Book Review: Gamestorming by Gray et al.

5 out of 5 Stars


The following is a book review for "Gamestorming: A Playbook for Innovators, Rulebreakers, and Changemakers" by D. Gray, S. Brown and J. Macanufo. This book was written for individuals at all levels of the enterprise to show different collaboration tools for organizations of all types to bring out creative solutions. The book is clearly written, uses clear examples and is well written and organized. 

The authors do an excellent job of providing an introduction and background on the use of brainstorming games, which they call "gamestorming". Chapter 1 describes the objectives of games and suggests a solid approach for the facilitator. Chapter 2 lists the 10 essential components of a game and Chapter 3 discusses some skills required for effective facilitation. These chapters provide a foundation that allows for a rapid understanding of how the games should flow, how to structure the information, and how to ensure good results.

The remaining five chapter discuss a multitude of brainstorming games to solve many of the problems that an organization faces, which are often best solved through a collaborative effort. I've made slight adaptations to these games to suit my own style and solve client problems in a very smooth and professional way. Best wishes on your path to a new type of gaming!

Systematic Genesis and Obsolescence-A Product Management Mantra

Product Managers can't sit on their tails even when they believe they're winning the goodwill of the market. In this respect, Product Management might be the second most thankless job in industry after that of an operations manager, where even if you make the production numbers for the month, upper management and executives shift their focus to the next period and cast doubt on the manager's ability to hit the numbers for that period. Both these jobs are a treadmill where accomplishments are made and forgotten.

In the "Building Product Value-Guidance for Product Managers" blog-post I listed several truths of product management and offered a framework of enabling capabilities for building product value. In this post I want to focus on the most basic truth of Product Management:

Truth #1

Product Managers must be willing to cannibalize old products with new products. If managers aren't willing to give up on old products, competitors will make the products obsolete for the manager.

Sustaining and Disruptive Innovations
In product management (products are bundles of goods and services), there are two ways to characterize innovations made to products: sustaining and disruptive [1]. The sustaining innovations utilize a single genetic code for their products to which incremental changes are made to yield performance improvements. Alternatively, disruptive technologies utilize a completely different genetic code that produces a slightly different value proposition to the customers' fundamental needs. Ironically, disruptive technologies often yield products that perform worse, at least in the near-term, to the incumbent products, but over time may actually dethrone those products due to performance/cost advantanges.

Businesses can fail for many reasons, such as poor execution of plans, poor plans, poor leadership, poor processes, and even bad luck. But Christensen [1] showed that businesses can fail even when they do the right things from a traditional management theory standpoint. Many businesses invested aggressively in new technologies, listen to their customers, and did market research only to lose their leadership position to another business that was shrugged off as a niche player. One of the most recent examples of a disruptive business that was shrugged off might be NetFlix, who swiftly dethroned Blockbuster with a new way to deliver home entertainment.

Systematic Genesis and Obsolescence

Businesses that were able succeed in the face of disruptive innovations did several things right [1]:

1. They funded disruptive technology projects when they could align customers with the innovations.
2. They scaled disruptive innovation projects so that staff could get excited and demonstrate small wins.
3. They planned to fail early and inexpensively and made it organizationally acceptable to do so.
4. They developed new markets for their technology rather than go head to head with sustaining technologies.

One of the best examples of success through cannibalization is how Hewlett-Packard developed and introduced ink-jet technology. In the mid-1980's the laser jet technology dethroned the dot-matrix printers and HP developed the leading market position. Even though ink-jet printers were slower, resolution poorer, and the cost per page was higher; evidence was there that the printers themselves were cheaper to manufacture. To investigate the opportunity, HP created a separate organization to take responsibility for making ink-jet printers a successful business opportunity. Now HP is the major player in the ink-jet printer market.

Avoiding the Innovator's Dilemma

The Innovator's Dilemma, as put by Christensen [1], is that "logical, competent decisions of management that are critical to the success of their companies are also the reasons why they lose their positions of leadership."So should product managers throw their hands up in the air and regress to a shoot-from-the-hip management style? My position is that the innovator's dilemma doesn't have to be a dilemma at all because those "logical and competent decisions" would have been dismissed with the proper use of Value Driven Product Management tools.

Value Driven Product Management (VDPM) is the organization, coordination, and execution of activities focused on growing the net-value of products. One of the core enabling capabilities of VDPM is the ability to quantify the critical value metrics as depicted in the chart below as they are the key to managing the fundamental metrics of product value, product cost, and pace of innovation.

VDPM advocates the planned obsolescence of products by including disruptive technological innovation in the product plan. As shown in the figure below, net-value improvements begins with innovations that lead to product performance improvements that yield product value gains. Although searching for process innovations should always be sought to reduce costs, they generally lag the product performance curves. Nevertheless, when net-product value improvements are coming primarily from process innovations, businesses should begin investing in projects to identify new product architectures that have the potential to produce either more net-value (as shown in the figure) or to add a product to the portfolio that addresses an underdeveloped market.

VDPM tools are used to measure the fundamental metrics of product value, product cost, and pace of innovation. All three metrics can be shown in the S-curve figure above and can be used for predicting product obsolesce and the need for a new technological architecture (sometimes referred to as a platform). The VDPM not only measure the current state, but can be used to detect product value opportunities and forecast market performance (predictive analytics) to make sure incremental profit is not left on the table.



