So you are experiencing the trials of dealing with a non-strategic orphan. You recognize that you need to explore your options to optimize resource utilization and customer satisfaction moving forward. You start down the list of the viable options; divest, discontinue or harvest. Because you recognize that although the product line is non-strategic to you it may have value for someone else you decide to explore a sale. However, the product line is relatively small and the operations are not cleanly extractable from your core business. As a result, you can’t even get the appropriate business development or finance personnel to engage in a discussion about what a sale would look like. Even if you could you start to wonder who would be interested anyway given the size.
Still determined to move on, you focus your efforts on discontinuance. Your product manager and the marketing team are devastated by the message you will be sending to customers. Despite the fact that they have been lobbying hard for investment to make the product more viable in the market they now assure you that the best strategy is to simply keep the product in the portfolio without further investment so that you don’t “abandon” those key customers and you don’t have to scramble to find replacement revenue sources. You resign yourself to the fact that, by default, you have now settled on a harvest strategy.
Why Clarity Is Essential for a Harvest Strategy
Whatever path led you here, whether through one similar to that outlined above or through a more deliberate decision, now is the time for clarity. If divestiture or discontinuance had played out, the path would be clear and the duration finite and foreseeable. It would be easy to ensure that everyone within your organization understood the objectives and stayed on point for the limited time that the product was still in your hands. However, for a harvest strategy, which can play out over many years, it is essential that you are clear to the organization and take decisive action to reinforce what is and isn’t inbounds or you risk an ongoing frictional loss to your continuing innovation efforts.
A lack of clarity and incentives around the harvest objective will lead to a straying from the course, a revisiting of old arguments by new or unsatisfied stakeholders and the simultaneous opposing views by various stakeholders in the organization that either; (1) the company is supporting a failed business that should be discontinued to focus on the core or, (2) if only the company would invest appropriately in the legacy business it could provide substantial returns at least by maintaining happier customers. If the organization is not clear on the boundaries of the harvest, it is even possible that sporadic investment is made to breathe new life into the product, even while in harvest. Typically, such an investment will not result in the return used to justify it and will aggravate parties on both sides of the argument as those who want the product discontinued see good investment capacity wasted and those believing more could be achieved see management taking half-measures to success.
Because the temptation to stray from the strategy increases with the distance of a stakeholder from the decision-makers both within the organizational structure and in elapsed time, you may need to make structural changes to reinforce a harvest strategy. For example, you could use a structural change to reinforce the objectives of the harvest with the employees most “vulnerable” to this backsliding – those closest to the customer and success of the product, such as those in sales and product management. One way to do this would be to change the organization’s relationship to the product through a move from direct sales to distribution. Anything you can do structurally to refocus the organization on the success of the strategic product lines instead of the legacy revenue generator will help your strategy survive the inevitable changes in personnel and perspective that may occur over the years a harvest strategy must play out.
Be clear or your organization will continually revisit the arguments that led you to this decision in the first place, wasting mental energy and precious capital while creating a climate of frustration over individual contributions to organizational success.