In part two of our series on digital products we look at the business change required to shift the way an organisation operates and get true value from innovation. Read part one to find out more about the challenges businesses face when developing a mature product capability.
So you’ve decided on the digital product you want to create. It might be to automate some of your labour-intensive activities or equipment maintenance. Maybe it’s a customer-facing app that allows users to transact with your business. Perhaps you’re thinking bigger, and building a system that will disrupt an entire industry, city or nation!
Whatever the digital product, moving from idea to reality is not as easy as assigning a project to a team. Organisations with a mature product innovation capability (such as a ‘product studio’) understand that a holistic approach encompassing business, experience and technology aspects (BXT) will make the journey easier and be more likely to deliver value.
In this second article in our product series we look at the three steps businesses need to take to ensure the right systems are in place for product innovation.
1. Start with strategy
To make the best product decisions you need a solid product strategy in place so you can measure and evaluate progress and reduce any re-work or roadblocks along the way.
The first step is to define your product vision. What is the future state you are trying to create? Beyond the product itself, what’s the story it enables? Your digital product alone won’t solve this, but the vision will align people to purpose. Your mission, on the other hand, should be attainable. Defining it will allow you to form a roadmap, for focus and direction. With this map, you will be able to align products to value creation (measuring objectives and key results) and accommodate changing priorities and market opportunities at regular intervals.
For instance, if your vision were to solve climate change and your mission to improve the ease of tracking carbon emissions, your roadmap and objectives would ensure a digital product, such as a dashboard showing emissions hot spots, got built, measured the right things, and provided value.
To ensure that everyone is on the same road, product principles should be agreed to at the start, defining the guardrails for all future product decisions. A ‘disagree and commit mentality,’1 for example, will allow the team to stay true to the vision, but be flexible on the details — never holding up the product build.
Additionally, to compete in a global marketplace and innovate at pace, businesses need to strategically partner to bring new business models and propositions to life — essentially redefining the concept of ‘value’ to a shared partner ecosystem. Make sure that any partners you bring in are aligned on vision and principles, and the commercial structure/relationship reinforces the right behaviours.
2. Enable the business
Next, you will need the right people capabilities to come together from across the business to deliver the product. A ‘team of teams’ approach will provide efficiency in how people collaborate together and interact with other parts of the business, as well as ensuring the quality and consistency of the work.
In reality, this means setting up three teams within your product studio — one to deliver the work incrementally (the product squad), a supporting team of specialist advisors for any additional expertise needed, and an ‘enabling team’ that removes blockers, coordinates workflows and assets, reports upstream, and considers governance and quality control.
Delivering with pace and agility requires a clear understanding of how value is delivered. This includes the business units and capabilities involved, the processes and touchpoints required, how strategy cascades into task level work and a common taxonomy for each step. Combined with an optimised and efficient team structure (of all the people you need while minimising dependencies and handoffs) the conditions for the quickest flow of work from start to finish will fall in place.
Importantly, you will need an agreed way to determine product priorities, balance customer and business needs, and technically develop your product. A prioritisation framework will help make tricky decisions and could consider the importance of customer pain points, the features which will generate revenue or growth, or the effort or complexity involved.
Finally, well structured governance is critical. While this will differ by industry context, risk appetite, business process and culture, product teams should all share their progress and get customer/stakeholder feedback regularly (a fortnightly cadence is typical). Enabling teams should review performance against objectives and key results each quarter to identify value delivered, share learnings and address/amend the plan forward. At these key quarterly points, one of three decisions should be made — to continue working on the product (persevere), focus on other value (pivot), or stop working on the product if it no longer makes sense (pause).
3. Transform your culture
The products you create will result in new capability for your organisation and redesign processes that will transform how your business operates. But you need to lead people through this transformation to ensure the adoption and growth of your product.
A new kind of leadership is required to motivate people and create an environment where teams self-organise, collaborate, learn from each other, get quick feedback from customers and are focused on quality and continuous learning.2 3 4 Successful product leaders therefore require a balance of a growth mindset and ‘product thinking,’ which can be summed up as building the right thing, the right way.5
If product leadership is approached simply as project management, you’re likely to encounter problems.6 Significant effort is required to ensure employees feel informed, understood and are part of the future vision. A variety of steps should be taken, such as creating urgency, building advocates, developing strategy, communicating vision, removing obstacles, achieving short term wins, continuously improving, and embedding change in culture.7
It’s also worth investing in a transformation roadmap, which, in the same way a product roadmap communicates the product creation journey, does the same for the overall transformation effort. It should be a living breathing document, co-created with business stakeholders and used in regular sessions to align and achieve outcomes.
Last, but not least, creating understanding and awareness of a new product involves internal and external (staff and customer) communication and engagement activities. Adoption relies on awareness campaigns, testing and training with users, onboarding experiences that communicate the value of the product, and ongoing support services that reduce friction and increase use.
The above tips should help organisations to get real value from their digital products and solutions, but make no mistake, they are not all easy.
Big business in particular often struggles to align on a product’s vision and mission or to prioritise the funding and resources needed to deliver. Small businesses, however, are the disruptors in this space, more nimble in structure and able to make the necessary changes for success. Alignment on the above areas is often the difference between products that drive growth, and those that waste time and money.
In part three, we’ll look at the experience aspect of product innovation — creating the conditions for high performance, a dual track approach to product innovation, and how your physical/digital environment will support your product efforts.