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Up Your Organization’s Annual Planning Game

Using Segmentation as a Measuring Stick

How does your organization do annual planning or establish its targets and goals for the next year? Is it a top-down percentage growth with a target margin threshold? Is it business unit specific and bottom-up using this year’s run-rate, current account opportunities, recurring revenue projections, and more? Every organization does annual planning a bit differently, but for most organizations, there is an element of reflecting on the past as well as setting intentions for the future. Almost all companies can agree that to determine where one needs to go, they must first have a clear view of their current position.

So, what metrics are typically relied upon during this reflection and goal setting process?

Understandably, companies often default to financials as baseline indicators for organizational health and performance. While financials tell a strong story about operations, efficiency, and growth, they may veil the story behind a company’s strategic performance. Following a volatile, unpredictable year, market shifts forced numerous companies into unprecedented territory. Though many companies prevailed financially, successfully adapting to the changes presented, some adjusted at the sake of their long-term strategies. They moved away from their core where to play and how to play approaches to pursue short-term revenue. This may have worked temporarily, and for some, this may have charted a new (permanent) strategic direction, but most organizations are beginning to find their way back to their old strategies as we get into this new year.

Finding the path back to their strategic core requires reflection and analysis; account and market segmentation is underutilized for this purpose but is an effective tool that provides both while offering insights and establishing a baseline from which an organization can build a strong future.

The snapshot of a company’s account and market segmentation is the manifestation of its strategy. It gives a company a view of where and how it is playing so it can better answer the question: is reality aligned to the strategy?

Account Segmentation

The goal of account segmentation is to evaluate a company’s current customer base to see the current size and offer penetration at each of its accounts to identify opportunities to better deploy resources to make a greater impact on those accounts most important to the organization today.  Many organizations have defined goals and have designed a strategy to help them penetrate, become more impactful in, and upsell to what they believe are their top account types. Through account segmentation, however, many find that their current focus is misaligned with their overarching strategy – and the top accounts are not the ones the organization is most focused on maintaining.

Market Segmentation

Market segmentation leverages market demographic data to organize the market of potential buyers into groupings based on perceived value to an organization. In other words, market segmentation can help inform what a company’s strategy should be. Where in the market can an organization capitalize on the greatest growth and value? Answering this question will help companies understand who they should be selling to, and therefore, what they should be selling.

The Power of Account and Market Segmentation in Tandem

While both account and market segmentation provide strong insights independently, the combination of the two provides a holistic picture of the company’s strategy. For example, organizations often believe their largest accounts (account segments) are their “best” accounts, rather than also evaluating how saturated those accounts are and how much growth is available (market segments). This belief gets an organization by for a while, but eventually it becomes difficult to hit double-digit growth goals when you continue tapping on the same well.  By the time organizations realize this organically, offer strategy and resource investments are no longer directed at the portions of the market that now need the most growth and investment. By looking at the account and market segments together, and their trends over time, companies are better able to understand and prioritize the accounts that are most important to them, now and in the future, and build strategies accordingly. It causes leaders to ask the following critical questions:

  1. Do we have the correct strategy in place?
  2. Has my organization committed to our strategy?
  3. Is our current situation a product of our approach or a product of the market?
  4. How should we shift our investments and focus to better support our desired strategy?

Once these questions are answered, companies can ensure their plans are realistic, their efforts are focused on achieving their strategic objectives, and they have a non-financial baseline to measure future decisions against.

 

Written by: Anthony Paluska

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About the Author: Anthony Paluska is a Partner at McMann & Ransford with experience helping organizations overcome commoditization by developing stronger, more intimate, relationships with their customers. He has leveraged his management consulting, problem-solving, and change management skills to support 15+ Fortune 1000 organizations, across a multitude of industries.

Three Signs that Suggest It is Time for a Portfolio Review

As we have discussed in the first two blogs in our series, a solutions portfolio is the embodiment of a company’s where to play and how to act strategies that involves cross-business initiatives and investments. Because a portfolio is dynamic and multifaceted, companies often overlook key indicators that tell them to focus their attention on the portfolio. In this blog, we share some of the common situations that should trigger organizations to immediately refocus their efforts on a portfolio analysis.

  1. The organization is embarking on a strategic effort to become more outcomes-oriented.

Being outcomes-focused is a strategic repositioning of an organization with the guiding light being ‘how do we maximize the value we drive to our customers & how do we make sure our market knows it?’.  This leads to product/service enhancements, marketing and sales changes, and often to restructuring to more closely align the customer-facing aspects of the business.  However, oftentimes, organizations do all of this to achieve the overarching strategy, without first going through the formal exercise of evaluating their portfolio from a high-level in its ability to achieve outcomes that their key markets truly care about. Building an ideal state outcomes-focused portfolio requires a distinct sequence of decisions.

