We’ve done a blog post on HiPPOs (Highest Paid Persons Opinion) and ZEBRAs (Zero Evidence But Really Arrogant). Now we have one on RHiNOs (Really High-value New Opportunity).
This excellent blog post was written by Garry Prior, Director of Product at THG Ingenuity.
Whilst the experience in your organization might be different (maybe RHiNO’s are shot on sight!) or maybe you can head them off by flagging up their impact on your plans, we agree with many of the points Garry makes about how to deal with a RHiNO if you find one marching into your office. Over to Garry. . .
As product managers, we’re all familiar with the HiPPO – Highest Paid Person’s Opinion. This is where a senior exec (often the CEO) insists on a certain product or feature being put right to the top of the roadmap, just because he or she likes it. Regardless of whether the evidence proves it’s the right thing to allocate precious resources to next, or even whether customers want it, once a HiPPO appears it can be difficult to stop.
Well in Business to Business (B2B) product management there’s another animal we have to deal with – let me introduce you to the RHiNO, or Really High-value New Opportunity. This is when a sales person in your business comes along with a new customer deal, for something that you don’t currently do. Once a RHiNO enters the picture, you’re in danger of your carefully researched roadmap plans being trampled underfoot, as resources are quickly re-allocated to build whatever it is the RHiNO requires in order to win the deal.
How does this happen?
Well, life is simpler in B2C product management (there are many other B2C challenges of course, but in this respect at least, it is) – you have a set list of products, features, packages, tariffs, and that’s it. Sales people can only sell what’s available ‘on the system’ – imagine walking into a Vodafone store and trying to buy a mobile tariff or product that they don’t support. No matter how much the Vodafone salesperson wants to close the deal with you, they simply aren’t able to step outside the boundaries of what’s available to them.
But in B2B organizations these boundaries often don’t exist or are conveniently ignored by sales teams. Sales people will do whatever it takes to win a customer deal, and if that means having to ‘bend’ whatever is on the currently supported product list, or agree to provide something entirely new, then they will do so. In my experience this is especially prevalent in organizations more used to solutions-selling, i.e. building one-off solutions based on a single customer’s requirements, rather than selling scalable, repeatable products. Typically the CEO will have come from a sales background, so will be inclined to allow this practice to continue as long as the revenue comes in. And to a certain extent, it’s OK, as long as the business accepts the downsides caused by a RHiNO. I’ve worked in an organization where the roadmap for its most important product was pretty much put on hold for over a year, as all engineering and development resource was diverted to work on a single RHiNO. Sure, the business closed a big new deal with one of its biggest customers, but what was the opportunity cost of delaying several other new features that many other customers wanted to buy? It’s hard to quantify, but it’s real nonetheless.
So what do you do if you’re a B2B product person and your sales team comes strolling in one day, proudly leading a RHiNO? You have two choices:
- Chase the RHiNO away: essentially you can argue against signing the customer deal. Is the opportunity cost of diverting resources onto this particular requirement too great compared to the value it brings? You’ll need strong evidence of customer demand for your current roadmap features to build this case. Hopefully, you’ve done your research and already have customer insight that backs up what you have coming down the line. If you have committed customers then so much the better. But beware, this will always be a tough argument. To use another wildlife-related saying – “a bird in the hand is worth two in the bush” (in other words, your CEO may well prefer the guaranteed RHiNO revenue over the less certain product forecast revenue). RHiNOs are tough to chase away.
- Tame the RHiNO: in many cases, this might be your better option. How do you tame a RHiNO? Well, take a look at the detail of this specific customer’s requirements. Maybe it includes features you already had planned further down the line – perhaps you can bring forward something you had on the roadmap for later in the year. Or better still, are there specific requirements or features you’ve been struggling to prioritize, maybe because previously customer demand hadn’t been strong. There’s nothing like a customer commitment with revenue on the table to gain business justification when you need it. But most importantly of all, when building something new in response to a RHiNO, ALWAYS make sure to build in a scalable, repeatable fashion, so that you can re-use the capability for any other customer. Never build one-off point solutions even though this might be the quickest way to deliver – if you have to take resources away from your product roadmap, at least make sure to get some new products or features that you can take to the rest of your customer base in return. And so the RHiNO is tamed (at least till the next one arrives).
RHiNOs, HiPPOs – who knew you’d need to be a qualified vet to work in product management? But it’s what makes the job so much fun.
Although we largely agree with Garry we also think that there can be times when it makes sense to do a quick and dirty for a RHiNO rather than putting effort into making something scalable and repeatable. If it’s a one-off that doesn’t fit with what other customers want and doesn’t cost a lot to support you can build, bill and forget. And there are plenty of businesses who make their living creating one-off solutions for big customers with a mix of bespoke development and standard building blocks.