As a B2B software product manager, you spend your day responding to internal and external requests for help. In between these requests you find time to manage requirements, roadmaps, and customer intelligence all before you invest the necessary time politicking for your team.
Since we all know success rests heavily on learning new things, innovating new ideas, and competing better to achieve more with the same resources, this scenario is a dangerous one because in all this flurry of activity, there’s simply no opportunity to learn.
When I ask product managers what they’re learning, I often get one of two responses: a dry-winded summary of a book they read a few months ago or verbal diarrhea of the 99 things they learned since lunch.
Here’s the truth: in an average day, you’re learning a lot about making today’s business more efficient. But when I ask these B2B managers to think about what they are learning that challenges their assumptions about the company and its opportunities, the response is almost always awkward silence.
Looking for Disruptive Opportunities in the Fringe
Learning how to achieve goals slightly more efficiently every year is an important priority for many companies, and companies that evaluate internal processes may discover small ways to improve the existing business or make slightly more money. However, far bigger wins can come from shifting your thinking from incremental growth to big-picture innovation.
These fringe ideas and customers usually sit on the edge of your typical thought processes and therefore go unnoticed until it’s too late. And when you combine this efficiency-focused attitude with the fact that companies seldom learn new, earth-shattering ideas from their current market, it becomes clear that most companies have built up a wall of incremental progress that lets no innovative idea survive.
When senior leaders over-invest in building efficiency because over time, it narrows a company’s field of vision. This makes you fragile because your systems, processes, and culture outweigh the importance of efficiency, resulting in difficulty to implement change (such as when IBM, SAP, and Oracle moved into the cloud). This also makes you slow to respond because you’re often playing catch up with companies that embraced the fringe much sooner (such as Nokia’s response to smart phones and Microsoft’s response to search engines).
It’s this dangerous company culture that threatens the future of your company’s ability to compete, and it’s the opposite strategy — similar to BCG’s tagline, “Strategy happens at the fringe” — that will free your business up for unlimited opportunity.
Finding Your Company’s Fringe Market
Every company has at least two fringe markets that they can tap into to unveil innovative ideas and white space opportunities. Simply identify your primary market and look a step below it to see what tangential audience is not being served by the processes and ideas you already have in place.
For example, almost 100 million customers shop at WalMart at a monthly frequency. Its fringe market, then, are the 100 million occasional shoppers who shop at a yearly frequency. Another example is Workday. It’s strong in healthcare, but it stands on the edge of a huge fringe opportunity in hospital functions such as asset management that it doesn’t currently offer. It could also grow from near verticals such as long-term facilities.
Creating a Fringe Strategy
Should you redirect your entire service from the served market to the fringe market? Definitely not. It’s all about balancing today’s risk while lining up new opportunities for the future. The most strategic, forward looking product VPs I know spend about 80 percent of their time focused on today’s customers and 20 percent of their time focused on the fringe. Junior product managers should spend 95 percent of their time on today’s business, leaving about 5 percent of their time to explore the fringe.
The tyranny of the served market and the opportunity of the fringe are at odds with each other. Focus too much time on increasing efficiency in today’s processes, the future will pass you by. However, too much learning from the fringe and you won’t have the profits (or customers) to propel you to the future. As a senior B2B leader, you are obligated to balance what you learn between what serves your customers now and what will serve them in the future to best organize your time today.