7 Tips for winning with a Product Mindset
Updated: May 1, 2020
For many enterprises, it has taken a pandemic to bring a laser focus to the most important initiatives within a portfolio. Overnight we have seen projects slashed and our best and brightest re-directed to the most important initiatives. This highlights forced prioritisation as just one of the most valuable skills we can develop.
These prioritised initiatives tend to be large and complex programs and projects. Even with studies published by Mckinsey and The University of Oxford which stated, "on average, large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted", organisations are not adapting to a more scientific-based continuous value approach.
Fortunately, the start-up world has been working in volatile, unknown circumstances since inception and now more than ever is the time for Enterprise to incorporate these Lean Startup principles, alongside the rapidly maturing fusion of Product Management, Design Thinking and Agile practises and techniques.
By adopting a Product Mindset which is underpinned by a data-led approach we can dramatically lower the risk of delivering the wrong outcome, solve real customer needs, and in doing so increase organisation revenue and profit.
So what does it mean to adopt a Product Mindset?
1. Empathise with the customer
Through a combination of our education, upbringing, life and work experiences we naturally form a view of the world we operate within. This view can lead to a certain amount of cognitive bias about our customers’ requirements and their perceived needs. We are hard-wired to move to solution mode rapidly and often make many assumptions to gain traction and demonstrate progress towards a solution. Sometimes we get lucky and deliver something that sells and at many other times we completely miss the mark. We can start to remove our bias if we adopt the mantra "don't believe everything we think".
Instead, we can take a customer-led approach and in the words of Steve Blank, we must "get out of the building” if we truly want to understand the needs of our customer. This means finding ways to observe, interview and collect feedback from your customers on a regular basis. Techniques such as empathy mapping, story mapping and personas assist you to understand their pain points, purchasing patterns, knowledge acquisition habits and platforms of choice. This customer behaviour will provide insight into the minimal features that matter for the customer and guide your go-to market strategies.
2. Discover needs versus gather requirements
In more traditional software development techniques, we were educated to gather requirements from our customers on the assumption that they knew what they wanted. How many times have you talked to a customer and they were unhappy with the status quo yet still not sure what the alternative might be or what their requirements were? If we accept that we don’t know, and our customer is also unclear we can discover the problems and opportunities together. In fact, we can apply various techniques depending on the level of knowns and unknowns. AJ Justo provides an excellent history and explanation of how The knowns and unknown framework can be applied to explore a problem space with an open mind.
3. Think and act like a Venture Capitalist
By taking the time to explore the problem space, and its varying complexities we usually uncover a multitude of opportunities. This can quickly become overwhelming and we run the risk of analysis paralysis. In order to arrive at the best way forward, an alternative is to start taking calculated bets on many smaller opportunities. These bets can be tried and failed rapidly or nurtured.
The bets that 1. customers love, 2. we know we can deliver, and, 3. indicate they will make money (if that’s your strategy) we can preserve to be brought to market at a far increased chance of success due to this early validation.
While it’s recognised that we may continue to need to deliver some large rocks which may be well understood and can follow a more process and output based approach, there is increasing value in providing a runway for both known problems and solutions alongside more experimental bets.
Smaller investment may yield massive value to your business and your customers and depending on the timing be incredibly valuable to take to market quickly. COVID has accentuated certain product features as “delighters” that in a different world may have been launched unnoticed or undervalued in the eyes of the customer.
By example, ABC’s special continuous coverage of COVID is a great example of a feature that has never been more valuable to its readership right now. According to ABC’s Product Manager, Anthony Lee, the feature was taken out as a bet at the right time and has paid off during COVID. His recent talk of his team’s product strategy evolution and journey delivering both boulders and bets is available via the ProductTank Brisbane Meetup.
4. Take a Data Led Approach
It is easy to say and very hard to achieve. Culturally many large organisations are still adjusting culture and leadership styles where the HiPPO (highest paid person’s opinion) drives the priorities for teams. These organisations exist alongside others who understand the need for intimacy with their customers and utilise numerous data points to guide their roadmaps and choices along the way.
The data points take many forms and include but are not limited to:
interviewing our customers to discover their needs,
launching solutions early to validate if, when and how they use the solution,
making observations of customer behaviour in their environment, and,
collecting data and analytics about the usage of our products, possible drop off points and the hook that will keep them returning for more during the lifecycle of a product.
It becomes easier to utilise data to justify priorities when a team has established trust with their leaders. One of the fastest ways to earn trust is to deliver on some early commitments and then start to introduce the concept of testing out future ideas with customers once you have some runs on the board.
5. Mitigate risk by testing assumptions
Two techniques to reduce risk include running experiments to remove assumptions and managing the size of the experiments you want to undertake with each unknown and have the rigour to stick to that.
Experiments can be structured as follows:
Our hypotheses is that…
We will know it’s true if….
We observed that…
We have now learned that….
Our next steps will be..
Based on our initial assessment of the size of the prize we can take a relatively sized bet. A small bet may take a few days, a medium bet might be 5 days and a large bet might take 10 days. This timeboxed approach encourages rapid feedback and prevents scope creep of tests been developed into products which may not appeal to a wider group of customers.
Adapting a culture to safely fail ideas in order to bring focus to ones that show more promise takes time. It is difficult to let go of our own pet projects and ideas. Fortunately, the scientific method helps to remove this cognitive bias.
6. Outcomes versus Outputs
It is more important what the customer can do or achieve with the product you provide them, then the product itself. The product is the vehicle of value. As Peter Drucker said, “The quality in a service or product is not what you put into it. It is what the customer gets out of it.”
7. Iterate to learn and improve
Taking an agile approach helps to reinforce the early and continuous feedback loop. By sharing and demonstrating progress early, listening to the feedback and making the necessary adjustments based on that feedback we can evolve our solutions into products our customers love and refer to others. The ultimate prize.