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The Ultimate Guide to Turning Professional Services into Scalable Products

How Fear Kills Productization

When services firms choose to pursue a productization strategy, they can face many challenges. I’ve seen companies fail because they didn’t have the right skills, poor product-market fit, or they under-invested in go-to-market. Another significant challenge is changing the organization’s behavior and culture to be more product friendly.  Consider this:

Culture change_CMYK grey-7

Making these changes to our culture and behavior is a significant challenge, but without them, the best product ideas will fail to launch and succeed long-term. 

Stepping back, when I think about WHY it’s so hard to do things like adopt a test-and-learn mindset, or embrace abundance thinking, or even to collaborate I see one emotion: fear.

I see this in my own business and in my own behavior. Vecteris is a consulting firm that started by providing bespoke services.  As we’ve worked with more clients, we’ve started to productize some of our services into more standard engagements and products.  As we evolve, I’ve had to face my own fears that stem from perfectionism and deriving a lot of my professional identity from working 1:1 with clients. 

In my experience, there are four main fears that prevent services organizations from successfully productizing:

  1. Fear of Cannibalization
  2. Fear of Failure
  3. Fear of Not Being Perfect
  4. Fear Surrounding Personal Worthiness

Fear of Cannibalization is the fear that new products will cannibalize revenue from existing services that are often higher in price. We are afraid that new, sometimes lower priced, products will take away from current, often higher priced customized services revenue. That fear can make us afraid to ask current clients to buy our new products. But, there are proven steps we can take to reduce cannibalization risk and, at the end of the day, if  we don’t risk cannibalizing our own services, someone else will. 

Fear of Failure is a fear that most of us have experienced at some point or another.  We are afraid to try something new or different and fail, so we don’t try at all.  This fear is what keeps organizations from taking on the test-and-learn mindset, from seeing the development of new products as iterative.

The Fear of not Being Perfect is a powerful barrier to productizing. It is so much easier to innovate new products or services when we stop trying to be perfect. This can be really hard for those of us who have perfectionist tendencies. Many organizations lose money on new product development or get lapped by competitors because they take too long getting a product to market. Worse, they invest too much time and money in a product with a poor market fit. 

When services firms pursue a productization strategy, fears surrounding our personal worthiness often come to the surface. This is because the source of value creation transitions from  individual expertise to the product. This shift from services to scalable products can be very uncomfortable for professionals who have distinguished their careers by delighting and catering to individual clients.

Taming the Fears by taking the LEAP

The good news is that there are proven tactics for overcoming fear. We already have access to a wealth of research and practices from human and organizational psychology that we can implement in our organizations. The LEAP acronym is one method:

  • Listen to your inner wisdom and open your mind to possibilities
  • Expect less than perfect
  • Ask for help
  • Practice gratitude

When we LEAP, we start to eliminate those fears that can hold our productization strategy back.

Listening to your inner wisdom might sound odd at first, but what we really mean is to listen to your “gut instinct.” Some of the best innovators and leaders have an inner voice encouraging them to take the unknown path and follow that inner voice, not ignore it.  But it’s not always easy to hear our inner voice, much less trust it. It takes time and practices like meditation. For example, clinical research on the impact of meditation on the brain has demonstrated that meditation reduces fear and increases creativity. When, as a leader, you practice listening to your inner voice, you can help others do the same and open your organization up to new ideas and new possibilities. 

Training our teams to expect less than perfect can help shift us toward a test-and-learn mindset. A culture that is open to testing and learning is less likely to fear failure or expect perfection. Sal Khan of Khan Academy, an innovative online learning company, said it best: “Shipping is better than perfect.” This mindset allows them to prioritize delivering online courses that are well-functioning but have room for improvement. Because they expect the first version of the course to be less than perfect, they are able to launch boldly. The point is that our products do not have to be perfect to go to the market. They should be good; they just don’t have to be ‘done’. And that’s the case for just about anything we are working on in our careers or our lives.

Our ability to ask for help is a vital way to overcome and navigate through fear as well as to address our fears around personal worth and value. In her book Reinforcements: How to Get People to Help You, Heidi Grant Halvorson explores how even though we hate to ask for help, most people are wired to be helpful. One common reason people do not ask for help is to avoid the perception of not having the answer. But by asking for help and sharing the responsibilities of productizing, we learn that we do not always have to be the one to have the answer. Research shows that asking for help can lead to better results. The Great Work Study, conducted by the O.C. Tanner Institute, shows that 72% of people who receive awards for their work ask for advice, help, insights, and opinions from people outside of their inner circle. In doing so, those workers generate fresh ideas and perspectives on how to solve problems that they otherwise wouldn’t have imagined. Adopting a similar mindset in your organization can build a culture of collaboration and demonstrate that innovation and productization thrive when we work together, rather than through individual heroics. 

Practicing gratitude can sound more like a trend than real business advice. But, cultivating a culture of gratitude within our organizations  can teach us to see failures and missteps as lessons rather than roadblocks and shift to an abundance mindset rather than a scarcity mindset. Practicing gratitude can break down barriers, encourage teamwork, and help team members have better performance - and can also lead to business growth. Raj Jana, founder of Javapresse Coffee Company, claims that his business grew by 800 percent in a single year because of practicing gratitude. I consciously started a regular habit of writing thank you cards and keeping a gratitude journal in 2017. Every Friday, I write at least one handwritten thank you card and mail it. And, every night, I write what happened that day that I am grateful for in my one sentence journal. Both the thank you notes and the journal have helped to shift my mindset to one where I see an opportunity, rather than scarcity. I believe that mindset shift has helped me have more courage to try new things, take risks, and tackle my fears. Gratitude doesn’t make our problems disappear, but it helps them feel more manageable by putting us in a positive mindset.