Tuesday, December 8, 2015

Do Leadership styles matter in forming Product Portfolios?

To find the context of this blog, please do read this one I published recently. To summarize, this is a part of knowledge sharing of my panel talk at GHCI. Just as a note of caution, please do not expect the below answers to be elaborate as these were conveyed in a time limit of 3-4 minutes. I have tried to recollect these to the best of my knowledge.

Jack Welch famously said that if a division at GE is not #1 or #2 in their industry, that division should be closed. He implemented that strategy at GE while he was CEO.  How important is leadership style in driving the necessary portfolio changes?

Let me talk first about three pioneering figures of our Industry. Bill Gates, Steve Jobs and Andy Grove. They make an interesting study because all three of them had their strong points and they had weaknesses too and their personality reflected in the organizations that they eventually led to glory.

Gates’ USP in his early days was the rate knowledge on how to program the early personal computers. And he was a true expert at that as he has been featured in Malcolm Gladwell’s famous 10000 hour rule needed to be expert at anything. During his early days (till around 90s), he was so involved in programming related work that he himself admitted that “I wouldn’t let anybody write any code. I went in and took every statement that anybody else had written in BASIC and rewrote it myself, just because I didn’t like the way they coded.” He used to astonish company’s engineers with his programming details. He soon realized that he and Microsoft couldn’t scale this way and hired the able people to lead in other major functional areas.

Steve Jobs’s focus on design was just as intense as Gate’s focus on software. As Gates went deep into the code, Jobs committed himself to user experience and design with maniacal depth. He oversaw every aspect of product design and would scrutinize everything, down to pixel level. There are stories around Jobs wanting scroll bars to be looking in a certain way, forcing the team to show multiple versions in a process that took almost six months.

Andy Grove, possibly lesser celebrated than Gates and Jobs but no less effective was passionate about disciplined thinking. He would challenge people’s thinking. Then he would probe all the way through a strategy and force people to really justify it. He also once famously said- “Execution is God”

So be it Gates’ penchant for technical details, Jobs’ for design and Grove’s focus on disciplined thinking, their personalities showed up in the way their organizations shaped up and that included how their products looked a fared. Their leadership styles driven by their primary personality preferences shaped up the products.

Michael Watkins in his book “The First 90 days” talks about STARS framework based on the business situation a particular business or for our discussion, a product is. Each letter except the letter “A” in the STARS is related to a business situation i.e. Start-up (when business starts), it either becomes Sustaining Success (after some efforts) or it closes (Shutdown/Divestiture). Once it’s a sustaining Success usually complacency sets in where it reaches the state of Realignment and post this stage, it is either back to Sustaining success or Turnaround. If we study this framework closely, each of the stages requires different leadership style. 

To quote the case of Apple, when Steve Jobs took over Apple in 1997- it was almost a dead business dearly in the need of being Turned-around. At this stage, he adopted a very hands-on approach to leadership and involved himself in taking tough decisions, culled projects, got into product design. He eventually made Apple, a sustaining success. On his departure, and taking over of Tim Cook, Apple has undergone certain realignment and Cook’s leadership style evolved accordingly. E.g. Steve Jobs used to call acquisitions as “Failure to Innovate” whereas under Tim Cook Apple has made more than 50% of its acquisitions. Tim Cook is more open to doing partnerships with IBM, Microsoft than probably Steve Jobs was and Cook even leveraged these partnerships to open-up enterprise market for Apple.

How can the Engineering function positively support the growth of Product portfolio?

To find the context of this blog, please do read this one I published recently. To summarize, this is a part of knowledge sharing of my panel talk at GHCI. Just as a note of caution, please do not expect the below answers to be elaborate as these were conveyed in a time limit of 3-4 minutes. I have tried to recollect these to the best of my knowledge. The below question was more meant for designer in the panel and I had follow-up comments covering the Engineering aspect-

Indra Nooyi is one of my role models and she appointed a chief design officer a couple of years ago who has a seat at the table for current and future portfolio decisions.
As a chief designer for SAP, what problem are you trying to solve when you look at the portfolio of technology products?

