It’s not hard to blind a CEO with science.
That’s easy for me to say, because I am one. At least until my next Board meeting. Being blinded by science is what I expect in a product portfolio review. After all, good CEOs hire development teams who are smarter than they are.
But when your Board of Directors puts you on the spot once a quarter, it makes you resilient in the face of your own ignorance. So when I go to portfolio review meetings, I listen carefully to how a product is being designed. I ask questions about a product’s features. Layup questions for any development team. Which give me plenty of cheerleading opportunities because my company designs cool products. I leave it to my CFO to drill down on timelines, budgets and the Cost of Goods. My CFO asks the questions about market size and price.
As the session approaches its conclusion, I take charge. By asking what matters the most:
- What do we know about our target customers? Do we understand our customer segments?
- What are our customers’ unmet needs or problems? How does our product address them? In 3 bullet points or less.
- How is our product differentiated? From how customers are doing things today? From alternatives we will compete with?
- What value does our product create for our customers? How will we make our customers more profitable? Nothing is more persuasive than a number. With a dollar sign in front and lots of digits at the back.
- Does a reasonable value based price result in product profitability? If we can’t make money helping our customers make money, we should close our doors. Tomorrow.
I file away the answers and the customer value slides. At the next product review, I don’t care which way the numbers change. What matters is whether the product team understands customer value better. Quantitatively. In dollars and euros.
Creating value for B2B customers is the key to successful product launches. Earlier, quantified, clearly communicated value.
If you don’t believe me, read Dr. Tom Nagle’s latest whitepaper. To view his white paper, please visit our Resource Center.
About the Author:
Peyton Marshall is CEO of LeveragePoint. Previously, he served as CFO and Acting CEO at Panacos Pharmaceuticals, Inc., CFO of EPIX Pharmaceuticals, Inc. and as CFO of The Medicines Company through their initial public offering and the commercial launch of Angiomax®. Previously, he was an investment banker in London at Union Bank of Switzerland, and at Goldman Sachs where he was head of European product development. He has served on the faculty in the Economics Department at Vanderbilt University. Dr. Marshall holds an AB in Economics from Davidson College and a PhD in Economics from the Massachusetts Institute of Technology.