Why Product Strategists Should Embrace Conjoint Analysis

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JP Gownder

Aside from my work with product strategists, I’m also a quant geek. For much of my career, I’ve written surveys (to study both consumers and businesses) to delve deeply into demand-side behaviors, attitudes, and needs. For my first couple of years at Forrester, I actually spent 100% of my time helping clients with custom research projects that employed data and advanced analytics to help drive their business strategies.

These days, I use those quantitative research tools to help product strategists build winning product strategies. I have two favorite analytical approaches: my second favorite is segmentation analysis, which is an important tool for product strategists. But my very favorite tool for product strategists is conjoint analysis. If you, as a product strategist, don’t currently use conjoint, I’d like you to spend some time learning about it.

Why? Because conjoint analysis should be in every product strategist’s toolkit. Also known as feature tradeoff analysis or discrete choice, conjoint analysis can help you choose the right features for a product, determine which features will drive demand, and model pricing for the product in a very sophisticated way. It’s the gold standard for price elasticity analysis, and it offers extremely actionable advice on product design.  It helps address each of “the four Ps” that inform product strategies.

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Product Management Is Political. Deal With It.

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Tom Grant

Politics is a word that we use so loosely that it risks losing meaning altogether. When we talk about office politics, as some recent posts by product management bloggers, we're usually expressing scorn for odious behaviors that stand in the way of some rational course of action. Every organization is susceptible to politics, in this negative sense, including every development team. Better to assume it, or even take advantage of it when possible, than to pretend that some magic tool or methodology will do away with politics.

Can't Live With Politics. Can't Live Without Politics
In their blogs, both Jim Holland and Jennifer Doctor recounted a session about politics at a recent Product Camp in Seattle. The topic struck a nerve, as evidenced by the outpouring of complaints from the audience. We've all heard them, whether we're product managers or not: Empire builders put themselves ahead of the interests of the group; real decisions happen in a back channel, instead of in the open; teams decide in haste, and repent at leisure . . . It sounds as if this session was as therapeutic for the audience as it was informative.

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Dont' Like Documentation? Think Of "Persistent Communication" Instead.

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Tom Grant

Scott Sehlhorst has an outstanding post at Tyner Blaine about documentation. Not technical documentation, but the information you write down to make the development process work. By work, I don't mean just the activities within the development team, but also the rest of the value chain, too.

Scott is talking about the role of documentation in Agile development, but his points are relevant to any team, Agile or not. Agile creates greater sensitivity to the issue, since too much documentation can cripple the team's velocity. Of course, the lack of documentation can damage the team's success:

 

Some collaboration is transient – communication happens right now, and is only important right now.  Other communications are persistent – the collaboration happens right now, but we need to remember later what we agreed upon and why.

 

Scott's post is a great illustration of what I was discussing yesterday about treating requirements as conversations, not dictionaries. Requirements are part of the conversation, but a lot of the same content that defines what to build, and why, gets recycled later when you need to describe what you built, and why. For example, personas get passed around quite a bit among groups. Perhaps the originate in the development team, but people in sales, marketing, support, and other downstream groups have a keen interest in that information. 

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Tom And Dave's Excellent Agile Adventure

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Tom Grant

At this link, Dave West and I exchange observations about the Agile 2010 conference earlier this month. For some earlier notes from the event, click here.

Tank You For Making Innovation Work

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Tom Grant

In the tech industry, the earlier in the innovation process a developer works, the greater the prestige. Lower in the status hierarchy are developers who work on performance and scalability issues, build integrations with other systems, handle security issues, and (heaven forfend!) help the QA team set up test environments. 

Of course, the customer has a much different set of priorities. Sure, new products and features are interesting, but their value is moot if the technology doesn't work. How many concurrent users can the system bear before it keels over? Are the big security holes plugged? Has anyone else run version 7.0.1.3 on Ubuntu 10.04? These questions determine whether a customer buys your product and how likely they are to remain a customer after they've tried to deploy it.

Remember The D In R&D
Some of the larger technology companies have decided to make a serious investment in fixing the problem. While sensitivity training might help some development teams better appreciate the contributions of some of their members ("Looks like the performance guy needs a hug!"), there's no replacement for a well-staffed, well-equipped, dedicated effort to ensuring that the technology works as advertised. Or, just as importantly, doesn't work as advertised, so that the customer knows what sort of configurations and use cases to avoid.

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Shoveling Ideas Into The Requirements Engine

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Tom Grant

[Another interesting finding about the requirements tool market, from research by Yours Truly and Mary Gerush. For other observations about this very interesting market, click here and here.] 

As organizations improve their requirements practices, and as the requirements tool vendors adapt in response, the front end of the requirements process is getting a disproportionate amount of attention. Many requirements defects start early, with the information that you feed into the requirements-generating machine. For example, if you don't have a clue how criminal investigators work, you're going to make basic mistakes in feature prioritization and design when you build a case management system for them. 

