Lessons in “Service-First Product Leadership” from Ford, PlayStation and Beyond with Ross McGregor

Podcast, Season 6

 

Building a new subscription model in a large, successful company is hard enough, but when your company’s core competency is manufacturing and the subscription involves content and software, you have to do more than build the new business model. You have to change the way the organization thinks about product management.

With experience, both at PlayStation and at Ford, today’s guest, Ross McGregor, will shed light on how to build a service orientation across a product team. Something critically necessary if you’re going to build a forever transaction with your customers. In this conversation, he talks about how to put together the business case that merits a strategic bet on subscriptions, how to build support across the organization from the beginning, and when it’s time to scale the experiments.

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Listen to the podcast here

 

Lessons in “Service-First Product Leadership” from Ford, PlayStation and Beyond with Ross McGregor

 

Building a new subscription model in a large, successful company is hard enough, but when your company’s core competency is manufacturing and the subscription involves content and software, you have to do more than build the new business model. You have to change the way the organization thinks about product management.

With experience, both at PlayStation and at Ford, today’s guest, Ross McGregor, will shed light on how to build a service orientation across a product team. Something critically necessary if you’re going to build a forever transaction with your customers. In this conversation, he talks about how to put together the business case that merits a strategic bet on subscriptions, how to build support across the organization from the beginning, and when it’s time to scale the experiments.

 

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Robbie Baxter: Ross, welcome to the show.

Ross McGregor: Good to be here. Thanks for having me

Robbie Baxter: Tell me a little about your background. Your subscription autobiography, and how did you develop your subscription expertise?

Ross McGregor: I know I got into subscription more accident, rather than design. Maybe the better part of 15 years ago is now at PlayStation, where we’re moving into the subscription space. I was formally part of the team that had created the service or science to develop and think about the service, certainly. And they asked me if I’d be interested in running it.

I was there from kind of day 0, and the rest of it was blood, sweat, and tears. It kind of went through when subscription is still a business model, and even as a concept, this is back in maybe 2010. So I had many different roles throughout the decade. Plus a PlayStation across different subscription components from product side to business management and everything in between. Learn a tunnel on the way.

Most recently, I was at Ford Motor Company. The whole automotive industry, which is well publicized, is trying to move into this services space. And it reminds me a lot of those early days, really a PlayStation whereby poker is trying to work out what the customers really want in this space. How’s it going to work? And then, of course, it’s infinitely more complicated, I think when you try and combine different kinds of software and services on top of vehicles which helps the clock speed, as we used to say, or the planning cycles are still different, so it’s a new and very exciting space. And I think this is something that potentially has the opportunity to change human behavior over the next 10 years or so as these services are realized.

Robbie Baxter: Wow, you’ve been in some very large and well-established companies with strong businesses at the moment when they are introducing subscriptions. What kind of business case should a company have before making a strategic bet on subscriptions?

Ross McGregor: Like all things starting with “Why?” is probably the most important first step. What are you trying to do in the first place, what do you expect to change by taking that action? Especially nowadays, because the subscription model over the years and certainly in my time has become so prominent. And there’s been a lot of high profile success stories that you hear that comes with high margin and recurring revenue. That’s great. How do we get involved?

But the truth is, I think the road is long, and it’s full of peril, so you have to be prepared for the journey. The clear purpose is front and center. While you’re doing this, what’s our purpose?

But the second thing is, can we build the right value proposition? Can we deliver something to customers that they will truly love? And then, can you scale that to the extent that you, as the company, can benefit from all the good stuff that maybe a subscription model has to offer? Can you deliver to customers something meaningful with ongoing value? That’s what I’ve always described before when I described service. I described subscription as the model that sits with that. It’s the provision of value to the customer over time. That’s the fundamental difference. But if you can do that and create meaningful value that meets an unmet need for that customer, you hit that kind of business sweet spot where you benefit from recurring and predictable revenue. But you also have set yourself up for an ongoing customer relationship that you can build, and that builds stability in your business.

Deliver to customers something meaningful with ongoing value Click To Tweet

You start there, but then there’s other things on the back end you need to consider. The infrastructures and tools and capabilities.In my experience, a recurring business is very different to a traditional sales business. So your financial systems is an accounting treatment that is different from how you might typically account for sales. Have you got the infrastructure in place to to make those shift?

