Product-Centricity Post-Pandemic: Here Are The Levers You Need To Pull
The pandemic upended business as usual and overhauled company culture, even for strong-willed firms like Tesla, Google, and General Electric (GE). Board members debated employee wellbeing. Workers demanded transparent communications. Leaders tapped into their emotional intelligence. How firms treated staff affected product sentiment.
In all this turmoil, Agile was an unlikely savior as it spread beyond the IT department and into all facets of the business. These practices enabled firms to become more product-centric and customer-focused —important when the value of products depended more on how they were consumed rather than how they were created. The ability to deliver value incrementally and pivot based on customer feedback led to faster benefits realization. Building product management and experience design capabilities became the need of the hour.
Good technology usage, coupled with solid Agile practices, allowed even slow-moving industry titans to manage workloads like digital natives. And that Agility led to improved financial performance for many companies.
Three product-based Agile levers for business success
A recent Agile Radar 2021 research surveyed 1,000 business and IT executives to calculate the value of Agile when it is used across business and technology functions. With the right levers, Agile increased companies’ chances of growth by as much as 63 percent.
The executives in seven industries and across seven regions found that doing Agile — even in a remote context — increases market share, boosts productivity, and accelerates software development. Though the research looked at holistic Agile capability across 13 Agile levers, three of them were most closely associated with a product-centric workforce and delivered superior business outcomes. Top performing companies (”Sprinters”) used these three levers the most, to ensure teams were motivated to do their best work, even in the midst of a crisis. The levers were:
Customer insights to strengthen customer journeys
Customer insights provide real-time feedback on how to improve a product or service and enables even large firms to pivot at the speed of market data. Firms like Peloton and GE ensure data analytics is a core offering that translates insights into strategic value. These insights unlock the attitudes and motivations that cause customer churn, engender loyalty, and convert emotion to action. With GE’s “GE Store”, these insights can be shared across the business – a horizontal strength that’s harnessed to create scale-based innovation and dominant global distribution.
Focus on value streams and products rather than functions
According to Gartner, 85% of executives wish to transition to product-centric value delivery in the short to medium term. Though firms such as Apple have done remarkably well by sticking to a functional operating model, the future operating model, exhibited by firms such as Daimler and CVS Health in the U.S., will be platform- and product-centric.
Focusing on products means delivering product value at high quality and speed. This has the knock-on effect of making firms more customer-centric, software-defined, and able to operate in a disruptive market, releasing products that customers didn’t even know they wanted. Value delivery in this operating model cuts across functions and ensures that siloes are broken, customer journeys are lean and orchestrated, and teams are built with the end-user persona in mind. Rallying teams around a specific customer solution also gives the organization a sense of shared purpose and a vision that is pro-active and more transparent, leading to more effective and happier employees.
Funding incrementally using a minimum viable product-based approach
A key mantra of Agile is to set forth a clear objective for change that can be cascaded down from senior leadership to those working day-in, day-out with the customer. These objectives should be embedded into objectives, key results, and other outcome metrics. Once this vision is in place, firms can link short-term funding to specific business outcomes. Products can be built quickly, in prototype fashion, and tested with customer personas in real-time. If there is significant traction in the market, the prototype can be launched at scale. Nordstrom's Innovation lab uses this “venture capitalist” approach to value delivery, with money set aside at the beginning of the year for an innovation committee to incrementally fund products and solutions that have high emergent value for the customer.
Agile post-pandemic
These three Agile levers showed their value during a crisis. But they will continue offering companies paths to success post-pandemic. Companies must implement these three levers by making micro-changes in team behavior through KPIs, nudges, and rewards. Leadership must act more like guides, leading from “the back of the room” in some team discussions.
Of course, beyond people and processes, good technology is also critical. A solid IT infrastructure will ensure that upskilled, virtual teams can generate better insight into the customer’s ever-increasing demands.
Firms must put a good roadmap in place now and ensure that leadership is comfortable with working in a decentralized, lighter-touch mode of engagement. Financial benefits will accrue to those that do. Those firms that are all in on Agile product delivery will increase business outcomes, generate new synergies between employees and customers, and achieve greater growth.
