Marie Kondo and the Art of Portfolio Maintenance

Like my overflowing closets at home, every product range needs a good clear out periodically. Ranges expand over time and what fit the portfolio in the past, may not suit any longer. 

And like the Marie-Kondo method, the key is sort by category, rather than line by line.

So start by classifying every single product you own into one of the following categories:

1. Standard products
2. Zombie products
3. Downscale products
4. New products
5. Competitor Standards
6. Special products

Next, review the products in each category separately. It is important to complete the actions for one category before attacking the next. Depending on the size of your range, I advise reserving at least half a day per category and spreading the work out over a couple of weeks.

1. Standard Products

These products are typically 80% of your volume and 20% of the products.  Check that every product is clearly targeted for a unique market segment and application. Good-better-best products options can be useful for customers who prefer premium features or economy solutions, but if more than one product meets the same needs they will compete with each other for volume. 

• If you have overlapping products, decide which one to keep and prepare to downscale the others. 
• Identify any gaps in the range and add them into your product development roadmap.
• For the products you are keeping, make sure the value propositions are clear and distinct from one another. Update your marketing content as needed.

2. Zombie Products

You know the ones I mean – the products that were killed ages ago, then suddenly rise from the dead without warning because they were never properly deactivated in the systems. Somehow an order sneaks in without anyone noticing and the next thing you know, John Snow, your production manager is standing over your desk screaming at you for leaving the gate open.  Block them now.

3. Downscale Products

Even after an official product withdrawal, a few customers can get left behind for one reason or another. 

• Resend the product withdrawal documents to the remaining customers, announce a final order date and then kill the product. 
• When there is a good reason not to kill off this remaining business, you need to reclassify the product as a special and adjust the price accordingly.

4. Nursery Products

New products often need a little time to get established.  Make sure you have sufficient marketing support for them and check their progress regularly.  

If sales don’t pick up, you need to analyse why. If the product doesn’t meet the market need, add the key missing criteria for the next generation product into your development roadmap. Decide if you will support the current sales until the new version is ready.

If there market demand is simply less than you thought, be prepared to kill the product if it is unprofitable.

5. Competitor Standards

It is often easier to gain a customer by matching a competitor’s product exactly, than convincing them that your standard product is better.  The problem is that you now have all the costs associated with small volume production assigned to a product with a bulk volume price. In my experience this rarely ends well. 

• Check if the product is actually filling a gap in your range.  If it meets a clear need, you can offer the product to a wider range of customers and increase your sales overall.
• Asses the real profitability of the product and the customer. Make sure the full costs of producing a low volume product are included.  Be prepared to kill the business if it doesn’t make sense.
• Prevent it happening again. Make sure your sales team really understands, and believes in, the features and benefits of your products. Your product performance vs the competitive alternatives need to be understood and backed up by evidence.  Regular refresher training is important, even for experienced sales staff.

6. Special Products

These are basically every other product in the range. To sort this category, first you need to understand the true profit of each product.  Despite the wealth of data in our businesses, very few can accurately calculate the profit on each order. If your business doesn’t have activity based costing, there are still ways to get a more accurate impression of the real production cost:

• Establish the set-up costs. Machine changeovers usually take time and result in waste materials, these are usually the main profit killer on small volume products. Production staff can normally give an idea of the typical time and scrap required for setup and you can estimate the cost based on normal hourly machine rates and material costs.
• Allow for additional administration overheads.  Whether that is time taken to create the system information and product documentation, or the time to calculate the price for a non-standard product, this should not be underestimated. Special products need to be more profitable than standard products for this reason alone.

Next, address any unprofitable products:

• Increase prices where possible. 
• Reduce costs with larger minimum order sizes – setup cost is diluted over a larger volume.
• Increase leadtimes so similar product orders can be grouped together, reducing set up costs.

Prepare ground rules for the future. Use your findings to put in place a clear pricing strategy and agree order handling rules with the organisation for future special product requests. This transparency will enable faster decisions regarding special product requests and ensure that future business is always profitable.

More Information

I have over 15 years experience driving profit in complex portfolios, ranging from a few hundred products up to tens of thousands of SKUs. If you would like specific advice on how to manage your portfolio or more support on driving range profitability, please get in touch.

Likeability Bias: Why we don’t promote women

In the Netherlands, as in most countries in the world, women make up the majority of the population at 50.4% but only hold 11.7% of board level positions and 24.9% of management roles. This situation is reflected across most developed countries. There are many complicated reasons for this, and likeability bias is one of them.

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We like successful women less.

We promote people we like. This makes sense – we want to get along with the people we are working with. The challenge is that when women display leadership skills, we like them less. A little girl who tells her friends what to do will be told off for being ‘bossy’. A wife who asks her husband if he was done a task is told that she is ‘nagging’. Both ‘nagging’ and being ‘bossy’ have strong negative connotations – but telling others what to do and ensuring action items are completed are necessary behaviours for leaders. And here lies the problem.

We are conditioned by society to expect women to display communal behaviours. They are expected to be sympathetic, sensitive, supportive, responsible, friendly, and nurturing. Male gender-stereotyped behaviour is based on displaying agency – being competitive, adventurous, forceful, dominant, and able to withstand pressure. Recent Pew research showed that both men and women perceive male stereotype behaviours in women as negative traits, whereas they are seen more positively in men.

We expect leaders to be self-confident, assertive, problem solvers who inspire others. These traits map more closely to male behaviours, and when displayed by women this cognitive dissonance causes us to evaluate female leaders more harshly than their male colleagues. In a now-famous example, Professor Frank Flynn of Columbia Business School gave out two variations of the same Harvard case study to his students. The case study explained how Heidi Roizen built an extremely successful career as a Silicon Valley venture capitalist. Half the class were given the original case study with Heidi’s name on it, while the other half received the same case study – but with the name changed to Howard. Professor Flynn asked students to fill in an online survey after reading the case, and he reports that “Although they think she’s just as competent and effective as Howard, they don’t like her, they wouldn’t hire her, and they wouldn’t want to work with her.”

