A Funnel Approach to Refining Innovative Products

Episode 192

July 12, 2022

Solving your customers’ problems and creating a product they’ll want to purchase is at the forefront of all research and development departments. In today’s episode, Chris Witt, Vice President and General Manager of Portfolio Solutions at Tektronix, sits down with us to review his funnel approach to innovation and how it drives the process of developing the right products for his market. He explores how they understand their customers’ problems to approach the launch of their refined disruptive products.

A Funnel Approach to Refining Innovative Products Transcript:

Announcer: You’re listening to The Kula Ring, a podcast made for manufacturing marketers. Here are Carman Pirie and Jeff White. 

Jeff White: Welcome to The Kula Ring, a podcast for manufacturing marketers brought to you by Kula Partners. My name is Jeff White and joining me today is Carman Pirie. Carman, how you doing, sir?

Carman Pirie: I’m a year older today, Jeff. That’s how I’m doing. 

Jeff White: It’s true. 

Carman Pirie: It’s more gray hair every second now. I feel like… I think I saw that the folks down in the lobby at least brought a walker for me to help me get back down to my car later on. 

Jeff White: You’re still two years younger than me. 

Carman Pirie: Yeah, I know. I didn’t want to point that out but thank you. 

Jeff White: Yeah. Not entirely sure what to do with that. 

Carman Pirie: I don’t know, but look, excited for today’s show. It’s a topic that we don’t get to cover a lot or kind of dive into much, so-

Jeff White: But it’s intrinsically linked to what we do talk about, which is marketing and sales, and has a fair amount to do with how the products are brought to market within a lot of organizations. 

Carman Pirie: Well, if you’re gonna market or sell something, if it’s not a service, it better be a product, and that means you gotta develop them at some point, right?

Jeff White: Exactly. Exactly. 

Carman Pirie: And so, how do you think about that? How do you bring them to market? How do you make sure you have more winners than not? That’s the topic of today’s conversation. 

Jeff White: Yeah. And you know, it’s also interesting, we don’t often get an opportunity to speak with multiple people within a single organization, so it’s nice to see-

Carman Pirie: Yeah. That’s true. Usually after one they kind of… The word gets out. Don’t talk to those guys ever again. 

Jeff White: Exactly. If I were us, I wouldn’t. Absolutely. But no, it’s great to have someone else from the same firm and bringing us a different perspective on how they go to market. 

Carman Pirie: Yeah. Let’s get it going. 

Jeff White: Yeah. So, joining us today is Chris Witt. Chris is the Vice President and General Manager of Portfolio Solutions at Tektronix. Welcome to The Kula Ring, Chris. 

Chris Witt: Hey gents. It’s great to be here. 

Carman Pirie: It’s wonderful to have you on the show, mate. 

Chris Witt: Thanks, Carman. 

Carman Pirie: Look, I know that some of our listeners may have heard a recent episode about Tektronix. Maybe they think they know the company but I’m sure there’s some folks that do not, so let’s introduce our listeners to the firm a bit and tell us in more layman’s terms what you actually do there. 

Chris Witt: Sure. So, Tektronix is an electronic products company. We work in test and measurement and make a variety of tools for engineers to help develop electronic products. We’ve been in business for 75 years and the company has obviously changed a lot over that time, but the company started kind of at the advent of the radio age when transistors were appearing and folks developing products needed better tools to do their work faster, and we still do that today. 

You’re probably familiar if you’re an electrical engineer with the brands Tektronix and Keithley. That kind of makes up our portfolio. So, that’s a little bit of a background. When the kids ask me, “Well, what do we make?” The main product is an oscilloscope and it’s akin to a stethoscope for an electrical engineer to look into their circuits and see what’s going on. 

Carman Pirie: Really cool. And basically… I mean, I know Jeff gave us the formal title, but we can just shorten it up and say you lead product at Tektronix. 

Chris Witt: That’s right. Yeah. 

Jeff White: And you go about it in a rather interesting way, too, and I think that’s largely the subject that we’re here to talk about, so why don’t you tell us a little bit about… Well, I think it’d be great first of all to just let us know how long you’ve been there and how you’re kind of shaping that role and then let’s get into how you guys really make products in a very different way and bring them to market in a different way. 

