Why understanding the needs of your users cannot be outsourced

In this week´s session about Information Systems and outsourcing @HEC we have discussed what to think about when considering outsourcing. One quote was “don´t outsource the problem, but outsource the solution”. This is interesting from a Product Manager´s point of view.

One thing I keep talking about, is that one should refrain from jumping to solutions too quickly. Before that step, a Product Manager needs to understand the problem to be solved for the users. And this requires going deep on the needs of users and thinking about their mental model. So, if you are thinking all day long about potential solutions you might start on the wrong foot. Actually, you might even consider not to outsource your product development at all nor to trust your own product development teams to come up with the right solutions.

I am sure that some readers of this post will even doubt the necessity to understand the needs of the users. This is a core competence and not peripheral. Outsourcing the solution is legitimate, but outsourcing your problem (aka understanding the needs of your users) is not an option.

If you see your own product development team as a vendor, what are you doing to direct them? What is the “contract” between you and them? Do they know enough about the problem to be solved so that they can operate on their own? Considering your own product development teams as “external vendors” might help you refrain from micro managing the solutions they come up with. You need to focus on your core competency: understanding the “problem space”.

 

 

Executives and the Silver Bullet

“Show me the product, I will decide to give it a go or not!” – this is a more than a legitimate request from an Executive. There is nothing wrong about it. But in reality, the very same person might be saying something like this: “Show me that you have invented something really new. Something that outperforms everything I have seen so far. Something that obviously will be very successful. I don´t want to take any risk, you know. If it doesn´t convince me now, you have done a bad job, I am afraid.”

And later, in another discussion, she/he might say something like this: “They showed me their ideas. It went no where. It is good that we are not pushing too hard into this new direction. I could have told you before. Why are we even exploring this direction?”

In product management we name the one solution that nails it the “Silver Bullet”. Unfortunately they rarely exist. Especially in digital. And sometimes, people might have it in front of them – and they literally don´t see it. It is as if you showed a car with a fuel consumption of only 1 litre per 100 km, and the reaction would be: “Well, this is nothing new. It has wheels and doors.”

I believe, there are two main reasons for this attitude: one is avoiding risk and uncertainty and the other one is not looking beyond the obvious. Both are common on Executive level. Those not only following, but also really driving change are a marginal species. Only very few embrace the opportunities and don´t shy away from risk. Getting the Silver Bullet means no risk. It is as simple as that. One could start printing money on a Silver Bullet concept. How often are we in situations like this?

The other one is more subtle. Looking beyond the obvious requires unbiased thinking. Requires abstraction from one´s own character and learning curve. The more experienced we get, the more we believe we “do know already”. Do we really? How about the digital transformation – do we have a clear feel for what it means for my company?

I frankly admit that I don´t know much. But I am curious and do have tools at hand how to tackle the challenge. Welcome to our joint journey…

Five good reasons for enabling Product Managers on strategic level

During the last couple of months and countless inspiring talks with very diverse people, it is becoming more and more obvious that there a many great opportunities for your company. And some of those are around product management and its function in the corporate world. Let´s call out the most important ones:

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  1. Good product management is the answer to your strategic challenge. If you get it right, you will manage your company in a way that it produces the right products. And if you produce the right products, then there is a much higher likelihood of success. Don´t get lost in all those IT and business discussions. Be consequent!
  2. Don´t make the mistake to believe all product managers are more or less the same. There are huge differences. I think I should write a separate blog post on how to assess the quality of product managers.
  3. Product Managers listen to customers. And executives should listen to (good) product managers. Why am I writing this? Well, because in most cases there is at least one executive who says: “believe me, I am more senior than you. And I know what needs to be done.” If this person is good at product management (aka listening to customers), then it is ok. If not, your company will get into trouble – sooner or later.
  4. Product management is the leading function. Why? Because it ensures that your company is building products “customers love” – enabled by IT and by business. It is the function that helps to pave the way into uncertainty and how to deal with it.
  5. Don´t believe product management is mere tactics. If you do it right then it becomes very strategic. Let me give you an example: changing from a static website to a data driven app (which is increasingly the case) requires not only investments in IT, but also a fundamental rethinking of business modeling. You need to anticipate future user behavior and align your company deliverables to leap frog your competition. This doesn´t happen over night and requires focus of the entire company.

So, when are you prepared to really focus on the needs of your customers? Good Product Managers can help you with that. But you have to give them the empowerment they need. And bet on the right candidates 😉

By Jörg Malang

Why designing for innovation contradicts focus on cost saving

Reading about supply chain management educates me that there are basically two dimensions to look at it: risk in supply vs. risk in demand. As long as you can accurately predict the demand of your products, you can optimize your production capacity and therefore reduce costs. But as soon as you have to take risk on the demand side, it will become more important to react quickly to changes in demand. Speed over costs!

