Product management is one of those mysterious roles that lives in the shadows. In fact, before joining Nike as a product manager back in 2007, I had no idea that such a job even existed. That’s because, as discussed in my previous piece on what a product manager actually does, our deliverables almost never see the light of day.
If we, as product managers, do our jobs well, the research we lead and briefs we craft inspire teams of designers, engineers and brand marketers to create products and communications that resonate with our target customers. But, much like the internal framework of a building, the support we contribute is hidden from view. The unfortunate consequence for those of us with an interest in the field is that opportunities to see the work of product managers are about as rare as sightings of the snow leopard. And the few peeks we do get are usually manufactured puff pieces that reveal little of substance.
That’s why I was so happily surprised to come across this video introducing Hyundai’s Santa Cruz Crossover Truck Concept at last year’s North American International Auto Show (aka the Detroit Auto Show). It’s remarkable in the depth to which the presenters address not only the features of the concept, but the business case underpinning its creation. It’s this story—the “why” behind the “what”—that’s so rarely shared in public forums.
Hyundai Motor America president and CEO, Dave Zuchowski, sets up the reveal of the Santa Cruz Concept with a refreshingly candid look at the challenges faced by the company circa early 2015.
As to the why for the Santa Cruz Concept, in the preamble to the video I’ve embedded below, Dave Zuchowski, president and CEO of Hyundai Motor America, explains that, while Hyundai America had delivered five consecutive years of record unit sales growth, their growth rate of 1-percent in 2014 underperformed the broader industry growth rate for that year of 5-percent. Zuchowski identifies the culprit for this slowdown as follows:
“We’re a car-centric brand that is competing in an industry that is effectively comprised of nearly 55-percent truck-segment buyers. And those segments—those trucks segments—accounted for about 95-percent of the entire industry’s growth in 2014. And that growth was being driven, not by conventional pick-ups, as it has been in the past, but it came from the booming CUV [Crossover Utility Vehicle] category.”
It’s really rare to see a company that’s doing pretty well be so open about its shortcomings. The insight Zuchowski shares above is the sort of thing that’s frequently discussed in board rooms and perhaps at shareholder meetings, but rarely out in the open. I believe the reason he was willing to air it in a public press conference at the biggest car show in the Americas was that he needed his true audience, namely Hyundai’s dealer network, to know that his leadership team understood the crux of the brand’s problem. And the reason he needed to be so overt about this was that the prototype his team was prepared to unveil addressed that problem in a highly unconventional way.
Navigating the Tension Between Product & Sales
Before going on, it might be worth sharing some context here for the benefit of those who’ve never worked at a product company—specifically, a company that sells products (versus, say, a company like Facebook, that creates products, but monetizes them through advertising rather than through sales of the products themselves). In such companies, there’s frequently tension between the group that creates the products and the group charged with selling those products. I’m massively simplifying here, but sales orgs are typically driven by past performance (e.g. According to last year’s numbers, Acme’s widget outsold our widget, so you need to make our widget more like Acme’s), while product teams—at least the good ones—are driven by future opportunity (e.g. Acme’s widget is the current sales leader, but our research suggests that the market for widgets is nearly saturated and that there’s a large, unaddressed market for gadgets, so we believe we should make a gadget).
History—and particularly recent history—has shown that brands that are overly sales driven risk being left behind by nimbler competitors that more quickly adapt to shifts in the marketplace (e.g. Polaroid, Blockbuster Video, et al.). Conversely, brands that ignore sales history risk over-investing time and capital into concepts that ultimately fail to connect with customers (e.g. JC Penney under Ron Johnson, Quirky, et al.). So, you need a bit of both, and much of the art of effective product management lies in one’s ability to find the equilibrium between these two powerful centers of gravity; a task made doubly difficult by the fact that this equilibrium is a moving target—it shifts with changes in the dynamics of your company, your market, the broader economy, and society at large.
Hyundai America Shows Their Work
Coming back to Hyundai and their introduction of the Santa Cruz Crossover Truck Concept, why I found the presentation so exciting was that Hyundai’s product team effectively “showed their work.” The inputs and insights that enabled their team to strike what they believed to be the right balance between past and future are laid bare with a clarity that’s sadly atypical of modern product launches. Walk through the intro video with me and I’ll show you what I mean, but two quick caveats before we dive in: The presenter, Mark Dipko, Director of Corporate Planning & Strategy for Hyundai Motor America, is a bit stiff, and the stagecraft of the presentation itself is rather hokey. But stick with it, because the substance of the Hyundai team’s work shines through.