This is called ‘likeability bias’: when women assert themselves, they are liked less. Since we promote people we like, this can prevent women from progressing in their careers. If women don’t assert themselves, they are often seen as weak and not leadership material. In both situations women will find it harder to advance their career. And, it is important to remember that both men and women display this bias against women.

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How can we overcome this?

Overcoming likeability bias involves changing our gender stereotypes, which could take several generations. In the meantime, our daughters and sisters are entering the workforce, so what can we do to improve the situation for women in our network?

Be your sister’s voice

One of the ways you can help your female colleagues is to tell others about their great ideas and work. Women pay a penalty for asserting themselves so they need they male and female allies across the organisation to speak for them.

When women talk about their achievements, their future vision, and their capabilities, they may simply not be heard. Self-promotion is not an expected female trait and our brains are great at ignoring things that don’t fit our expectations. However, women discussing others (‘gossiping’) is seen as normal female behaviour and therefore people ‘hear’ it. Women can take advantage of this by talking about the amazing results and brilliant ideas their female colleagues have delivered. Women can speak for each other.

And, as my mother always told me, “If you can’t say anything nice, don’t say anything at all”. Negative gossiping between women will also be ‘heard’ in the organisation – your colleague has enough battles to face without you adding to her troubles.

Mind your language

Be aware of the words you use to describe the behaviour of a female colleague. There are many words that we only use in a negative context for women – words like feisty, bitchy, bossy, shrill, hormonal, and nagging. Consider whether you would use the same term to describe the same behaviour in a man. If you wouldn’t, choose another word.

Challenge your colleagues if you hear them using these terms, often they may never have thought about the implications. Ask them whether they would use that word to describe male behaviour. Be aware that your female colleagues are just as likely as your male colleagues to be guilty of this.

For more information about how to support women in the workplace, visit the lean-in website.

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Share your experiences

Have you been affected by likeability bias in your career? What have you done to help female colleagues overcome likeability bias in your workplace? Join the conversation, and leave a comment below.

Getting Sales buy-in during product launch.

You’ve recently launched an amazing new product which blows the competitive offering out of the water. You’ve supported the launch with great sales tools and a fantastic marketing campaign.  Despite this you start to notice that the sales team haven’t informed their customers, and you begin to wonder “what went wrong?”.

Your sales team is not engaged with the product.

Sales is a tough job. In the end, sales is mostly about relationships and these guys and gals spend weeks and months building up trust with their clients.

• They are afraid of getting questions about a product that they can’t answer and appearing stupid in front of the customer.
• They may have experienced problems with new products before and they would rather their client wasn’t the guinea pig (which could put the client relationship at risk).
• It’s usually easier to reach bonus targets selling familiar products, than having to put in extra effort to sell something new.

In the hectic last minute rush of a product launch it’s easy to throw the product over the wall to the sales team and expect them to drop everything else and start running with it. However, the sales team has many other things to do and promoting this fantastic new product might not be top of their agenda.

Your first customer is your sales team.

During a product launch, your most important customer is your sales team, treat them like it:

1. Build the relationship.
2. Sell them the product,
3. Get commitment.
4. Make them the hero.

1. Build the relationship

Like your sales colleagues, you also need to build trust with your key customer – them. Listen to their input when setting the development criteria, keep them informed about progress and get their feedback on prototypes.

Build credibility within the organisation. An influential sales colleague who had a successful pilot project at his customer will persuade other sales colleagues about the benefits much better than you can.

2. Sell them the product

Awareness: Make sure you sales team know the new product is coming. Sending out advance emails and reminders closer to the launch is a good start. But, your email is probably buried under 4 angry customer complaints and 3 new business opportunities. Don’t assume they’ve read the email – pick up the phone.

Benefits: What’s in it for them? Have you fixed an issue that was a source of customer complaints? Did you remove a delivery constraint? Can they grow their business at existing clients? Do they have a list of sales leads they can’t convert yet because they are waiting for this product?

Remember, sales is a tough job. Think about how this new product will make their life easier and tell them.

Knowledge: Make sure they have extra background information so they feel confident to answer customer questions. This means in-depth technical explanations, test results comparing to competition, price positioning vs own and competitor products, how to order, stock availability, etc. And most importantly – where the product doesn’t perform so well – they won’t trust you again if they have to find this out for themselves.

Ideally this should take place in a face to face meeting. If that isn’t possible try to keep online trainings to small groups so you have a lot of interaction (and reduce the risk that they get distracted by their email.)

3. Get commitment

You need to get commitment from your sales team to hitting growth targets. If the new product introduction is sufficiently important to the company success it should be included in the sales bonus structure. Make sure to have this discussion with the Head of Sales well in advance. If your product development cycle is predictable enough, try and do this before the bonus structure is agreed for the following year.

Sometimes it isn’t possible to include the new product in the bonus structure; perhaps the sales won’t come in the same financial year, or the systems simply cannot support product-specific sales bonuses. However, it is still important to get buy-in from your sales colleagues and sometimes an extra incentive can help motivate them. I’ve had success offering a dinner voucher for the first person to get 5 customers signed up for a trial or given away the latest gadget to the first person to sell 1000 widgets.

4. Make them the hero

Make sure the sales staff bringing in the first big wins on the new product get credited by the CEO in the internal newsletter. Getting recognition will spur them on to sell more and your sales team will become genuine product evangelists.

Everyone wants to be a hero.