McKinsey Digital
Apr 23, 2018 · 8 min read

by Mason Adair, Digital Product Strategy at Digital McKinsey

EDITOR ‘S NOTE: This is the first in a two-part series focusing on Agile Commercialization

As I’ve worked with companies undergoing digital transformations over the past few years, one of the areas I have seen otherwise well executed programs falter is bringing their new digital solutions to market.

Companies spend millions developing ‘digital factories’ without touching their existing sales organization or developing new channels more suited to the learning objectives of minimum viable products. As a result, would-be disruptive products limp slowly to market, struggle to gain traction, and tarnish the credibility of the overall transformation effort.

It makes little sense to burden the outputs of rapid innovation with cumbersome go-to-market overhead.

For rapid innovation to move the revenue needle, companies need to think beyond how to build products quickly and also consider how their commercialization engines need to evolve.

The good news is that product managers in these digital factories typically employ agile, design thinking, and lean methodologies which emphasize rapid experimentation and customer validation. In addition to contributing their modern process knowledge, product managers can also benefit greatly from direct exposure to the process of selling of their new product, a solid reason for them to work more closely with sales reps.

Getting sales and product to work together isn’t always easy. Entrenched attitudes and divergent expectations of both roles can create barriers to collaboration, while collaboration frameworks are almost non-existent. Improving commercialization success rates in digital transformations will require tackling both issues.

Learning from MVPs

During the course of developing a product, good product teams will employ several methods to validate their product’s direction, conducting user and customer research from the beginning. Initial research with ‘representative users’ yields important early validation, but the hypothetical nature of these methods as well as the absence of real tradeoff decisions render the findings more indicative than conclusive.

Minimum viable products (MVPs) are later stage assessments of product-market fit that (largely) remove the hypothetical element of early research. What sets an MVP apart is high fidelity learning that only results from real customers making real financial decisions.

“A Minimum Viable Product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”

Eric Reis, The Lean Startup

While the MVP concept was designed to market-validate products, the systematic low-cost approach of learning from real customers can also be applied to agile commercialization and the development of what could be called a ‘minimum viable pitch.’

Product-Sales Collaboration is Accidental

In my experience launching new B2B products, there always seems to be a spike in dialogue between the product manager, marketing, and sales as soon as the first customer conversations occur.

Sales will inevitably return from an early customer meeting with a list of questions and reach out to the product team in a panic to have them answered quickly. It’s a bumpy process that doesn’t set the sales team up for success. Planning from the start to have product and sales collaborate on the development of a minimum viable pitch would be a much smarter approach.

Sales Wants Support, Just Not Like That

Put yourself in the shoes of a salesperson who has been selling the same enterprise suite for half a decade and is suddenly pressed into selling a brand new experimental “product” that emerged from new digital unit in just a few months.

While she’s accustomed to approaching prospects with polished collateral, a knowledge base, and a wealth of pro-tips from her peers, this new product team probably gave her none of that. Instead, both she and the product manager must try to squeeze time into their calendars to quickly cobble together some customer-facing material.

It’s extra work for both roles, but don’t forget that our sales rep has a quota to meet — any time she spends trying to fix this new product pitch is money out of her pocket.

It’s not that sales doesn’t want input from product and marketing, it’s just that many enterprise sales teams are used to receiving it in a certain way and are understandably frustrated with the realities of selling a minimum viable product. The key is to avoid the type of entrenched mentality that makes sales resistant to new products and exposes large organizations to disruption from more nimble upstarts.

Fortunately, research findings published in Salseforce.com’s second annual ‘State of Sales’ report offer encouragement. Researchers found that the majority of enterprise sales team members are not just open to collaborating with other functions, but find it critical to their success.

image credit: Mason Adair, Digital McKinsey

Expectations for what type of support sales should receive for new products need to be adjusted.

Companies seeking to avoid disruption through rapid innovation can’t allow sales to hold out for a mature collateral pack before they start calling on customers.

Product Managers Sell, Reluctantly

Product managers are often less open to collaboration with sales, in part due to the potential of falling into the trap of building a custom solution for a subset of vocal customers.

Nevertheless, in my global study of product team roles and responsibilities, almost 90% of product managers reported some degree of involvement in sales support, ranging from training sales people to representing the product in external sales pitches.

image credit: Mason Adair, Digital McKinsey

In contrast to their current levels of responsibility for sales support, when asked to indicate how much responsibility they believed their role should have, both product managers and product marketing managers tended to prefer lower levels of responsibility. In other words, they’d both like to ‘do less of that sales stuff.’

image credit: Mason Adair, Digital McKinsey

Product Managers need to balance the risk of spending too much time away from their product teams visiting individual customers with the fact that they are in the best position to support sales during initial commercialization. Perhaps more importantly, product managers stand to learn a lot about their product through exposure to real customer questions and objections during the sales process that they would struggle to uncover otherwise.