And it's not just the information that has fallen under suspicion. A lot of people are equally worried about the other raw material, ideas, that you feed into this machinery. Here are a few commonly cited concerns:

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If Serious Gaming Can Improve Politics, Why Not The Technology Business?

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Tom Grant

As readers of this blog know, I see a lot of benefits in using serious gaming to make better product and development decisions. Consulting firms like Enthiosys and Booz Allen Hamilton use different serious gaming approaches, but they ultimately have the same aim: Avoid the traps that we mere humans frequently make, even when confronted with a wealth of facts and reasonable arguments. The bigger the decision – for example, What will make us more competitive in the next five years? How do we make sense of all these enhancement requests? Should we pursue a new market? – the greater the need to guard against groupthink, the loudest voice in the room, information overload, and other common decision-making pitfalls. 

While I could (and have) provided examples from business, an equally compelling example comes from politics. One of the offshoots of Enthiosys' work with businesses is Games For Democracy, a charitable foundation that, as the name implies, applies serious gaming techniques to political decision-making. A good example is healthcare, the topic of a Games For Democracy exercise using the "Buy A Feature" game. Each participant had a limited amount of faux money to invest in different healthcare options, such as the public option, a mandate for personal health insurance, and cost containment measures. No one had enough money to buy any option outright, so horse-trading among participants was mandatory.

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Why Do We Consider Only One Option When Building Technology?

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Tom Grant

Outside the technology industry, engineers sometimes build multiple prototypes before selecting one particular design. Rather than finding the defects of one proposed design, discarding it, and moving on to the next idea, engineering teams that apply this approach, set-based concurrent design, save themselves a lot of time and headaches by running through as many options as possible simultaneously. As you might have guessed, this technique isn't cheap. You need to staff multiple design teams, and prototyping in many industries, such as automotive manufacturing, is always expensive. Nonetheless, by delaying the design decision for as long as possible, until the team has found the best among multiple ideas, development can take less time, with a greater probability of building a good product, than with sequential design.

So why don't we build software this way? For Microsoft, SAP, and other technology companies, prototyping is orders of magnitude cheaper than it is for Toyota and General Motors. Executives at tech companies would love to reduce the unpredictability of development schedules, often thrown off-track by unexpected design issues. So why hasn't set-based design caught fire in the technology industry?

That question has been plaguing me since hearing an excellent presentation by Jean Tabaka and Bill Wake on this topic at Agile 2009. I'm not sure of the answer ("More research required," says the analyst), but I'd be amazed if it didn't include two factors: (1) the nature of the product being developed; and (2) the unspoken assumptions of the tech industry.

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The Best Feature May Be The One You Don't Build

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Tom Grant

A lot of my recent research – about SaaS/PaaS, Agile tools, requirements tools, and innovating with your channel – share a common conclusion: successful technology vendors see integration as more than just a necessary evil. Here's why.

Business problems drive technology adoption 
You can see this principle in action in the requirements tools market, which in the last decade has grown larger and more complex. Teams use these tools to address more than one type of requirements-related challenge, so it's easy to see why the tools themselves are now as diverse as as Micro Focus (née Borland) Calibre, Atlassian JIRA, Ravenflow RAVEN, and VersionOne's Ideas Management module. If your problem is, "People don't like using our product," you might look at a visualization tool like iRise to shorten the feedback loop, leading to better design decisions. If, instead, your problem is, "We don't have a good business justification for what we build," you might look at IBM Rational DOORS to evaluate the pros and cons of alternative scenarios for what goes into the next release.

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The Storied History Of Requirements

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Tom Grant

In the tech industry, the "tell me a story" approach to product requirements – personas, user stories, use cases, visualizations, etc. –  has made a bigger impact than many people may realize. Not only has this new type of content resolved many problems that existed with requirements, but it has led to a brand new way of looking at requirements. By thinking of requirements as stories, it's easier to figure out what kinds of requirements we need, and why we need them.

A tale of two mini-series
The fundamental question when writing any kind of story is, "What are you trying to convey?" I was thinking of exactly that question while I was watching the HBO mini-series The Pacific. I probably wasn't the only person to expect The Pacific to be the same kind of story as Band Of Brothers, just transplanted from the European to the Pacific theater of operations. I was wrong.

As it turns out, the new series has a very different kind of story to tell. Band Of Brothers depicted the experience of combat, in (literally) gory detail. While The Pacific does have more than enough battle scenes, it also tries to show military life beyond the battlefield. For example, one episode focused on the painful romantic choices that young people stationed in faraway lands have to make. Another episode depicted something rarely seen in war movies, the psychiatric casualties of war. Far more than Band Of Brothers, The Pacific shows more of the atrocious things that young men under brutal, terrifying conditions are capable of doing.

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