Posts Tagged ‘company culture’

Category creating – it’s as easy and hard as it looks. By Peter Zaballos

February 9, 2018

Part One: Bold vision is everything

I’ve been thinking about categories recently. A lot.

I’ve been fortunate to have been in three companies who had that bold vision, who could see that structural opportunity, and who zeroed in on the audience that was affected. At LSI Logic, we saw the opportunity to enable new categories of computing devices – personal computers and mobile devices. At C-Cube Microsystems we envisioned the impact that digital television and film could have on the broadcast and entertainment industries. And at RealNetworks it was as simple as enabling internet-delivered audio and video – developing the breakthroughs making Netflix and Spotify a reality.

Creating a category is easy to say and so hard to do. Or rather, it’s easy to see a company who has created a category and it sure looks obvious in hindsight. But in the early days, even in the middle phase, it’s nothing short of a free-for-all.

Table stakes are having a bold vision for what you think could be dramatically different for the customers you serve. Not better, but different. Not a little different. Fundamentally, earth shatteringly different. And with those words and the belief in them, you then need to have the audacity to live up to them.

The creators of categories dominate the market they create. Because they see a future their competitors don’t. Their competitors chase what the category creator makes visible. They will always be steps behind the category creator.

Creating a new category in the market begins and ends with a bold vision for what’s possible. A clarity of the mission of the company and more importantly, for the customers you serve. This is about getting precise about the words. The words matter.

But defining the category is more than words and sentences of a paragraph. And bringing a category vision to life is more than a marketing campaign. It is precisely where the company’s strategy and strategic intent are mobilized across the organization. Category creating is a holistic commitment of the business. It is the CEO’s personal obligation. If the CEO doesn’t personally own this ambition, no amount of over-functioning executives can make up for that. At some point the conversation gets shrill.

BRING THE CATEGORY TO LIFE

With the CEO owning the category vision, they don’t need to  develop the framework that will enable the company to take advantage of and define the category. That can be handled by a member of their team. It has to be someone senior enough in the organization to have visibility and perspective, and also be someone who can work across teams, across execs, and orchestrate engagement. This includes:

  • Identifying the people, processes, and products required to fulfill the category potential.
  • Specifying how you will get from today to that future potential. The solution you have today and what you will build in the future to address  the category problem
  • Identifying the ecosystem that will validate and accelerate the development of the category, and squeeze out your competitors

To bring a category to life depends on this strategic alignment first and foremost with the product strategy. The product needs to deliver this category promise to the users. Their experience validates the category potential, and literally brings it to life in the market. And this product alignment needs to be fully aligned with how these products are taken to market. The words that are literally used to attract prospects, engage them in learning more, and choosing the solution all have to map back to the category vision and definition.

In an age where essentially every sale is driven through some form of digital interaction, the good news is that search performance provides and awesome data-driven laboratory to ensure you get all of this right. You’ll know. The data will scream the results at you.

STEP UP AND LIVE YOUR AMBITION

This is where so many companies get scared. Especially once a company is in the midst of category creation. It’s easy to get frightened, chasing near term revenue and investments in the face of the riskier long term commitments that need to be made. Remember, you’re bringing to market something fundamentally different than what exists today. For the meek, that means there will be some pretty powerful forces pulling you back to…today. Today is familiar. It is safe.

Creating a category is lonely. Especially for the leadership of the company. The CEO and their team are the custodians of this vision, and for a long, long time, they may be the only true believers.That’s why it’s easy to get scared. Why it’s easy to back off. To retreat to the goals and tactics that produced the recent past, and not make the bolder choices to bet on the future.Bringing a category to life is a fully focused go-to-market campaign. Externally and Internally.

That internal part is key. Employees need to have clarity on what that different future will be and how to explain in an appropriate context, whey this journey is important. Customer Success needs to be trained and fluent spokespeople. Sales needs to be trained and fluent spokespeople. Everyone inside the company is on a mission. To fundamentally transform the lives of their customers.