As I have observed, Design is a much younger profession if we compare it with Engineering. One may argue that design may have existed long back but its importance in the Information Technology profession was brought in arguably by Steve Jobs and his maniacal focus on design.

From an Engineering perspective, when I started my career one of the first applications that I worked on was built on- then modern and now obsolete- Three tier architecture. Three tier architecture was an improvement over the earlier architecture but it was still very locked and un-scalable. The key characteristics of the modern engineering architectures are that they are not monolithic (like their predecessors), they can be morphed, they embrace extendibility, they are modular. In today’s world, the architectures are usually referred to as “Platform-style architectures”. What is a Platform? Let me explain with an example-

iPhone is a fabulous, high quality, supremely designed product. For a moment, can you imagine the utility of an iPhone without App-store? It will still be a fabulous, high quality, supremely designed product but with a severely limited utility. The presence of app-store and its compatibility with iPhone enables Apple to “extend” the functionality of an iPhone. iPhone with app-store is really “iPhone with billions of features” considering each app as a feature. Could Apple have built all billion apps by itself ? Possibly not in one life time even with thousands of developers. So what’s happening here ? Apple has actually have been able to build an ecosystem of developers and consumers and been able to build a win-win scenario for all. Apple provides a “platform” for developers to build apps. Consumers who buy iPhones need apps that solve their problems and needs. Developers earn a good portion of what they gain from each app usage. Apple earns its chunk. And Consumers get an answer to their needs by apps.

This is all being made possible by embracing Platform style architectures. If, for a moment, we assume that iPhone was built on a three-tier architecture, could it have achieved extendibility? No, there was no way it would have allowed external developers to add features. Platform style architectures achieve that by exposing the APIs with the right amount of data. External developers can use these APIs and integrate their offerings. We live in a API economy, and this trend is going to stay for some time to come.

When we thinking of building something these days, we don’t say “Lets build products”. We say- “Lets build Platforms”. To conclude I would state the below quotes that was doing rounds, which reflect the power of platforms-

"Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening."

What kind of mindset is needed to deal with changes that can impact the product portfolio?

To find the context of this blog, please do read this one I published recently. To summarize, this is a part of knowledge sharing of my panel talk at GHCI. Just as a note of caution, please do not expect the below answers to be elaborate as these were conveyed in a time limit of 3-4 minutes. I have tried to recollect these to the best of my knowledge.

For many companies, portfolio planning is an annual affair. In this mobile-first, cloud-first world, how can organizations keep up with the pace of change.

I love Sports and I will be a bit biased towards sports related examples. I would like to narrate an example from the sport of Cricket-
There was an England bowler named Monty Panesar, who was bowling in one of the Ashes tests (Ashes is one of the most traditional cricket series between England and Australia). Commentating in the match and seeing Monty bowl, Australian legend Shane Warne is said to have remarked-
“Is Monty bowling in his 33rd test or the 1st test for the 33rd time?”
Monty probably stopped growing and probably he started to think of himself as having been an accomplished bowler after getting a break into England playing team and stopped growing there afterwards. Monty probably did all the hard-work to reach the pinnacle of his profession but sadly, after reaching there, kept doing the same things that brought him to the top and didn’t innovate further. 

For the purposes of our discussion, let’s call this phenomenon as “Monty Effect” i.e. doing all the hard-work to achieve initial grand  success, only to not being able to sustain the same over longer time. Interestingly I have seen a lot of companies go through “Monty Effect”. Companies cash-in well on what made them successful and eventually the very reason that made them successful slow starts to become the reason for their downfall. They keep doing the same things that made them successful in the past, only to realize later that the incrementalism has really pushed them down. The key fact remains- things that make companies (and careers too) reach success at one level doesn’t work well while reaching a different level. A related corollary is echoed by Robin Sharma also famously quotes- “Don’t live the same year 75 times and call it life”

On the topic of managing change, while dealing with the product portfolios- I would like to say just 2 points here-

Point#1. Anticipating change and adapting to it is a skill…
…and if we don't treat it as a skill we leave a gap open to become victims of change.