And this stuff is not about agile development. It is part of our lecture “Operations Management” @HEC Executive Education. Those concepts are not new. Companies like P&G, Zara and others have optimized their value chains giving good example cases.

I am writing about this because I was very often in the situation where the Executives wanted me and my team to innovate and at the same time precisely forecast the demand and save costs. Intuitively I was reluctant to even try this. Working agile means being able to react to changes in demand. When you are building, measuring and learning this is exactly the same challenge. You need to be able to read the signal of your customers as soon as possible in the process and to adjust the “production” accordingly.

In the traditional supply chain model this would be described as “speed to react upon changes in demand”. There would be a business case for heavy investments – as long as your products don´t fall into the commodity space. Then you won´t achieve high margins. But what else than achieving greater margins is innovation about?

So, companies, believe in your ability to innovate. The reward will be superior margins!

Best of Both 2013 Berlin – I will be there

 

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Looking forward to interesting discussions. And also hoping that the “old” economy is not only interested in giving money and the “new” economy is not only interested in receiving funding. At the end of the day it is also about products and strategies to be delivered… Let´s see tomorrow!

Seeing Facebook, Google & Co as pure service providers impacts how we design internet products

When thinking about the role of technology or “digital” (as many people would prefer to call it), we have learnt during the Services major @HEC in Phoenix, Arizona that it can replace so called front line employees. A service is been delivered to the customer. Almost like the process of car rental or sleeping in a hotel.

At first sight, this sounds pretty trivial, doesn’t it? But, please think twice: if we design websites, apps etc. with the mindset of delivering a service to our customers (not users 😉 ) this might have an heavy impact. One impact can be the the value we deliver to the customer isn´t worth mentioning because it might have become a commodity. Another one could be that we will focus more and align our efforts with much more rigor. We need to focus on delivering on the promise we make to our customer.

So, please take a moment to think about the promise a service like Google is making to its customers. And then think about potential solutions. And finally compare your ideas with the real solution that Google have built. Any gaps here?

We have been told about the “moments of truth” concept. Do we deliver to our customers when it counts or do we fail? It might be worth considering either making the promise smaller or focusing on a more specific target audience. But you will better deliver in a moment of truth or your customers will look for alternatives or substitutes respectively.

A 19yr old explains Top Level Executives how the digital world works

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Yesterday I stumbled upon a book with the title Wer wir sind und was wir wollen – Ein Digital Native erklärt seine Generation by Philipp Riederle (@Phipz). In English this means “Who we are and what we want – a digital native explains his generation”. This is an amazing book for a “Digital Immigrant” like me, I can only recommend it. Unfortunately it is in German only, and I don’t know whether there is plan to publish an English version soon. Could also imagine German Execs needing a book like this more than US Execs.

Philipp portraits the “Digital Natives” in a very comprehensible way, and I am absolutely sure many Designers will use his descriptions to describe their personas even better.

And for those who are still reluctant to listen to a 19yr old man: if you don’t seize this opportunities, I am sure, others will…

 

Digital blurs the distinction between product and service

For my preparation for the Services Major @HEC I have read some interesting stuff about service blueprinting. What I find really interesting is the fact that digital can be seen as the replacement of front line employees. Or, in other words: the “physical” product is kind of “dissolved” into a service. And this fits very well into the product management concept of finding solutions for user problems on the one hand side and on the other hand side the border between marketing / branding (e.g. intangible assets) is becoming more and more unclear…

In some circumstances, it makes sense to modify the traditional blueprint. For example, when blueprinting an Internet or kiosk-based service that does not have any onstage contact employee activities, it could be beneficial to remove the onstage contact employee action row and replace it with an onstage technology row that would capture how customers interact with the company’s technology (p. 12 “Service Blueprinting: A Practical Technique for Service Innovation” by Bitner, Ostrom & Morgan).

If a company is really serious about providing great service, everything needs to be thought from the customer. In Bitner & Co. framework, this would be Physical Evidence / Customer Interactions layer. This is very close to design thinking. There are also interesting case studies to be read about companies who have become successful due to a radical change in their thinking: from executive level to frontline employees. It is great, not to feel too lonely as a Product Manager and to get support from academic folks in the US (https://twitter.com/WPCCSL) with great reputation. In that sense, I am really looking forward to our Services Major @ The Center for Services Leadership (CSL) in Phoenix, Arizona next month!