Becoming a digital product-centric organisation
Inflexion is increasingly seeing the benefits of digital product teams in its portfolio – but taking full advantage of this capability requires evolving how the rest of the business works too. Alex Mathers, Inflexion’s Digital Director, sat down to discuss this with CMSPI Chairman John Kerr and Gareth Owen of Digital Product Group at the 2022 Portfolio Exchange.
We hear a lot about a product mindset, what is it?
Gareth – The biggest mistake I see companies making is treating digital the same way they treat IT. Digital product is not IT. IT teams buy and configure products built by other companies, but the creativity has happened elsewhere. Digital product on the other hand is about creating value out of nothing, to generate revenue and growth for your business. The mindset required for each is very different, so people who are good at implementing systems like Salesforce and SAP aren’t necessarily the best people for driving the creativity and business understanding that is needed to create profitable digital products. IT teams celebrate delivery, digital product teams celebrate business growth/results.
The other mistake I see companies making is treating the shift to being digital product-centric like a project, thinking that investment is a one-off, that it can all be outsourced to agencies, etc. The reality is you’re changing your business entirely for the future, injecting digital into the lifeblood of the organisation. It’s an ongoing investment to make it a core part of your company’s offering. Digital isn’t going away and so you constantly need to be iterating and investing in your company’s digital offering – this means building capability, understanding and buy-in to the vision throughout your organisation.
How does a product-centric business balance corporate strategy with product development?
Gareth – Defining your vision and strategy is still vital – but in a digital product business how this is done is a bit different. It’s no longer a long-term project worked out in the boardroom or c-suite with the help of management consultants. In modern digital product-led businesses it’s a constant process, driven by data, worked out on the ground iteratively with empowered teams working day-by-day on customer-centric data-driven experiments – constantly looking for the quickest and cheapest way to validate each new idea.
Whilst on the surface this might sound radical, the reality is most entrepreneurial businesses developed through constant iteration too – coming up with ‘hypotheses’, testing them with potential customers and making changes where necessary as you go along. The idea that you can sign off complex innovation, costing millions of upfront investment, with fully defined scope and also expect guaranteed results probably didn’t work in the early days of your business and it won’t work as you develop and evolve your digital products. Instead, leaders need to set the headline vision they want to achieve from a new digital product, define business metrics you want to see move and then find the quickest, cheapest way to start to prove out your vision. Get this right and you’ll feel greater control over your spending/direction on digital, your digital teams will be free to create in whatever direction the market takes them and your successes will be easier to measure.
John – We received minority investment from Inflexion’s Partnership Capital fund last year, and they introduced us to their Digital Associate Gareth who has been working with our team on product development. We’ve taken a highly iterative approach, building on our immense wealth of data to create products aimed at both internal and external users. We’ve refined our thinking through working closely with our customers to test our ideas, and improve each iteration.
How do you get buy-in from the existing team to embrace change?
John – In times of transition, people in the core business don’t always feel incentivised to cooperate with people in new areas. But for our analysts, for example, we’ve showed how new products can make them more productive and enable them to focus on client service as opposed to data crunching. They can see how these products can help them in their day-to-day work and so collaborate more with the product teams.
Finding talent is very difficult in engineering, and if anything it seems even more difficult in product. How do you go about finding great product people?
Gareth – One of the most important things I’ve found is to be transparent about where you are in the journey. If you try to entice people by exaggerating how advanced you are, you’ll struggle to get the right people working for you, and you certainly won’t keep them for very long even if you do. In general the market is short on good talent, and with so few companies doing digital product development well, there’s not a lot of training ground in the wider market. You need people leading recruiting internally who understand what good looks like, and a partnership with a handful of good recruiters who work with the brands you aspire to be like. This is another area where I see the IT confusion damaging the digital ambitions of companies, the agencies that hired your IT team are highly unlikely to be the right people to help build out your digital teams. If you genuinely want digital at the heart of your business then, as a leader, you need to embrace it – digital isn’t going away, if you want to be successful then you need to be able to attract great, creative, digital talent – a mediocre digital team will only hold you back.
John – It is really difficult to find the right talent. We’ve found the most effective thing has been using the networks of the senior team to find people, as well as building partnerships with a few strong recruiters, as Gareth says. Equally important though is developing our existing people – that’s a key focus for us, and we’ve built our product team through a combination of internal role changes and hiring externally.
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