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Lifecycle Strategy: Product, Market, Execution Fit

Everything has a lifecycle. It is born, it grows, it ages, and it ultimately dies. It’s easy to spot a lifecycle in action everywhere you look. A person is born, grows, ages, and dies. So does a star, a tree, a bee, or a civilization. So does a company, a product, or a market. Everything has a lifecycle.

All lifecycles exist within a dynamic between system development and system stability. When something is born, it’s early in its development and it also has low stability. As it grows, both its development and stability increase until it matures. After that, its ability to develop diminishes over time while its stability keeps increasing over time. Finally, it becomes so stable that it ultimately dies and, at that moment, loses all stability too.

That’s the basics of all lifecycles. We can try to optimize the path or slow the effects of aging, but ultimately every system makes this progression. Of course, not all systems follow a bell curve like the picture above. Some might die a premature death. Others are a flash in the pan. A few live long and prosper. But from insects to stars and everything in between, we can say that everything comes into being, grows, matures, ages, and ultimately fades away. Such is life.

What do the principles of adaptation and lifecycles have to do with your business strategy? Everything. Just as a parent wouldn’t treat her child the same way if she’s three or thirty years old, you must treat your strategy differently depending on the lifecycle stage. And when it comes to your business strategy, there are actually three lifecycles you must manage. They are the product, market, and execution lifecycles.

  • The product lifecycle refers to the assets you make available for sale.
  • The market lifecycle refers to the type of customers to whom you sell.
  • The execution lifecycle refers to your company’s ability to execute.

In order to execute on a successful strategy, the stages of all three lifecycles must be in close alignment with each other. If not, like a pyramid with one side out of balance, it will collapse on itself and your strategy will fail. Why? Because aligning the product, market, and execution lifecycles gives your business the greatest probability of getting new energy from the environment now and capitalizing on emerging growth opportunities in the future. (I discussed in a previous post that the goal of any strategy is to get new energy from the environment, now and in the future.) As you’ll see, aligning all three lifecycles also decreases your probability of making major strategic mistakes.

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By |2021-05-18T05:39:04-07:00October 18th, 2011|Articles|1,050 Comments

Rethinking Product Management: How to Get from Start-up to Scale-up

I earn my living as a scaling coach to expansion-stage companies. One of the advantages of my position is that I get a deep, inside look into different industries and businesses. While no two situations are exactly alike, I have seen a consistent yet under-reported issue out there that keeps 9 out of 10 companies from getting out of start-up mode to the next level.

What is it? It’s a breakdown in Product Management.

Assuming that you already have a sound strategy and execution framework in place, if you can get your Product Management function right, you’ll solve a lot of problems inherent in scaling your business. You will also have a much easier time increasing revenue growth, execution speed, agility, and profits. If you don’t get Product Management right, scaling to your potential will be much harder or even impossible.

Before proceeding, I need to call out that the problems and solutions described in this article are only applicable to a company in the late Nail It to early Scale It lifecycle stage of business development:

The Organizational Physics Strategy Map. You'll likely need to redesign Product Management in order to make the leap from Nail It to Scale It. The Organizational Physics Strategy Map. To scale successfully, you’ll need to rethink and redesign Product Management between the late Nail It and early Scale It stages of business development.

In the early start-up stages of a business, Product Management doesn’t need to be a well-defined function. It’s just something that is organically “managed” by a product-savvy entrepreneur. At this stage, there’s a drive to find product-market fit and not much else matters.

But once product-market fit is established and the company is ready to scale up by adding new product lines, customer types, or markets between the late Nail It and early Scale It stages, that’s when Product Management should be rethought and redesigned. This article will help you do just that.

Is There a Breakdown in Your Product Management Function?

It’s pretty easy to spot a breakdown in the Product Management function in your business. Assuming that your business has already aligned around a clear growth strategy and execution framework, some symptoms of a Product Management breakdown will show up when there is one or more of these conditions:

  • Poor coordination between sales, engineering, manufacturing, and marketing
  • Haphazard quality in new product releases
  • A struggle to translate customer needs into a delightful customer experience
  • Growing revenues but little or no profits
  • Finger-pointing and blame between departments
  • Perpetually late product development
  • A strong technical product but poor product marketing or vice vera
  • A lack of organizational clarity on the short- to mid-range product roadmap
  • A visionary entrepreneur who is stuck managing product details

Now, you’re probably thinking that I’m attributing a lot of internal corporate issues to a breakdown in just one function. And […]

By |2022-01-03T16:15:46-08:00October 15th, 2015|Articles|Comments Off on Rethinking Product Management: How to Get from Start-up to Scale-up

The Magic Spot in Product Development

What’s more important… following the “Four Steps” or experiencing the genuine epiphany?