INVIGORATE THE COMPANY

The day-to-day work of creating a category is the essential job of every employee. They need to be trained, to be fluent in, and have internalized the same understanding of the structural opportunity and the role the business has in realizing this opportunity.That’s why RealNetworks had a palpable intensity – every day – that employees were energized and motivated by.

It’s why my friend and RN colleague Dave Cotter remarked “I was probably young enough to believe it, but there really was a sense that we were fundamentally changing the world, and, actually, for a period of time we were.”Bringing a vision to life for customers and prospects goes hand in hand with bringing that vision to life for employees.

This is why the obligation for defining the category rests with the CEO, but how important it is that every employee is enlisted making the vision real to prospects and customers, every day.Category creation is not a board topic, it’s not an exec staff meeting topic.

It’s the CEO’s life mission. It’s internalized by every employee. It’s the lifeblood, the daily obsession, of everyone.

Lots of low cost experiments

April 22, 2009

The really interesting improvements companies make come from takings risks, but in a lot of cases risk-taking can be held hostage by needing data to support every decision.  Being conservative and careful across the board may be safe, but it’s not where breakthrough learning happens.

This is where I see a lot of startups struggle:  confronting the tension that is created between knowing when to apply disciplined fact-based decision making to avoid failure, and when to be disciplined about making decisions where failure is accepted as a likely outcome.

The best companies create a culture that can foster two seemingly conflicting organization abilities: precision and failure.  In fact, you need both to reliably profit from your mistakes.

The key is understanding where in your business you can afford to routinely experience failure, and where failure has more costly significance.  You need internal processes that measure performance, coupled with a culture that has a pretty solid foundation of trust – where anyone and everyone feels comfortable taking a risk, and reporting the results as data.  I wrote on this earlier, it’s a culture where bad news has got to travel faster than good news.

Steve Blank wrote a pithy essay on how to navigate this decision making quandry and I love the quote he referenced from General Patton: “A good plan violently executed now is better than a perfect plan next week.”  This is a variant (or perhaps the inspiration) for another saying “the perfect is the enemy of the good.”

To me they drive home the value of action and experience placed on par with the value of planning and data.  Patton would never go into battle without a well thought through and justified plan, but he speaks to how perfecting the plan is different from winning the battle.

The same is true in startups.  It’s critical that they operate with a well thought through plan supported by data, but it’s equally important that they understand when the plan is no longer as important as what the real world is telling you.  It’s another way of understanding why the numbers in your operating plan are wrong, and is in fact healthy.

Steve talks about a simple heuristic, that decisions have two states: reversible and irreversible.  With the reversible decisions you can liberally experiment, and should.  This is where you can create significant breakthroughs for your company by being highly creative, and surprise yourself by taking risks, and failing, perhaps a lot.  If you’re wrong, re-load and try again.  For me the construct is learning to try “lots of low cost experiments”.

He makes an even more interesting observation about tempo.  It’s not sufficient to be able to take risks with reversible decisions, it’s to do so at a brisk tempo.  Quick, responsive, hungry.

Where this comes in especially handy is with sales and marketing performance and new product development.  In both cases you’re in a race to discover what works, and then what works on a repeatable, scalable basis.  I forwarded Steve Blank’s article to one my CEO’s who is focused on improving her sales and marketing team’s pace and performance.

Jenny Hall also made a similar observation in her post about what she learned as CEO of Trendi.com when it failed.  For her it was “if it won’t matter in three months, don’t spend too much time on it.”

She’s got the necessary ingredients: a culture of trust within the company, data-driven decision making, and performance measurement processes.  When she first arrived, these ingredients weren’t as prevalent, and she worked hard to put them in place, and placed a priority on reducing errors and increasing predictability.  But that was then, this is now, and she’s making the transition to fostering more appropriate risk taking as a way to increase performance.

Lots of low cost experiments combined with a brisk tempo supported by a disciplined acceptance of failure.  That sounds like a lot of fun.  Try it.