Commercial Product Framework
The framework is designed to improve business outcomes by combining strategy, customer satisfaction and commercial viability with the benefits of rapid test and learn
CPF process flow
CPF aims to increase your product’s likelihood of success. It is commercially focused, ensuring profitability is a top priority. It doesn't matter if a customer likes your product, it matters if they are prepared to pay for it.
CPF is primarily designed for digital products and services. For example, a SaaS offering or insurance that is bought and managed online.
The framework allows an organisation to move seamlessly from strategy to rapid iteration with small increments of value. It is an adaptive framework containing many tools that can be used stand-alone.
CPF is open to everyone. Click here if you would like to contribute.
CPF high level process
Framework guide
The guide for each stage describes the framework's workings in full detail. Each contains a canvas to help you structure your work.
Create a new product or paid feature
Structure and optimise your position in the market
Evaluate many inputs into strategy, prioritise and assign to teams
Structure your strategy and the results you expect
A minimum sized item of work that will be developed and tested
Implementing CPF
If you are interested in deploying CPF or a custom target operating model, click the button to see the approach
Key benefits
This section will demonstrate some of the advantages of CPF, including why it is called a “commercial” framework.
Creating a new product
What can possibly be wrong with a solution-first approach with small changes following user feedback?
As you receive more and more positive feedback from your user research, you keep building. Finally, you are ready for launch with an excited sales team. The product sounded good, but nobody is prepared to pay for it. In digital products and services, this typically ends up with the feature being added to the core offering and given away for free.
Further impacts
This can result in your product being bloated with ideas that don’t work well. This creates user dissatisfaction where a product has features continually added to it that aren’t very good or, at worst, useless. The effects can be even worse than that. As your sales team start to push these features that sound good, new customers sign up with high expectations and end up churning to a competitor.
CPF approach
Next, we will compare how CPF works for creating new products and paid features.
Creating a business model
CPF contains a structured process using canvases that help you model your idea. This helps you capture why you think you have product-market fit and can be profitable very early on. Even from basic analysis, you may discover major issues. For example, the problem you are solving for customers doesn’t look big enough, or your competitors have very large products that you cannot compete with. CPF asks the following questions and helps you identify your major assumptions:
Feasibility - Can it be built and run for a sensible cost?
Desirability - Do customers want this?
Viability - Does the business case stack up? Consider if this will justify the return on investment.
Testing assumptions
You may test if you can build a new server configuration or check if your design is performant. Only after successful assumptions testing should we move into build. This can mean months of effort saved. Often, creating a new product or chargeable feature is a great deal of work.
The importance of commercial viability
Let’s use an example to show why commercial viability is important. You decide to offer an improved service level of 24/7, covering weekends. You write up a problem statement showing the number of major issues on weekends. Next, you ask if your customers want this service and find that most are delighted. You spend the next two months recruiting and additionally offering evenings and weekend overtime. You are ready to go! With your new service, you approach your customers for an extra £100 a month. At this point, you discover no one is interested in paying.
Commercial viability is not the same as asking if someone “likes” something. You need to understand if they will pay for it. CPF includes techniques for testing this.
Strategy versus iterative change
In this section, we will consider incremental improvements to a product or service.
Problems with strategic planning
Traditionally, organisations have focused on business strategy with longer-term planning. Each business case contained a lot of detail, including financial modelling. This investment and the “certainty” provided by analysis made it hard to back out. Large work items took months or even years to deliver. For a low-risk change in a stable market, this could work. However, where conditions were more uncertain, this could lead to a very expensive failure.
Emerging competition
Even in traditionally stable markets, new competition can emerge and start to eat market share. Organisations with long-term planning cycles will not be set up to respond quickly and can be overtaken. The need to rapidly innovate requires a major shift in operations and culture. There are many examples of very successful organisations that don’t exist now.
Problems with iterative change delivery
Moving to Agile-based methods, we can see a move away from structured business cases to rapid deployment of small changes. This adaptive culture allows for much faster releases of value.
The business case that includes “How will this make us money?” mentality is replaced with a backlog full of small changes. The product owner is typically juggling requests from large customers, alongside changes to increase customer satisfaction. These organisations are now able to adapt quickly. However, the lack of strategy and commercial focus has meant many features and changes being built, although good, don’t lead to increased revenue. These organisations will be burning through money despite high customer satisfaction rates.
The impact of competition
When the competition has more structure to their strategy, they can get ahead. For example, they focus on creating stronger differentiation or are tackling reasons for sales loss. Eventually, this can collapse an organisation as each competitor gets stronger and stronger.
CPF approach
Next, we will compare how the CPF strategy layer works, helping you avoid these anti-patterns:
CPF begins with Strategic Inputs, which include metrics and competitor analysis. These allow you to prioritise a Strategic Direction. These include options like reducing sales loss and churn, reducing costs and creating new products. This is different to every other framework. With this priority, you can now look for options. CPF provides structured inputs for this, including PESTEL trend analysis and Customer Journey Maps. After you have prioritised your options, you create Strategic Areas. This allows you to structure your strategy. Finally, to avoid long lead times, a Minimum Valuable Increment is built. The results of which go back to the Strategic Area.
Overall, this helps you think strategically and deliver rapid change.
Copyright notice
CPF is covered by the Creative commons license - CC BY-NC-ND
Please reach out if you would like more information about using CPF
Interested?
Feel free to reach out for a conversation or use the button below to view a typical operating model transformation approach:
