Delivering Profitable Value

Abstract

Chairman, The DPV Group, LLC Hewlett-Packard’s Colorado Telecomm Division (CTD) was in trouble in the early nineties. CTD’s “Protocol Analyzers” (PA’s) helped computer managers analyze network malfunctions. Originally, CTD’s new PA’s produced much more network data than competitors, allowing network managers to make quicker diagnoses. CTD had gone six years without a new product. Competitors had attacked niches, steadily eroding CTD’s leading market share. CTD had slipped from the highest profit and growth division in its HP group to!the lowest profit, fastest shrinking. CTD’s new-product efforts had been frustrating. Projects leveraged CTD’s strength (in their eyes): producing more network data for analysis. However, as the diversity of networks increased, niche competitors designed PA’s that also produced large amounts of data but with features customizing that data to the customer’s specific network, applications or maintenance organization. CTD would discover, months into a project, that they had missed an important feature. The project would backtrack and reach the market too late, or simply grind to a halt. Managers thought R&D objectives needed to better reflect customer understanding, so CTD tried elaborate planning exercises to identify customer-desired features. They divided the market by network, application, etc. and tried to identify what features, along with large amounts of data, these various customers wanted from their PA. Surely this would work - it would be customer-driven! Instead, it only led to long statements committing all things to all people, failing to better clarify R&D objectives. Then CTD tried a new approach to their strategic dilemma. They started with exploring a “day-in-the-life” of a series of customers to see problems through their eyes. This focused not just on network managers, the traditional “customer,” but on networkmaintenance staff (the real users inside the customer-entity, from CTD’s perspective) and even on the immediate customers of network management - the employees using the network. This time, CTD did not ask what PA features customers wanted but instead spent hours at customer sites “becoming” users, managers and their customers. Becoming the customer is different from listening to customers. It meant studying what customers tried to do and how, including the users’ diagnosis and repair of network malfunctions, with what frustrations, compromises and inefficiencies. CTD sent inter-functional teams out to interview and analyze network managers, the users in maintenance, and their customers, doing their jobs in various installations. From these explorations, CTD discovered the scenarios which customers in different situations would most value. In this way, CTD discovered many users in network maintenance increasingly overwhelmed by network complexity and pressure from their customers, the network users, to maximize availability (uptime) of the network. Although the manager/buyers would still request PA’s with various features, CTD discovered that the scenario of

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