Reprinted with permission from Accounting Today.
Innovation is a sizzling hot topic in our industry, the subject of countless articles, conferences and memos from managing partners. Much of what I read and hear, however, focuses on how to be more innovative, and fails to address the foundation upon which innovation is built. And that is product management.
Product management is a functional discipline that dates back to the mid-19th century, when companies like Procter and Gamble (P&G) pioneered consumer-facing approaches that remain relevant today. Product management is comprised of product development and product marketing. Product managers, especially in technology, partner with engineers, marketers and others to align market needs with innovative new services and successfully commercialize the innovations
New Realities – New Rules
For decades, accounting firms have managed to successfully ignore product management. In the not-so-distant past, business for generalist firms washed up onto the shore, with little-to-no active fishing required. For a number of reasons, including disrupted market conditions and the tsunami of technology rushing toward us, continuing to refuse to engage in product management is no longer an option for growth-mined firms. While it may not be as finely honed as in the corporate world, understanding and executing the basics of product management has become essential as a way of keeping the “shiny new stuff” on the shelves as our industry continues to evolve.
Product management allows you to navigate the sea of technology that is disrupting the practice of accounting, from artificial intelligence, data analytics and cybersecurity, to continuous audit and block chain.
Imagine that you’re targeting the institutional healthcare market. Your research reveals that data analytics is a highly in-demand service in the sector, with significant upside potential.
In order to recognize this potential for innovation and gain skill in product management you’ll need to:
- Develop a deep understanding of the business problem you are solving.
- Clarify the personas of the buyer and buyer group.
- Understand which distribution channels are engaged in the problem/solution.
- Articulate a definition and design for the service.
- Launch a successful early adopter program that will allow incremental and collaborative execution
While our “products” are vastly different, accountants have a lot to learn from the makers of soap and razors. P&G, home of iconic brands including Tide, Crest, Gillette and Olay, championed the idea of fashioning products around what consumers want, and refashioning those offerings as wants evolved.
Consider the example of Tide Pods. In 2012, P&G identified the fact that consumers had apparently become too time-strapped to measure out laundry detergent. In response, the company introduced and aggressively marketed a pre-measured pod. Innovation with a capital “I.”
This ability to innovate around shifting priorities has been elevated without limit in the B-to-B tech sphere. Apple, Google and others strive not only to understand and respond to consumer needs, but to anticipate them and deliver relevant product solutions. Ironically, the very technologies that are disrupting our practice offer a model for how to address disruption.
Two Little Words
Whether we pattern ourselves after makers of B-to-C soap, or B-to-B software, CPA firms need to perfect the process of foreseeing buyers’ needs, aligning them with offerings at the market level and driving their commercialization. In two words—product management.
So how do you develop this essential skill? You can read my articles (thank you!), attend conferences and talk to people within and outside the field of accounting who are successfully doing this. Seek them out at seminars, on social media or wherever they reside. Learn to look at the market from the outside in. This means asking what the market wants or needs first, rather than looking from the inside out, which means creating an offering based on what you believe someone else needs. I first learned this key distinction at IBM in the 1980s, when I was a product manager there.
Invest incrementally so that, if it becomes necessary to pull the plug at a given moment, you can do so without significant loss. Be your own critic. Seek out flaws in your thought process about what the market wants until you get it right.
Yes, we must continue to innovate. But we need to do it through the proven discipline of product management. Remember the Tide pod and dream big.