  1. The first step is to develop a robust and coherent segment definition.
  2. With where to play and act clearly understood, companies must then define the segment-specific portfolio strategy to answer what the portfolio will address and solve for that segment.
  3. Finally, companies should determine how their current solutions fit the market segment strategy. This will unveil portfolio gaps and encourage the prioritization of new solution design to complete the puzzle required to solve customers’ key challenges or opportunities. This may result in some high-value PS on the front end that is designed to pull-through much larger purchases.

By identifying the unique challenges and opportunities that key markets are facing and aligning them with solutions, companies will drive the outcomes that their customers care about. At that point, the other ‘transformational’ activities can then begin with a much clearer end goal in mind.

  1. Margins are continuing to erode on a core set of products across the entire business.

For organizations that find themselves in a situation where they are facing competition and commoditization, it is time to evaluate the product lifecycle and rethink the portfolio through the lens of ‘how has my market evolved?’.  Eroding margins may indicate that a product is nearing the end of its lifecycle, and rather than pouring resources into attempts to make the product more profitable, less costly, or more relevant, organizations may need to move on from the particular product segment entirely. Though the notion of retiring a cornerstone solution may cause initial fear, organizations that hope to differentiate themselves in highly competitive markets must make decisions for the good of the whole portfolio and long-term organizational strategy. Doing so is always a difficult decision, and must not be done without the appropriate historic analysis and future modeling of where the portfolio has been, what that product’s role was in the portfolio, and what the role of that solution is in the future state.

  1. There is a disconnect between what is being sold and the organization’s strategy.

Strategic impact should be a key criteria that dictates portfolio investment decisions and when organizations find themselves faced with the above scenario, even if they are currently very successful, the constant challenge of living at an organizational cross-road leads to disjointed investments and a declining outlook.  Strategic portfolio management is about making tradeoffs that align with and drive the strategic objectives. For example, if a primary goal of an organization’s strategy is to grow share of wallet at existing accounts, but the organization’s solutions revolve around legacy products, there will likely be a constant struggle to achieve the desired strategic outcomes. Growing wallet share will require the addition of value-added solutions focused on generating customer intimacy.  While the solution itself may not point to an explicit issue, aligning the portfolio and strategy at a high-level will reveal the strategic disconnect that may ultimately limit the organization from achieving its objectives and will inform the key actions required to align the portfolio with the strategic goals, without abandoning what is working well today.

These common symptoms, among others, emphasize the need for effective portfolio management. Understanding and identifying the key indicators of portfolio problems is the first step to fixing these issues and building a more strategic, outcomes-oriented portfolio.

Written by: Anthony Paluska

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About the Author: Anthony Paluska is a Partner at McMann & Ransford with experience helping organizations overcome commoditization by developing stronger, more intimate, relationships with their customers. He has leveraged his management consulting, problem-solving, and change management skills to support 15+ Fortune 1000 organizations, across a multitude of industries.

Defining the Role of Portfolio Manager

In the last blog in this series, we introduced three challenges companies face that are often symptomatic of poor solutions’ portfolio management. In this blog, we want to delve into the first challenge in more detail – a striking majority of organizations lack a dedicated resource who is responsible for owning the portfolio for the entire organization – and provide insight on the critical role of a Solutions Portfolio Manager.

Most companies have numerous ongoing solution development efforts and initiatives spread across different departments and business units, each pursuing their own objectives. While generally speaking, initiatives can exist in harmony, solutions are also often competing with one another – for resources, internal and market mindshare, etc. – or even overlapping. Challenges arise when there is disconnect in the business and a lack of portfolio governance and overall management to determine what solutions should be prioritized, what efforts can be combined, and what should be delayed.

Unfortunately, despite the proven ability of the Portfolio Manager role to drive outcomes for organizations, only 50% have a dedicated Service Portfolio Management team[i]. Solutions that are in high alignment with companies’ overall goals and strategies have a 15% higher success rate of meeting said goal[ii], as well as an increased rate of staying within budgets and being delivered on-time.  For many organizations, the responsibilities of a Portfolio Manager are doled out among different executives and spread across others throughout the organization; true company/portfolio alignment requires a dedicated resource or team of resources who are aware of all initiatives and own the portfolio decisions. The solutions’ portfolio is critical to organizational success. Therefore, the role of Solutions Portfolio Manager is best not filled by a consortium and entails a number of key responsibilities:

Maintaining Market Awareness and Alignment

This role is responsible for gaining a deeper understanding of the different target markets by sourcing expertise, so it can help define the markets to target, the buying personas that should be engaged, and what those markets and buyers need.  In order to accomplish this, the Portfolio Manager must work to facilitate feedback by engaging different teams, including account executives, sales solution architects, strategic marketing, sales specialists, and services delivery teams.  Through these regularly scheduled feedback meetings, the Portfolio Manager can proactively evaluate initiatives through the big picture lens of market strategy to anticipate changes and challenges before they arise.