Then there’s your analytics capability, a subscription service. I’ve said for many years, it never sleeps. It doesn’t take any time off. Your customers are constantly acting in the ways they think about renewing and they changing their plans. They’re moving up and down. So you have to be able to track behavior organically and react accordingly. So, how are you going to look at the data? You have to analyze the insights and leverage them, or manipulate them, to grow your business. That’s very different, I think, from maybe more of a traditional sales process, although your metrics, maybe traditionally, you’ve got metrics that output very focused sales. Like KPIs, and you might move more to a lifetime value or LTV model if you’re focused on subscriptions. And that in turn. has an impact on how you communicate to customers of services marketing overall. I think once you get into that relationship, there are different life cycle stages customers will have. So you’re triggering one-to-one messages based on an action a customer will take rather than maybe a more traditional marketing approach might be one to many with your communications.

And maybe last, but not least, your product planning or development cycles. Again, they’re fluid. They’re very behavior-based. So you’re going to react to what customers are doing. And then you might want to evolve this because, again, the service needs to provide that customer value over time. So if wants and needs are evolving, you need to be able to react to that.

And then, although I said that was the last point, maybe one more jumps out. I think there’s also a bit of a mindset change here, and you need to be clear about the timeline. Typically, subscriptions come with a lower price point, so the revenue bump or the gratification isn’t immediate. And if you make a decision in the near term, that can have ripple effects further down the line. So you need to be very clear that you’re creating long-term value for customers. And this isn’t about a short-term bump. I think they’re the main things in my experience.

Robbie Baxter: Yeah, it’s a lot. Know your why, which I agree with you is the most important thing to know why you’re getting into subscriptions, and it shouldn’t be just to enjoy some higher margin revenue. You should have a product that delights customers on an ongoing basis, right? Because this is a value over time, and that you should be able to see that this is a scalable business. And then, you went through all of the changes that you can expect. Another piece of that is that if you’re going into subscriptions as as an organization, you shouldn’t just think of it as a product you’re introducing but as a new business, with different roles and different metrics almost across the board.

Ross McGregor: Yeah, very much so.I don’t think it’s black becomes white, or vice versa. But there are a lot of fundamental changes that you need to be prepared for across the board. And it’s going to take a lot of hard work throughout any organization to enable that. And it tends to start with a small team with a vision that’s very clear on that purpose. And then working out, you know what that next step is. But typically, it’s a cross functional effort and requires much patience.

Robbie Baxter: You’ve been at two places at least now that have have been at that first point. How do you know whether the company understands what they’re what they’re getting into? And maybe if you can share, an example from either those organizations or somewhere else of what gives you confidence that you see, I’m going to be successful in this environment?

Ross McGregor: I think in my experience, it depends. I don’t know if you’ll ever know, if you’re going to be successful. Like, there’s a moment where it’s like, “Okay, here we go.” But there are frameworks. I think you can apply that will help you de-risk some of those decision-making when it’s all new. So if I start with that kind of more measured approach rather than saying, “I don’t know. We’re just going to jump in to the deep end and see what happens.” I think in my experience, and we did a lot of this. I’ll talk about PlayStation here for a moment, when we launched the latest situation of PlayStation Plus which is the tiered service. We knew game subscriptions were rapidly changing within the industry. You could see that new entrants coming in and that traditional entrances are evolving their offering. So we spent a lot of time, and I would advise anyone to do this, do the work early on the scenario plan, push on the options that you have in front of you, get alignment with your stakeholders on your goals, and again, why are you doing this in the first place? Why are you making this change? What are you trying to achieve with that? I think the most important piece is getting some definition of what a successful outcome might look like. Not necessarily this is our perfect outcome. But if we achieve this, we recognize there’s some success, and that objectively allows you to measure.

Now, what do we do next? So to your point, are you doubling down? Are you going for this or not? But a framework I learned a while back now that I like to apply for these is the race framework. So at the point at which your experiment concludes, at your results and do you redirect, do reassess your resource. Do you accelerate? Do you pile more into that? Do you continue at current pace and see what happens? Or do you recognize that this didn’t go as planned? So, do you exit? And I think that with a framework like that, it really helps manage a disruption process which is typical of companies that are trying to evolve from sales into subscription. Because it gives you objectivity through which you can measure your success, and it allows you, as the disrupter, to be quite transparent in what it is you’re trying to achieve along the way, you’ve got these milestones, and the transparency will also help you build trust that when the difficult times occur, you’re able to weigh it all down and say, “Hey, we’re doing this together, we agreed. This is what success looks like. How close did we get there? Or did we fall short?”

