Driving Forces - HubSpot

Driving Forces

Driving Forces is concept to predict the future. This paper has been inspired by

mechanics, philosophy, management research, intelligence agencies and practical

experiences.

Magnus Billgren, CEO, Tolpagorni

© TOLPAGORNI product management AB 2016 www.tolpagorni.com Value Engineering [2]

Driving Forces

Abstract

Product management is about telling the future.

The decisions that we are taking will have an impact on your product for many years to come. It is

difficult to understand the consequences a decision is having on your portfolio. Whether it comes

to a specific requirement that you approve, project that you decline or market you enter. All of

these decisions have a great impact on your future capabilities and activities. They will have a

direct impact on the outcome of your product. To analyze each and every decision in depth is

cumbersome and sometimes impossible. To understand the internal consequences are difficult.

But it is even more difficult to anticipate the changes that will happen in the market over the

lifetime of your product. Still product success is often derived from a great market insight and

understanding of how the market will develop over coming years.

There are a number of tools and research models to understand the market. But it is not enough

to understand the existing situation, we need to understand the future of our industry.

The Driving Forces Methodology is a model often used to understand the future. Driving Forces

are easily communicated and easily used for decision making. Driving Forces can be made generic

for multiple decisions and a product portfolio within an industry. Driving Forces are being used not

only by product managers but also by the Intelligence agencies around the world.

The Field of Force theory or Driving Forces is a way to support your analysis of the future. It

structures the insights you have and brings out the existing tacit knowledge within your

organization.


Driving Forces

1 The Concept of Driving Forces The concept behind driving forces is to think like Newton. Think like a genius and apply the physics

from high school. If forces are applied on an object, it will move. In fact it will not move unless

forces are applied. By the same theory we can conclude that the movement of the object can be

predicted by analyzing the forces exerted upon it.

Figure 1: The Driving forces on and within a market will enable you to predict the future Market

Need.

Not only can we use standard mechanics, we can also apply philosophy. The German philosopher

Friedrich Hegel talked about the concept of a “Zeitgeist”, Spirit of Time. The Zeitgeist theory states

that certain times are ready for certain ideas. He talks about influences and actions taken in a

society that are driving the change. If we understand the Zeitgeist we will understand the future to

be. Martin Rogberg an organizational researcher looking at modern industry and management.

He provides some additional thoughts based on in his research on fashion and trends. From his

research we can conclude that industries and markets are exposed to forces that shapes it.

Intelligence agencies across the world and specifically in Europe have been using driving forces to

analyze the behaviors of groups like terrorists, criminal networks, and different forms of extremism.

By uncovering the driving forces of the groups they can foresee activities and how the group will

evolve.

We have used Driving Forces in multiple development projects with very good results. In all

projects we have seen the uncovering of hidden knowledge and the creation of groundbreaking

insights. These leading to the development of successful products.

So research from mechanics, philosophy and management gives us the same input: We can

predict the future if we look at the forces exerted on the market. Practical applications, from

product development or intelligence work, give us the same input. We can apply the theories and

make them useful.


Driving Forces

2 Identifying key driving forces There are forces and there are forces. To structure the work we must initially identify relevant

forces, structure them and then analyze them.

Driving forces can emerge within two areas: Micro and Macro environments. The macro

environment forces puts a pressure on the Micro environment. The Micro environment creates the

forces exerted on your market.

Figure 2 – The relations between the three layers. The Macro environment affects the Micro

environment which in its turn affect the market need of the future.

2.1 DRIVING FORCES IN THE MACRO ENVIRONMENT

At Arizona University they have structured the Macro forces into seven areas. Below they are

explained and examples are given on some generic driving forces.

Economic forces

What are the economic forces that affect your industry? It is not just about the growth or

decline of the economy but also on the structure of it. Over the last twenty years there has

been a huge increase in venture capital enabling new startups to faster enter and change

existing markets.

Political

Are there any political decisions affecting your market? They can have the form of new

legislation or removal of trade barriers, environmental rules etc. New legal requirements

have many times changed complete industries. Could be Personal Safety industries, RoHS

for electronics, Integrity rules for the CRM industry, etc. There can also be social political

movements that have a direct effect on your market.

Population & Demographic

Demographics never lie. The demographics often has a direct influence on a market. If the

population in a market grows it normally makes the market bigger. The demographics like

age analysis is valuable to understand more than just the numbers.