Understanding the Solution Lifecycle

Another responsibility of the Portfolio Manager is to consistently evaluate the lifecycle for each solution to know when to retire a solution from the portfolio.  Every product and service has a lifecycle, from the conception of the idea to the eventual discontinuation.  The Portfolio Manager should ensure that time and resources are being funneled to high-priority solutions. By making strategic decisions around when to retire a solution, the Portfolio Manager can reserve critical resources for other timely investments that are more aligned with current and future market needs.

Prioritizing and Approving New Products, Services, and Solutions

In organizations that excel at this, for any new offer to go to market, it must be directly approved by the Portfolio Manager at various tollgates that give a go/no-go decision for each stage of it being developed, marketed, sold and sold at scale.  This ensures that every new addition to the portfolio stays aligned with the organizational strategy and objectives and fits into the organization’s point of view of the future marketplace. A Portfolio Manager facilitates conversations between business units, functions, etc. to understand solutions and their potential impact on the portfolio and broader organizational goals. This process is often formalized through request forms and regular meetings. Making strategic decisions requires the Portfolio Manager to integrate information from the market and across all parts of the business to evaluate the solution based on a set of predefined, weighted criteria. For example, a solution’s strategic impact, market attractiveness, investment requirements, and sales and delivery potential.  The role’s primary responsibility is ensuring that individual solutions, and the portfolio as a whole, help the organization get closer to the customer and support the organization’s broader strategic and financial objectives.

With the role of the Portfolio Manager defined, we can dig deeper into understand why companies struggle to identify the symptoms of poor portfolio management. The next blog in the series will explore how to identify and address underlying portfolio issues.

[i] https://www.tsia.com/blog/5-steps-to-building-a-service-portfolio-management-function

[ii] https://gocatalant.com/epm/everything-you-need-to-know-about-enterprise-portfolio-management/

Written by: Anthony Paluska

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About the Author: Anthony Paluska is a Partner at McMann & Ransford with experience helping organizations overcome commoditization by developing stronger, more intimate, relationships with their customers. He has leveraged his management consulting, problem-solving, and change management skills to support 15+ Fortune 1000 organizations, across a multitude of industries.

Maximizing the Value of The Solutions Portfolio

What is a portfolio and why is it important?

The definition of the word “portfolio” varies greatly based on context, but for this blog series, the word portfolio will not refer to a suite of technology offerings, a financial portfolio, or a static snapshot of a company’s products and services.  Rather, we will use portfolio to refer to a solutions portfolio – the strategic way in which a company invests in and delivers a mix of products and services to drive value for the buyers and markets it serves and help it achieve its larger goals. Portfolio defines how your organization is going to fulfill the market’s needs and is informed by the markets you want to play in, the buyer personas you want to engage, and what those markets & buyers need.

Persistent Portfolio Challenges

While most organizations acknowledge portfolio’s strategic role in defining “where to play” and “where to act,” we consistently see organizations use portfolio as a catch-all and as the end result of market sizing and R&D. A failure to analyze market-back information, identify opportunities and align them with their strategies inhibit companies from maximizing their portfolio’s impact. Rather than building a list of existing products and services, companies must avoid constraining themselves to their current capabilities and solution set and understand what their portfolio must include to serve as the linkage between the value and outcomes you provide to a client.

When looking at a solutions portfolio in this way, it becomes clear that many of the problems that companies face today are symptomatic of poor solutions portfolio management. Companies’ struggle with portfolio often manifests in three main problems.

  1. Organizations lack a dedicated resource who is responsible for solving this problem.
  2. A solutions portfolio is inherently complex and difficult to manage.
  3. Organizational symptoms don’t explicitly point to portfolio challenges, therefore, organizations continue to operate, unaware of the portfolio-related issues they are facing.

Now is the time to focus on your solutions portfolio. These Portfolio-related challenges have been exposed and exacerbated by recent market volatility. The arrival of COVID-19 has flipped markets on their head and changed company’s strategies and long-term goals in unprecedented ways.  Companies in almost all industries experienced some pandemic-induced market change, and the question now is how to respond.  Inevitably, some companies will make changes to their objectives and strategies without altering the critical engine for achieving their desired outcomes: their solutions portfolios. Others will complete overhaul of their solutions portfolios but will fail to align it with the organizational strategy and objectives.

The rest of this blog series will discuss these challenges in more detail and how to combat them to build a solutions portfolio that addresses the market’s needs, capitalizes on opportunities, and continuously drives outcomes.

When evaluating an organization’s portfolio, it is important to consider the following questions:

  1.  Does my portfolio align to my current goals and objectives?
  2. Do the products and services in my portfolio align to my strategy?
  3. Understanding the market, should I adjust my portfolio strategy to better meet my goals and objectives?

In order to achieve a company’s long-term goals, the company must align the solutions portfolio to the company’s current goals and objectives.  For companies that offer a wide range of products and services, occasionally old solutions will work against the company’s newer goals.  Combatting this problem requires organizations to understand the product lifecycle.  Not every product lasts forever, and a company must take the time to evaluate if a product is no longer beneficial to the company.  Companies must also consider how solutions support the broader strategy.  A company that hopes to penetrate a new market through rebranding itself and providing a new service, but still offers the same services that it did 20 years ago, can confuse buyers and work against the company’s strategy.

