This article was a collaborative effort by George Schlitz, Ryan Keawekane, and Adam Asch.
In this 2015 article Tom Goodwin wrote:
“Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.”
What has happened is that many traditional businesses have been disrupted by startups who have placed one thing above all else: customer delight.
Previously, customers were a necessary evil in the money-making engine. But today a confluence of technological, political, social and business advancements has amplified the voice of the consumer, wrestling power away from mega-corporations and redistributing it among those businesses that have acutely attuned their focus on solving real customer problems, not simply delivering widgets. The enterprise primed to survive and thrive in today’s environment, guided by a clear vision and human-centric values, has all four of the business agility capabilities:
- Delivery Agility
- Product Innovation
- Organizational Adaptability
- Leadership Effectiveness
In our upcoming webinar, “Enabling Product Innovation Through Agile Product Management,” we paint a picture of how innovation is possible with an evolved, Agile approach to product management. If business agility is the driving force enabling companies to thrive at the pace of change, then Agile product management must be its engine.
Here are 7 things you need to know about Agile Product Management.
1. Agile product management is lightweight, continuous, smaller in terms of effort, and less linear.
The era of building big, long-term strategies designed upfront, both for business models and product lines, is behind us. Agile has enabled businesses to accelerate their value delivery to the market – but often at the expense of product strategy. The reason for this is that, led by a widely pervasive and mistaken view that Agile is only about delivering software and a desire to get on the “Agile train,” businesses failed to determine the role of strategy, longer-term planning, and customer research in an Agile organization. Agile was being used to create prioritized backlogs for delivering value – often in the form of widgets or features that may or may not have been what customers need most – and most were happy just to deliver something on time and within budget.
Today we recognize the weakness in lacking product strategy and customer understanding: customers don’t care about more features. They care about solving their problems – and Agile product management restores an organization’s capability to determine what customers need and what market opportunities might exist or need to be created. Agile product management, among other things, ensures that product backlogs represent our best learning about customer needs and desires, while helping realize successes hypothesized by Agile product managers.
2. Agile product management depends on a constantly evolving strategy.
To the layperson, Agile processes seem to lack strategy, because they focus on constantly looking for small increments of value to deliver, and only those with insider business knowledge are clear on how these slices of value deliver against more strategic goals. In fact, strategy is even more important in Agile processes, and in particular product management, because the work is continually growing, shifting, and evolving in starts and stops. The Agile organization is obsessed with things like customer delight and competitor disruption because these are on opposite sides of the same problem: unhappy, underserved customers constitute an orchard of opportunities ripe for creating market disruption.
One thing the Agile organization is not obsessed with is getting it right the first time. The premise that any business can get it right the first time is flawed and reveals an anti-failure, linear-analysis, overconfident mindset that enables the more flexibly and curious mindset to easily to upset and disrupt it.
3. Agile product management shifts the focus from output to outcome with an intent to have impact.
We love to measure things, even things that are essentially meaningless. One common measure is output: how much stuff we have delivered. Saying, “We delivered this much stuff in this much time” seems like a far better measure of success than none. In a production system, more units moved may equate to greater success.
With increased uncertainty and volatility, however, these types of metrics can be misleading. In Agile product management, we evolve away from measuring output towards measuring outcomes. Where output tracks units, outcomes track the result of the consumption of a particular unit. A smoothie stand may produce lots of smoothies, but only those that lead to a purchase, and then satisfied customer count as an outcome. This opens the door to deeper if less linear customer impact (e.g., more return customers, more customers in general due to word of mouth). Creating impactful customer experiences is the new “it” metric – so much so that Adobe has built an entire platform around it.
4. Agile product management aims to turn data into insights.
People like to point to data as a good thing in itself (especially in this time of “big data”), but lots of data can quickly turn into lots of confusion. Agile product management is focused on drawing insights from data; making sense of the numbers, words, and experiences; identifying trends, underserved segments, and opportunities for competitor disruption; and more. Insights, not data, yields learning. If data is the words on the page, insights are story the words tell, the sense we are able to make of it.
Through processes like Design Thinking and Lean Startup, Agile product management aims to make sense of data – i.e., generate insights – faster and thus to learn. Research and experimentation are need-to-haves. The new “it” business analysis capability is how to use more data without getting bogged down in it.
5. Agile product management leverages Design Thinking to analyze customer problems, find market opportunities, and examine viable solutions.
Disruptive innovation can be scary to companies who have figured out how to establish a healthy revenue stream. While this fear is understandable, embroiled within it is the mistaken assumption is that the problem is that it’s impossible to do everything on top of watching out for disruption. Instead businesses should unravel their reliance on antiquated business mindsets and processes – annual budget cycles, internal innovation chained to the parent company’s business model – and get comfortable with uncertainty, change and continuously striving to delight customers. The idea is to re-align business objectives to customer needs and wants. But how do you do that effectively?
Design Thinking is a methodology for creative problem solving that individuals and organizations can use to tune into customer problems and examining solutions to these problems. Where, at the team level, Agile prescribes that Product Owners create and prioritize a product backlog, Design Thinking has powerful tools to better do so. Where Agile experts might stare at a blank user story template, Design Thinking helps them arrive at a compelling story and “so that” statement.
6. Agile product management is all about the MLP (Minimum Lovable Product).
It’s not enough to have a working widget anymore: customers have to love your product and develop loyalty to your brand. The MVP (minimum viable product) and even the user story were both intended to get at this problem, but have acquired baggage that results in teams delivering lackluster features quickly, or delaying customer delivery because “minimum” must include everything the old product or competitive product does. Or worse: they may call whatever is finished by the end of a sprint the MVP.
Increasingly, we are focused on concepts like MLP – the minimum lovable product. What is the least you can do to generate a good, strong feeling in your user? How do you get the wow factor out of a widget that results in real customer outcomes? One easy answer is: test it on actual customers.
7. Agile product management is an innovation enabler.
In the HBR article “What is Disruptive Innovation?” we find sound advice for enterprises:
“Incumbent companies should not overreact to disruption by dismantling a still-profitable business. Instead they should strengthen relationships with core customers while also creating a new division focused on the growth opportunities that arise from the disruption.”
This statement encapsulates the need for Agile product management both for near- and long-term business reasons:
- Innovation (potentially both disruptive and sustaining) should be a part of your strategy, not your entire strategy.
- Maintaining happy customers is as important as seeking out new markets (and customers) to delight.
- Businesses disrupt themselves when delighting one customer base interferes with the delighting of another customer base that the business is servicing.
From a business agility perspective, Agile Product Management is key to figuring out WHAT to deliver (Product Innovation), HOW to deliver it (Delivery Agility) and WHY it matters (Vision, Strategy and Goals). Without Agile Product Management, it doesn’t matter what you innovate – it is likely to have all of the same problems as your current products. Further, innovation doesn’t happen in a vacuum but can be fueled by data-driven insights and guided by desired impact on underserved markets. Agile Product Management enables you to put it all together and derive the hoped-for value.
Learn How Agile Product Management Fuels Product Innovation
In this webinar, the fourth installation of the Business Agility Webinar Series, George Schlitz and Adam Asch connects the dots between product management in Agile organizations and product innovation, a capability necessary for business agility. Through compelling stories with enterprise clients, they will cover the key aspects of Agile Product Management and how each differs from their traditional counterparts. They will also provide actionable ways you can assess how your organization’s existing product management is hindering or helping your business agility.