Gartner says 54% of companies are planning to become product-led organisations.
By Calton Nhando, digital consultant at IndigoCube
That may seem like a lot and it’s often easy for the business and technology people to see the advantages of adopting the approach. But it still means half of companies haven’t come around. Supporting that view, I’ve seen a lot of interest in the local market but fewer companies able to take it forward.
They face challenges, such as cultures that avoid risk, silos and disparate divisions of one kind or another, hierarchical bureaucracies and employees happy to keep plugging away the way they have always done.
The Business Agility Report, Raising the B.A.R., second edition, 2019, by the Business Agility Institute, found that one of the biggest challenges to entrenching agility is bringing leadership around to the new way of working.
Processes are entrenched, the way businesses operate, what people value and how they approach their jobs, how they perceive the success of the business – all point to a way of doing things that often focuses on delivering shareholder value above customer value.
That was successful under the ideologies of the twentieth century but it’s a vessel that holds little water in the twenty-first century which is characterised by disruption and frictionless customer experiences.
Ergo, the desire to become agile.
As the report notes, outcomes are valued more than outputs, as is establishing base agile capabilities, creating strategic agile practices across the entire organisation not limited to software development, and incentivising employees to look after customers above all.
The goal is to become a product-led business with products that focus on serving customer needs. Just like Facebook and Uber and Amazon, Takealot, Loot, Discovery and Waze.
Our culture tends to be project-focussed but product-led development is at odds with it. Projects have served our businesses well for decades. They help us to organise our goals, resources, deliverables, and manage the returns. But projects don’t help agile environments perform well.
Projects are slower and less efficient for software development in our fourth Industrial Revolution (4IR). But they also neglect some advantages product-led development offers.
Product-led businesses are fast, agile and support the dynamism companies need to stay in tune with market forces, which can be unpredictable.
Product-led organisations remove the barriers between customers and employees. They break down the shutters that kept customers at arm’s length and instead put your product development teams (not limited to software developers) in intimate commercial contact with customers to better survey their needs, desires, requirements and rapidly deliver the goods.
People in product-led businesses gain a healthy autonomy that’s a transformative new reality for executive antiquities. They discover also how IT evolves from a revenue vacuum to blow a fresh breath of revenues through the business.
Flatter, more autonomous structures with intent-driven leadership that fosters environments promoting high value customer outcomes yield dividends in excess of the previous century’s rinky-dink daydreams of margin.
More businesses adopting this approach have forever altered our lives. You no longer need to own a car. Today you can Uber just about anywhere if you live in a city. You no longer need to leave your house to shop. You can get almost everything online and often all from the same store. You don’t have to visit the bank branch for nearly everything finance related. Fitness and training will never be the same again with wearables, apps and online coaching. Medical administration is also permanently altered. Record stores are gone, video rentals with them, and pretty soon VR goggles may kill the monitor star.
Most of the world agrees that Steve Jobs was a smart guy. He said that you have to begin with the customer experience and work your way back, not begin with the technology and work toward the customer. That’s how he brought one of the greatest technology business success stories to life then resurrected it years later. And, when you think about it, it’s the converse of what a lot of companies have always done.
Jobs knew that Steve Wozniak was important because he could make the dream real. But Jobs knew that the customer’s dream was more important because it gave “Woz” a goal that channelled his technical genius.
Woz was a whizz electronics engineer at the time they formed Apple. But at least part of Job’s genius was, according to his biographer, Walter Isaacson, that he was a “tweaker” who constantly sought to perfect his designs.
It’s a laudable achievement in a pre-disruption world when just finding out what customers wanted was a major hurdle. Without the many automated feedback mechanisms that we have today the success or failure of companies often pivoted on the gut feel or intuition of someone like Jobs.
The problem, of course, is that there are never enough Jobs’s to go around. And that is why we are fortunate today to have the innovations of product-led businesses that extend the invaluable lessons of the lives of people like Jobs and the missteps of people like Henry Ford, who ultimately knew very little about the customer experience.
All we have to do now is create an environment where product-led businesses can take flight.