Learning from the best: Key Messages from the Study: «Swiss Product Management 2013/14»

1. Building Competence. Crossing Borders.
Learning from the best: Key Messages from the Study: «Swiss Product Management 2013/14»
Dr. Rainer Fuchs, Head of Product Management Centre Zurich University of Applied Sciences (ZHAW)

2. Master in Physics (University of Konstanz) PhD in Biomedical Engineering (ETH Zürich) Master in Industrial Management (ETH Zürich)
Professional career:
− Development Engineer for balloon catheters and stents at Jomed AG (Beringen, CH)
−Product Manager Sensor Technology at Mettler Toledo (Urdorf, CH)
−Consultant for Strategy, Processes and Organizational Design at K&P AG (Zürich)
−Director Product Management «End User Business», Head Business Unit «Clinical Diagnostics», Vice President «Innovation Management» Liquid Handling at Tecan (Männedorf, CH)
−Since 2012 Head of Product Management Centre at ZHAW School of Management and Law
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Dr. Rainer Fuchs

3. Product Management Center
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at ZHAW School of Management and Law
ZHAW is one of the leading universities of applied sciences in Switzerland. Teaching, research, continuing education, consulting and other services are both scientifically based and practice- oriented.
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With the Center of Product Management the Institute for Marketing Management (IMM) maintains the first and only competence center for scientific and operational questions of current Product Management in Switzerland.
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Therefore, we offer a broad range of continuing education courses as well as a portfolio of business support services.
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We act as an independent and confidential partner for companies and offer them various scientific approaches that they can apply to generate valid and success-relevant results.
The goal of the Product Management Center is to advance continuing developments in the scientific research of Product Management and to make these results accessible for our economic partners.

4. «What you get»:
What are the differences between «GOLD Performer»- Companies and their less successful competitors regarding Product Management strategies, processes and organizational design?
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Organizational anchoring of PM
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Skills of successful Product Managers
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Challenges and success factors of PM’s
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Measurement of performance in Product Management
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Innovation
Trends that determine today’s and tomorrow’s success in Product Management:
•Overview
•Servitization
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Content and aims of this presentation

5. The basis:
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Research Study «Swiss Product Management 2013/14 – Learning from the Best»

6. The basis:
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Research study «Swiss Product Management 2013/14 – learn from the best»

7. Organizational anchoring of Product Management:
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Product Management is still rather part of Marketing than part of Sales or R&D
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Meaning of PM as independent department is growing
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GOLD Performer organize PM less often as staff unit
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Mans of Action need Empowerment!
Key Success Factor for successful Product Management: Broad access throughout the organization
Organizational status of Product Management
Part of Marketing
Part of Sales
Staff Unit to CEO
Independent Department
Part of R&D
Staff Unit to CMO

8. The abilities of successful Product Managers:
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Product Managers more often have a technical background than experience in business and economics
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Less successful companies seem to value a background in economics much more than SILVER or GOLD Performers
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The GOLD Performers shows: It all depends on the right mix!
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The best out of two worlds
How to get successful Product Managers: Invest into target-oriented continuing education!
Educational background of Product Managers
Rather technical / scientific
Technical / scientific AND business / economics
Rather business / economics
Others

9. The main challenges of Product Management:
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«I wish I had 4 hands and the day had 48 hours»
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Important: Understand your customers and their idea of innovation
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Measurement of success of Product Management: It seems that it isn’t that easy…
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Crucial point: Missing financial sources, personnel resources, time pressure
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But also: Ambiguity about responsibilities
The main challenges of Product Management
Important soft skill of a successful Product Manager: Leading without (line-) management responsibility
Resources: $, t, man power
Difficulty to measure success
Not enough innovations
Lack of customer understanding
Lack of market intelligence
Lack of customer orientation
Unclear responsibilities
Lack of knowledge about competitors
Lack of decision-making power
Not enough flexibility and FTO
Insufficient training and education
Lack of top management support
others

10. The challenges from the view of GOLD Performers:
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«Give me more information!»
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GOLD Performers sense less pressure concerning resources
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Preferably, they would like to know even more about the market and competitors
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Successful companies complain less about a lack of customer orientation
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Gold PMs can rather decide on their own, at the same time they wish for more support of the top management.
Challenges of Product Management in detail
Successful companies grant more resources and freedom to operate to their Product Management
Resources: $, t, man power
Lack of market intelligence
Lack of customer orientation
Lack of knowledge about competitors
Lack of decision-making power
Lack of top management support