Learning Opportunities in the B2B Sales Cycle

There is no market validation method more reliable than actually trying to sell your product.

Don’t get me wrong, I’m actually a huge proponent of qualitative research among representative users — these methods offer vital early insight before teams spend much time and money going down the wrong path. But both researchers and product managers will acknowledge that these more hypothetical analyses will never match the efficacy of real world consumption by real customers.

In their questions and objections to a product pitch, customers may reveal competitor capabilities and roadmap ambitions. When a new customer has agreed to deploy a trial version of a product, details can emerge about the product’s compatibility with other systems or processes already in place.

image credit: Mason Adair, Digital McKinsey

Just the process of negotiating with customers is a great test of value and price hypotheses. By observing how people on the customer side of the table interact, product managers can see which functions are the real decision makers and maybe what those decision makers really care about. First customer sales meetings are simply the best testing ground for a new product’s Minimum Viable Pitch.

eCommerce Product Teams Get It

So far, I’ve focused on the pitfalls common to B2B direct sales of new products, but there are other contexts where product teams really put the build-measure-learn concept to work to improve sales.

In companies that live off of product transactions, ‘growth product managers’ constantly pour over conversion data to identify where prospective customers are lost during the buying experience in order to fine tune that experience.

image credit: Mason Adair, Digital McKinsey

Product teams use platforms like Amplitude, Mixpanel or Google Analytics to quantitatively drill down into user interaction with key transaction workflows on their site. They then use this data to zero in on problem areas, prioritize, build, and test improvements to the flow until they see conversions improve. Then they repeat the cycle. Of course there are key differences between direct B2B direct sales and eCommerce transactions, but the concept certainly applies.

Proposal: The Agile Commercialization Team

In short, what I’m proposing to help B2B companies with direct sales channels bring their MVPs to market as quickly as possible is the formation of what could be called an ‘Agile Commercialization Team’, or ACT for short. This team consists of carefully selected and specially incentivized sales reps, a product manager, and, ideally, a product marketing manager, who collaborate on development of a minimum viable pitch, testing it with a small set of early adopter customers in real selling situations.

image credit: Mason Adair, Digital McKinsey

For a fixed period limited to a maximum of roughly 8 weeks, the ACT will meet at set intervals as they prioritize customer sales opportunities and perform the B2B equivalent of an eCommerce funnel analysis, identifying issues with the Minimum Viable Pitch, creating a backlog of pitch enhancements and iterating on the pitch until it reaches maturity. After maturing the pitch, ACT will adjourn, with reps and product team members then continuing their respective work on the product and interacting on an as needed basis.

image credit: Mason Adair, Digital McKinsey

The Only Thing to Fear is Fear Itself

Trepidation about reputation damage is one of the primary reasons companies encounter internal barriers to rapid innovation and commercialization. But the reason that lean innovation has taken hold in the last decade is that the alternative often means the demise of the hesitant company. If the idea of damaging an established reputation with a product experiment is scary, the consequence of not taking these risks should be terrifying.

Overcoming fear-induced barriers will require strong leadership and a deep mindset shift. To encourage commercialization risk taking, companies can offer ‘carrots’ in the form of incentives and SPIFFs, while also going to lengths to establish a culture that rewards failure and learning. But in some cases, it might also be necessary to use a stick — making it clear that sales reps who are afraid to experiment and product managers who scoff at sales support don’t belong at the company.


REFERENCES

The Lean Startup | The Movement That Is Transforming How New Products Are Built And Launched. (2011). Theleanstartup.com. Retrieved 23 April 2018, from http://theleanstartup.com

State of Sales Report — Salesforce.com. (2016). Salesforce.com. Retrieved 23 April 2018, from https://www.salesforce.com/form/pdf/2016-state-of-sales.jsp

Leavitt, R., Arad, S., Houghton, J., Shah, V., Thede, M., & Boudinet, J. et al. (2017). The Ultimate Guide to Agile Sales Management: Leading the Sales Force of the Future (1st ed.). Base, Ambition, LearnCore, and Lead Genius. Retrieved from http://www.learnagilesales.com/

Hardawar, D. (2018). Nokia had iPhone-like prototype in 2004, but killed it. VentureBeat. Retrieved 23 April 2018, from https://venturebeat.com/2010/09/27/nokia-had-iphone-like-prototype-in-2004-but-killed-it/

Martin, E. (2016). Why 5 is the magic number for UX usability testing — InVision Blog. InVision Blog. Retrieved 23 April 2018, from https://www.invisionapp.com/blog/ux-usability-research-testing/

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Creating value by reinventing the core, together. http://www.digitalmckinsey.com

McKinsey Digital Insights

Going beyond our insights and knowledge to connect you with McKinsey Digital.

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