Robbie Baxter: Yeah, I really like what you’re saying about doing a lot of the work upfront and the scenario planning and also having some agreement before you jump in on the criteria to accelerate. What are the criteria going to be to just continue steady state under what circumstances do you adjust and reassess? And under what circumstances do you exit? Because I’ve seen both sides. I’ve seen organizations do an experiment that goes pretty well. The leadership or the board or the owners, whoever that might be, that’s above the person doing all the work says, “That’s not good enough. Let’s shut it down,” and I’ve seen them. Say, “Let it all ride. This is the future of the company,” and then the person running was like, “Wait. But this was such a narrow experiment, and you know this is with our friendly audience.” You know all these things. So I think you’re right that it is important to have some agreement. And back to your first point about what the purpose is. Electronic cars are good examples. We had Mike on the show a few episodes ago. One of the things that he talked about was about building direct ongoing relationships as opposed to huge new source of revenue. Now, if his team and leadership had turned the tables and said, “Oh, actually, it’s not about retention, it’s about revenue, or it’s about profitability.” That would have made success difficult. Right? Because you’re optimizing for a particular metric. And I think the other thing that happens a lot is that when you ask executives which metric are we going for? Is it about engagement? Is it about revenue? Is it about bringing in a certain new audience, or deepening trust with a certain audience, or whatever it is. Most executives will say it’s all of the above. We wanted to do everything, we wanted to generate lots of new revenue, more existing revenue, greater profitability, greater feelings of trust and that’s certainly hard to do. And it’s really hard to do. When you weren’t asked to do that at the beginning.

Ross McGregor: Spending time with your executive team or your ultimate decision makers upfront and making sure you’re all speaking the same language and having some of those tougher conversations upfront is definitely helpful. There’s going to be bumps along the road, there always are, and I expect once you get a taste for success, you very quickly end up into the space you talked about. We want more. We want it quicker. And how do we do that?

But again, at every stage from my experience, I’ve lived throughout where it certainly felt like disruption. It wasn’t a pure play additive business to where we started, so you had to be very cognizant of that. I’d say gain the trust of your stakeholders, because in some instances, what you were doing might have seemed almost counterproductive to the core business. So being upfront about that and proving that. “Hey, I’m a straight shooter, and I have no interest in blowing this up. This is what we’re trying to achieve, but you bought into it, which is very helpful.” If there was one thing I would like to impart on anyone who’s going down that journey it would be to do the work upfront, gain the trust and be authentic in what it is you’re trying to do and be transparent, and then through that, good things will come.

 

Aligning visions, bridging perspectives: Success starts with shared understanding and upfront discussions with your executive team.

 

Robbie Baxter: Yeah. And one of the challenges you’re bringing up, which I think is is unique to organizations that are already successful, like Ford, is that you already have good business. The owners of those traditional businesses might see you as a threat. You’re certainly a distraction. This new subscription business is disruptive. But you may be making suggestions that are actually going to take revenue out of their line and into your line, or take it out of their line and make it smoke and disappear. There is a lot of give and take, especially in the early days.

Early on, I worked with Netflix, and they’re quite small. And we were really worried about what Blockbuster could do since they had physical locations. They could do a hybrid program. They could ship, but also have them at the store, like we imagined what we would do if we had that kind of footprint. But the truth was that the retailers, the store managers weren’t set up for that. They’d be distracted, they weren’t going to do it right. The idea that Walmart, when they were in the subscription video DVD business, we had this vision that they were going to give it away as a loss leader to get people into the store which they could do. But that wasn’t how they were set up. They were set up as their own little independent, prove your case before we give you any of the keys to the kingdom.

I’m curious. Can you share some of the considerations, either PlayStation an example of the kinds of considerations and tradeoffs that people were talking about that you were thinking about?

Ross McGregor: Well, I think the big one that actually transcends both Ford and PlayStation is that they’re successful in hardware in some form or another. It has been the traditional model. But it’s also almost a B to B to C business. Traditionally, in the games business, you sell to retail, customers buy your game, and in the automotive industry, you sell to a dealer, and then your customer will buy the vehicle off the lot. So I think when you move into this kind of subscription space, it is thinking more of a direct relationship, because to be a successful service, again, is the provision of value over time. You’re going to have to know your customer and the classic customization. You know me, and you’ve got to know them intricately, and you’ve got to know the cohorts of different customers, and where they’re at in their life stage and within the service for you to effectively serve them.

