I was interested to see this business dilemma billed as a product manager’s job, since I probably would have described it as a business strategy or VP’s problem before taking this class. This issue isn’t cut-and-dried, especially since the two units have been successfully operating for some time with flexible revenue models. Both units have built themselves strong, loyal customer bases, and it even seems that these bases are to some extent built on the units’ flexibility: free support services and easy response to customer complaints are listed as some of the primary traits that have earned Teomik and Siiquent their supporters. To drastically switch revenue models at this point, switching focus to specific services and removing support and responsiveness surrounding parts of the product that aren’t part of this new model, seems like it could risk losing some or many of these loyal supporters who have stuck by Teomik and Siiquent even following the emergence of cheaper alternatives after the expiration of important patents.
However, this isn’t the whole story. Teomik and Siiquent are already losing customers, as we learn on page 2 of the case study, and since the company is moving to merge the two, it’s clear that something isn’t going right. It also could be difficult to work out such an intuitive, judgment-based revenue model under the leadership of two different collaborators, Emanuel and Isolde. What if they disagree?
As a PM assigned to mediate this conversation, I would do my best to decrease the stakes of the conversation by creating space for both leaders’ perspectives and setting up the interaction as a strategy session, not a diagnostic to figure out which leader will eventually go. At the same time, I’d do my best to honor the expertise of these employees, both of whom have worked with their products and revenue models for years and have good authority to tell me what is the best course of action. Despite the cons listed in the paragraph above, they both seem convinced that the best thing for the company is to continue with an intuitive revenue model, and they certainly appear ready to work together–so maybe that’s the way to go.