22:32: Dipko takes the stage to introduce the Santa Cruz Crossover Truck Concept.
22:44: As with any good brief, Dipko starts by identifying the target customer for the product.
22:58: He proceeds to describe a larger societal shift—urbanization—and how that shift is changing their target customer’s product needs.
23:09: Dipko then notes that this isn’t a localized trend, but a shift that can be seen across the whole of the U.S. This bit might seem entirely obvious, but it’s a critical callout if you assume, as I do, that the primary audience for this presentation is Hyundai’s dealer network, who are hungry for products that will drive unit sales growth.
23:20: He then gives their target customer a name: Urban Adventurers. As corny as this may seem, anyone who’s spent time as a product manager at a big company will tell you that naming a concept is a critical milestone in building support for it within an organization. In my experience, telling an audience of corporate stakeholders that “our target is men and women between 18 - 34 years old, who live in a geographic region with a population of at least 50,000, and with a population density of at least 1,000 people per square mile,” will draw mostly blank stares, while stating that “our target is the Urban Adventurer,” will spark a wave of head nodding. The reason? While the underlying demographic profile is a more concrete way to characterize a target customer, most people who aren’t engineers or scientists simply have a hard time relating to numbers. A name—so long as it affords an intuitive link to an underlying truth—can make an otherwise esoteric dataset feel more concrete and relatable.
23:33: Dipko employs a clever presentation tactic here: He acknowledges that he’s not representative of the target customer, thereby distancing himself from them and tacitly relating himself to us—the audience. Not only does this establish a bond between Dipko and his audience, it makes him—and by association, his message—appear more credible and objective. This segment of the presentation is also important in that it starts to make the ethereal concept of the “Urban Adventurer” more concrete through examples of the values and behaviors these people manifest in the real world...
24:11: …thereby establishing the unique product requirements the Santa Cruz Concept must deliver on. You can almost think of this as the start of the second act of Dipko’s presentation—act one introduced the customer, and act two introduces the product.
Dipko builds his presentation around the classic three act structure, with the first act introducing his target customer—the Urban Adventurer—and the second, which starts just after the 24 minute mark, introducing the unique new product solution that will change that customer’s life for the better. Most big-brand concept reveals these days skip right to the product, so I was surprised and impressed to see Dipko start, instead, with his target user. Every single successful product creation program I’ve been a part of was built on a crystal clear definition of the customer. Conversely, I’ve seen consistent failure in programs in which the customer definition was muddled, or where the needs of the customer were subsumed by other criteria, such as the needs of a retailer or an attempt to match a competitor’s latest offering. Putting the customer first might sound patently obvious, but corporations aren’t the most logical of organisms.
24:32: Interestingly, this is the only part of the presentation in which Dipko addresses performance specifications, or, as Steve Jobs dismissively described them, “speeds and feeds.” But Dipko does so within the context of the Urban Adventurer’s strong desire for efficient, sustainable transportation. So, it’s not just specs for the sake of specs, but specs that deliver on the values and needs of his target customer.
24:52: This is another important segment of the presentation: Dipko highlights the relatively small dimensions of the Santa Cruz Concept as an essential requirement for the Urban Adventurer, while also giving his audience a frame within which to contextualize the vehicle. He does so by using the term CUV twice in the span of just 20 seconds, and gets even more specific by noting that the Santa Cruz offers a “footprint that’s similar to a small CUV.” He’s emphasizing to his audience that they should compare the Santa Cruz to other CUVs, not to conventional pick-up trucks...
25:09: …which then enables Dipko to highlight the one attribute that differentiates the Santa Cruz Concept from every other CUV on the market: “its versatile cargo bed.” In my opinion, this is the crux of Dipko’s presentation: Given that literally half of the Santa Cruz is dominated by an open pick-up bed, anyone who sees the Concept will instantly think “pick-up truck.” It’s Dipko’s job to flip that first impression—to get the audience to see a CUV with a unique, segment busting value proposition rather than a small pick-up that lacks the capabilities that traditional pick-up buyers demand. If, by this point in the presentation, you see the former, he’s made his case. But if you still see a small pick-up, he’s lost you.
25:19: This is where the hokey stagecraft really kicks in. Still, as cheesy as this section is, much in the way that Ikea “stages” their furniture in mock rooms to encourage customers to visualize the pieces in their own homes, Hyundai’s mock use-cases help to concretize concepts that could otherwise seem abstract.
