For years, marketing folks have thrown around the “S” word – solutions – in hopes that prospective buyers will run a bit faster to sign on the dotted line. “Product” sounds so pedestrian; “solutions” can promise the moon.In reality, of course, buyers are not so easily fooled, and offerings tagged with the “solutions” label are often dismissed as mere marketing hype.In today’s market, however, more and more business buyers these days are indeed looking for “solutions” rather than straight products—if by solutions we mean specialized or customized offerings that integrate products and services to address a specific customer need.
Research from ITSMA and others highlight the fact that the demands and expectations of business buyers continue to rise. With little margin for purchasing error, they pay less attention to product features and functions, and more to the measurable business value that your offerings can ultimately deliver in their particular situation.
The point is not that your products don’t need to be great; they do. It’s that great products are no longer enough in many enterprise sales situations. Rather, they need to be embedded in industry- or even buyer-specific packages that include the services, business processes, and intellectual property required to ensure success in each customer’s unique business environment.
Taking Solutions Seriously
Developing and delivering true solutions in a consistent way is no simple task. Solutions typically emerge in the field: Smart and creative sales people and consultants figure out on the fly what mix of existing products and services might be need to satisfy a particular customer’s need. But getting beyond this reactive approach and moving to a more deliberate solutions approach raises a number of thorny organizational issues, especially in large, multi-division companies where the products, services, and processes often reside in groups with little incentive to support cross-divisional activity.
Specifically, business and product managers need to address several critical questions when they begin to take solutions seriously as a business strategy:
- Are we working collaboratively to ensure that we are leveraging all of our assets and resources across the company—and our partner ecosystem—as effectively as possible? Which products need to be part of which solutions? Do we need to develop new products and/or services to support our new solutions? How can we best enable our products with effective services?
- Are we building or selecting solutions that address the most important wants and needs of our customers and provide us with a reasonable return? How do we increase confidence that our products and solutions will work as advertised in each customer’s specific environment?
- Are we shaping our solutions to ensure that they provide demonstrable value to customers and stand apart from competitive alternatives? Many companies attempt to answer these questions by forming cross-organizational governance bodies to help identify, build and market new solutions. These “solutions councils” (the most common name for such bodies) can indeed play a critical role in defining and developing the right solutions, but the specifics of the process matter greatly. Absent clear roles, responsibilities, and processes, these councils can become just another bureaucratic obstacle to success.
Making Councils Work
We have recently interviewed a group of marketing and business leaders from a number of companies actively pursuing a solutions strategy. The companies represent a range of industry segments, including information technology, systems integration, and telecommunications. Their offerings typically include a combination of hardware, software, and/or professional services, often adapted to specific industries and individual customers. All of these companies have extensive experience in setting up and running solutions councils. Our discussions brought forth three major issues and ten specific lessons for making solutions councils work.
Defining Roles & Responsibilities
Obtain CXO sponsorship. Employees across the company that deal with the council need to know that it has support from executives at the top of the organization. If top executives don’t visibly sponsor and endorse it, the next levels of management will get the message that putting significant time and energy into the council will not be a career-enhancing move.
Empower the council to make decisions. The council cannot be seen simply as an advisory group. The council should hold ultimate responsibility for the success of the solutions business. If decision-making authority is not part of the deal, the council runs the risk of getting inferior talent as members and little attention from the real decision-makers. Include the right level of senior people from across the organization. Council members should represent all of the organizational constituencies that contribute to the solutions portfolio. Members should also have authority to allocate the assets needed to create and enable the envisioned solutions. Companies that delegate junior staff as proxies prevent the group from making decisions about sharing resources, which is a major council role.
It is equally important that a council not be seen as driven and controlled from central headquarters alone. Including senior representatives from the relevant business units is essential, especially since many solutions emerge from the field and ultimately succeed or fail at that level.
Give the council a budget. The council may quickly be perceived as more of an academic group if it doesn’t make significant budget decisions. Moreover, the budget decisions need to affect all of the major stakeholders on the council. At one professional services firm, for example, a large share of the company’s R&D and offering development budget is taken out of the business units and placed in council hands. This ensures that business unit leaders pay attention to council decisions, and that development funds flow to the BUs where council members collectively see the greatest opportunities.
Sustaining Interest and Effectiveness: Processes and Activities
Be clear about what a “solution” actually is. This is the real starting point and should be a gating factor for any solutions development process. Council members should forge a clear consensus around solutions terminology before any significant investment is made in solutions activities. “Solutions” mean different things at different companies. It is critical that everyone on a council and within a company selling solutions has a clear, agreed definition and an understanding of the related taxonomy. Absent strong and clear definitions, councils can easily bog down in diversionary debates and decisions.
Employ proven portfolio management processes and tools. The council needs to be supported with the right information at the right time to make good decisions for the solutions portfolio. This likely includes a clear view of corporate strategy and priorities, financial data on potential investments and returns, resource data on potential solution components (products, services, processes, unique IP, etc.), potential partner requirements, and solutions development benchmark data.
Develop an internal marketing program. Given the importance of the council and the level of individuals that should be on it, it typically raises a lot of eyebrows around the company. Make sure that all key stakeholders are aware of what the council does and who’s involved. Lack of information only creates an atmosphere of secrecy and suspicion. At the same time, making the council highly visible can provide both psychic and career-enhancing benefits to its members.
Running Council Meetings
Keep the meetings strategic. Interest will flag quickly if the meetings devolve to long discussions or disputes over tactical issues. Councils should convene so important managers and specialists can make key decisions that impact the company. A good way to keep the group focused on strategy is to remind participants of the cost of having the meetings. Do a rough estimate of the revenue and costs that are represented at the table. A back of the envelope calculation will quickly show that the group simply can’t afford to waste even five minutes on non-essential, non-strategic issues.
Pay attention to interpersonal dynamics. Solutions councils live or die based upon the ability of council members to function as a cohesive team. While there is no magic formula for building team chemistry, our interviewees pointed to several ideas, including having regular meetings to help members develop stronger relationships, including face-to-face meetings, and integrating team building activities into council deliberations.
Insist that council members prepare for decisions at all meetings. Effective council meetings focus on decisions, not just discussion or debate. To make good decisions, though, council members need to come prepared. The head of the council should make sure all necessary materials are distributed well in advance of the meeting, and talk individually with each member to review the decisions to be taken. Meanwhile, council members should exert peer pressure to help ensure that each participant does show up prepared. Council members should also agree that decisions would not be postponed if some members are unprepared.
A Final Thought
As companies look more and more to solutions as a way out of the downturn and into more sustainable growth, the issues of solutions development and management increasingly come to the fore. While many companies have created some sort of solutions council to help manage the development process, the effectiveness of those councils seems to vary dramatically. As our interviewees suggested, how you organize and manage the council will determine its ultimate success.
Steve Hurley is Managing Director and Rob Leavitt is a Principal at Solutions Insights, a Boston-area B2B consulting and training firm that helps companies put meaning into the term “solutions.” Building upon deep experience in the technology and professional services industries, Solutions Insights provides research, strategy, and programs that create internal alignment, market distinction, and faster routes to revenue. Contact Steve at firstname.lastname@example.org or Rob at email@example.com, or learn more at www.solutionsinsights.com.