After evaluating goals and objectives, the product lifecycle, and company strategy, decisions must be made.  If there are old services nearing the end of their product life cycle, remove them from the solutions portfolio.  If the products and services within the portfolio are strong, it might be time to reevaluate the company strategy and the current goals and objectives.  These questions help companies understand just how important solutions portfolios can be, and it isn’t hard to imagine the constant headaches that can arise if the solutions within a portfolio are butting heads with long term goals.

 

Written by: Anthony Paluska

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About the Author: Anthony Paluska is a Partner at McMann & Ransford with experience helping organizations overcome commoditization by developing stronger, more intimate, relationships with their customers. He has leveraged his management consulting, problem-solving, and change management skills to support 15+ Fortune 1000 organizations, across a multitude of industries.

The Future State Business Model: Managing Through Account Journeys

As mentioned in earlier blogs, B2B companies in mature markets must manage complex businesses in order to grow and sustain reasonable margins. We believe the best way to view the business is through the lens of market segment needs and share of wallet. This is because of the “law of intimacy” – if you are solving the problems your customers care about, they are more likely to purchase your more commoditized products and services with less concern of price. In addition, your portfolio mix at the account level will provide greater margins. If you offer higher-end services (e.g., specific targeted software), the margin mix will improve. Therefore, account (or market segment) portfolio matters a great deal. Furthermore, how that portfolio performs and drives account journeys becomes paramount.
This idea is not controversial, but it does fly in the face of many companies currently trying to become or, at least, portray themselves as software companies or XaaS companies. In general, we applaud a growing percent of revenue from these sources, but we believe it is only one part of your account (market segment) portfolio. If Xaas or software revenue is taken in isolation, it is just a short-term step in the company extending its commoditized products.
Let’s take a closer look at Account (Market Segment) Journeys. First, why do we group Accounts and Market Segments together? Well, often many issues are shared across a market segment – these shared priorities are likely the rationale for grouping accounts together in a segment – but certain accounts (e.g., large key customers) have their own unique priorities that should be taken into consideration as well.

Account Journeys can be thought of as the sequence of pre-planned deals at a given account. In the visual above, the blue circles represent the products and services you intend to provide to a given account over time. Revenue is indicated by size of the shape and the “Line of Safety” highlights the offers that are most relevant to top-level executives. Also, it should be noted that Account Journeys are distinct from an offer journey or Service Chain, which are specific to a single transaction or solution.
The Account Journey must take into account three key things:
1. Developing an Intimate Partnership – This is accomplished by working with the account on the topics that matter to key executives. These are usually (but not exclusively) advisory projects developed with the segment’s needs in mind and, therefore, do not necessarily need to relate directly to your core products or services. This concept can be challenging to those accustomed to leveraging advisory services purely as “wrap around services” that are explicitly connected to core products and services.
2. Sequencing the Revenue Drivers (harvesting) – This is focused on driving significant revenue through your core product and services. These revenue drivers should be phased in after intimacy is established, because they can be sold more easily once you have worked with the executive team as a problem solver. This “halo effect” provided by intimacy opens the door for the account to see you as a partner, rather than just a vendor. In addition, creating Service Chains to pull-through your core solutions will also allow for quicker results (for more details, read our blog series on Service Chains).
3. Renewing Intimacy with Accounts – This mostly pertains to staying relevant between buying cycles and/or improving a damaged account relationship. The actual tactics function similarly to the “Developing an Intimate Partnership” mentioned earlier – i.e., working on the things that matter to the most to the account and continuously providing value.
A well-structured Account Journey should lead to closing larger deals, in addition to a more impactful relationship with an account. It allows you to meet the needs of your key customers, while fulfilling your desire to become a single sourced provider of your core products and services.

Written by: Dean McMann

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About the Author: Dean McMann is a Founding Partner at McMann & Ransford with 35+ years of experience in consulting and professional services.  He is a sought-after expert and speaker on topics of: B2B differentiation, professional services best practices, and overcoming commoditization.  In addition to his extensive experience in the Professional Services space, Dean also serves on the board of various non-profit organizations.

Complex Business: The Future State Business Model

Stop Chasing the Silver Bullet to Maintain Simplicity

We have two conflicting pressures in business today.  The first is the need for companies to be successful managing a complex business model – products, software, services, and professional services – in different segments and markets. The second is leaders’ interest and comfort with simpler businesses.

Today’s business leaders matured in straight-forward business structures. For example, we sell copiers and service them.  You can see the pull toward a single business model today in companies that want to become a software company or XaaS business. These companies are hoping to find a silver bullet that will allow them to return to growth and simplicity.