11. «Customer Whisperers» are clearly at an advantage :
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What GOLD Performers define vital for their success
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The usual suspects: Understanding customers needs and enough resources to be able to create innovation
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Gold performers consider clearly defined processes as much important than SILVER and BRONZE performers.
Main factors for successful Product Management
The successful PM doesn‘t show any weakness: Understands customers and the market, knows how to promote the product internally
Understanding of customer needs and behavior
Innovation
Clearly defined processes
Broad understanding of the market

12. The Product Manager in successful enterprises:
„At METTLER TOLEDO we defined a structured and integrated Product Management process throughout the Group, which comprises the whole product life cycle – from the product idea until the phase-out.
That‘s how we guarantee our high innovation rate as well as the outstanding quality of our products and in order to ensure highest customer satisfaction.“
Dr. Hilmar Brunn, Head Global Product Lifecycle Management, METTLER TOLEDO INTERNATIONAL
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Jack of all trades in all disciplines along the product life cycle

13. Success makes sexy:
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But how is success measured in practice?
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Still most important direct economic indicators like revenue, sales, profit / costs.
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Customer satisfaction measurement tends to become a standard, evaluation of brand awareness and image increasing
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The compatibility / cross selling potential of products is especially important for industrial products
Which indicators are used to measure the success of Product Management?
There’s no one size fits all solution: The measurement of success of products is and will be complex and situation-related
Margin, Profit
Customer Satisfaction
Cost Targets achieved
Turnover with new products
Share of volume of new products
Market share
Relative advantages
Portfolio compatibility
R&D costs of products to sales
Payback time
Brand Awareness
Image improvement
Time-to-Market
Media resonance
Others

14. Measurement of Product Performance:
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How successful companies act differently
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GOLD performers’ strong focus on innovation is also reflected in the way they measure performance
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The share of sales of new products and time to market are measured significantly more often.
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Measurement of market shares is conducive but work-intensive
Success is predictable from the beginning: Consider innovation markers in your product performance measurement!
Margin / Profit
Turnover with new products
Market share
Time-to-market
Which indicators are used to measure the success of Product Management?

15. Innovation as a factor for differentiation against competition:
A no-brainer?
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«Only companies who are building up a continuous flow of innovation are able to maintain their sales success in the medium and long term.»*
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ZHAW study confirms: Innovation triggers growth of businesses**
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Success factors for innovation:
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Anchoring in the corporate culture
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Encouraging research and creativity
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Trend: Open Innovation
* Source: Ulrich Eggert: Megatrends Handel II – Trendupdate 2025/30, 2013 ** Source: Mandl et al.: Swiss Product Management 2013/2014- Von den Besten lernen

16. Potential recognized - process implemented?
Sometimes…
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Most of the companies don’t have an institutionalized innovation process!
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Unused success potentials*:
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Prevent interface problems
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Integral process responsibility and thereby improved customer orientation
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Concentration on value-creating activities
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Organizational assignment of Innovation Management has no impact on a company’s success.**
Innovation makes a company successful – An Innovation Process makes Innovation successful!
* Source: Vahs, Brem, (2013): Innovationsmanagement. **Source: Mandl et al.: Swiss Product Management 2013/2014- Von den Besten lernen

17. «What you get»:
What are the differences between «GOLD Performer»- Companies and their less successful competitors regarding Product Management strategies, processes and organizational design?
•
Organizational anchoring of PM
•
Skills of successful Product Managers
•
Challenges and success factors of PM’s
•
Measurement of performance in Product Management
•
Innovation
Trends that determine today’s and tomorrow’s success in Product Management:
•Overview
•Servitization
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Content and aims of this presentation

18. Product management 2020:
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The future is bright!

19. Quo vadis Product Management: 19
Trends for the next years
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«Business Management of Products»: Product Management as Profit Center, Product Manager as «Business-Owner»
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Accordingly: Importance of continuing education is growing – technical, economic and soft skills are needed
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Organizational centralization of responsibilities, Product Management Teams
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Paradigm shift: Product was yesterday, System is today, «Servitization» is tomorrow!
* vgl. auch: Aumayer: Erfolgreiches Produktmanagement (2013);

20. Paradigm shift :
«Rentalship and Licensing are the new ownership.»*
* Source: Rachel Botsman: What’s Mine Is Yours: The Rise of Collaborative Consumption, 2010 ** Andy Neely, Servitization Working Paper, Cambridge Service Alliance , November 2013

21. «Servitization»:
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The new service orientation in Product Management
«Servitization describes the strategic change from a producer of goods towards a solution provider with individual services for customers» *
−Successful examples:
−Rolls Royce «Power by the hour»
−Hilti Fleet Management
−Canon Copiers
* Source: Fraunhofer/ TU Berlin, Servitization Studie 2011

22. Thank you very much!
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