The challenge there is starting to break up those relationships that you’ve held for years in a certain successful medium and rebuild them with the customers at the center. And at no time at PlayStation, was it ever declared, we didn’t want to work retail. And Florida has very publicly stated that dealers are critically important to their future. You have to work out ways to bring everybody along. And while it’s far easier said than done, a shared sense of purpose is critical, and that’s why you share with your stakeholders, who and wherever they may be, tell them what you’re trying to do, get them on board earlier, and importantly, listen to what they’re going to have to say about this. Like, I’m someone who intently likes to listen to what people are saying to me, and often enough they have a counter objective and outside in perspective, and I like to understand why it can make your job much harder, honestly. But I believe if you listen, and objectively kick the ties together, it moves from my thing to our thing. And you take their input, and you build that shared sense of purpose.

In my experience, there’s nothing more powerful in business than a shared sense of purpose. If you have that together, you can take on the world. And when inevitably problems occur, you’re right there together, writing shotgun, and you’ll go and tackle it head-on. You can objectively move to solve some of those problems together.

Robbie Baxter: When you say together, is it you and your colleagues, your fellow employees, or is it also the partners?

Many of our guests have moved from not just from transactional to subscription, but also from indirect to direct. There’s a big fear that the distributor, in Ford’s case, dealers, or whether that’s retailers. They’re going to be concerned, and they might pull away, or change their behavior out of fear of what you’re doing.

Are you recommending talking to, let’s say the channel manager at your own company, or getting out there and going to a dealer meeting or a retailer conference and talking about, “This is what we’re trying to do, we’re working together to serve this customer.”

In my experience, there's nothing more powerful in business than a shared sense of purpose. Click To Tweet

Ross McGregor: So the latter I feel like, and again, it depends where you’re at and what level of maturity but I think the best way, although it’s maybe the hardest, steepest hill, is to talk to everybody first. I mean your ecosystem, your partners. Yes, your team. In my experience, we haven’t done that early enough or we haven’t listened to what our partners are saying. Sometimes you only land part of the way there, and you’re building a debt that probably needs to be collected at some point. If you’ve been successful, there are a lot of people who have contributed in different roles and functions to that success. So just because you’re going, “Hey, We’re going to do this service model now, and subscriptions,” you’re no longer in sales. I don’t think that traditional business dies overnight. There’s a lot in there, and any service you build should build on the strengths already established in that existing business. If you’re trying to do something net new, I would question why, as an organization, you’re doing it this way when you’ve had success in another way.

Now, it’s different. If you’re a startup and this is the first time, a lot of what I’ve lived through applies there. But as you highlight in my experience, I’ve been at large companies that have been very successful. Worldwide brands in doing what they do. Then in the journey towards, or have already completed, the first steps in that journey to the transition towards a service model.

Listening and really taking on board your ecosystem in the broadest sense is telling you is important.

Robbie Baxter: It is hard to do that because there is a lot of fear. There’s emotional concern, and then there’s also technical skills experience with different kinds of models. Both of these companies are hardware companies or grew up as hardware companies. Very different cadence from a service business. I know when you were at PlayStation you talked a lot about having a service-first mindset. That was one of your big battle cries. What did that mean at a place like PlayStation? And what does that mean for you when you think about subscription?

Ross McGregor: Yeah, it applies to most. At my time at PlayStation, we had a lot of success with PlayStation Plus, years into the journey, and I can be fact-checked on this. I believe it’s still the biggest game subscription in the world by way of subscribers. So it bloomed into this large business, and we had those early stages of success. So then you start to question, well, how do we nurture this business further? What do we take from what we’ve learned? Which is in the retention business now. It’s not all. We were always in the sales business, but now we have to think about, how do we engage with our customers? Communicate with our customers so much that they stay, and they stay for the long term. It starts to shift, and some of this might sound very obvious to the audience. It’s still worth saying.

 

Ross McGregor’s insight on the power of teamwork: Fueled by a shared purpose, we conquer challenges as a united force in business.

 

In all your decisions, if you take a service-first mindset, you absolutely have to put front and center the customer value you’re creating in the long term first. Because if you take that path and you prove to your customers that you are serving them well and they’ll love you for it. They’ll stay, and benefit from the business. If you shortcut that in any way, you run the risk destabilizing what you might hav or inevitably blocking future opportunities, because you didn’t think it through in the long term. So long term thinking and taking in the big picture is really important, and that’s in my mind what that service-first is. Observing the customer first and foremost.