For a moment, let us suspend this silver bullet mentality by viewing the world from a “share of wallet” and “most valuable accounts” point-of-view and letting that drive our future state business model.  At the 30000-foot level, this is widely accepted and understood. Everyone wants to do more with their key accounts and/or important segments.  They want to drive intimacy and create more value for customers.  Many companies have achieved sporadic success with this approach, like Xerox did when it introduced “managing print cost”.  But few (if any) are breaking through, viewing and, therefore, managing their businesses this way.  Do they understand how to create an integrated portfolio that works across an account journey to stay relevant and intimate? Are they able to drive more value for the account and value for themselves?

Accenture is an example of a company that is working in this way. They understand how to maximize their business in key accounts with target account values and impact. Their ability to operate this way is likely because they grew out of an advisory company that understood how to stay relevant.  But, for the most part, the significant B2B companies are failing at this, causing many of them to stagnate or even lose ground.  How many great companies have faded away?

Let’s take a deeper look at managing a complex business. Because companies grew a certain way (i.e., they had a breakthrough product that allowed them to build critical mass), therefore their muscle memory is all about that model.  Their profits may have moved from the product to the related services, but it is still the same basic business model.

To truly get a view of their business, they should look at their offerings against the current and future key account business spend, strategy, challenges, and opportunities.  The first challenge to understand is the following:

Do we truly understand our key customers’ businesses? This understanding goes beyond what we sell to the market and its related impact. If we understood the key customers’ businesses, we might see how insignificant we are to the most important customers; that is why we often deal with purchasing instead of with top executives.

We recently had a client that wanted to understand their opportunity in a segment of their market – small and mid-size banks/financial institutions.  The client did well with large financial institutions, but they struggled with small and mid-size banks/ financial institutions. This small and mid-size banking segment is in a quandary of how to compete with larger financial institutions and new entrants to the business – competitors that do not have the expense of physical locations.  The market does know what to do about technology, what their branch strategy should be, or how to convince the tech-savvy generations to work with them. In short, this segment needed a partner to lead them and provide tech in a whole different way – to be their true partner and provide the guidance to allow them to survive. But, instead of stepping up to change the whole paradigm of the relationships, our client decided they wanted to be a software company. Though they have billions in revenue from non-software sales, they are seeking a simple business model that they can understand and, therefore, operate.  Someone will take that market and provide the kind of relationship that is needed.

Again, a place to start is by viewing a segment or key account the way they view themselves, and then organizing around how to become indispensable to that segment or account.  This is out of most organization’s comfort zones.  A simple tool to use is Account Journey maps. Where are we trying to get an account to buy? Where do we make money today and in the future?  How do we get so involved and intertwined with accounts that they become the sole source for that product or service?

To accomplish this, companies have to become true problem solvers (including helping customers to take advantage of opportunities).  They must work at the executive level on the topics that truly matter to the customer or segment.  They must connect those services to their broader account journey map and have products and services to offer across the continuum.

In future blogs, we will take this concept through its components and discuss why companies must become true problem solvers of executive-level challenges and how to get there.

Written by: Dean McMann

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About the Author: Dean McMann is a Founding Partner at McMann & Ransford with 35+ years of experience in consulting and professional services.  He is a sought-after expert and speaker on topics of: B2B differentiation, professional services best practices, and overcoming commoditization.  In addition to his extensive experience in the Professional Services space, Dean also serves on the board of various non-profit organizations.

How to Play – The Financial Value of Categorizing Accounts

In this blog series, we will begin discussing the important issue of how to play – how to organize the go-to-market assets to address different account categories and different business models – hardware products, software products, services, professional services, outsourcing etc. The goal of a “how to play” model is improving the ability of the portfolio to drive greater revenue/margin more easily.

Clear financial objectives must be created for each type of account.  Creating achievable financial goals require more than just applying a growth rate to historic performance in each market.  Doing so effectively depends on having a deep understanding of the customers in a given market’s core business, current market dynamics/pressures, and the market’s key strategic issues and initiatives. In addition, clarifying financial objectives requires the mastery of managing multiple business models, service lines, and offerings and determining where they fit in an account and its journey.

Category 1 (Strategic) – High-value accounts where you make your money – What percentage of revenue should come from your largest/best/most strategic accounts? This should be a significant percentage (~60%) of the revenue generated from this account category.  If not, then that points to a challenge of getting meaningful share of wallet – this is both a portfolio problem and a leadership challenge to work with customer journeys, not sales transactions.

Category 2 (Key) – Accounts with high growth potential – The next category includes accounts that look like our largest/ best/ most strategic accounts but aren’t providing the financial value that they should or could.  These Key accounts are the primary growth accounts.  Included in this group should be your competitors’ key accounts – it is always fun to take away the best accounts from competitors.  The target percentage for these growth accounts does not go directly into the annual plan but does give you clarity on what should/could be happening.  Additionally, as your business matures and you develop the ability to manage multiple business models, your confidence in growing and/or penetrating these accounts will improve; therefore, your ability to predict outcomes improves.