It’s the epiphany, right? Right!

I bring this up because I continue to run across product development teams that are so enamored with following a sound lean startup process that they have lost sight of the ultimate objective: building something magical.

Where’s the magic? The magic happens at the nexus between what’s possible, what you’re capable of, and what the client is willing to pay for:

ProductDevelopmentMagic
When you get so consumed by following the right process that you lose sight of the real goal — finding the magic in the middle — you can make yourself look like a bad dog…

wetdream
Don’t purse the wet dream trying to build something that you’re incapable of delivering. It’s a fantasy that will ultimately leave you feeling alone and ashamed.

yawn
Don’t make your clients yawn, only building what they ask for but missing what they’d really love once they experience it.

slowclap
Don’t build for the slow clap, a product that only you are excited by.

Your real objective is always to find the epiphany that reveals the magic in the middle…

puppies
DO build something magical. You know, like puppies. Puppies bring delight. Plus they’re capable of growing through their own lifecycle stages and one day… giving birth to something new and magical themselves.

So the next time you’re in the heat of a product development process, don’t be a bad dog. Keep your eyes on the prize and find the magic in the middle.

By |2021-05-18T01:59:12-07:00March 11th, 2014|Articles|Comments Off on The Magic Spot in Product Development

The Stages of the Execution Lifecycle


Navigating your company up the execution lifecycle 1 and keeping it in optimum shape is a great challenge. This article will show you how to do it successfully.

The stages of the execution lifecycle become easier to understand with a little pattern recognition. Basically, every business must shape or respond to its environment and it must do so as a whole organization, including its parts and subparts. If it doesn’t do this, it will cease to exist. Recognizing this, we can call out four basic patterns or forces that give rise to individual and collective behavior within an organization. They are the Producing, Stabilizing, Innovating, and Unifying (PSIU) forces. Each of these expresses itself through a particular behavior pattern. The combination of these forces causes the organization to act in a certain way.

Just like the other lifecycles, the execution lifecycle exists within a dynamic between stability and development. The basic stages of the execution lifecycle are birth, early growth, growth, and maturity and, from there, things descend into decline, aging, and death. The focus within the execution lifecycle should be to have the right mix of organizational development and stability to support the stages of the product and market lifecycles. That is, the lifecycle stage of the surrounding organization should generally match the lifecycle stage of the products and markets. If it’s a startup, the surrounding organization is the entire company. If it’s a Fortune 500 company, this includes the business unit that is responsible for the success of the product as well as any aspects of the parent organization that influence, help, or hinder the success of the product.

The surrounding organization should act a certain way at each stage of the product/market lifecycle, as you’ll see below. Note that, when a force is or should be dominant, it will be referenced with a capital letter:

• When piloting the product for innovators, the company should be in birth mode and be highly innovative and future-oriented (psIu)
• When nailing the product for early adopters, the company should be in early growth mode and be producing verifiable results for its customers (Psiu)
• When beginning to scale the product for the early majority, the company should be standardized and operations streamlined for efficiency (PSiu)
• When fully scaling the product for the early majority, the company’s internal efficiencies should be harnessed, as well as the capability to launch new innovations and avoid the commodity trap (PSIu)
• When […]

By |2021-05-18T05:37:49-07:00October 28th, 2011|Articles|3,857 Comments

Lifecycle Strategy: How to Tell if You’re Doing it Right

In my previous post, I introduced the product, market, and execution lifecycles and why a successful strategy must align them. Now we’ll take a look at the four key indicators that will tell you if you’re on the right strategic path. The key indicators, which must be taken into account at each lifecycle stage, are Market Growth Rate, Competition, Pricing Pressure, and Net Cash Flow.

Let’s take a visual walk around the figure above and see how the key indicators work. First, notice that when you’re piloting your product for innovators in quadrant 1 you should be in negative cash flow. The total invested into the product to date should exceed the return. The market growth rate should be low because you’re still defining the problem and the solution for the market. Therefore, the competitors within your defined niche should be few both in number and capabilities. Consequently, the pricing pressure will be high because you haven’t defined the problem or the solution, so you have no ability to charge enough money for it at this stage.

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By |2021-05-18T05:38:26-07:00October 19th, 2011|Articles|1,088 Comments

Audio Book Images

Organizational Physics Audio Book Visual Materials

This page contains visual materials for audio book listeners. Enjoy the book!