Most companies proclaim that they are customer-centric. But I think when you say you’re service-centric, your priority is to create the most value for our customers, so they love us for it, and then once they engaged with you, the monetization will follow.

Robbie Baxter: Can you give me an example of a time when you said “Hey, service-first, what was happening? What would it have looked like if they hadn’t gone service-first?”

Ross McGregor: PlayStation for example. If you break it down to the most basic needs like gamers want games, they want to access games. They want to play games and play good games as often as frequently as they want to and if I go way back to the very beginning, when we launched the instant game collection, which I believe is 2012, there was naturally a lot of hesitance, both on the first party platform side and through our publishing partner side, that you’re including games as part of this subscription will that cannibalize our revenue potential. But we talked long and hard, and we evolved that over the years. We talked about content, windowing the right time, mixing genres of games, looking at how people are consuming those games, the type of games they were, and it’s evolved a lot. But I think in many ways the instant game collection changed the way game consumption is forever. Now there are a lot of games you’ll get through subscriptions. But we did that because we came back to the most basic of basic needs. If we get it right, our customers will love us for it, because we’re giving them more of what they want at a more economical price. It wasn’t like they stopped playing the other games that weren’t in that subscription, but you gave them more of what they loved, and therefore they appreciated you as a result, and there was a lot of pain to walk through that as an industry. But if I look back now over a decade ago, I don’t know if we could ever imagine that world again. Now we’ve evolved, and I think that’s very much taking that service-first mindset saying we will give customers something they all love. We will take the pain up front because we believed they will extract maximum value for it, and therefore we will benefit in the long term and we did as an industry. Although it’s still very hotly debated. There are now subscription services all over the place that simply wouldn’t exist if it wasn’t for the instant game collection taking that first very mainstream step with PlayStation Plus.

In all your decisions, if you take a service-first mindset, you absolutely have to put front and center the customer value you're creating in the long term first. Click To Tweet

Robbie Bater: How do you establish a subscription-oriented value proposition in an organization with a rhythm around hardware?

Ross McGregor: I think you must build from your strengths. There are certain things that have made you successful. So what are they and how can you augment that?

Probably the first fact that you might describe is hardware businesses typically, have longer R&D planning cycles, manufacturing times, and shipping distribution costs. If you move to a software services model. Once you’re scaled, it’s a lot easier to pivot. Take your path and monetize

In the hardware model with all those downstream costs, if the product wasn’t successful like you intended, you don’t recoup those cost. The first thing is you ask out the gates on kind of business cases, you’re transferring away into this more consistent financial or revenue line rather than kind of lumpy revenue. So there’s that lens to it. But then, if there are ways that you can at least again, in my experience where you can add services that augment the core business, build on that, it becomes win-win

One, I think the customer gets a better experience because they’re in your ecosystem. They’ve purchased the hardware, but if they buy into the service layer, that makes the hardware even better. It opens up more opportunities for them, gets them from A to B without friction, or frankly, helps them enjoy the product they’ve invested in more. Then there’s a way to benefit from that as a company, and that’s where that business case all comes together. It’s not easy to do. I’ve certainly been part of some things we’ve tried to do that didn’t work along the journey. But if you can do that certainly early on, it’s the best way to help scale your business because you’re feeding the company flywheel that already exists around hardware and you are enhancing that rather than detracting away from that.

Robbie Baxter: Something that I’ve seen and I’ve thought about quite a bit, if you really believe in a service mindset which I know you do, I would imagine that the ultimate end game for a hardware company with software services is that the whole thing is a service, right?

Talk about product mindset versus service mindset coming head to head for battle. I have a 5-year-old Peloton in my garage that doesn’t have a lot of the features that they talk about on the subscription that I’m still on. And if I want to get the full value, I have to buy new hardware. It doesn’t come with my already pretty expensive subscription. The same thing is true with my phone. A lot of companies have kind of straddled to two different mindsets. What’s your thought on that?

