Part 1: Identifying anomalies and converting them into business opportunities
©2011 by Karl Hellman and Robert S. Siegel
Part 1 of a 4 part series
We all delight in the legend of the entrepreneurial-hero–the genius who invents the new product that transforms the world as he or she is sitting in their dorm. And the world has indeed produced wonderful entrepreneur heroes, like Facebook’s Mark Zuckerberg and Google’s Larry Page and Sergey Brin.
But happily for the rest of us, entrepreneurial work is not typically flights of genius. It’s work:
|“Organized, systematic, rational work,” as Peter Drucker defined innovation in his book, Innovation and Entrepreneurship.||Peter Drucker (November 19, 1909 – November 11, 2005)|
was called “Father Of Modern Management”
|Charles Thomas “Chuck” Close (b July 5, 1940,) an American painter and photographer.||Or as Chuck Close likes to say, “Inspiration is for amateurs. The rest of us just show up and get to work.”|
The heart of the product manager’s entrepreneurial work is to systematically look for anomalies–unsolved customer problems, incongruities in your business or industry, surprises–and turn these anomalies into business opportunities by solving the inherent problem and then marketing the solution. Entrepreneurial work is not, contrary to popular notions, risk focused, it is opportunity focused.
There are seven places to look for anomalies:
1. The unexpected
Unexpected events–both successes and failures–provide the richest environment for finding anomalies. Product managers must explore and explain positive as well as negative variances. Unexpected successes are symptoms that something important has changed. And when we say unexpected failure, we’re not talking about foolish mistakes or poor execution. But failures that occur despite the best of execution are symptoms that something important has changed. In both cases, identify the change and convert it into an opportunity.
Incongruities are the differences between reality as it actually is and reality as it ought to be. For example, if demand goes up and revenue goes up, profits ought to go up. But what if increased revenue results in lower profits? It’s a symptom that something important has changed, some part of conventional wisdom no longer holds. Identify the change, convert it into an opportunity.
3. Changes in Customer Perception
What better way to spot the changes in customer perception than to include customers in an on-going conversation. Philip Kotler’s latest book, Marketing 3.0, points out that one of the biggest payoffs of social media is that they give the product manager the opportunity to listen in on conversations by your customers about your products. Identify the change; convert it into an opportunity.
4. Industry and Market Structures
Again, Kotler in Marketing 3.0 brings this source of opportunity right up to date. He observes that globalization is creating “universal global culture” and industry structures, while at the same time strengthening “traditional culture” and local market structures “as a counterbalance.” (p14) Identify the implications for your product; convert it into an opportunity.
Who has not contemplated the aging of the American population? Or the fact that the largest middle class in the world is in India and the total market value of the expenditures of people in India who live at the subsistence level is more than $1 trillion? Track demographic developments that affect your products. Identify the changes; convert them into opportunities.
6. Process Need
You have continuously improved almost every part of the your company’s working process for years, but the step that still does not work well has become the domain of work-arounds and employee-heroes. Define the problem and the solution; convert it into an opportunity.
7. New Knowledge
This is the realm of the entrepreneurial superstars. But for all the glamour of the successes, new knowledge is the most risky and hardest to systematically exploit. Knowledge based innovation almost always depends on the convergence of several different kinds of knowledge–some scientific, some management. Stay aware of new knowledge and the supporting technologies. This may be the biggest opportunity of all.
Which of these seven sources of opportunity are most relevant for your product? The current economy and shifts in market structure are rife with change–that spells a bonanza of opportunity for the entrepreneurial product manager.
Karl Hellman is President of Resultrek (www.resultrek.com), an international marketing consulting and training firm.