6 Tips to Adopt and Thrive With a Product-Driven Culture

In 2018, a Gartner survey found that 85% of organizations have adopted or plan to adopt a product-centric model, with the majority of organizations already embracing that structure for at least 40% of their work. This trend continues to accelerate and by 2022, that number is expected to rise to 80%.

CIOs cite time to market for software as the primary driver of process transformation, a need only accelerated by the COVID-19 pandemic. Legacy project mindsets have fixed requirements, but often go over budget and time. Product mindsets have a fixed timeline and budget, but the requirements are ever evolving. Beyond increased efficiency, consider how embracing a product-oriented mindset and culture can eliminate silos, improve the quality of your product, and strengthen alignment between your teams and your business goals.

A product mindset transformation begins at the executive level. For the CIO who has not yet welcomed the change from software/application project to product, here are six ways to shift your thinking and position your organization for exponential growth.

1. Start with the why, not how

This concept should be the cornerstone of your business strategy. Customer-centric product engineering models aim to address a pain point in the market, rather than focusing on the software itself. If you start to develop your strategic plan by asking, “how do we solve this problem?” you are debating the solution, thus limiting your course of action to a set of narrow options. When you zero in on why you are developing an application, you can define your priorities, clarify your goals, and create a central belief to build your strategy.

2. Own a problem, not a technology

Once you’ve crafted your “why” you can begin to build teams around that central focus. In a product-centric model, avoid the mistake of hiring a massive army of “super specialist” developers (front-end, middle-tier, back-end, database). With this strategy of building a tech team, you risk segmenting your teams, creating project silos, and adding many rounds of approval from non-specialist teams.

Instead, focus on building teams that have a deep understanding of your long-term product goals and vision. This gives your organization the flexibility to restructure your teams as necessary. When your team is aligned on a single overarching goal, you challenge your employees to innovate constantly -- the ideation does not stop when a single project has been completed.

3. Code is a liability, functionality is an asset

Complicated code alone has no value. Even the most sophisticated code is useless without a strong team behind it. As you build out your organization with forward-thinking leaders, consider how code can be most useful as a tool to advance your larger, customer-centric, goals.

The next generation of software developers and business professionals may benefit from low-code or no-code solutions as part of your modernized model. Simpler code is easy to understand and maintain. Once again, a small shift allows your teams to be agile. In this case, deep technical knowledge is not always necessary to advance your product goals.

4. Measure what matters, not outputs

It is no longer enough to report on cost alone. A customer-centric mindset means also targeting your analytics practice towards your customer. At a macro level, to advance your strategic goals, measure product efficiency, effectiveness, and impact. Did you achieve what you set out to when you nailed down your “why?”

To improve the customer experience and business margins as you scale, look to sound revenue metrics for insight. To understand your organization’s relationship with each customer, track your cost of customer acquisition, customer lifetime value, and net customer worth. This trio of metrics can help you understand where slowdowns in your development process are happening and whether your business solution adds value for your customers.

5. Look at iterations and deliver continuously

You know you have made the transition from legacy project system to product-centric model when your teams can think down the line to several iterations of your product and can deliver continuously. A strong product-focused team can transition to the next version of your software without being bogged down by overwhelming technical debt.

6. Focus on new channels, markets, and distribution models

As your new agile team expands the technical capabilities of your product, look to maximize your reach by thinking about where else your product can add value. What channels and markets have pain points that could be addressed with your solution? Is your distribution model still the most effective way to market your product as when you started? Look to your engineering-minded innovators to brainstorm out-of-the-box solutions that will take your business to the next level.