Productization

Caramel Cake

My Great Aunt Evelyn made the best caramel cake* ever, and before she passed away, she gave the recipe to everyone in my family. Now don’t get me wrong, we have some tremendous bakers and cooks in our family, but Aunt Evelyn’s caramel cake presents a unique challenge. All have tried to make it; many have come close, and none of them have gotten it right! The reason is simple: Aunt Evelyn’s magic was not in the recipe, but in the execution. This is a key concept to remember as you begin to think about productizing your Service Provider offerings. We all know what we are trying to do – make money and increase efficiency – but the real mystery is in the execution.

Last week, we talked about knowing your strengths, and I pitched the necessity of “productization” – identifying the creative, one-off solution you delivered to a single customer, and turning it into a product that can be delivered to the masses. This week, I’ll dive more deeply into productization and add an important ingredient – operational leverage. You’ll learn how to create and implement processes over and over to add value to your SP business. Easier said than done, but like Aunt Evelyn’s caramel cake, it all about the execution!

So, where do we begin? When you start thinking about productizing your offering, you have to detail all the piece parts, or ingredients, of your solution. From there, think about which elements must be standardized for reliable delivery at-scale, and which ones can remain customized without compromising the supportability of the overall solution. Let’s say, for example, you delivered a disaster recovery solution to a customer and it’s ripe for productization. The toolset that you used to manage and move data to create redundancy should definitely be standardized. The endpoints receiving the data – colo or AWS or Azure – and the overall framework should be customized based on each customer’s infrastructure.

A great way to start identifying how different piece parts should be treated is by analyzing your customers’ support tickets. Take a look at the support history of the customer that received the original disaster recovery solution, and you may notice that certain aspects created higher ticket volumes. These are things that should be standardized, so you’ll want to think of ways to preventatively mitigate these in the productized version you roll out.

If taking apart your solution only to put it back together seems like a lot of work, that’s because it is, but it’s the only way to really create operational leverage. Operational leverage is the idea that you can grow revenues without having a similarly proportionate growth in expenses. In short, “do more with less.” The only way to truly achieve operational leverage is to create standardized offerings that can be delivered and supported by any of your engineers – not just your rockstars – in as short a timeframe as possible. To put it another way, you can’t rely on the “hero effect.”

My favorite way to illustrate the need and the value of maintaining operational leverage as you start to productize is what I call “The Charley Story.” At my last job, as VP of Cloud and Managed Services at Teklinks, Charley – a solutions engineer – was one of our best guys. He was sharp and personable, great at implementations, and amazing when it came to troubleshooting. All the tricky problems were escalated right to him. Our sales people were always clamoring to get him on calls with prospects during the presales process, and in turn, customers were clamoring to get Charley onsite for onboarding. The only problem with Charley was that we only had one Charley. Don’t get me wrong, we had some great people that were good at several of those things, but Charley was good at all of them. We simply couldn’t scale Charley. If we put him in presales, implementations suffered. If we put him in implementations, support escalation suffered. I bet right now you’re thinking you have a guy just like Charley!

At Teklinks, we learned the hard way that we had to pivot from people to processes. It is difficult, expensive, and time-consuming to scale people, but you can always scale processes. To achieve operational efficiency, we needed to have confidence that the process would deliver the results we wanted, instead of just Charley. Productization – a standardized, repeatable approach to a common problem – made this much easier. The sales people had seen the productized solution before and knew how to pitch it to the customer; the process of standardizing the original solution meant there was limited opportunity – or need – for customization; and we showed the customer the entire process along with documented success stories, thereby giving them confidence that their experience would be a good one.

Work through the suggestions below and see if you can build a recipe that yields success for process-focused productization:

  1. Pick a couple of the solutions that you feel are differentiated.
  2. Deconstruct the solution into the piece parts and make a list.
  3. Which elements would you change or tweak from the original solution to make the productized one easier to deploy, support, or reproduce?
  4. What are the contingencies or dependencies that must be discovered in the presales cycle that will impact the solution? In other words, arm your sales guys with the right questions so you can identify potential sticking points before they occur.
  5. Document the process! Create a checklist or workflow for all the necessary steps that must take place to implement this solution for a new customer. Pro tip: This checklist should be modified after each deployment of the productized solution to ensure that it continually improves.
  6. Think about the logistics of selling your new product.
    • What does customer acceptance look like? In other words, have a clear understanding of what the deliverable looks like at the end of the deployment, so you can ensure customer acceptance before handing off to support.
    • What does the customer need to see before they sign off and it goes to billing?
    • Who will be the customer’s primary point of contact?
    • What is the best way for them to get support? Remember, behavior rewarded is behavior repeated. If you don’t tell the customer the best way to receive support, they will simply figure it out.

If you follow these steps, you’ll be well on your way to operational efficiency as you productize your offerings. Take it from someone who had to learn the hard way, reduce your reliance on the hero effect and replace it with the right processes. Hopefully, all of you will have better results than my family has had with Aunt Evelyn’s caramel cake recipe!

Next week, we’ll look at your Sales team and explore ways you can transform your Sales team to meet changes in a market that is undergoing rapid change, becoming increasingly distributed, and more complex every day.

Previous – #3 of 10, Service Provider Transformation Series: Know Your Strengths

Check out the rest of the posts in the series:

Intro Transform Your Service Provider Business

#1 What is your Current Location?

#2 What is Your Desired Destination?

#3 Know Your Strengths

#5 Sales Transformation

#6 Creating a Product Suite

#7 Service Delivery Model