26:31: Dipko delivers the critical, one sentence summary for the concept: “Santa Cruz is the perfect vehicle for those that want the attributes of a CUV, but still have lots of things that belong back there.” Though perhaps not quite as artful as Apple’s “1000 songs in your pocket” tagline for the original iPod, it’s vital in that this is the one idea that Hyundai wants its dealers and the media to absorb and share. I can’t emphasize enough how important it is for brands to summarize the unique value proposition of any new concept in the form of a clear, human-friendly sentence. After all, if you, as the brand bringing the concept to market, can’t succinctly articulate its reason for being, how can you expect anyone else to?
27:33: This section is targeted at the cynical old-timers in the room, who’ve seen similar sounding concepts from other brands—i.e. car-like vehicles with pick-up beds—come and go over the years. I’m impressed that Dipko included this segment in his presentation as I think most corporate presenters these days would have left it out, the argument against being that it could sow doubts about the Concept in the minds of the audience. But I support Dipko’s call to keep it in because, by addressing it, he’s arming supporters of the Santa Cruz with answers to a question that will invariably be raised.
The concept of a vehicle with the size and comfort of a car and the utility of an open pick-up bed isn’t new. In fact, in Australia, this hybrid species, which locals call a “ute,” is among the most popular body-styles available. But in the U.S., car-based pick-ups have come and mostly gone over the past several decades. One of the more recent entrants here was the Subaru Baja, which was introduced in 2002 and remained in production for only four years. But the Baja wasn’t Subaru’s first offering in this segment: that distinction belongs to the BRAT, which has an origin story as wacky as its looks. When Dipko notes in his presentation that past offerings in this segment had “design issues,” I’m guessing he had the BRAT in mind (as an aside, many journalists have compared Santa Cruz to Honda’s aesthetically challenged, but moderately successful first-gen Ridgeline crossover pick-up, but the Ridgeline was a far larger vehicle, so I think the BRAT offers a more appropriate basis for comparison).
27:50: He also uses this question as an opportunity to clearly define what Santa Cruz is not, which can be as important as defining what it is.
28:06: Dipko’s really starting to bring it home here, introducing data to buttress his case. I’m a fan of this approach of back-loading a presentation with quantitative support. Capture your audience’s imaginations with the first two acts of your story, then lock them in with an appeal to logic—in effect, give them the tools they need to convince themselves, both emotionally and intellectually.
28:45: Finally, Dipko closes with a Reader’s Digest version of his pitch, reiterating the characteristics of the Urban Adventurer and emphasizing Hyundai’s belief that this customer represents a growing segment of the market. I was particularly taken by Dipko’s description of Santa Cruz as “a vehicle for the next frontier”—a clear indication of Hyundai’s intent to play a role in shaping the future rather than simply “getting by” with products and form-factors that worked in the past.
So, what do you think? Did Dipko make an effective case for Santa Cruz as a unique new CUV proposition, or do you see Santa Cruz as an under-sized, under-powered pick-up destined for the junkyard of failed concepts, right alongside the Subaru BRAT?
As suggested above, I think Dipko absolutely nailed it. Contrast his pitch to this snippet from BMW’s introduction of their Concept X2 CUV at last month’s Paris Motor Show [Note: Unfortunately, BMW has taken down the Concept X2 launch video], which is sadly representative of the norm for concept unveilings, and you’ll see how unusual Hyundai’s presentation is in its depth and substance. Whereas BMW and most other brands present their concepts as fait accompli, Dipko gave us the why behind the what. In other words, he didn’t just expect his audience to accept the Santa Cruz Concept as the best thing since sliced bread, he taught us why we should believe in it.
This idea of marketing as education is something Steve Jobs talked about frequently (see the video above for more on this), but few brands—including today’s Apple—actually deliver on it. Considering how long I’ve already rambled on, I won’t go into why I think that is, but the topic is rich enough to merit a post of its own some day. In the meantime, I hope the ground I have covered has been at least somewhat instructive for my fellow product geeks. As noted above, opportunities to see our trade being plied don’t present themselves very often, so I felt it was important to highlight this unusually good example of product management in action. Oh, and I should note that I wasn’t the only one impressed by Dipko’s presentation—according to Motor Trend, the Santa Cruz has been given the green light for production starting in 2018. Even though I’m not sure I qualify as an Urban Adventurer, I’m seriously interested in buying one.
As ever, please don’t hesitate to shoot any questions or comments my way—I’m on Twitter @edotkim.