Resources

The access of resources is critical to many industries. This is of course obvious if you run a


Driving Forces

paper mill or a steel plant. The supply of ASICs and chipsets has long been an important

part in the electronic industry. But it is also relevant in the service industry where we can

look at the working force as a resource. The EU changed the supply of employable

individuals in the UK market for the service industry. Also outsourcing possibilities can be

seen as resource change.

Environment

The environmental challenges exist in all markets. But how they affect the market are

different from one to another. They are sometimes found in legislation. But all too often

we can identify the forces in the value chain. At the customers’ customer or even further

down the line.

Science & Technology

It is obvious for all of us that the speed of technology development is increasing. And of

course the availability of new technologies or new materials can change a complete

industry. Many times it is not about the new technology but about the applicability of new

technology. The technology can also have an impact on organizations and how we work.

The mails, intranet and collaboration tools has drastically changed our capabilities in

working together. Not only internally within a company but also with customers, suppliers

and partners.

Work & Workplace

The work environment is under continuous change. Everyone working in development has

seen huge changes in the last ten years. The Agile revolution has changed the complete

software development industry. It has in some markets altered everything. The way

contracts are being written, deliveries being made, collaboration between development

partners.

AREA NAME Description

Economic Access to Venture Capital Enables Start-ups to make a market impact faster

Political Integrity legislation Makes it more difficult to connect big data

Demographics Aging An aging population in Europe creates demand for

new housing solutions

Resources Schengen (EU) Allows work force to move freely between countries in

EU

Environment Willingness to pay End customers are willing to pay more for

environmentally friendly products.

Science & Technology Collaboration tools Easier to make development partnerships deliver

Workplace Agile The way of running development projects has

drastically changed.

Table 1 – Examples of generic Driving Forces in the Macro Environment


Driving Forces

2.2 DRIVING FORCES IN THE MICRO ENVIRONMENT

To define the driving forces in the Micro environment we can use the five forces of competition

defined by Porter. He states that we can analyze the market by understanding the forces within the

five different areas. To use Porter’s model for the driving force analysis you need to put your

customer in the middle and yourself as a supplier. We want to find out the future of the market

need and your customers. We will then have a customer focus in the analysis we are doing. The

potential and alternative solutions might provide possible new markets for you to enter. Use the

macro forces on every area to understand how the Micro environment is affected by the changes

in the Macro environment.

The forces in the micro environment are to be found in:

1. The customers

The customers in the market you are looking into. The way they act and behave will of

course have a major impact on the future. In many situations the customer can also be a

competitor.

2. Existing competitors in the market

The competitors are not resting. New technologies and trends are affecting them and

hence the existing competitive landscape.

3. The existing alternative solutions

There is always an alternative not to buy a solution or to solve it another way. The

alternatives and the consequences of them will be changing over time making your

customer change.

4. The potential competitors

The potential competitors are often to be found in new technology or new applications of

existing technology.

5. The suppliers

The suppliers to the market exert a big force in some cases and a minimal in other.

Remember that you are one of the suppliers.

Figure 3: Porter’s five forces can be used as areas to define driving forces in the micro

environment.


Driving Forces

3 Analyzing the Driving Forces After doing the initial identification of the driving forces you will probably have identified many

forces. We cannot work with more than 10 major driving forces. You will need to reduce the

number either by grouping them or eliminating the ones with the least impact.

3.1 ATTRIBUTES OF A DRIVING FORCE

We now need to analyze and define four attributes on the different driving forces: Size, Timing,

and Applicability.

Size

The size is to identify the magnitude of the force. How strong is the force? You can work

with three levels

1: It is not big enough to change the market

2: It will make the market move slowly

3. It will make the market move quickly

Timing

When we analyze the future we often find the timing difficult. We need to understand the

development of the force over time. Is it really strong today or will it become even

stronger next year? You can score the strength of the force by assigning it a strength of

today and a strength of the force “tomorrow”. You will need to establish the relevant time

period for your industry. In some industries we work with very short time periods of 6

months while in others we have an industrial pulse of five years.

Applicability

Is the force applicable to the complete market or only to parts of the market. Many of our

clients work in multiple markets and segments. Are the forces applicable for all or just a

few segments? We recommend that you only use two levels:

1. Applicable for the most of major markets

2. Applicable for some markets

By looking at the three attributes of the Driving Forces we are able to select the top 10-15 items to

keep working with.

