In another Brilliance Nugget, I talked about shifting your company from custom services to products. It is about productizing what you offer.
There are many advantages:
- Serve more customers.
- Make more money.
- Become affordable to more customers. Custom solutions are expensive. Often, companies underprice their custom solutions.
- It is much easier to support standard products than custom solutions.
- It is easier for the company to stay at the cutting edge because offering a product saves time. You can use that time to be creative and invent new products.
- Your business is now sellable and at a best-of-class price.
- You have made your “brilliance” (what you do best) immortal rather than taking it to the grave.
Let’s look at the differences:
Custom Services Versus Off-The Shelf Products
1.) A Company Offering Custom Services
- Is used to
- Creating custom proposals
- Customizing everything to the individual customer’s needs
- Spending a lot of time on each customer
- The implementers also do customer support because noone else can do it
- Has staff that excels at finding the best solution for each customer
- The staff is generally not concerned with standardizing their process
- There is no product launch. Improvements continually flow into the work done with customers
One might think of this type of company as a custom studio with craftspeople.
2.) A Company Offering Off-The-Shelf Products (OTS)
- Offers one or several OTS products – they may have a set of options to configure the product
- Has standard pricing. Proposals and pricing are much more standardized and streamlined.
- May have partners who help the end customer configure the OTS product to the customer’s specific needs. This is common when the product is complex. One example is software that requires a lot of configuration and customization.
- Product developers and customer support are different teams.
- The product is developed and then “frozen” to allow scheduled launches/releases. New developments go into the next version.
This type of company could be compared to a manufacturing company.
The big question is: How can you be successful with shifting your team from one to the other mindset?
7 Things You Must Have to Shift Your Team’s Mindset
To shift your team’s mindset from custom craftsperson to team member of a product company:
- Strong leadership that directs the way
- The visionary has to set the course for becoming a product-based company. Think of this person as the “composer”.
- A key role is that of a leader working with the visionary. The person working most closely with him or her is the “conductor”. The conductor is the conduit between the visionary and the rest of team. This person must be fully onboard with becoming a product company, and must guide the team accordingly.
- Awareness. The team must have awareness of the differences between being a product company and a custom services company.
- Buy-in. The team has to buy-in into the vision and be willing to shift their day-to-day behavior.
- Opportunity for creativity. Giving the craftspeople the opportunity to meet their need for creativity where possible. This has to be done without compromising the product goals.
- Clarity. It has to be clear: “Rogue” product modifications undermine the released product. Offering custom solutions through the back door are not acceptable.
- Wise hiring. New staff joining the team ought to have experience working for a product-based company.
- Realistic expectations. Some staff may never fully commit to the shift. Some of them may be useful for customer support on legacy custom solutions you have built in the past.
If you are shifting your team’s mindset right now (are thinking about doing it soon) which of these seven things do you already have in place? Which ones do you need to beef up on?
P.S.: I appreciate you commenting and sharing this Treasure Tuesday with others. Thank you!