{"id":34415,"date":"2016-11-02T04:45:50","date_gmt":"2016-11-02T09:45:50","guid":{"rendered":"https:\/\/michaelhyatt.com\/?p=34415"},"modified":"2016-11-02T04:45:50","modified_gmt":"2016-11-02T09:45:50","slug":"companies-forget-product","status":"publish","type":"post","link":"https:\/\/fullfocus.co\/companies-forget-product\/","title":{"rendered":"What Happens When Companies Forget About the Product"},"content":{"rendered":"<p>I used to watch Apple\u2019s product events with eager anticipation. But when I watched the most recent one, I was disappointed. I\u2019m a serious Machead. But if I\u2019m honest, I think they\u2019re losing their mojo. It\u2019s a cautionary tale, one that Steve Jobs actually warned about.<\/p>\n\n<p>Using IBM and Xerox as examples, Jobs explained the evolution of large, successful companies in two stages. In the first stage companies focus on products that solve customer problems. In the second they focus on sales and marketing.<!--more--><\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/-AxZofbMGpM?rel=0&showinfo=0\" width=\"853\" height=\"480\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>The shift from Stage 1 to Stage 2 happens in the natural growth of a business. As companies experience greater success, the focus shifts from products to greater distribution. This can be a plus, but there\u2019s also a risk.<\/p>\n<h3>The Stage 2 Trap<\/h3>\n<p>As sales and marketing people rise in the organization, they can edge product people out of leadership. But when expansion trumps innovation, there\u2019s only so much time before the product stops serving customer needs. Jobs warned:<\/p>\n<blockquote><p>\n  The product genius that brought them to that monopolistic position gets rotted out by people \u2026 who have no conception of a good product vs. a bad product.\n<\/p><\/blockquote>\n<p>This is what happened to Microsoft when Steve Ballmer took over from Bill Gates. Innovation took a backseat, and competitors\u2014like a reinvigorated Apple\u2014were able to take marketshare.<\/p>\n<p>Now it looks like Apple is in the Stage 2 trap. Arguably, they\u2019ve lost their product mojo. Several tech writers I follow are saying so. I hope they\u2019re wrong, but Apple\u2019s ho-hum MacBook Pro announcement last week would indicate they\u2019re right.<\/p>\n\n<h3>Stage 3 Is Even Worse<\/h3>\n<p>One thing Jobs doesn\u2019t mention in the video above is what happens after the reign of sales and marketing. From my experience in the book publishing industry, the finance people take over next.<\/p>\n<p>When I first started in the industry, publishing was a Stage 1 business. Product people drove the key business decisions. The sales department did not predetermine what we published. We assumed if the books were great, we could figure out how to sell them.<\/p>\n<p>But gradually, we shifted to Stage 2. Sales and marketing cast the deciding votes on what got published. It all came down to what they thought they could sell\u2014or not. And sadly, lots of excellent books didn\u2019t get published.<\/p>\n<p>But then it got worse. With the triple tsunami of the Great Recession, ebooks, and social media, the finance people took over. I call this Stage 3. Everything became about cutting costs. Product quality suffered. Marketing budgets were slashed. Predictably, sales fell even more.<\/p>\n<p>In many publishing companies today, there is no real growth strategy. It\u2019s simply about managing the decline. During the recession, publishers quipped, \u201cflat is the new up.\u201d Today, \u201cdown is the new flat.\u201d<\/p>\n<p>So what\u2019s the way out?<\/p>\n<h3>The Microsoft Example<\/h3>\n<p>Whatever business you\u2019re in, you can find yourself in one of these three stages. The one thing you must do if you\u2019re in Stage 2 or 3 is shift back to Stage 1.<\/p>\n<p>Surprisingly, Microsoft is moving back into Stage 1 under the leadership of their new, innovative, and product-focused CEO, Satya Nadella. Microsoft scooped Apple by hosting their own product event the day before Apple\u2019s.<\/p>\n<p>They introduced the Surface Studio, a stunning new device that blends the best of tablet computing with incredible desktop innovations.<\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/_wVt8dj0GJU?rel=0&showinfo=0\" width=\"853\" height=\"480\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>Everyone was blown away, me included. Several pundits commented that Apple\u2019s event was like an older Microsoft event\u2014boring and predictable. Meanwhile, Microsoft\u2019s event was like an older Apple event\u2014exciting and innovative.<\/p>\n<h3>Back to Stage 1<\/h3>\n<p>With the release of the Surface Studio, Microsoft models three actions we can all take to shift back to Stage 1 if we\u2019ve lost our way:<\/p>\n<ol>\n<li><strong>Reconnect to real needs.<\/strong> Did you notice the concern for the way designers and creatives work? Microsoft dialed into their needs.<\/p>\n<\/li>\n<li><strong>Imagine a better solution.<\/strong> To meet that need, Microsoft imagined a way to radically change the way designers interact with their work. And then, they directed their innovation to make that possible.<\/p>\n<\/li>\n<li>\n<p><strong>Execute with excellence.<\/strong> Microsoft still could have fumbled the Surface Studio if they executed as they did under Ballmer. Instead, the new device is as elegant as it is functional.<\/p>\n<\/li>\n<\/ol>\n<p>I\u2019m not suggesting sales and finance people are not important. Far from it. But if there\u2019s no balance with the people who innovate and address customer needs with creative product solutions, companies will kill their chance of long term health and vitality.<\/p>\n<p>As I said at the start, this is a cautionary tale, and worthy of further reflection. It doesn\u2019t just apply to technology or publishing companies. It also applies to those of us in other growth industries, too.<\/p>\n<div class=\"reminder\">Where\u2019s your business: Stage 1, 2, or 3? What would it take to get back to Stage 1 if you\u2019re not there now?<\/div>\n","protected":false},"excerpt":{"rendered":"<p>I used to watch Apple\u2019s product events with eager anticipation. But when I watched the most recent one, I was disappointed. I\u2019m a serious Machead. But if I\u2019m honest, I think they\u2019re losing their mojo. It\u2019s a cautionary tale, one that Steve Jobs actually warned about. Using IBM and Xerox as examples, Jobs explained the [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":34422,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[34],"tags":[788,112,789,790,204],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Happens When Companies Forget About the Product | Full Focus<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fullfocus.co\/companies-forget-product\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Happens When Companies Forget About the Product | Full Focus\" \/>\n<meta property=\"og:description\" content=\"I used to watch Apple\u2019s product events with eager anticipation. 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