Chris Witt: Sure, Jeff. So, I’ve been here at Tektronix for eight years. I’ve been in this industry for over 30 years now. Used Tektronix products when I was in school. For many years competed against Tektronix. Had a deep respect for the brand and then had a chance to join the company and help write the next chapter in how we’re going to innovate it and grow. 

We absolutely have flipped the script on innovation and how we approach that, and that journey started three or four years ago. We brought in experts from industry. Companies like Apple, IDEO, Nike, and helped engineer a process, if you will, to build better products and more disruptive and innovative solutions for our customers. 

Previously, what we would do is have a great idea, develop a product, bring it into the market, and then see exactly how successful it would be, how the competition might respond, how well we did in delighting our customers. By flipping the script, we’re doing a lot of that market work up front and treating innovation more like a funnel than a pipeline and starting with a wide range of ideas and refining and filtering that down so that by the time we start developing a product we have much more confidence that we’re onto something that’s going to be truly disruptive. 

Carman Pirie: So, it’s really about kind of slowing down up front, if you will, in those early stages. 

Chris Witt: That’s absolutely true. We spend a lot of time with customers when we have really crazy ideas and are trying to almost see around the corner about what problems are emerging for them and going through the different stages of what we call our dream process we refine down to something that we have a great amount of confidence in. 

Carman Pirie: You mentioned Apple, so I just saw this old Steve Jobs quote from yesterday that you reminded me of in this conversation, where this is just suggesting that Jobs didn’t really believe in research  all that much. He said, “It’s not the job of the customer to tell me what they’re gonna want. It’s for me to know what they’re going to want.” 

Chris Witt: Yeah. 

Carman Pirie: Because part of this process is to bring more disruptive and innovative products to market, how do you square that with the notion of maybe can customers tell us what they don’t know they need yet? 

Chris Witt: They can’t, so I do agree with Steve in this case. What they can tell you about is the pain that they experience, the frustrations that they have, and which ones are growing in magnitude and will become more and more compelling to address over time. 

So, in a way, the approach we take is to fall in love with the customer’s problem, if you will, and really try to have a deep sense of empathy for what they are working with every day. 

Jeff White: I love the notion of falling in love with a customer’s problem. It means you’re really examining it from every possible angle. 

Carman Pirie: At the same time, it may sound like you don’t want the problem to end, either, but-

Jeff White: Well, no, because they won’t need the product, Carman. 

Chris Witt: That’s right. So, in the process we also look at the business model, and is this something that’s going to grow over time? Is our advantage on day one going to be durable? So, it’s not just a one and done, but is this something we can build on? So, that’s also a pretty important business aspect to looking at these different ideas. 

Carman Pirie: And if we’re thinking about this as a funnel versus a pipeline, which what that tells me is that we’re developing potentially fewer products through to completion, but we’re exploring many more ideas up front than we used to. So, assuming that that’s accurate, what’s the order of magnitude of that? How many more ideas are you able to explore using this process versus what you were able to kick around before? 

Chris Witt: Those are both true. For different reasons, though. So, we are doing fewer things. The robust process allows us to know why are we doing fewer programs. By doing this more disciplined market work up front, we’re finding bigger opportunities that we can really double down on and those tend to have bigger payback, bigger returns. Maybe a little bit less compelled by a move a competitor does today or something we need to do to win the deal today, but to think three to five years out and that’s led to fewer bigger things. 

Now, the difference between the funnel and the pipe, we have to start with about nine ideas for one that yields into development at the end of the process. And we have to get comfortable with killing things and pivoting things and that’s a bit of a change leadership journey that we’re on. Embracing failure is one of the terms you hear a lot, but I think of it as embracing learning through the process and insights we get. Anytime we kill something or pivot something, we usually end up with greater insight about what’s coming next, and some of those ideas come back much stronger as a result. 

Jeff White: As you work down through that funnel with those nine ideas, striving to perfect one of them… Well, obviously not perfect, as things will continue to iterate and you’ll be looking for that multiyear engagement where you’re releasing things, but how far do you go? Do you end up nine things and then five of them you end up taking to a prototype stage or begin to trial with others? Or are you basically kind of working through the ideas theoretically and then getting down to one thing that you prototype and kind of build out to test? 