How to Read this Book

Figure 1. Organizational Physics Strategy Map
Figure 1. Organizational Physics Strategy Map

Chapter 1

Figure 2. The Universal Success Formula
Figure 2. The Universal Success Formula

Figure 3. Available energy first flows to manage entropy needs
Figure 3. Available energy first flows to manage entropy needs

Figure 4. High entropy steals from high success
Figure 4. High entropy steals from high success

Figure 5. A decrease in entropy allows the system to have more energy for top-line performance
Figure 5. A decrease in entropy allows the system to have more energy for top-line performance

Chapter 2

Figure 6. The Vector of Happiness and Productivity
Figure 6. The Vector of Happiness and Productivity

Figure 7. The greater the gap, the more unhappy and unproductive you are
Figure 7. The greater the gap, the more unhappy and unproductive you are

Figure 8. The narrower the gap, the greater the happiness and productivity
Figure 8. The narrower the gap, the greater the happiness and productivity

Chapter 3

Figure 9. The Adaptive Systems Model provides a universal framework for understanding individual and collective behavior
Figure 9. The Adaptive Systems Model provides a universal framework for understanding individual and collective behavior

Figure 11. The four styles
Figure 10. The four forces of Organizational Physics

Figure 10. The four forces of Organizational Physics
Figure 11. The four styles

Figure 12. The friends, foes, gains, and drains for each style
Figure 12. The friends, foes, gains, and drains for each style

Chapter 4

Figure 13. The Producer Style
Figure 13. The Producer Style

Figure 14. Traits of the Producer Style
Figure 14. Traits of the Producer Style

Chapter 5

Figure 15. The Stabilizer Style
Figure 15. The StabilizerStyle

Figure 16. Traits of the Stabilizer Style
Figure 16. Traits of the Stabilizer Style

Chapter 6

Figure 17. The Innovator Style
Figure 17. The Innovator Style

Figure 18. Traits of the Innovator Style
Figure 18. Traits of the Innovator Style

Chapter 7

Figure 19. The Unifier Style
Figure 19. The Unifier Style

By |2022-01-05T16:15:06-08:00June 21st, 2015|Comments Off on Audio Book Images

The Lean Startup Goes Mainstream: Here’s What You Need to Know

Entrepreneurial guru Steve Blank (awesome systems thinker) has an article coming out on the cover of Harvard Business Review this month: “Why the Lean Startup Changes Everything.”

I really appreciate the framework of the Lean Startup approach and I’m a big fan of the movement. One thing I notice that’s missing from it is a discussion on the lifecycle stages of the customers that the lean startup should be targeting/getting feedback from. Here’s what I mean:

The Product Lifecycle goes like this: Pilot it, Nail it, Scale it, Milk it, Kill it.

The Market Lifecycle of customer types goes like this: Innovators, Early Adopters, Early Majority, Late Majority/Laggards.

In order to navigate from the temporary organization of a startup, find the business model, and scale it, the disruptive entrepreneur should seek to align this sequence of steps together. I.e., Pilot it for Innovator Customers. Nail it for Early Adopters. Scale it for the Early Majority, and Milk it for the Late Majority/Laggards like this:

Align the product and market lifecycles with the execution lifecycle (not shown). Align the product and market lifecycles with the execution lifecycle (not shown).


Put another way, you DON’T want to be Piloting a project for a Late Majority/Laggard clients or misaligning the other stages. Why not? Because those Late Majority/Laggard clients are old and stable. They are outstanding at telling the entrepreneur what the market needs now (or 5 years ago) but tend to be incapable of identifying where it’s going to be 5 years from now. To find that out, you have to go to the fringe — those Innovator and Early Adopter Clients that aren’t currently served by the status quo. That’s where the true disruption lies.

Late Majority/Laggard clients also have a vested interest in maintaing the status quo. So even if the entrepreneur has a visionary champion within that Late Majority/Laggard client, he or she is going to be blocked by the surrounding inertia within that large, stable organization. The Late Majority/Laggard client is also subjected to broad market forces and quarterly financial targets that may require it to shift directions. So even promises of “yes, build this for us at this price and we’ll roll it out to our distribution network” aren’t worth the email they were written on when market forces change.

A great example of this principle in action is Square, a great disruptive force in the mobile payments space. Notice that Square DID NOT go to Visa, Mastercard, and Paypal to find the initial product market fit. They went to taco truck vendors, independent artists, and others SOHO’s who were NOT served by the status quo. If CEO Jack Dorsey did go to Visa or Pay Pal to practice the Lean Startup methodology and find the product market fit, he would have […]

By |2021-05-18T02:09:10-07:00April 16th, 2013|Articles|Comments Off on The Lean Startup Goes Mainstream: Here’s What You Need to Know

The 6 Laws of Organizational Physics

The following is an excerpt from Organizational Physics – The Science of Growing a Business.

