What Business Are You In?

It's pretty hard to develop the right products when you're not sure what business you're in. Or what business you're not in.

A few years ago I joined a small company and was asked to design a new delivery platform for their content and interactive applications. The platform, which would manage user profiles and transactions over time, needed to be a very sophisticated system that would underlie all the company's products. I diligently began investigating the user requirements and existing products that did similar things.

As I gathered data, I realized what a large undertaking this would be. I talked to the development team and began to get an idea of the resources that would be required, and did some thumbnail calculations. Something was wrong.

The company's strength was in developing interactive content - video and accompanying web-based activities. While a new back-end platform was clearly needed, this was not something that they had experience developing. They could not afford to hire new staff, and moving people to a major new product would have derailed the mission-critical content production work.

I began a series of discussions with the VP of Technology and the CEO. The topic: "What business are we in?"

It took a remarkably long time to answer that question. In retrospect, the question could have been answered in a few seconds, but the execs first wanted to explore the follow-up question: "What business do we want to be in?"

The answer to the first question was that the company was in the interactive content business, in a very specialized niche. The answer to the second question was that they wanted to continue to be in this business, and increase the number of products and customers by doing what they knew how to do well.

A third question was implied: "What business are we not in?" Once the first two questions were answered, we quickly determined that the company was not in the business of developing delivery platforms. Sure, we could do it if necessary, but there were numerous companies already building this technology. Why divert precious resources to something that wasn't in our primary focus?

Fortunately, there were companies that we could partner with to obtain this technology, and my focus shifted to that task. Enormous amounts of effort were saved, and the development team remained focused on producing great interactive content.

It's not always easy to be clear about what business you're in. Everyone thinks they know, but they may actually think different things, based on their perspective - Sales, Engineering, and Management may have different views on the same thing. (Think about the fable of the blind men and the elephant…) Organizations often craft mission and vision statements to forge an organizational consensus, but these are often so general and "inclusive" that they provide little real guidance, particularly in understanding what isn't part of the mission or vision.

Who should make sure that an organization really understands what business it's in? Ultimately, it is senior management's responsibility, but since Product Management's role is to understand the business, the customer, the market, the products, and the capabilities of the development organization, PM can play a key role.

As I discovered, just asking the question at the right time can have a profound impact. And by providing data and perspective to help answer the question, product management can play a vital part in focusing and articulating the direction of the business.

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