Chris Witt: We don’t actually think a lot about the yield, that nine-to-one ratio through the process. It’s just what actually happens when we actually measure at each gate what yields. There are four gates through our dream process and they each have distinct criteria that we evaluate against, and ideas come to a growth board, and in that meeting we decide if it’s a pass, or a kill, or potentially a pivot. And we don’t hide the process. So, the team that’s coming with the idea is there for the deliberation, the Q&A deliberation, and decision all within 45 minutes of that meeting. 

The gates go through a series of key questions to be answered. So, just to pass an idea into the dream process, we have to see that it’s a big enough idea, we have a compelling thesis about our ability to play to win, some of the advantages we can leverage, and we check for alignment with our strategy. And then progressively each of the subsequent gates refines further and further, culminating in a business level validation, which means we really have something we might need to deliver and something that has sustainable advantages. 

Carman Pirie: Help me understand the kind of stages of customer validation along that path. 

Chris Witt: Well, the first gate after the idea gate is we call the problems worth solving, so that’s really thinking about the market. What’s emerging as a real pain point? And is this something that’s going to grow over time? Is it big enough that it will yield a large revenue opportunity for growth? 

So, once we understand the problem, we have an idea of how big this is, what the customer personas are, and then we start to get into prototyping of different kinds of solutions to those problems. The next gate is actually called the customer validation gate. That is the result of all of this prototyping, sometimes hundreds of prototypes, yielding what we call the winning solution. And customers will tell us. They’ll come back with, “That’s a 10 out of 10. I would buy that today.” One we have confidence in that, then we go onto business model validation. Have we thought about the full business model canvas? Do we need to partner with someone to bring the full solution to the market? Do we have the go to market? Do we have the engineering talent? Do we have the ability to manufacture it? All of those aspects. 

Then we end up with a pro forma P&L of that business and look at it and say, “Well, is this above our hurdle rate for an investment? Do we really, really like it better than the other choices we have?” And if that’s a yes, then that’s the one out of nine that’s made it all the way through. 

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Carman Pirie: It is interesting to reflect on your earlier comment around the leadership needing to cultivate the practice of getting good at killing ideas. Would you say that that’s been the biggest organizational challenge in kind of implementing this new approach? 

Chris Witt: It’s probably the second biggest. Embracing insight as a currency as opposed to falling in love with my idea, or as opposed to the customer’s problem, and then feeling really bad when it gets killed, and a lot of companies are going through this, so we do have help in helping the team learn this, find their new comfort zone, if you will. 

Jeff White: I think that’s incredibly important because being able to… I went to design school where critique was certainly a form of currency and an expected result for every project, so you learned to develop that kind of, “Okay, I’m making for this group of people and it may not succeed there because of these things, but it doesn’t mean that the idea is completely crap.” 

Carman Pirie: Or it doesn’t mean you’re a bad person because-

Jeff White: No, exactly, and not internalizing that, that’s a difficult thing for people to learn-

Chris Witt: It is. 

Jeff White: … if they haven’t kind of started with that from a young age. 

Chris Witt: Oh, yeah. There’s a lot of ownership for the work that people do, and it is a different mindset. 

Carman Pirie: I would be curious if there’ve been some… There has to have been some aha moments as the leadership gets better and better at killing ideas. They must look at some other ideas in the past and say, “Oh my goodness. We really kept that alive for a lot longer than we should have.” 

Jeff White: Legacy products, you mean? 

Carman Pirie: Well, or just ways that you think about when you’re actively in that meeting killing products, you’re probably thinking there are a bunch that came before that should have been killed earlier than they ended up getting killed by the market or what have you. 

Jeff White: Yeah. 

Chris Witt: Oh, yeah. The sooner you address a defect, and the defect can be a bad idea, it can be an actual defect in your product, the earlier in the process you catch that, the better your efficiency is, your effectiveness is. 

Carman Pirie: No question about that. 

Chris Witt: Now, you said what was the biggest frustration. The biggest one is actually the change in governance in how we did this, and it’s a little bit like, “Hey, you moved my…” Why are we using growth board? My general manager used to be able to make these decisions. And embracing the fact that we’re making better decisions with better outcomes and embracing this new process has been probably the biggest area of learning and growth for the team. 

Carman Pirie: Yeah. I could see… I mean, because it means that there’s people from other disciplines that used to have no input into it probably now having a say on that board. 

Chris Witt: Yeah. 

Carman Pirie: A collection of people would be like, “Well, who the hell do they think they are, anyway?” 