3.2 DIRECTION AND INHIBITORS

Not all of the identified driving Forces will foster change. Some of them have limited consequences

to your market while others will have strong inhibitors. Analyze the two and reduce the number of

Driving Forces to maximum 10.


Driving Forces

DIRECTIONS

Our old physic teacher taught us to identify the direction of the force to enable a prediction of a

movement. The same is true for our Driving Forces. The direction or maybe “Consequences” shall

be described for all of the chosen Driving Forces. The consequences you are looking for can be

generic but in most cases they are very specific for your industry. Even if the driving force is

generic the consequences for your market are often industry specific. An example, the access of

employable individuals in the UK has resulted in a huge change in the tourism industry, while the

changes in the Medtech world have been limited.

3.3 INHIBITORS

Every Force has a counter force. There will always be some friction or inertia that slows the driving

force down or making it powerless. The most frequent failure mode of adopting driving forces is

the negligence of Inhibitors. They come in different forms and shapes similar to all the Driving

Forces. You need to truly challenge your findings and define the inhibitors. It can be powerful

stakeholders in your ecosystem make the change come slower. It can be existing processes that

are complex and hard to replace or change. It can be technology improvements of existing

solutions. They exist and you need to identify them.


Driving Forces

4 Using Driving Forces The driving forces often becomes a so called strategic asset. They will guide your product and

align activities whether it is product marketing or product planning. But we need to make them

useable.

The driving forces are to be shared in the organization. They need to be communicated.

In one case we created a filter for requirement management based on the Driving Forces. We

were to develop a completely new product and we had no limitations. The product were to have a

lifetime of approximately 10 years and the industry was rapidly changing. We secured that every

single functional requirement was connected with one of the driving forces. If it was not we didn’t

do it. The product was awarded prize for the most innovative product in the industry.

Another time we used Driving Forces build the marketing material for a product launch. For each

driving force we created a marketing message. Instead of communicating functions and features

we only communicated the how the market was changing. The customer response was fantastic.

“Finally a supplier that truly understands the challenges we face!” The launch was extremely

successful and we got over 50 prospects in when we had anticipated 10.


Driving Forces

EXPERIENCE

The paper is written based on experience working with great companies like: Ericsson, ABB, Tacton,

Infinera, Tetra Pak, Scania, Volvo, Hexagon, IBM, Atlas Copco and others.

Scientific foundations are found in research project participation at Blekinge Institute of Technology,

Swedish Institute of computer science, Uppsala University and other fine institutions. In addition we

have used the models and results from Andersson et al at Northwestern University in Chicago.

Results have been discussed and tested in co-operation with thought leaders such as: Rich Mironov,

Steve Johnson, Michael McGrath, Steven Haines, Adrienne Tan and others.

SOURCES of INSPIRATION and DISCUSSIONS

International Software Product Management Association, ISPMA www.ispma.org

The Art of product management, Rich Mironov www.mironov.com

Under10 Consulting, Steve Johnson www.under10consulting.com

Professor Dr Tony Gorschek www.gorschek .com

McGrath ME (2001) Product Strategy for high technology companies, second edition

Thom Thavenius, Security analysist

Jonas Hjelm, Product Strategist

Martin Rogberg, Organizational researcher

The conference Product Leadership Day (2009-2016) with 50-100 Product Managers

Nine Product Management Networks, hundreds of training sessions with product managers

About Tolpagorni

Research and Knowledge are the key foundations of Tolpagorni. We take the lead in testing new

strategies and in developing a framework of methods, tools and techniques for effective product

management. We work closely with research organizations and we continuously build our skills

framework through our ongoing projects. We also take an active part in building the Book of

Knowledge (BoK) for the world’s leading organization for Software Product Management (ISPMA).

However, the most important thing for us is to make sure we deliver value to our customers. We

understand that theory on its own will not deliver usable outcomes. We strive to apply our knowledge

in a practical, hands-on approach so that our customers have tools and methods to use in their

everyday work practice. This approach also develops the role of the Product Manager so that they add

value to their business.

All of us who work at Tolpagorni know product management from the inside, because we have done it

ourselves. We believe that the combination of theoretical research and “on-the-floor” pragmatism is

what makes us excel in what we do.

If you want to learn more about Tolpagorni go to www.tolpagorni.com.

http://www.ispma.org/

http://www.mironov.com/

http://www.under10consulting.com/

http://www.tolpagorni.com/

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Driving Forces - HubSpot