My observations during 2015, building business & product strategies for connecting products (#IoT)!

2015-12-22, 15:01 Posted by: Advisory

2015 has been a very interesting year in my profession. I am a strategic adviser to product companies looking into connecting their products (IoT). Working with them on how they can use it as a competitive advantage, deliver a higher customer value and transform there industry. This year I have noticed three big changes on the market:

  • The strategic decision has been taken, but  now the question is what does it mean for us?
  • There is an openness for a new way of working but it is always threaten by the internal process death
  • Broad alignment is prioritized over speed

Let's elaborate on the three areas from my perspective.

The strategic decision has been taken, but  now the question is what does it mean for us?
This is probably the biggest change! More and more companies has taken the strategic decision that this will be important for them and their industry. Previous years I have worked much more with inspiring, educating and explaining why it is an important area for the companies and why they need to take an active decision on if they should do something or not.

This year my assignments has started with that there is an board/management decision that this is important but now they need to define what this means for them and their industry. For this purpose I have defined a tight series of three workshops where I together with a cross functional stakeholder group can achieve wonders over a short period. In the end of this series the company has a strategic framework and a vision for what they can accomplish including a hypothesis on the core customer values that the new offerings must build. This is important so that they can focus their innovation efforts. However, this is when the hard work starts which eventually leads to the second area.

There is an openness for a new way of working but it is always threaten by the internal process death
I am a firm believer in that we need to spend more effort in securing (reducing risk in) the selection of the right thing to build where you think big, but start small and iterate quickly. About this, inspired by Lean startup and Business model generation, I have been talking to companies during many years but over the last year I have seen an increased openness and understanding that this is very important. This is especially important when creating new customer value when connecting an existing products. However, independent of how open and understanding my sponsor within the client is there is two processes that always threaten to crush the efforts to change the way of working:

- the budget process - if you do not have the idea defined before summer it is not part of the budget process and you will not have any money next year :-). This is completely against the new way of working where you embrace that your ideas are based on hypothesis and you work with validated learning to prove or disregard your hypothesis. Always changing direction based on your learning until you have reduced the uncertainty enough to invest.
- the holy product development process - which in many of my clients has been develop to cope with hardware development where every change after start comes with a high cost. For digital it is instead important to structure for change and to make that cost as low as possible.
If the initiative can survive the two first areas then comes the third area.

The broad alignment is prioritized over speed
I believe in strong alignment across the companies different verticals, which become even more important if the company has several products bought by the same customer, but it must not hinder speed! So today I often recommend a initial broad process and when the strategic alignment is established there must be a smaller group with fully dedicated people which has the mandate to work in the new way, test new offers and business models on the market even if there is a risk of cannibalization of existing business. Today, most companies I see still get stuck in the broad committee way of working with people already fully occupied with other tasks (and no time for this new task) which slows the process extremely.

How do you view the world of connecting product and digitization efforts, do you recognize my observations? Please comment and discuss below!. This is the last thing I do before a longer Christmas holiday and I hope to see you all in the new year!

Merry Christmas and a happy new year!
Peter Tyreholt (+46730255855)
Senior adviser 

Ps: After testing to have visual workshops with people both in the room and people online. I would really like to have an online collaboration tool where you mimic and improve the group process of working with post-its on the wall with VPC, BMC or any other canvas. Anyone know of such a tool visual and multi concurrent editing?

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