The 7 lessons I learned from managing a product for a large multinational corporation and how can they be applied to a startup.
The journey as a country product director for a multinational corporation has been fascinating, enriching and filled with learnings. It is the most meaningful of those learnings that pushed me into writing this post to try distilling them and get them out to the world. These main learnings apply to tangible and intangible products (physical products, services or software), and I hope they can be useful for product managers working in startups or in large corporations alike.
Back when I first started, as an eager learner as I am, I dived right into product management literature, books like Marty Cagan’s Inspired: How to Create Tech Products Customers Love, Richard Banfield, Martin Eriksson, and Nate Walkingshaw’s Product Leadership: How Top Product Managers Launch Awesome Products and Build Successful Teams, Bernadette Jiwa’s Meaningful: The Story of Ideas That Fly, Alex Gofman and Howard Moskowitz’s Selling Blue Elephants: How to Make Great Products That People Want Before They Even Know They Want Them and of course the classic Eric Ries’ The Lean Startup.
All of them (and some more) provided great insights to the new task I had at hand with several important caveats: there were things happening in my job that I never encountered in literature.
Before disclosing them, let me first give you some context about my venture to set the stage:
The multinational I am talking about is a worldwide Fast Moving Consumer Goods (FMCG) company, the tobacco giant Philip Morris International; as a specialized FMCG, the company was optimized for repetitive tasks, new products and innovation were just versions of the same old product with few non-disrupting additions, variations on flavor capsules in the filter, pack materials, pack design and tobacco blends were the “new products” we had to deal with. And of course manufacturing, supply chain and route to market for cigarettes are extremely well oiled machines than run smoothly and are very cost efficient.
Recently, the company decided to transform and disrupt the tobacco industry it is leading in pursuit of an inspiring and incredibly daunting vision: “a world free of tobacco smoke”. Smoke is the leading cause of tobacco related diseases and the company believes that cigarette smokers are looking for less harmful, yet satisfying, alternatives to smoking.
As part of the transformation, new smokeless products emerged; products that were designed with the vision in mind: “satisfy smoker’s needs without delivering tobacco smoke”, these products, while not being completely risk free, are a far better choice for smokers.
The star product is called iqos, a product that electronically heats tobacco instead of burning it and thus, avoids the generation of unwanted tobacco smoke.
And here is where our story starts: even though product management is essentially the same basic key principles everywhere, in a large multinational corporation, the different “disciplines” of product management are divided between central product managers and in-market product managers. Let me elaborate.
Product management can be distilled into the following key areas:
- Product and experience design
- Stakeholder engagement and regulatory compliance
- Business readiness
- Market introduction
- Lifecycle management
Product and experience design
This is the core of the matter, it is what most people think of when they hear product management, it is the “cool” aspect of designing looks and features that future customers will love, but there is a paramount distinction here between startups and large corporations. In a large multinational like Philip Morris, this task is divided between central and market functions. The central team will gather insights from around the world and design the main product, they will also produce guidelines for the experiences around such product, in the case of iqos for example, these experiences can be within retail, customer care, apps and very importantly consumables replenishment. And it is the job of the local “market based” product manager to orchestrate the final design and implementation of those experiences to cater to the country’s consumers.
In a startup, the product manager will have to oversee the whole chain and if the startup has a global reach, the product manager will have to make sure that the design decisions she is taking are well tuned for the nuances of the different markets.
Of course, as a product manager, you have read plenty of times about consumer centricity and the importance of lean cycles in your design process, and it is exactly because plenty of articles exist around these aspects that I will not delve a lot into them, but be sure that I acknowledge that without being consumer centric and lean, there is no modern product management and thus even if I know it to the bone, I make it my #1 lesson, I want to be reminded of it every step of the way.
Stakeholder engagement and regulatory compliance
This aspect is sometimes overlooked but it is extremely important and working for the tobacco industry, where it is central, taught me that.
In particular, for tobacco, the regulatory aspect is key, there are strict regulations in place in most of the world for tobacco products, these laws determine where and how can tobacco products be advertised (if they can be advertised at all), how can the company talk to the consumers, or if it can talk to the consumers at all, and the packaging and the product itself are as well strictly controlled. All of these laws were put in place for good reason, cigarettes are harmful, but this meant that for the new product, iqos, even though it demonstrates reduced risk, the same regulations apply to start with, and hence a lot of stakeholder engagement has to take place to create a healthy regulatory framework before even thinking to introduce the product into a market.
Imagine this: you need to introduce a novel product into the market, but you cannot talk directly to consumers about it, neither through advertising or other means, how would you go about that?
