Dear reader, Leon is the Product Line Director, a Category Leader of a 1 billion dollar global product line. His company has 7 product lines, smaller ones but also bigger ones from a turnover perspective. He is 45 years old, a commercial guy with a lot of knowledge about the technical aspects of the products and their variants in his portfolio, but also from manufacturing processes. He has a huge personal network in the company. I talk with him on a regular basis about his challenges. These are the things he tells me.
“Huub, it is not easy to be a Product Line Director, you know, I feel like driving a car without a steering wheel. My hands are in the air. No power. I am not empowered to give orders to anyone. I always have to ask, beg, if others want to help me and my roadmap. The only people who report to me are a group of market researchers, and a group of product managers. Also people without power. My success depends completely on the goodwill that we have in the company”.
I ask: “But you have commercial targets, you have to ensure billions of current and future business, and, you have to modernize your products continuously, how can you do that, and how can you commit to these targets?” Leon: “Yes, I have targets, a multiyear target, growth targets, revenue targets per regional market segment, and other targets. For example, I have to refresh the Sales Catalog by 20% per year, so that in the end every 5 years we have a completely renewed Sales Catalog. It is my task to make sure the Sales guys have a modernized competitive Sales Catalog that will make them successful. My success completely depends on the sales success of these folks in the end”.
I concluded: “So, you have to agree the sales catalog of your product line with the Sales Directors every year? And that is the starting point of your product line roadmap?” Leon says: “Sure, to give you an example: every year we have to decide which products should be phased out from the catalog, and when. I can tell you, sales people like to sell what they know sells the easiest, certain success runners we can’t simply phase out, even if they are old products, too old. Sales people do not intend to go for the new products, too uncertain. Are the new products good enough? And will they be delivered on time as agreed? I can understand that. They do not want to lose shelf space from their retailers. It is very difficult to win back shelf space. If a new product comes later than expected and promised, the retailer will replace our product with the products from a competitor. Shelf space is expensive. The problem is that the rest of my company is not aware of this risk and does not understand the impact of delays or product scope changes.”
I ask: “How then can you define and agree a roadmap for your product line? Is that possible in practice? Because you have many dependencies that you cannot control”. Leon: “Exactly, Huub, that is my biggest challenge. First to get an agreed roadmap, agreed by all the internal and external suppliers of product features and agreed with Production. In fact all the functions of the company have to participate and invest resources in my product line and roadmap. New products cannot be on the roadmap and not funded. The problem is that I do not have the funds. The funds are with R&D, Marketing and Production mainly. If I would have the funds I would have power, now I have to ask. So my main role in the end is to be a coordinator, an orchestrator. My CEO wants to have the products in the market as agreed, and promised. I have to help the company to execute on that”.”
I feel for Leon. Is it fair to put somebody in a leadership position, also financially, if you don’t empower him, financially? Internally he is the customer of the goods, he owns the sales catalog for his product line, and he is held accountable. Wouldn’t it be better if the supplying departments would be handled as external suppliers, who should “sell” their capabilities to the business? But, the companies I know don’t budget that way, they give budgets to R&D, to Marketing and to Production and the plants. Outsourcing as a realistic alternative still did not land. So, how can I help Leon to be successful despite his situation? I don’t think there is a lot of choice: I have to help him to be a perfect coordinator, somebody with information that allows him to act and steer pro-actively, see the dangers before they are there. And, I believe that he should make explicit internal contracts with his colleagues, agreements that are traceable and trustworthy, in which they commit what to deliver to him, in which form, for which price, and, very important, when. With a hard deadline. To safeguard his business in competition with the other 6 Category Leaders… Interesting situation. Don’t you agree?
More about Innovation Governance in a next Blog.