Category 3 (Core) – Accounts that can be managed with a low-cost service model – For the next account category, we suggest analyzing where you can move to a more self-serve relationship.  Service models for these accounts reduce onsite visits and may include leveraging a community consulting model to maintain intimacy, using inside sales to contact accounts, etc.  These accounts are attractive when you can lower the service cost and improve the margins.  If served in a cost-effective manner, what can you expect to yield from this type of account?

Category 4 (Small) – The conundrum accounts – Finally, for accounts that are not strategic and do not have a low-cost service model, we suggest conducting a strict analysis of their value and how best to serve them.  This usually results in a combination of the strategic account journey approach and the low-cost service approach.  Also, are there account categories that do not currently exist but could in the future? These may be an important input into planning in the future. If you can be effective at adding more high-value accounts, then the percentage of the accounts that fall into this category dwindles as they either “move up” or are weeded out over time.

In the next blog we will discuss account journeys.

Written by: Dean McMann

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About the Author: Dean McMann is a Founding Partner at McMann & Ransford with 35+ years of experience in consulting and professional services.  He is a sought-after expert and speaker on topics of: B2B differentiation, professional services best practices, and overcoming commoditization.  In addition to his extensive experience in the Professional Services space, Dean also serves on the board of various non-profit organizations.

Market/Customer Back Portfolio Approach to Maximizing Customer Value and Outcomes: Part 4

As discussed in this blog series, most agree that Portfolio plays a strategic role, yet we consistently see organizations use portfolio as a catch-all at the end result of market sizing and R&D. Oftentimes, organizations fall prey to a “Typical State” portfolio that acts as a broad offer/sales catalogue over time.

As discussed in our 2nd blog in this series, there are 3 significant decisions to make when building a market-back portfolio that addresses your customers’ needs and drives significant value for both them and your organization. Our most recent blog in this series focuses on decision #2: What challenges do customers have that need solving and/or what opportunities do they have that we can help them create?

In this blog post, we focus on decision #3: What solutions can we provide to address those challenges and opportunities? Key considerations when making this decision:

  • Your Existing Solutions – Determine how and where they fit into the target sub-segment and their objective. It is important to be honest and admit reality: force-fitting existing solutions to problems can hurt your credibility and future opportunities.
  • Potential New Solutions – There is never a shortage of ideas; the challenge is deciding which ones to pursue given an almost unlimited supply of ideas. Therefore, you need a deliberate and organized manner to filter them into a short list of those worth commercializing.

A Sample Framework for Evaluating Potential New Solutions

The goal is to identify ideas that bring differential and financial impact as quickly as possible. Thus, this approach identifies failure points early in the process so you can adjust or simply table the Idea for a later time.

We find that a simple funnel concept helps narrow the choices for which new solution ideas are worth pursuing by answering the following questions:

  • What are the customer’s business case drivers for
  • addressing the problem and how material are they?
  • What are the economics for solving the customer problem (big picture value)?
  • How does your approach compare to the customer’s alternatives?
  • What skills, capabilities, and technologies are required and how well do they fit with what you have (or can get)?

In our experience, items #1 and #2 are difficult because companies often do not really know the answer. And many organizations oversimplify the answers to items #3 and #4, which leads them to taking undifferentiated solutions to the market. Again, being objective is important to this step when building an impactful market-back portfolio.

Therefore, our next blog in this series will focus on prioritization criteria to get a result that is as objective as possible.

Written by: Mark Slotnik

About the Authors:

Mark Slotnik has spent nearly 20+ years advising clients in the areas of designing and taking to market high-value business solutions, solution portfolio management, talent development, resource management, business process re-engineering and commercial software.

Tips and Tricks for Working Remotely

This is not a typical post for the McMann & Ransford blog so for those of you in search of one of those, excuse the self-help nature of this post and come find us next week. In light of the surge of people transitioning to working from home for an extended period of time the first time, we thought that one of the few ways we could help was to pass along some of the lessons we have learned about working from home and managing teams remotely.  The following list of recommendations hopefully can assist some of you as you adjust to a completely (or partially) remote-based work environment.

1) Separate Work Time from Non-Work Time

This one should be familiar to anyone that has ever allowed their work to come home with them – you can’t let the lines blur too far between your personal life and your work life or soon you won’t have a personal life.  The work never stops and has the potential to consume you if you feel like you need to immediately respond to everything and clear everything from your to-do list.  This is incredibly difficult when you are working from home and your hours are more flexible, and you are trying to “prove” your worth to people that can’t see that you are getting in early and leaving late every day.

2) Separate your Work Space from your Non-Work Space

The easiest way I have found to separate your work time and non-work time is to physically separate the spaces where you enjoy personal time vs. the space that you work.  This doesn’t have to be a separate floor, separate room, or anything that significant if your space doesn’t allow for it – trust me, when I first began working remotely, I shared an apartment and the only place I had to myself was my 10×10 room; I was still able to manage this separation. It is as simple as establishing a place to do work. As soon as you start working in bed, on your couch, etc., the line between work & personal space begins to blur.  That risk goes both ways – you might get distracted with other things and be less productive if you do not have a “work space”, but the opposite is also true, you may find yourself working into the night on things that don’t matter and risk getting burnt out unnecessarily.