Generalizing stakeholder engagement and regulatory compliance into other products and industries there are a great deal of things to consider, for example:
- Uber: the 12 year old company created with its platform a revolutionary new economy, the gig economy, where individuals can provide services to millions of customers. But by doing so, Uber also entered a largely gray area in labor law: are Uber drivers employees or freelancers? To this day, legal battles are being fought between the company and governments trying to create a regulatory framework that could benefit all parties; this particular distinction has great implications for the design of the Uber platform. As you know, Uber is not just an app, it is a whole platform consisting of contracts, software and business processes bundled together into services for consumers, hence its product management has to consider all of its pieces and how they interact with each other.
- Spotify: Back when it started in the mid 2000s, this novel music-as-a-service company found that, in many countries, intellectual property laws had not been amended to consider the digital realm. Thus having to engage locally or modify their legal bindings to fill up the existing wholes. The same is true about Netflix by the way. This has accelerated the inclusion of digital intellectual property laws around the world.
- Financial, insurance, biotech and Pharma: ensuring compliance from the start will reduce headaches down the road, specially for groundbreaking products and services for which the regulatory framework could be a gray area.
Even if your product is not in one of those “hot” verticals as described above, warranting regulatory compliance from the start is paramount, specially in the age of big data where privacy is a great concern. So, considering regulation as part of your design process will give you plenty of benefits and save you a lot of time down the road, even seemingly little details like how are you going to store and process sensitive (private) information about a consumer can have a large impact on ensuring compliance.
Another aspect of stakeholder engagement is the opportunity for strategic alliances. We live in a world where partnerships even amongst competitors are common place, we have finally come to realize that by working together we create a better world. Reaching out in search for mutually productive cooperation agreements can also have great design implications for your product. Let’s say for example that you are creating a fraud detection service for insurance companies based on speech recognition, what if you were to partner with the leading psychology university in your country to apply their research directly into your algorithms? I am sure such an endorsement will greatly improve your chances of being adopted by the top insurance companies and your product will yield far better results. So, by creating your product based on this relationship you are securing a better future for it.
An often overlooked aspect of product management is making sure your company is prepared to provide the product, services and experiences in an “frictionless” and future proof (at least scaleable) way. You can have a completely consumer centric design process for your product, but if your company is not also designed around providing the experiences your team defined from the start, the overall perception of the consumer will be bad.
What I mean by “frictionless” or at least with the minimum friction possible, is that your company must be prepared for the possible situations it might encounter once your product is out, things like: how will the product be invoiced? what if a customer wants a return? how can the consumer learn more about the offering? how are we going to offer support? does your budgeting process need to be updated for the new services? are there going to be new functions and jobs within the company? are we going to offer different variable pay incentives to our employees with this new offering?
This and many other questions are very important to think about before launching a new product (or a new feature/version of a product). In particular for Philip Morris, the initial launch of iqos meant a huge change in the way we were doing business, so big that a company wide transformation program was established.
Maybe in your case, there is no need for such a deep transformation initiative within your company, specially if you are a startup. In the nascent environment of a new company, processes and business functions are defined as needed and, as such, it is easier to create the business capabilities your new product requires. What I want to stress out is that you should always check with the different business functions to ensure they have all the capabilities needed to provide the experiences you have designed for your product.
A good product manager will orchestrate this readiness across the company and will make sure the other business leaders do their part and their respective functions are correctly set up and fine tuned to face the consumers your product will bring.
Some of the typical things a product manager might need to oversee readiness are:
- Call center scripts. Are our agents prepared for all the questions the new consumers might have?
- Finance. Is the correct revenue cycle set up in the systems? Will we be able to correctly record all transactions from the revenue model of our product? Will we provide refunds?
- Employee engagement. Does everybody in the company knows and is excited about our new product?
- IT. Are all the systems and behind-the-scenes pipelines ready?
- Legal. Do we have all the legal agreements in place for the new offering?
- Manufacturing and supply chain. Is our supply chain ready and flexible enough for our growth targets? This also applies to code/software factories, not only physical goods.
- Recruitment and employee onboarding. When our product brings the growth it promises; are we ready to recruit and get employees ready to be productive as quickly as required?
Prepare for the product and experiences you designed and to scale up the company to face the growth you will bring!
Our product is ready, manufacturing has been secured and the organization is eagerly waiting for it, now it is time to make it available to the world. In many companies, market introduction is not the direct responsibility of the product manager, but in any case, a successful one will make sure the market introduction plans are in sync with the growth plans and proficiently use the competitive edge of your product to craft a story that will entice the future consumers.
