In the face of increasingly complex consumer demands, product thinking and agile innovation are key enablers of success for digital transformation leaders.
Product organisations group employees by product, so each product has a dedicated team instead of employees working in siloed departments. While product organisations aren’t new, tech giants like Google have popularised product thinking as a means to improve operations, increase customer happiness and innovate for the future.
The following 5 tenets are proven methods of driving success for organisations with a product mindset.
1. Meeting Customer Needs
As distribution channels have gone digital, consumers no longer have to choose between the products and services in their local area. With a wealth of choice at their fingertips, customers can switch products and services the moment you begin falling behind competitors. Given these developments, it’s unsurprising that a recent survey conducted by EY found that meeting changing customer needs is the number one priority for digital transformation leaders.
At its core, product thinking requires organisations to be relentlessly customer centric and view a product as a whole, rather than the sum of its parts. From establishing ‘product-market fit’ to optimising your product based on real-world feedback, solving customer problems always takes priority.
To employ product thinking, enterprise organisations can take a leaf out of the SaaS and startup playbooks, where concepts like Product-Market Fit (PMF) and Minimum Viable Product (MVP) are essential.
Simply put, PMF refers to the ability of your product to satisfy a strong market demand. Establishing product-market fit is necessary to validate a new product or feature, but also to identify new verticals for growth. Similarly, focusing on the MVP of a product necessitates that your organisation or team focus on features that deliver the most value, whilst also enabling you to get to market quicker and obtain valuable real-world feedback.
2. Using Agile development cycles
Agile development is an enabler of faster deployment and innovation at scale, key dimensions of value creation in the digital transformation process.
Agile development cycles focus on consistent iteration using customer feedback. This philosophy places customers in the driver’s seat rather than letting employees decide what to create.
Key concepts to adopt for agile development cycles include:
Minimum viable products: Embracing MVPs shortens the time between feedback loops, helping your product team meet customer needs fast.
Incremental value: In a similar vein to MVPs, incremental value focuses on developing features on the smallest scale possible. Again, this method shortens feedback loops and helps guide the product’s development roadmap.
Continuous integration and deployment: These focus on delivering consistent product iterations while testing each addition and ensuring it works as it should. CI and CD help product teams better identify issues, fix them faster and cater to changing customer needs.
But there’s no one-size-fits-all agile approach. It’s about choosing the one that best fits your needs.
For example, Cisco chose SAFe as they wanted to implement agile development at scale. And this framework helped them:
Decrease critical and significant defects by 40%.
Improve employee satisfaction.
Run more efficient development sprints.
Ashish Pandey, Technical Lead, Cisco IT Team, told SAFe, “Continuous delivery improved quality, increased productivity, and improved the employee experience.”
3. Developing valuable ecosystems and partnerships
The majority of innovation leaders believe partnerships are crucial to succeed in today’s market.
Starting a partnership isn’t about adding names to each other’s websites. It’s about creating a consumer solution that goes beyond what’s already available and adds value to both companies.
Microsoft is an excellent example of using a partnership ecosystem to succeed. By leveraging partnerships to better meet complex customer needs, they drive a staggering 95% of revenue through their 400,000 strong partner network.
Rodney Clark, Corporate Vice President, Channel Sales and Channel Chief, says that “these partners are essential to how Microsoft delivers innovative products and services.”
To ensure the partnership is valuable, Microsoft supports their network by providing:
Product guidelines, such as their Cloud governance documentation.
Community resources, such as their Partner Centre and Microsoft Partner Network.
Technical product training.
In turn, partners sell solutions that incorporate Microsoft’s products, driving revenue for both parties but, more importantly, increasing customer satisfaction by delivering the right combination of capabilities and features.
4. Nurturing Talent and Creating an Innovative Culture
Product thinking and agile development lay the foundations for nurturing talent and driving innovation.
It allows product teams to:
Connect unrelated concepts into a unique consumer solution.
Always focus on the next product iteration.
Become specialists and experts in the product they create.
But these aren’t enough by themselves.
That’s why companies are making learning and growth a priority for their product teams. As an example, Waguih Ishak, division VP and chief technologist at Corning Research & Development Corporation has his own framework for driving innovation.
To help product teams to unleash their creativity and uncover innovative ideas he focuses on:
Networking with internal innovation leaders.
Having unreasonable goals.
Focusing on only a few products at once.
Cultivating external relationships.
5. Planning for Emerging Tech
Technology governance is crucial for keeping businesses and consumers safe, but also to scale innovative technologies.
Data and privacy risks surrounding areas like artificial intelligence have stirred up public debate and media attention, making ethical governance an imperative to winning consumer trust. This is especially the case for emerging technologies, where risks may be hard to predict until later in the innovation process, when intervention is difficult and costly.
Amongst digital transformation leaders, 43% have governance frameworks in place for select technologies and 64% are in the process of creating executive level governance plans.
To plan for emerging technology, it’s necessary to ensure risk is managed proactively. As a result, organisations should treat Risk as more than loss-prevention function and engage with governance concerns as part of the innovation process itself.
Based on Microsoft’s AI governance model addressing areas of concern such as the below in an open and inclusive process can help to ensure responsible innovation:
Privacy and security
Transparency
Fairness
Reliability
Inclusiveness
Accountability
Start Implementing the 5 Tenets of Successful Product Organisations
Digital transformation isn’t about adopting the latest technology, it’s about using technology to improve business operations to better cater to your number one stakeholder—your customer. By following these five tenets, you can successfully guide your company through digital transformation and continue innovating for years to come.
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