3) Get Out

Despite everything I said in the last recommendation, you need a change of scenery every once in a while, especially if you are doing any type of creative work. If you can leave the house, go to a coffee shop or a park. If you can’t leave the house, find a spot outside to work or move your desk close to a window and open it up.  Even taking a 15-minute walk around the block can help clear your mind and get you out of the house. In fact, I bet most people do this in an office environment without thinking much about it. Working from home, especially when you aren’t doing any other traveling outside the house, means that you are spending days in the same environment which can be mentally draining.  In order to stay focused and productive, I’ve found its critical to inject a different environment into your work-life occasionally.

4) Schedule EVERYTHING

Depending on your role, your calendar may already be full with phone calls and meetings, which is a forcing-function to remain productive throughout the day. However, for most people their calendar is not already scheduled for them for an entire week, and you need to make sure you have time set aside for your work task.  If you are already in a habit of scheduling your blocks of work time, particularly your individual “heads-down” work time, feel free to skip to the next suggestion. Scheduling everything (as far in advance as possible) and sticking to that schedule seems to help with this. In addition to your phone calls and meetings, set meetings with yourself to get done everything else you need to do.  For example: if you get overloaded by emails that you spend all night replying to, schedule 30 minutes twice a day to go through and catch up on emails; if you need to do an expense report, schedule it once a month; if you need to create a presentation for a meeting later in the week, put it on the calendar for an hour a day until it is done.  This scheduling doesn’t need to be limited to work activities, you have a more flexible schedule now, so take advantage of that and schedule lunch (because if you don’t, people will fill up your calendar and you will inevitably miss it), schedule time to work out, pick up your kids, etc.

If it is on the calendar, treat that time as sacred and don’t move it unless you absolutely have to do so, and do what you planned to do – don’t get drawn into other activities. Additionally, the act of reserving time on the calendar as “busy” can show coworkers that you’re unavailable, so you won’t get bogged down with outside distractions if they can wait. Final suggestion here – don’t schedule anything for yourself for more than 90 minutes at a time – it is difficult to remain focused for that long, and if you start blocking out entire days to work on something, you will inevitably not spend that entire time exclusively on the activity you had planned.

5) Establish a Start-Up & Wind-down Routine

In addition to scheduling your actual workday – think about how you get ready for the day and wind it down. What time are you going to start working for the day? Are you going to have breakfast/a cup of coffee first? What about shower and get ready for the day?  You will likely get a lot of advice on when to start and what to do to be productive – some people swear by getting ready for the day as if you are going into the office, but I have found that you need to determine what works best for you.  There is less advice out there on this topic, but I feel it is just as important, and that is determining how you will wind down your day.  Are you going to stop at a certain time? Are you going to do a specific work activity to close out your day (e.g., clean out your inbox)? Or are you going to do something else to signal the workday has come to a close (e.g., creating a to-do list to begin the next day with)?  Whatever you choose, something needs to replace the drive home that otherwise signaled that the day was over. (this ritual helps with tip #1, establishing work and non-work time).

6) Adjust that Routine & Schedule as Soon as You Know Better

Stick to your schedule and routine for at least the first week, but once you have spent a few weeks at home, reflect on your assumptions and see if they need adjustment.  For example, over the years, I have found that my low energy period of the day is between 2-4PM.  I know that unless I am up against a deadline, I am not going to be very productive at this time, so what do I do about it:

  • Schedule my creative time in the morning
  • Set aside my late afternoon time for phone calls (which force me to be engaged and productive)
  • If I don’t have enough/any phone calls for that afternoon, I might plan a late lunch or a workout or something non-work related during that time, and make up for the lost time earlier in the morning or later in the evening when I actually have more energy (for me it is typically 8-10PM)

Unfortunately, the world doesn’t always operate on, or align with, your schedule – so this doesn’t work every day, but if you try to organize your day to work best for you, you’ll be surprised how often it works out.

7) Keep it Clean

You don’t have to be a “clean freak” to benefit from keeping your area neat and tidy.  If your work area is clean, there are surprisingly less distractions.  Keep only the essentials on your desk and I suspect you will see an improved ability to focus.

For some people, this extends beyond your workspace. Clutter across the house can be distracting and make you itch to clean up when you should be completely scheduled tasks. With kids who are at home with you, it may be impossible to limit all clutter – but allocating some time in the morning or evening to de-clutter around the rest of your house can keep you from doing it mid-day instead of focusing on work.