Ross McGregor: Yeah, I’ve seen that play out, and I’ve certainly been in rooms where I’ve argued this is clearly the future. Why we hold it on to the past, frankly, I don’t know if I was right in some of those arguments as well. At least for the foreseeable future, screens and input devices are probably required, so there’s some form of hardware. As soon as you add that software layout, the complexity of keeping that hardware updated, as you said, is in perpetuity, or eventually just technologies outrun it, and you’ve got to re-up on the hardware. But I think there’s value there, and interestingly, with the exception, maybe kind of music and video that kind of omnipresent we’re seeing more and more. You mentioned One Peloton being a good example of that subscription services that combines hardware and service, and as long as we’re not hanging out all day in the metaverse, we’re still going to need tangible interaction points. So I actually think the perfect spot is having that service enhance quickly what that hardware experience could be, and enabling you to personalize or customize it more to the unique customer needs. Where again, for these reasons I discuss hardware R&D planning, distribution, and manufacturing, you tend to build it. It. It’s more of a static product where a service can evolve a little bit to fit quicker. You can maybe have multiple tiers of packages that appeal to different customer sets, and they feel a little more like it’s customized for them. Again, for people to love you, they’ve got to feel like they have a sense of belonging to you as a business and that requires you to deliver it to them. As an individual, they need to feel that way, even if they are one of a larger cohort of customers.

 

Pioneering a service-first mindset with PlayStation Plus: The upfront leap led to thriving subscription services

 

Robbie Baxter: Yeah, one of the reasons I really wanted to get you on the show is because so many manufacturing companies are trying to figure out subscription and are bumping into the kinds of challenges that you’ve described around the nascent business being like a flea on the back of a huge dog of a business or a huge successful business. The different business cycles, the fear of cannibalization, and the upfront investment that’s required for this long tail revenue.

What happens when you’ve got the latest software, and the 5 year old hardware. Should I have to buy it? Or should it be part of my subscription? I think these are really hard questions that are true of the whole hardware space.

Ross McGregor: Yeah. Honestly, it’s a terrible answer but it’s a good one. The answer is that it depends. Right? Maybe price points play some part to that. If you’re buying a vehicle or you’re buying a Peloton in that instance, you’re buying a console in some instances, I don’t know where that number is. Is it a few $100, is it many thousands of dollars? Is it tens of thousands of dollars? If you’re putting that money down, your expectation is that now you’re charging me on top, I expect this thing to go for time.

Now, it can’t be forever. Nothing lost forever. At the end of the day, maybe 10 years out, we’ll go, “Hey, We’ll support this for as long as you want it.” But at some point, customers are actually going to want to move on, not because technology has moved on and up, or the proposition has evolved so much that it’s no longer as relevant, and you’ll gracefully sunset what was before. So I think that probably matters company by company, from use case to use case. You really have to think about that.

You’re right, and I certainly argued in context that in a perfect world. Wouldn’t it be great that, as a subscriber, as long as you’re paying for this, and it’s hardware required, we’ll upgrade when the time is right. There’s the economical side to that, too, and then there’s the scalability side to that. Like a lot of digital services, as soon as you’re kind of shipping hardware to customers, you’re right back at are you doing that through retailers? You got the customer’s address and you shipped it in logistics. It is super complicated, but I think this is the next age of subscriptions. It’s working those problems out, and it’s not just physical goods. Health care is another super interesting area. Now, in this space where it’s trying to work out like medicine. You can’t digitize that per se. You’re going to have to get people’s prescriptions and the drugs associated with them. So it’s a super interesting space and in some ways, it’s moving forward to that physical world. Now we’ve added this service layer. We’re working at how they play together.

Robbie Baxter: Yeah, I agree. It’s much more complicated. 20 years ago, I was working with Netflix, and I thought that was complicated. But that’s a single business that was always direct to consumers. That is all digital compared to what we’re talking about, which is several lines of business at both companies that you’re talking about. Hardware and software, direct and indirect.

I have a question for you. Many organizations transform in multiple ways concurrently, right? Transaction to subscription, hardware to hardware and software, indirect to direct, and physical to digital. What do you recommend? Do you have 3 different teams working on these different transformations concurrently? Do you have one team that’s responsible for massive change? Or do you do these sequentially and say, “2023 is the year of direct-to-consumer, 2024 is the year of subscription, and 2025 is whatever comes next.”

