Strategy – Chicken or Egg

Strategy can be straight forward or an illusive and long sought-after mirage in the desert. One factor that makes strategy difficult to develop and hard to implement are ongoing conflicts regarding products and product lines.

In some ways, sales teams find certain legacy products easy to sell due to their existing customer base driving high customer demand and an easy selling environment. On the other hand, new products and the need to keep a product line fresh can be the lifeblood of a company over the long haul. It is logical that a sales team, much like water and electricity, will always choose the path of least resistance making legacy product lines a low resistance favorite. Unfortunately, or fortunately, these disagreements MUST be resolved before a solid company level strategy session can be effective.

One way to simply segment the products is to break your products up and place them in three categories. This can be a simple outline utilizing sticky notes on a wall with pieces of tape between the categories. The first category will have those products that will be of value to the company in then next 3 to 5 years with a reasonable margin above that of 10%. The second category will contain those products that are likely at the core of your business. Legacy products that account for the bulk of your production but have likely reached a point of commoditization with margins that are less than desirable. These are usually products the company cannot survive without from an overhead perspective. The last category contains those products that do not fit into the first two categories. These products are worthy of some serious discussions surrounding their future and how to fix or exit from the business.

As with any strategy process, the discussions related to products and company direction will need to be revisited a few times before the outcome starts to feel right. Getting alignment early in the process will help to ensure the company grows by selling the desired products. It also will likely lead to valuable insights into what is hindering the sales team from gaining customer adoption in the new products you are trying to sell.

Leave a Reply

Your email address will not be published.