8) Don’t Forget About Your Team

In the office, team building comes much more naturally than it does remotely.  Between the proverbial water cooler and the ability to poke your head into someone’s office, there are countless opportunities to connect and build relationships with your team. When you are remote, doing this is still possible, but requires making a bit more of an effort.  Find the right cadence of team calls and 1-on-1 calls with your team to maintain regular touchpoints (even if you didn’t have regular meetings when you were working in the office).  Remember that not all calls have to be (or should be) work-related. For example, I will often connect with coworkers to hear about their weekends or how their weeks are going. It goes a long way to show you care about your colleagues and maintain the camaraderie that you have in a face-to-face environment.

Set expectations for your team about when and how to get in contact with you – one thing we often see is that team members are reluctant to reach out and “bother” their manager for things they would typically be comfortable popping in their manager’s office to ask – and as a result they feel they aren’t getting the support they need.  As simple as it sounds, letting your team know they can reach out to you by phone with any questions they have, texting them or following up by email when you are unable to answer, and returning their call or answering their question in a timely manner, will provide them with the support they need.  Then keep an eye on the team for unusual behaviors and reach out to them if you get any sense that someone needs additional support or attention (e.g., someone used to be very vocal in the office environment, but is unusually quiet on team meetings; or, a historically productive team member is slow to respond).

9) “Managing Up”

The opposite end of the prior recommendation – give your leader the benefit of the doubt when they aren’t able to get back to you immediately, use their time wisely, but don’t hesitate to reach out when you need something critical from them or have important information to share.  Also, keep in mind that just because you aren’t watched doesn’t mean you are invisible – assume that your leaders trust you and know you are working hard unless you do something to break that trust. Productivity will be all over the board as people adjust to working from home, however in many cases it will normalize once everyone finds their rhythm and routine.

10) Don’t neglect your mental health

People adjust to new environments differently – some people are flexible by nature and change doesn’t phase them, while others go through a period of adjustment that can impact their mental state. This adjustment period can be exacerbated by feeling “stuck” in your home. During this time, it’s important to check in with yourself to make sure you are feeling just as comfortable and productive as you would be in the office or traveling. Reach out remotely with a mental health professional if you think you need a little additional emotional support throughout your transition.

Hopefully one or more of these recommendations are helpful for those of you that are adjusting to a remote work environment.  The important thing to keep in mind is to find what works best for you.

 

 

 

Market/Customer Back Portfolio Approach to Maximizing Customer Values and Outcomes

As discussed in our 1st blog in this series, most companies agree that a Portfolio plays a strategic role, yet we consistently see organizations use portfolio as a catch-all at the end result of market sizing and R&D. Oftentimes, organizations fall prey to a “Typical State” portfolio that acts as a broad offer/sales catalogue over time.

As discussed in our 2nd blog in this series, there are 3 significant decisions to make when building a market-back portfolio that addresses your customers’ needs and drives significant value for both them and your organization. This blog focuses on decision #2: What challenges do customers have that need solving and/or what opportunities do they have that we can help them create?

Another way to think about this is to truly understand the objectives your customers in key sub-segments have that you can help them address. Key considerations when making this decision:

  • Conduct your own research – obtain feedback from direct customer interviews – in addition to electronic surveys – and gather insights from your market-facing resources. Also leverage but don’t rely on market publications/ reports; if the information is in those reports, it is often either too generic or you are too late and therefore run the risk of being undifferentiated in the market.
  • Put yourself in the shoes of individual buyer personas – e.g. the CFO’s objectives are often much different than the CIO’s, and even the organization as a whole.
  • Be careful of overweighting one customer’s situation – that often results in many custom solutions.

A Sample Framework for Determining a Segment’s Key Objectives

Doing the above leaves you with a lot of data that has been gathered that now needs to be organized to “triangulate” on those key items that truly matter and need solving in the market. As you can imagine, using many sources and focus areas can provide a lot of possible areas to address, so taking the time to assess it all is important to develop a few key insights that are valuable and actionable. We find that a simple framework helps define what is truly important and worth solving for:

For example, in the Community Financial Institution (CFI) sub-segment of the financial services market, we discovered that branch expansion may be limited due to federal restrictions, so many in this sub-segment are looking for innovative strategies to increase the member/customer base in new regions without the ability to build new branches. Another example is in healthcare systems and hospitals that have nursing schools. We found that many are not able to hire as many newly graduating nurses as they want/need even though they are in their own educational program. Hence, there is a need to understand why and provide a solution.

Remember, there are 3 significant decisions to make when building a market-back portfolio that addresses your customer’s needs and drives significant value for both them and your organization:

  1. What market segments and sub-segments are you truly targeting?
  2. What challenges do they have that need solving and/or what opportunities do they have that we can help them create?
  3. What solutions can we provide to address those challenges and opportunities?

 

We will dive into the last one and its implications in the next blog in the series.

Written by: Mark Slotnik

About the Authors:

Mark Slotnik has spent nearly 20+ years advising clients in the areas of designing and taking to market high-value business solutions, solution portfolio management, talent development, resource management, business process re-engineering and commercial software.