By Ross Sleight, Chief Strategy Officer, EMEA, at CI&T
Businesses can develop new product innovations in adjacent markets, but the battle for share in core markets is crucial, and the winning formula is staying close to the customer. This requires a measured, disciplined approach to product innovation.
Innovation is a double-edged sword: being first to market with a new concept certainly creates a competitive advantage, but if the concept is not developed enough, too minimal, or not as relevant to customer needs, it can negatively impact the customer experience. To truly accelerate digital product innovation and stay ahead of competitors, teams must adopt a rigorous approach to defining and validating a digital product or feature they want to create —and build the right team to deliver on it.
1. Multi-disciplinary teams win
In traditional Project methodology, businesses organised their teams around creating business requirements and often developed these in disciplinary silos within the organisation. Project teams often lacked insight from other disciplines within the organisation, and once the project was delivered, they were often moved on to other projects, dispersing the knowledge, insight and experience built up through that project.
The modern product-based approach brings together a multi-disciplinary team across the organisation to develop a solution against a series of objectives rather than delivering requirements. These Product teams have digital skills such as development and experience design at their core, but also include representation from other relevant disciplines across the business such as logistics or compliance, which gives an informed and holistic view as to how an objective can be met and opportunities identified.
This Product mindset is universally adopted by digitally native companies. For example, Spotify has split its workforce into ‘Squads’ of 6-12 individuals since 2011, featuring all the skill sets required to successfully focus on an individual feature area. This strategy also fosters long-term ownership of the product, keeping insight and experience focused on the opportunity and generating ownership for team members which in turn creates a more motivating experience.
2. Consistent validation ensures relevance
The Product mindset enables consistent validation through a “prototype-test-refine” approach which fosters closeness to customers and accelerates relevance for the product.
Consistent validation streamlines the development process as Product teams are empowered to make decisions based on actual customer insight and reaction rather than developing based on internal team assumptions. What results is a product that, when launched, will genuinely be welcomed and loved by customers, rather than a product that launches, does not meet customer expectations and has to be re-developed.
Often, legacy technology platforms may not support the necessary features that customers want, and a parallel approach will be needed to develop the platform, or even re-platform, at the same time as developing the new front-end. CI&T recently worked with one of the UK’s largest energy utility providers to develop an innovative customer experience for a new subsidiary brand in parallel with re-platforming, and consistent validation enabled the customer experience to influence the platform development in tandem. This enabled the swift onboarding of customers within six months of launch while simultaneously scaling up the platform to bring even greater returns.
3. Constant evolution is key to success
Too often, we see organisations with a dominant market position get usurped by more agile competitors. A critical case study is Blackberry, which went from a dominant brand in the smartphone space in the 2000s to nearly obsolete by January 2022, due to its inability to keep up with rivals such as Apple and Android.
We’re living in a world of fundamental change, and customer expectations are growing every day, set by the best digital interactions they have in any sector. No matter how successful a product is today, its future can never be guaranteed. Companies must constantly evolve their offering to keep pace with both these customer expectations as well as competitive offerings. After all, the most dangerous phrase in business is “we’ve always done it this way”.
Consistent evolution is not blind however; core to the Product mindset is Product Strategy which not only defines the clear North Star vision of where we want the product to be but creates the roadmap to achieve this vision. The roadmap is never fixed but will need to be consistently adapted and prioritised to external influences and developments and this is core to business agility. Adopting a Product mindset will provide the flexibility and focus for companies to be successful both now and in the future.