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The fine line between appeasing your shareholders vs. your customers

10/7/2011

4 Comments

 
Many of my fellow product management practitioners are often placed in a difficult situation where customers request certain features for their products, but the product manager's hands are tied. It's not that they don't care about the voice of their customers, rather management's vision is different. On one hand, senior management makes promises to Wall St. or the investors, which appeases the company's shareholders, but neglects the opinion of the customers. How does a product manager ensure that s/he does not lose sight of the customers?

1. Look for common threads.

Ask yourself: will the direction my company is taking address my customers’ needs in the long run?

If you have done your homework as a product manager you should know what your customers expect from you. Look for a common thread between the customers' needs and the shareholders' interests. Sometimes they are in fact very similar.

2. What if there is no common thread?

Make sure your product offers something that satisfies your customers in addition to what was promised to your shareholders. There is always room for more customer features. It may be a hard sell to upper management, however it must be noted that the the consumers pay the bills. If you lose your customers' business, it will be detrimental to your shareholders. Have data to support this point; executives will agree with your reasoning if you have the numbers to support it.

3. You are overruled by the executives.

In the case that your customers' requests go unanswered, be prepared to discuss this with the customers. Being frank and honest goes a long way. If executive management is unresponsive, you may want to schedule a meeting between the customer and management so each party can voice its concerns. This step is especially important if it is a major customer who will be affected.

If after taking these measures management has not satisfied the consumer, be ready to concede defeat. Perhaps it is time to find a company that is more attuned to the consumers' needs.

4 Comments
Steve Robins link
10/17/2011 12:21:58 pm

Sarela,

Very thought-provoking! It's also important to consider the reason for the conflict. For example, is it because...
- Management is trying to cut costs? Answer: Try to identify cost-effective solutions.
- Management wants to focus on new customers and new markets rather than old ones? Answer: Develop financial justification for reinvestment (as mentioned above). Or implement a strategy that takes this into account.

I'm sure there are many other reasons. If you know the reason for the disconnect, that will help you to take the right course of action.

Reply
Fred Engel
10/21/2011 01:32:23 am

Very interesting issue to wrestle with. The company ultimately belongs to the investors and their representatives, management. It is true that far too often the management does not do a good job of communicating the reasons for their decisions. In that case (as you point out), are you in the right company?

If they have communicated you should know the exact reasons they disagree with your point of view. If there has been a fair discussion, then you have to assume your data was not convincing. Putting customers in the middle of the debate can be very problematic.

I have been part of board fights where some of the management wanted to do one thing and some wanted to do another thing. Usually, that can be a bet your job discussion. Having won a couple of those fights, it does take very solid data to go forward with the fight.

Many new companies have been started by people who see their company ignoring the market.

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Bruce McCarthy link
10/29/2011 12:49:39 pm

Balancing the inputs from multiple stakeholders is probably the hardest task in product management. The strategic direction of the company can't be ignored any more than the feedback from customers. Both are critical to success.


Recent events at Netflix show what can happen when you ignore the interests customers in favor of those of investors. Both end up suffering. The reverse can also be true. Blackberry kept improving their product and presumably responding to feedback from corporate customers to do so, but they are losing out badly to the new crop of iOS and Android phones. They missed a change to business people wanting more consumer-oriented devices.

What's needed is a balancing of these influences based on ROI. Resources can be allocated to both proportional to how much they help the company's overall tactical and strategic goals.

If Netflix had tempered their desire to move toward the streaming business with adequate continued nurturing of their whole customer base, they would be in a much better position today.

Reply
Daly City Girls link
7/10/2012 07:31:07 am

Was browsing Google and found your site, enjoyed the reading, thanks

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    Sarela Bliman-Cohen is a product management executive with over 20 years experience in Technology. 

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