responded to the shift to services-based licensing and computational models. Those ready to win in the turns embraced the realities of the new model, built for it first and marshalled resources toward the future. Others straddled their business model, waited for customers to pull them into the future and, too often, found their revenue challenged.
Technology general managers (GMs), product marketers and product managers play a vital role. For each, the key to “winning in the turns” is to work toward common goals and prepare in three critical areas: Strategy, cost and talent.
Strategy: Prepare to act confidently amid uncertainty
The key to strategic planning during (or in preparation for) a turn is focusing more on the strategic decisions that need to be made and less on the overarching strategies. Concentrate on the execution without getting lost in the roadblocks. In the same vein, bring data to the table and be a part of the solution. You don’t want to simply assign things to do to others.
“GMs are in a unique position because they engage with customers, sales, engineering and product,” says Mark McDonald, VP Analyst, Gartner. Focus on leading indicators and look for trigger events and binary changes in the market that indicate a turn is coming. Use your relationships and perspective to help guide the organization.
Product marketers are also in a unique position to be catalysts for action, given that they engage with customers, sales, marketing, engineering and product. With this perspective, product marketers can identify the best strategic options and create an open dialogue about how the option should be executed. Practicing these actions builds up management’s ability to make decisions and act when others hesitate, creating a core strategy responsive to changing customer and market conditions.
Product managers exist at the intersection of product and customer, which offers an opportunity to monitor customer behavior and spot the sort of weak signals that indicate a turn. As the behavior changes in response to various turns, product managers can help drive enterprise strategy. Take a more strategic position, and ensure that all decisions are based on relevant metrics that are real time and forward-looking.
Cost: Allocate resources and execution with discipline
It’s tempting during a turn to reduce spending by curtailing product investments, laying off staff, cutting capital investments and reducing training. But companies prepared to win in the turns recognize that the business cycle is not binary. It is not growing or in recession — it’s a series of multiple events. Cost optimization, as opposed to across-the-board spending cuts, enables a company to manage costs but also reinvest the resources into the organization.
GMs need a solid view of the cash flow and cash position, while preparing the organization for tighter product development budgets and greater customer demands. Even more importantly, watch how much discounting and service accommodations are costing the business. Ensure that products are priced appropriately, and use analytics to gain insight into deal structures, quote configuration and sales compensation. In a turn, you want sales teams focused on connecting with the customer, not negotiating a transaction.
Product marketers should develop a cost-optimization roadmap, analyze the martech stack, and incorporate flexibility into the culture with agile marketing and a focus on quick, nimble projects. Finally, make sure marketing is constantly auditing projects and resources for efficiency.
Product managers should focus on product investments that support enterprise growth, but shouldn’t sacrifice long-term advantage. Product organizations will experience immense pressure to reduce pricing during difficult times, and in such circumstances, product managers must stand firm in the overall product strategy and the role of pricing in it.
“Prices lowered on an ad hoc basis can be notoriously difficult to bring back to ‘normal’ levels if customers grow used to the idea that a company is prepared to compete on price,” says Aapo Markkanen, Sr. Director Analyst, Gartner.
Talent: Position people to sustain progress on transformation
Having the right team is key to winning in the turns. This means creating a high-performing, agile and flexible team with a high level of digital dexterity. Turns put even the best employees at risk for disengagement as they are asked to do and contribute more and more.
GMs must truly understand how to engage employees and drive job satisfaction. As leaders of product organizations, they play a major role in organizational transformation and the culture shift to increased service orientation. Create a culture that supports this new strategy with agile and DevOps techniques and build resilient teams.
Product marketers should recognize the rapidly increasing market value of product marketing skills and the corresponding need for employee retention, evaluate the current team’s ability to respond to the turns and achieve goals, and shift marketing work from outside agencies to in-house groups for greater control and acceleration.
Product managers should focus on assembling cross-disciplinary, “M-shaped” teams, strengthening collaboration with stakeholders and ensuring that there is enough time for direct interaction with customers — even at the expense of other, less crucial activities.
This article has been updated from the original, published on November 22, 2019, to reflect new events, conditions or research.