Chris Witt: Yeah, like I sit on the growth board with the CEO, our CFO, and our ops manager, the guy who’ll have to build all these things, and they ask a lot of questions that we didn’t ask that early in the process, and they’re pretty smart guys and gals. 

Jeff White: Oh, that’s fantastic. And I mean I have to wonder, has the impact of this new program been more outsized on your engineering team than anybody else? Were there other groups within the organization that maybe embraced it first? 

Chris Witt: We actually created a new team that we actually call the growth catalyst teams to literally be the catalysts for this new process. They go through deep training on innovation. Some of these people come from the companies I talked about, and they have a lot of experience about design theory and disruptive differentiation.  As the teams bring the ideas all the way through the dream process, they have the catalysts as part of their team. Kind of a player coach on the team to help them with these new tools. 

Carman Pirie: I want to kind of jump ahead a bit to how we were bringing these products to market, because it’s a bit of a different approach, too, that you’ve kind of changed along with this deciding which products to develop. 

Chris Witt: That’s exactly right. We have more confident, deeper insight for who our lighthouse customers are, the target personas, how they’re gonna resonate with this product not just functionally but emotionally and socially, how’s it going to make them feel in doing their work? So, all of that helps us refine our messaging in the collateral, whether it’s in a webinar, on our website, or in person, and in our training for our commercial team. It has, I think, a lot more depth than what we had in the past. We’re a lot more specific about how to position the product or solution. 

Carman Pirie: I have in my notes from our prep for this episode something called a rolling thunder approach and I have no idea what I was talking about, so is that something that you said, or did I just write something random down in an earlier conversation, Chris? 

Chris Witt: No, I talked about that as an approach and it does speak to how we introduce the products to the market, but also to how we’re developing the products. So, these new platforms we’re developing, kind of think of them as a franchise, if you will. So, we have our first kind of landing point and our first solution, but we keep a team on the platform and every three to six months we’re delivering enhancements and building momentum, expanding the aperture on the customer base. It may be adding another vertical. It may be introducing a companion product deeper in the workflow. So, you see a rolling thunder there as the product keeps getting better, and if you invest in the product as a user, you have confidence that it’s going to get better over time. New firmware drops. New capabilities coming. 

That enables us to have a rolling thunder to reach more customers and continue to build on this story. It’s a change in mindset from just thinking about we have something new, we’re gonna launch it, we’re gonna pull the whole team, go work on something else new and launch it. My team now, the portfolio leaders in my team are thinking about their whole portfolio. How do they reach all of the target markets, strengthen the portfolio over time, retire the pieces of the portfolio that have kind of outlived their usefulness, but help customers move to the more modern solutions that have replaced them? So, it’s more of a continuous focus than an event focus. 

Carman Pirie: And is that continuous focus being applied to the ongoing messaging development and kind of positioning of these products, as well? 

Chris Witt: Yeah. Every time we have a drop, three, four months or sometimes more often, there’s a collateral that goes with that and it also kind of keeps the customers coming back and looking to say, “Hey, what’s new? What’s going on?” And these are engineers that may get a new piece of hardware every five or seven years, right? So, they didn’t have occasion to come back to the website and learn about what’s new very often because they didn’t have a capital budget. But now they are much more engaged. 

Jeff White: What a great opportunity to be able to reengage and reengage and reengage with customers, and like you said, previously never… You know, they didn’t hear from you until they needed something completely new that was going to require a sizable new investment, so let’s not even worry about Tektronix. We’re not going to need another scope for some time. But you know, I really like the rolling thunder term, but one of the things you said a few moments ago about how you approach introducing products to market, about lighthouse customers, and as somebody who lives from the world’s… about 30 minutes away from the world’s most famous lighthouse at Peggy’s Cove, I thought that was a really interesting way to kind of turn that phrase about how you choose the customers that you’re truly-

Carman Pirie: True ideal fits. 

Jeff White: Yeah, exactly. You know, and that are also going… I assume that the reason you’re calling them lighthouse customers is that they’re also kind of letting their peers know about this product, as well, kind of spreading it in some way, shape, or form. How are you approaching that? 

