Getting Pulled In
Your company offers a product or product line that is experiencing significant competition for the first time. After a time, new products introduced by pioneer organizations almost invariably experience competitive pressure. At this point, you have a choice: learn to succeed in a jungle environment (and make the necessary changes); sell or discontinue the product and refocus your attention on other, newer products; or redesign the product so that it is essentially new once more.
Key IssuesIf your organization decides to continue with the product and to compete in a jungle environment, while also offering products new to the world in a frontier, your most pressing concern is how to live in both markets at once, with their differing business and organizational needs.
You will have to split the company into two separate entities, so that it can maintain or grow its market share in a jungle market without losing the open, entrepreneurial atmosphere necessary for innovation (a strict necessity for success in the frontier). These two business units must operate quite differently: the pioneer organization will continue to be very individual-oriented and driven by functions such as research and development or marketing; the hunter unit will be customer-oriented, market driven, and highly collaborative.
Your top-level management will need to begin to balance its need to allocate resources for innovation with the pressures of cost and customer needs. At the top, your managers will begin to feel caught between growing and/or maintaining a customer base and developing new products. There is no magic wand that will solve this dilemma; your executives will simply have to choose the balance that they feel will best serve the company.
Common DifficultiesLosing the innovative edgeCustomer demands for quality and service become ever-present. This puts great pressure on the entrepreneurial structure used to foster innovation. More and more of your time and resources get spent in developing trust and cohesion among marketing, production, and sales, so that markets are served well and efficiently.
This usually means that less time and fewer resources are allocated to the laboratory. As the frenzy of the jungle replaces the excitement of the frontier, management can no longer exert control on technical concerns in the same ways that were acceptable and comfortable in the past. The old system is simply too cumbersome to react quickly and effectively to customer needs.
Today's internet start-up companies will soon be in this environment, as the market becomes flooded with thousands of small companies that want to make some money through e-commerce.
Tracking the competitionAlthough the competition emerges gradually, it tends to grow at an ever-faster rate. What looked like minor competition two months ago may suddenly be taking huge bites out of your market share. In other cases, some new technology may suddenly emerge to create unexpected competition. Most pioneer organizations are not fond of spending their time searching out and studying the competition. (Usually they are too busy convincing potential customers of the superiority of their products and services.) But at this point, watching and keeping up with the competition will have become an absolute necessity.
Getting market leadershipTechnology people tend not to be market or customer oriented. However, they often think that they are, and that they understand the market better than anyone else. What they actually do understand, however, is not the market, but how their customers react to their products.
In pioneer organizations these technology folks usually have managerial authority over most product delivery functions. At this point, however, these people can easily become major obstacles to change. In the past, their answer to market challenges has been to develop new products, not to lead changes in marketing or in the organization.
Creating a market cultureInvolvement in a jungle market requires a different kind of involvement and a very different organizational culture. It becomes critical to make sure that many kinds of teams are used, and that people are well-trained and able to work together smoothly. (Unfortunately, such efforts are often not invested in.) You will need to recruit a different breed of marketers and salespeople: those who can work well in a very customer-oriented environment.
Solutions Starting immediately, organizational decisions need to support both hunter and pioneer business units, which must be separately maintained. Unless both cultures and structures are maintained in an open and conscious manner, both will suffer.
These separate operations cost money and management time, however. This is an investment issue and needs to be treated strategically as one.
It is common for companies to split off some or all of the functions of business units whose products are moving into the jungle. Typically, production and/or management gets moved to a new location. In some cases, it makes sense to create an entirely new organization, with its own culture and management structure.
A hunter organization needs to be led by people with a high sensitivity to the market, competition, customer needs, and financial concerns. These people tend to come from marketing. However,
they may be hard to find in the marketing department of the pioneer organization, since that department has not been attuned to these types of information during most of its life. As a result, people with the necessary skills may need to be recruited from outside your organization. Unfortunately, even though they may be indispensable to your success, once they are hired they are not usually valued by the rest of the organization.
Your top leaders will need to inspire confidence and trust in these new people, as well as in the directions that the new strategy takes the company.
As for the leaders of the new hunter unit or organization, they need to be intensely competitive by nature. They must be able to develop a strong linkage between marketing and all other functions, in support of total product quality and the lowest possible cost of manufacturing and operations. (This is not at all how most pioneer marketers work; they tend to be out in the field, finding new customers and building the customer base.)
Adaptation IssuesCreating the separationSeparating out part of your organization will almost certainly not be easy. The people who have had jurisdiction over this product may need to be reassigned and replaced. This typically results in friction, turf battles, resignations, and a moderate amount of distress.
You'll need to create this separation with the future in mind. The change needs to be led by marketing, but with strong support from your technology people. Rituals will be needed to help the technical people let go of product management, yet not give up their support for the product.
Moving fastBy the time it is necessary to take this kind of action, it is usually zero hour, if not considerably later. It is important, therefore, to speed up the decision-making process and move along the organizational design process quickly.
Providing strategic support from the top This move must be part of a general strategy for the company, so that internal stakeholders do not see it as a knee-jerk response to a scare in the market.
All the changes - and, more importantly, the strategic reasons for them - need to be communicated clearly and openly in advance. Straightforward, unambiguous communication (and, perhaps, deliberate over-communication) needs to occur at every step, so that people will accept the change and help it take place.
There is also the strong possibility that your company might get carried along with the market, and end up with most or all of its products inadvertently moving into the jungle. This is what happened for Hewlett-Packard in the early 1990s. This possibility also needs to be clearly communicated to everyone in the organization, so that if this situation does come about, people are at least somewhat prepared for it.