From a popular case related to AOL-Time Warner merger- AOL was the king of the dial-up Internet world, but that world was rapidly being supplanted by always-on, much faster broadband. At the time of the merger, half the country had Internet access, yes, but only 3% had broadband. AOL’s business model couldn't anticipate the threat related to broadband on time. 

Denial takes different forms. In 1984, the then head of Digital Equipment Corporation, the largest mini-computer maker at the time,  described PCs as "cheap, short-lived and not-very-accurate machines." This attitude was especially ironic when you consider Digital's past. Digital broke into the world of computers, then dominated by mainframes, in the 1960s with simply designed and inexpensive mini-computers, and grew to become very large company with that strategy. Yet when they were faced with a new technological change in their environment, Digital- once the revolutionary that attached the mainframe world- now resisted this change along with incumbents of the mainframe era."

In my career time, I have seen some legendary companies like Sun Microsystems, Compaq, etc. either merge with bigger companies or bite the dust altogether.
Companies need to build in mechanisms that can help them sniff the changes and help them respond to it timely.

Point#2: As much as we try, it's not possible to anticipate change every time
The second point that I mention here is in a way contradicting with the point I just said and it is that- As much as we try and want, it's not possible to anticipate and predict the change every time accurately. And when we cannot predict it, we should do the next best thing- respond to the situation like the best in the world.
The companies that survived the aftermath of 9/11 attacks weren't experts in dealing with such situations. But they were the companies that were most responsive to change, they were the ones who were willing to work on the ground, they were the ones who changed their plans by every hour and do all that was need to get back on feet despite numerous odds. Southwest airlines was one example which survived post 9/11 situation when most airlines just couldn't cope up with the gravity of the situation.
What happened after 2007 to Nokia is also widely known and written about. Though operationally, it had the best brains to take them past the fire-like situations with suppliers but strategically, it probably lacked the anticipation machinery that could help them assess the impact of disruption iPhone and Android were about to cause. Another aspect in this case is that Nokia failed to part ways with Symbian OS when Android seem to be becoming a de-facto standard.

Walter Gretzky, the father of Champion Ice Hockey player- Wayne Gretzky gave his son the advice to "skate where the puck's going, not where it's been". Likewise, the companies need to evolve and position their products and offerings consistently towards the direction where the industry and markets are moving, not where it’s been in the past.

When the Australian team was winning almost everything in the Cricket field from mid-90s through most of 2000s, their captain during the initial stages of its transformation Steve Waugh shared a secret of their success. I remember him once saying that internally the Australian team used to consider themselves as world no. 2 (though they were undisputed #1). This feel of them not being #1, even though artificial one but deeply internalized one, helped them get better even when they won. If they won by 10 runs, they did make sure to celebrate but more than that set themselves the goal to do win by a bigger margin in the next match. So this team remained emerging and constantly strived towards reaching great heights.

Companies need to imbibe this mindset when their products are doing well to help them prepare for the unforeseen change.

Monday, December 7, 2015

What factors matter in decisions related to Product portfolio growth and expansion?

To find the context of this blog, please do read this one I published recently. To summarize, this is a part of knowledge sharing of my panel talk at GHCI. Just as a note of caution, please do not expect the below answers to be elaborate as these were conveyed in a time limit of 3-4 minutes. I have tried to recollect these to the best of my knowledge.

Question: You have a portfolio and you have a strategy to grow into a new space. You have a choice of expanding your portfolio by organic growth or inorganic growth. How do you decide?

There are three ways that I can think of-

     #1. Build:
Every company is once a start-up. They come up with an idea, build it from ground-up, test the waters, release it to customers, market it, improve on the offerings and either achieve success or has to change the course of action. Building in-house remains one of the most fundamental ways to grow the portfolio. Not only start-ups, even the more established and successful organizations also invest a lot of time and energy to build products after achieving initial success. Most companies have set R&D budget that is spent on building the products that helps meet the needs of today or the perceived wants of tomorrow. Established organizations also drive the internal innovation to build in-house by means of the programs such as Innovators program, Start-up accelerators programs or “Spin-in” (where a sub team is asked to work on independent workplace on a particular idea to further give it shape and productize it).