If you’re a growth-oriented CEO, entrepreneur, or department manager, then you’re naturally under pressure to lead your business to greater levels of performance. You also need to do this in a fast-moving, turbulent, evolving marketplace. A lot is riding on your judgment and leadership and there’s little room for error. There’s time pressure, money pressure, market pressure—not to mention work/life balance pressure—that can all add to the difficulty of achieving success.

Complicating matters is that there are never enough time and energy available to accomplish everything that needs to get done. Using limited resources, you must drive success, build powerhouse teams, set the right priorities, and execute fast. And because the right plan is only as good as your team’s commitment to implementing it, you have to ensure constant buy-in and continually lower any friction that gets in the way.

That’s a tall order. If you’re honest with yourself, you’ll admit there are countless times when you’re feeling stressed, doubtful, unclear, or simply stuck. Sometimes your job can feel so thrilling, you can’t imagine doing anything else. Other times it feels so frustrating that you want to quit, move to Tahiti, and take up painting. All in all, you’ve chosen a career path filled with adventure, danger, excitement, and the opportunity to manage one mini-crisis after another.

As a wise leader, you have learned to trust in your own experience. But you also keep an eye and ear open for valuable insights and perspectives. In this regard, there are countless management theories and organizational practices that you can choose from. There are top-down, bottom-up, agile-iterative, data-driven, design-first, customer-oriented, outcome-based, decentralized, centralized, democratic, autocratic, process-driven, lifecycle-stages, and X-Y-Z management theories. If you ask a dozen entrepreneurs, CEOs, and management experts which is the best model, you’ll hear as many different answers.

When you’re faced with a myriad of challenges, opportunities, constraints, and choices, how can you decisively lead your organization where you want it to go? When can you trust your past experience and when does it cast blinders on your ability to see clearly? What’s the right approach for your particular situation? How do you maximize your organization’s performance and your personal satisfaction, now and in the future?

The answer, as with all things, is to first understand what’s really going on. For example, a good doctor understands how the body really functions. Rather than focusing on symptoms, s/he will work to understand the systemic causes of a disease. Similarly, if you understand how your business and team really work beneath the surface, you can get at the underlying causes of what’s making them fail or succeed.

The purpose of Organizational Physics is to do just that—to explain […]

By |2021-05-18T04:54:55-07:00April 30th, 2012|Articles|Comments Off on The 6 Laws of Organizational Physics

The 5 Classic Mistakes in Organizational Structure: Or, How to Design Your Organization the Right Way

Is your organization designed to be a rocket or a parachute? If I were to ask you a random and seemingly strange question, “Why does a rocket behave the way it does and how is it different from a parachute that behaves the way it does?” You’d probably say something like, “Well, duh, they’re designed differently. One is designed to go fast and far and the other is designed to cause drag and slow an objection in motion. Because they’re designed differently, they behave differently.” And you’d be correct. How something is designed controls how it behaves. (If you doubt this, just try attaching an engine directly to a parachute and see what happens).

But if I were to ask you a similar question about your business, “Why does your business behave the way it does and how can you make it behave differently?” would you answer “design?” Very few people — even management experts — would. But the fact is that how your organization is designed determines how it performs. If you want to improve organizational performance, you’ll need to change the organizational design. And the heart of organizational design is its structure.

Form Follows Function — The 3 Elements of Organizational Structure & Design

A good design supports its purpose. There’s a saying in architecture and design that “form follows function.” Put another way, the design of something should support its purpose. For example, take a minute and observe the environment you’re sitting in (the room, building, vehicle, etc.) as well as the objects in it (the computer, phone, chair, books, coffee mug, and so on). Notice how everything serves a particular purpose. The purpose of a chair is to support a sitting human being, which is why it’s designed the way it is. Great design means that something is structured in such a way that it allows it to serve its purpose very well. All of its parts are of the right type and placed exactly where they should be for their intended purpose. Poor design is just the opposite. Like a chair with an uncomfortable seat or an oddly measured leg, a poorly designed object just doesn’t perform like you want it to.

Even though your organization is a complex adaptive system and not static object, the same principles hold true. If the organization has a flawed design, it simply won’t perform well. It must be structured (or restructured) to create an design that supports its function or business strategy. Just like a chair, all of its parts or functions must be of the right type and placed in the right location so that the entire system works well together. What actually gives an organization its “shape” and controls how it performs are three […]

By |2021-05-18T05:25:49-07:00January 9th, 2012|Articles|16 Comments