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Product-Centric Mentality

The third factor that often prevents product companies from excelling in professional services is the inability to internalize the fact that "offering professional services" is not the same as "product offerings."

One of the oldest stories known to Western civilization is The Odyssey, composed by the Greek poet Homer. The story describes a conflict between a man named Odysseus and the Greek god Poseidon. Poseidon doesn't want Odysseus to return home to Ithaca, so the god hurls one challenge after another at the tormented man. But this is not the true conflict. The defining conflict that Odysseus faces is between his intelligence and his arrogance. On one hand, he is a very smart man. His wits brought about the fall of Troy (it was his idea to build the Trojan horse), and his wits allow him to survive each challenge the gods present. But his intelligence and success make him arrogant—enough to believe that he needs no assistance from man or god. This arrogance fuels the wrath of Poseidon. Not until Odysseus acknowledges his limitations is he permitted to return home.

Product companies also face the challenge of Odysseus. They're skilled and successful at bringing products to market. They have money from their margins to invest in new endeavors. They're confident in their business savvy. But this confidence becomes a harmful blinder as they enter the world of services. When service profits are thin or customer engagements go south, product companies have difficulty acknowledging that they've entered a new realm, where the natural laws are different, and new frameworks are needed for success. Specifically, product companies don't inherently contain the infrastructure processes that professional service organizations need to thrive. For example, the IT infrastructure and business process to support time reporting is a baseline staple for every independent consulting organization. But a product company may position IT investments in the area of time reporting as a low priority. If product-oriented management controls the purse strings, the professional services organization may have difficulty acquiring the basic tools required to do business. And time reporting is just one simple example. Everything from revenue recognition to the process of ranking external partners is different for professional services. The executive management team must itemize these differences and manage them. If not, they severely handicap this new service unit that they're so keen on growing.

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