Product Management – The Secret Weapon of Growth
It’s fair to say that CPAs have ‘gotten the memo’ when it comes to the importance and value of marketing. Telling their story to those who need to hear it – and are in a position to respond – is a concept many now understand and even embrace. But in today’s demanding marketplace, it’s not enough to market an offering; you’ve got to manage it – from incubation through birth, innovation and beyond. Sharply designed brochures, hard-hitting direct mail and interactive websites simply won’t get you where you want to go.
Sounds Like Widgets to Me
Many CPAs get glassy-eyed when I mention product management. They think it sounds like an industrial part or a brand of cereal. But in this context, a firm’s offerings are not appreciably different from other professional services (or goods for that matter). Consider this definition:Product management is the discipline of taking an offering or industry niche and managing its success in terms of development, positioning, delivery and continuous improvement. Certainly, a strong marketer can assist you with essential tasks like increasing visibility, identifying prospects and developing targeted messaging. But when it comes to shaping your offering, giving it a value proposition and credibility, that’s a different discipline called product management.
Michael Porter, the brilliant Harvard professor suggests that, “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.” Without these distinct activities, strategy is little more than a marketing slogan, he suggests. What he’s just described, I believe, is the essence of product management.
X or Y?
Consider Firm X, which is developing a new offering around forensic accounting. In a product-management context, CPAs could thoughtfully and professionally nurture the idea and build it, determining what the services will look like…who the likely buyers will be… who will be trained in it…how will it be kept fresh… and how the service will be delivered and success measured. Only then do the marketers, fully up-to-speed on the offering, begin to add their layers of value. Contrast this with Firm Y, where a partner walks into a meeting one day and announces, “It’s time we got into the fraud-services business. Let’s call the marketers in and get started on a brochure.”
Too often, I see Y-type firms that have no context for product management – they aren’t familiar with it and it scares them just a little. “Who’s supposed to do this for us?” they wonder. “How do we learn the strategies?”
Try these ideas for building top-notch product managers in your firm (aka partners):
- Segment your revenue into services and industries and assign individuals to those specific revenue segments and the services or industries they represent. Build a spread sheet on which services are the rows and industries are the columns. Run the total down the right-hand side and the bottom, and list the individuals assigned to each segment.
- Provide incentives for the assigned individual to “own” that service or industry.
- Determine potential future revenues within each segment.
- Based on the revenue outlook, determine what strategic direction is needed to achieve it.
Once an individual “owns” a segment, product management will be a natural outgrowth of that ownership. Knowledgeable concern about the fiscal and future health of that revenue segment will lead to questions, and those will lead to answers.
Where Did We Miss Out?
Many firms aren’t taking advantage of the opportunities afforded by Sarbanes-Oxley. Why? Because they didn’t have the mechanisms outlined above in place when the sea-change occurred. As a result, every decision about the direction of a service line is anecdotal, one-off, and a matter of luck and circumstance (eg. a client or prospect asks if you do this-or-that). That’s not a very efficient way to grow!
Don’t despair. There are going to be plenty of opportunities in the near future to participate in the enormous growth in this profession. Probably the biggest factor will be continuing regulation, which I believe is going to drive “standards-based” niches. If properly implemented, the above suggestions will result in “segment leaders” who will be thinking about where an offering or industry is headed, what competitors are offering, technological advancements that are occurring, regulation that’s probable, and where your firm should be headed. Managing partners can rely more on segment leaders to perform thorough due diligence, and the partner group can make higher quality decisions about your service mix.
Manage or Be Managed!
In summary, product management techniques will enable you to drive the best strategies for growth in each of your segments. Manage your markets instead of your markets managing you!