[1] Christensen, C.M. (1997). The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business School Press. Boston, MA.

Four Steps to Deliver Product Value

Businesses must be responsive to how customer's tastes change. For example, in the early days of cell phones customer's wanted small and light-weight phones. Today's phones must possess a balance between functionality, usability, size, and durability. What makes the task increasingly difficult is that there are several different markets of consumers with different expectations and willingness-to-pay for each of these attributes. The many cell-phone manufacturers have come up with their solutions over time and the consumers show their preferences with their purchase decisions. Some of the manufacturers have found ways to satisfy certain target markets, but these guys fight hard for every point of market share.

Product planners can make deliver big gains in market share and profitability by taking four major steps:

1. Identify sources of product value
2. Make changes to goods and services that increase net value (product value minus product cost)
3. Promote the changes
4. Assess the product value delivered

Identify Sources of Product Value

The first step in identifying sources of product value is to measure the current product's value to the customer. Measuring product value is how the business measures how its solution measures up against the competition and serves as a source of ideas for integrated communications to the customer to remind them of the solution's benefits. The key to Step #1 is exploring the voice of the customer for adding or changing attribute levels for which consumers are willing to pay. Although many product planners and executives use their gut to identify the sources of product value, it doesn't have to be this way. The competitive landscape is just too tough to rely on gut feels alone.

Increase Net Value

Competing on both product value and product cost is the key to creating value for the customer and value for the business. Studies have shown that successful businesses (in terms of profitability and market share) are the ones that focus on creating valuable products AND keeping costs down simultaneously. Generally, when making these tradeoff decisions, analysts will come up with cost forecasts and leave it to the product planner to use "the gut" to figure out if the change will be a net value winner (net value losers are the ideas where the change in willingness-to-pay does not cover the change in product cost). Again, making the net value decisions doesn't have to be this way. There are ways to make these calculations rapidly to support better decisions.

Promote the Changes
If changes are made that give the consumers more for the money--TELL THEM. The metric of product value is based largely on perception, so its important the product changes are communicated so that the consumer know how your product is better than the competition (and how to explain it to their friends).

Assess the Value Changes
The last step is measuring the value changes using actual purchase data. Actual sales data is the only way to obtain a metric of product value that truly measures how consumers vote with their dollars. Using survey data to forecast value changes is a necessary step in determining what product changes will help net value, but using real sales data to measure changes in product value is the only way to assess the innovative power of product changes.

Customer Satisfaction Versus Product Value

Many companies have systems in place to measure product satisfaction (the more popular term is customer satisfaction) and use the information to aid decision making. Alternatively, very few companies have systems in place to measure product. I share the belief with others that satisfaction and value metrics are different, they tell different kinds of stories and that together they provide the complete story. In this post I'd like to explain the following:

• The difference between satisfaction and value metrics.
• Show that both satisfaction and value metrics are necessary for decision making.

Customer Satisfaction and Value Defined

Customer Satisfaction is a customer's perception of how well a product (good or service) performs in specific situations or in general relative to their expectations. 

Product Value is a metric that is a property of a product (good or service), similar to product cost in that it is measured in $, but measures the worth of a product (customer's willingness-to-pay) for a specific market and is independent of use situations.

Below is a table that compares satisfaction and value in more detail.

Customer Satisfaction and Value in Decision Making

Both measures are needed to get a complete picture of how the business is doing and neither alone is a substitute for the other. Below is a table that shows how the metrics aid different types of decisions.

The Product Value Torque Wrench

I was have lunch with some friends of mine yesterday and they asked me why having a quantifiable metric for product value is important, because businesses and managers have been making decisions since the beginning of business based on their intuition. I answered by offering an analogy which I'll call "The Product Value Torque Wrench"and it goes something like this:

Early on in the days of nuts and bolts it was just fine for the mechanic to swing the wrench around until he felt that the nut was secure. Automobiles had plenty of redundancy and their performance was relatively slow and forgiving.

As automobiles became more sophisticated and adopted by the masses, auto companies needed to improve weight and reliability to become more competitive. Walter Percy Chrysler developed the first beam type torque wrench in the late 1920's/early 1930's for the Chrysler Corporation and licensed the Cedar Rapids Engineering Company to manufacture and distribute the invention, which was patented in 1938. Torque wrenches allowed assemblers and mechanics to swing the wrench around until the device said the nut was tightened to its proper torque as identified by engineering calculations.

Today, the automobile market is hyper-competitive and everything in the automobile is expected to operate perfectly well into high mileage. Torque wrenches are used routinely to assemble cars because there is just too much to risk by having assemblers and mechanics swing the wrench until it "feels right".

For product managers who must make decisions in today's hyper-competitive markets, choosing innovations to pursue or how to price products based on gut feelings is just to risky. One slip and your competitors will sweep your feet from under you. Not only that, if you aren't taking product value into consideration when you price your products, you might be leaving money on table!

In comes the "Product Value Torque Wrench". It is now possible to measure product value based on historical purchase data and to forecast future product value using special attribute value analytics. The time is right, especially in the automotive business. I was speaking to a former automobile executive who told, "When it comes to making decisions about product planning in the automotive world, sometimes I think there are more cowboys in Detroit than all of Texas.... everyone is shooting from the hip!"