Chris Witt: Well, a great lighthouse customer is someone who represents a segment of the market and is articulate about the problem that they have, and we were recruiting these lighthouse customers all the way back, and those lighthouse customers have had value exchanges with us before we’ve developed a product. They’ve either given us information, or purchased a prototype, or done something to demonstrate that they very much are into what we’re working on. And we’ll stay connected with them throughout the development phase. We have these sprints through our actual development and every time we have a build, measure, learn cycle, we are getting feedback from these target customers to see if we’re on track. 

And they’re also often the first ones to be using the product when it’s introduced. They’re often quoted in our press release, so-

Carman Pirie: Yeah. I was gonna say it just allows you to launch with social proof right out of the gate. 

Chris Witt: Exactly. 

Jeff White: Beautiful. That’s so, so smart and so… You know, it’s a great thing to learn. We often hear of how agile processes have made their way into marketing and obviously this has come largely from a software development kind of background, but now we’re seeing people developing physical products with supporting services and other software-level improvements that are rolling out in an iterative fashion that give you lots of things to talk about constantly. It’s pretty cool to see organizations adopting those principles and that they work in so many different functions. 

Carman Pirie: Yeah, that can cascade across many different areas of the organization. This is certainly one example of that. 

Chris Witt: Yeah. 

Jeff White: Yeah. 

Carman Pirie: Really cool. 

Jeff White: Well, Chris, we’re coming close to the end of our time here, but I really want to know… This has obviously been a labor of love and I’m sure it hasn’t been without its speed bumps and other things along the way, but what are you looking forward to next and what do you wish you knew before you started this process? 

Chris Witt: Well, this is a really interesting time for us. So, we put this process in place two and a half, three years ago, and this year we’re introducing the first products that have grown fully through the process. Through the dream phase, through the development phase, and into the market. I’m super excited about what’s coming. We, as it turns out, have a lot of choices. We don’t have to do everything. We don’t have to act on every idea we have. But the ones that survive through this process are pretty exciting to work on, pretty exciting to show to customers, and we’re just at the beginning of that journey, so that’s I think what I’m most excited about. We’re gonna have a fun second half of the year as we’re showing these new solutions to customers and bringing them to market. 

What do I wish I knew? I think I underestimated just how big the change challenge would be to bring the organization along. It made a lot of sense as we were talking about how to improve our process. Everyone agreed we had big opportunities to improve. Bringing the whole organization along has been interesting. A lot of learning. I think what I would do differently is not bring the whole organization on in phase one. I probably would have broken it up into phases, picked one part of the portfolio or two of them and brought those teams along, refined, and then broadened after that. 

So, we went pretty broad pretty quick and there were some fireworks early on, so that’s what I would do over. 

Carman Pirie: It’s always interesting to have that hindsight. At the same time, man, whether it’s organizational change or even in some instances I can think of a political change where when people reflect on it after the fact and they almost, “Maybe going faster would have been better.” Like going… I kind of think almost whichever way you go you’re gonna end up wondering if the other way would have been maybe better or easier. 

Jeff White: And had you done it a department at a time, would you be getting ready to launch some amazing new products right now? Maybe not. 

Chris Witt: Not as many. 

Jeff White: Yeah. 

Carman Pirie: Yeah. There’s a couple sides to it for sure. 

Chris Witt: That’s true. Yeah. 

Carman Pirie: This has been a fantastic conversation. I really thank you for sharing your expertise with us today. I don’t know, I just think it’s a fascinating change that you’ve instigated there and it’s exciting to watch it unfold. 

Chris Witt: Thank you, Carman. I really appreciate your guys’ interest and really enjoyed our conversation. 

Jeff White: Me as well. Thanks a lot, Chris. 

Carman Pirie: All the best to you. 

Chris Witt: Thanks, Jeff. Take care. 

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Chris Witt

Vice President and General Manager of Portfolio Solutions

Chris Witt is Vice President and General Manager for Tektronix Portfolio Solutions which includes six portfolios and teams covering all Tektronix and Keithley branded products and solutions. Chris joined Tektronix in 2014 as GM of the mainstream scopes business, and was subsequently promoted to VP/GM of the Time Domain Business Unit in 2016. Prior to joining Tektronix, Chris worked in a variety of senior leadership roles in T&M over 20 years, including roles as a Product Line GM, and senior leader roles in Marketing, Sales, and Sales Operations based in Europe, North America, and Asia. Chris holds a BS in Electrical Engineering from Rensselaer Polytechnic University and an MBA from the Wharton School at the University of Pennsylvania.

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