Ross McGregor: Yeah, so I’ve certainly seen it done both ways. And I’ve been part of something like mass change and I think the automotive industry is maybe a good example of that. Where there’s mass change across the industry trying to rethink, is this a survival path for us above and beyond the kind of traditional business? And I think you can take it on at once if you’ve got a really clear vision of where you want to be. Believe the capabilities are there. The teams. You’ve got the smarts. You can take it all on. But the issue is, I think you’ve got to be cognizant of the fact that the more change you add into any system, the more trash exists in that system, and the more stress there is, the harder things are. You’re running a marathon, and you can only run so far at Sprint’s pace, which is essentially what you’re doing if you’re taking it all on. So I think, most realistically, the ideal is that you accept that change is long, it’s stressful, and it rarely goes according to plan. Things are going to come up that you just didn’t foresee. Building a roadmap, as you describe it, or a structure through which you can build things into chunks. And then, what does success look like for this chunk? Can we derisk the bet here? Can we validate our hypothesis here? Can we do this thing and make it the best version we can? Because then we know we can get to this next piece, and it’ll be stronger as a result. So I think you can compartmentalize, and you’ll last longer. But I’ve certainly seen the case, being part of organizations with very strong vision from either leadership or within the group of disruptors that have been charged with this. Whereby I think you run up the hill, you run up it, and you go at it. But at some point, you run out of gas. You can’t do that forever.

Robbie Baxter: Yeah. So you’re saying either separate teams concurrent or separate teams sequential, but not one big messy piece of crap.

Ross McGregor: That depends on the size of the company. Right? I mean, it’s very difficult for a singular team to be a master of all the different components. They’re going to need to be successful in gathering the change. Yes, you’re going to need multiple changes. And you’re going to have to need a system through which those teams communicate and collaborate with one another. And in turn, it comes back to, and this is why I’m banging this drum all day long, do that work upfront. Talk to those teams and align on what it is you guys are trying to do collectively and what success might look like. Because if you don’t do that, the more teams you add sequentially or altogether, as soon as that first-hand grenade kind of goes off, or like the first-row bump, without that North Star guiding you, it becomes very difficult to work out which way is up

Robbie Baxter: Awesome. Wise advice. Do you have time for a speed round?

Ross McGregor: Yes, please go ahead

Robbie Baxter: First subscription you ever had?

Ross McGregor: You know the one that always sticks out to me from the office, the Dollar Shave Club. I’m still going with that. There’s hardware and subscription right there.

Robbie Baxter: Your favorite subscription today? Excluding your past companies.

Ross McGregor: Yeah. I probably see Apple One. It combines so many things together. It’s getting expensive, but we use it every day.

Robbie Baxter: The coolest automotive subscription idea you’ve heard of.

Ross McGregor: That’s interesting. Kudos to the team at Ford. I still think one of the coolest ideas is Ford’s BlueCruise, and Ford won an award for this. Which is kind of hands-free. Eyes on the road driving just gives you so much time. If that starts on the path to time as a precious commodity, and gives productive, fun time back to customers while they’re on the journey, I think that’s really cool for me.

 

Ford’s BlueCruise: User-friendly and hands-free driving tech

 

Robbie Baxter: How has your experience playing hockey helped you be better at your work?

Ross McGregor: Yeah. It’s humbling because, in some games, you feel like you could progress onto the NHL and all those games. You wish you’d never gotten on the ice in the first place. But I think quick decision-making and honestly, teamwork, like anyone who knows me will say, I optimize for teamwork and collaborativeness first and foremost. I’m a huge believer in that. And

I often said as a musician, I was a band person, not a solo artist, and I preferred to win and take things on as a team. So hockey is very similar to that, whereby it teaches you how to play your part with others.

Robbie Baxter: Fantastic. Ross McGregor, thank you so much for being a guest on Subscription Stories.

Ross McGregor: No, thank you for having me.

—

That was Ross McGregor sharing best practices about service-first product leadership learned through his roles at Ford and PlayStation.

For more about Ross, follow him on LinkedIn, and for more about Subscription Stories, as well as a transcript of my conversation with Ross, go to RobbieKellmanBaxter.com/podcast.

Also, I have a favor to ask. If you like what you heard, please take a minute to go over to Apple Podcasts or Apple iTunes and leave a review. Mention Ross and this episode, if you especially enjoyed it. Reviews are how listeners find our podcast, and we appreciate each one. Thanks for your support.

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About Ross McGregor

Ross McGregor is a seasoned product leader with a passion for creating products and services that bring joy and excitement to people.

With over 20 years of experience, he has successfully built, developed, and managed new areas of business growth within the global digital product and subscription services space.

 

 

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