    #2. Acquisitions:
Talking of Mergers and Acquisitions, I am reminded of a term- “Toothbrush test”. You may be wondering how toothbrush is related to this topic. A while ago, I learned about this statement from Larry Page, (former CEO of Google), which he asks before any acquisition and the answer to which drives the decision to acquire a company or not-
"Is this something you will use once or twice per day, and does it make your life better?"

Interesting to note that he doesn’t mention about financial gains (yet) from the acquisition. It is interesting to observe that the companies make acquisitions for unique reasons and along with the reasons, the parameters they gauge the acquisition’s success with also varies. So we will be limiting ourselves if we just look at financial success to qualify the acquisition as a success or a failure. When I was growing up, the key products that I used to deal with were things like TVs and Fridges. Our interactions with these products were limited to the number of times that we used them i.e. in case of TV and Fridge, only 2-3 times a day. If you compare that to today’s times, we probably see our Smart Phones 150-200 times according to some estimates. So the currency in today’s product world is not just how much dollars it gets to the companies but also today’s currency is user’s data, time and attention- which once captured is then looked to be monetized. Larry Page’s Tooth brush test validates this hypothesis of mine.
If we look at the high profile Facebook’s acquisition of WhatsApp for a whopping $21 billion or so, it follows the same pattern. If we just look at financials, it (WhatsApp’s acquisition) probably does not still get Facebook any greater tractions in terms of dollars. But if we try and look broadly, WhatsApp acquisition probably helped Facebook stay relevant. Facebook was fast observing that it was losing the user’s attention especially for the young people, who were finding value in alternate services like WhatApp, SnapChat and Instagram. WhatsApp, in the first 4 years or so, reached around 400 million + users whereas during the same time, Facebook had far less users. To think of it, the traditional products like telephone took 75 years to reach even 50 million users and the Radio around 38 years. So, we are talking about a massively different scale here. So, Mark Zuckerberg seem to be patient in making WhatsApp a paid service or finding ways to monetize it but he has been smart enough to consider the billions as he paid for WhatsApp as a price for staying relevant.

    #3. Partnerships:
We live in a competitive world and in this professional era, no two companies neither are permanent friends nor permanent enemies. We are seeing the emergence of terms called as “Frenemy”, which means that the same companies partner in some aspects of their charter and they compete in other areas. The case in point is Apple’s partnership with IBM last year. This partnership is helping Apple gain ground in the Enterprises (using IBM’s expertise) and helping IBM build world class enterprise apps. Apple and IBM compete in the other areas at the same time.

So to wind-up- three ways companies (these days) decide to grow portfolio- Build, Acquire and Partner.

Sunday, December 6, 2015

Panel discussion at GHCI- "Product Portfolio Optimization"

I had an interesting experience late last week while participating in Grace Hopper’s conference in Bangalore, India (abbreviated as GHCI). The conference was on 2nd-4th-Dec. This was my first time attending this conference and having been a part of many other conferences, I can confidently say that I liked being there a lot by virtue of raw energy and enthusiasm of the participants and variety of sessions.

I had my Panel talk on the 4th-Dec at 9:00 AM on the topic- “Product Portfolio Optimization- Choosing your Right bet”. Along with me were the esteemed panelists- Nidhi Gupta (Product Manager, Google), Martin Wezowski (Chief Designer at SAP) and the panel was ably led my Manjula Gondi (Director, Microsoft). The topic around product management, I was told, was being brought in for the first time at the GHCI conference. It was an enriching experience for me personally being part of such a learned Panel, who brought in such diverse perspective. And the in-person feedback that we received post the panel talk only confirmed that the session went humbly well.

The format of Panel discussion required the moderator (Manjula) to set the context and invoke a discussion among the panelists by asking specific questions around the topic and also invite questions from the audience. Through the next few blogs, I will try and list the questions that were put forward to me as a part of discussion and try and list the answers that I gave (as much as I recollect them).

Stay tuned for more Info. Below is the video link of the session-