In my particular case, as the product director for iqos in the Dominican Republic, I did oversee the market introduction efforts, and as challenging as it was, it is quite an opportunity to grow as a professional.
Defining your core audience is one of the main tasks of the product manager from the product design phase (consumer centricity is lesson 1!), you create a product because it solves a particular set of problems for your target consumers, and as such, from the get go, you are equipped with the fundamental piece of information the marketing efforts needs to be successful, “who” are your consumers?
Nobody is better qualified to pin point the particular features or qualities that make your product stand out than you, the product manager. You know exactly which pain points your product solves and it is those that constitute the “what” of the marketing story.
Knowing to whom and what to say is just part of the puzzle, the strategy also needs to consider “how” are you going to put this story across. And the selection of the different channels used to communicate with consumers is directly a function of the core audience and the message. Of course a product manager is not a marketing and sales specialist, but it is the role of the PM to make sure the story is consistent and it is delivered in the best possible and targeted way to the consumers.
Nowadays most startups think only in terms of digital marketing, and for good reason. Digital marketing when done well can be a very cost efficient and effective tool, and for a digital product it makes perfect sense to take advantage of it. But it is not the only way to get your story across, think out of the box and maybe use some of these tools or think on novel ways to make your story viral:
- Voice to voice! Your own employees, your suppliers, your existing customers, everybody within your circle has a great opportunity to transmit your story . Get them excited about the news, and tell them your compelling story in a way that provokes them to spread the word!
- Event marketing — can you provide content creation and shareable opportunities for influencers on demand? maybe a well executed thematic party with the right set of guests can provoke a wide out viral response!
- Traditional media can still be used for new products without having to cost a fortune in the form of news stories. News stations are always looking for innovation and ground breaking stories, and if yours is compelling, I am sure you can find a way to get them onboard.
- Industry specific events — sometimes the next big break for your product can come from a connection made in one of this events.
- Product placement and other cooperation agreements — is there a company that can offer your product to their employees and in turn you can offer something back? marketing doesn’t always have to be funded with hard earned cash, mutually beneficial cooperation agreements can broaden the extent and spread of your marketing efforts.
Product lifecycle management
Planning for the lifecycle of your product is as important as designing the product itself and ensuring adoption from consumers. This is particularly relevant in the electronic consumer goods industry, where things like battery end of life or technology obsolescence will create pain points for your consumers. These pain points, if you plan for them carefully, can be transformed into opportunities. That is how apple has made the otherwise tedious stage of changing your phone because its battery died, into an exciting opportunity to get the latest and greatest iPhone the company now offers.
Plan from the start as well as you can for the different life stages of your product, how will the consumer experience these different stages? can you offer additional support to your consumers when the product is reaching its end of life?
For example, if your product’s face to the consumer is an app, what will happen when the mobile OS companies (like Apple and Google) release a new version of their software? what if a new type of phone makes your product obsolete? In the measure that you have answers to these type of questions, the lifecycle of your product will be smooth.
How often would your product be updated? Do you release a new version every year, or every two years? perhaps once every three months? What will happen to the consumers of the old version of your product? will they get a free upgrade or at least an option to upgrade?
Software engineers are used to this, they often need to release updates to products already in the market, and need to do so with as minimum disruption as possible. But not all products are software (even in this digital world), and even with software, releases need to be carefully packaged into coherent versions of the product and things like user experience are crucial to make the new version widely accepted and loved.
And this is when we start again, by thinking in the next version of your product we are back into step 1: product and experience design. Everything I said before applies as the product cycle starts again all wrapped around in consumer centricity and the lean philosophy.
To sum up, I found seven lessons that I hope can give you another perspective into some aspects of product management that are not discussed as widely as I think they should in current books and blogs:
- Think about the consumer first, act fast, fail quick, learn and repeat!
- Never take for granted regulatory compliance and stakeholder engagement, thinking about it from the start will avoid headaches down the road.
- Don’t go to war alone, find strategic partners and alliances from the beginning and be constantly in the look out for opportunities to collaborate.
- Break the silos! A good product manager orchestrates the company wide efforts to be ready for the new consumers.
- Craft a compelling story! Who to talk to and what to say are as important as how to say it and by which channels when marketing your product.
- Don’t limit yourself to digital marketing. Look for other ways (sometimes even free) to promote your product.
- Beware of the different life stages of your product and plan ahead. Design experiences around them to turn possible pain points into opportunities.
I am very interested in what you have to say, do you think there is something else that should be included here? what are your lessons learned? Please share your thoughts or email me at email@example.com.