How to Pursue a Strategy of "product Leadership"

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To pursue a strategy of "product leadership" entails delivering value through offering leading edge products and services, providing a stream of new products and services, and creatively adapting to new and changing marketing conditions while constantly pursuing new solutions on behalf of its clients and customers.

This strategy depends on an organizational structure that, among other things, is very research and development centered (if a manufacturing company) or extremely knowledgeable about the products and services currently being developed and considered in the market place. In addition, the firm's Sales & Marketing Departments must be part and parcel of their customer's business planning process so as to be able to anticipate future needs, to supply that need, to teach their customers new approaches and solutions to their problems, and particularly to be able to direct their customers into avenues they hadn't entertained on their own as being profitable directions.

In contrast to (but overlapping in certain respects with) the organizational structure demanded by a "customer intimacy" strategy, "product leadership" requires an organization that is not bureaucratic but rather quick to action and opportunistic in intent. Personnel tend to be organized into matrix teams that cross departmental lines since this type of structure provides the fastest response time. At the same time, since decision making authority is spread throughout the firm, risk management is carefully monitored.

In addition, in order to stay current with clients' long range plans to which their input could be invaluable, "relation selling" is essential. These firms have not only the sales force, but also as many other departments as they can, in their clients' planning meetings. The firm's personnel take on an advisory and consultative role, putting them in the position of informing their clients' strategic thinking and anticipating their needs.

An advertising and PR firm continually scans the marketing environment for new approaches to offer their clients and for creative talent with whom to partner either temporarily or long term. They are continually meeting with their clients to review these new approaches and the opportunities their newly discovered talent opens up.

In order to achieve this level of "service leadership", personnel are teamed into matrices, with each team having the responsibility to bring fresh ideas and directions to their clients. They joke about having offices at their clients because they are rarely seen in their home offices. Communication between team members is so crucial that each team has a designated person whose primary responsibility is to ensure that everyone knows what everyone else on the team is doing and to serve as a liaison to senior management. In addition, the teams convene regularly to review not only the latest presentations and their impact, but also what is out there in the market place, who is doing what, etc., and how can they partner or ally themselves with the talent that is out there.

Because the cost of this kind of process is high (e.g., voluntarily preparing project ideas with accompanying support material clients hadn't even initiated or requested), Finance is regularly consulted about each team's ROIs.

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