I’ve written many times about how companies are right now creating the operating models of the future. For one, it’s a subject that is close to my heart given that I’ve worked in this field for so many years. Secondly, I see it as one of the cornerstones of digital transformation – and transformation in general: how companies can deliver value rapidly and consistently, innovate at market speed across the entire enterprise, and deliver sustainable results at scale.
We all know that technology is changing the world around us. The modern, tech-infused business models require organisations to radically shift their orientation to customers and value. However, becoming a product-centric company (whether physical or digital products, or both) is much more than an effort to boost efficiency or replace existing processes with new ones. Instead, a product shift typically requires organisations to rewire from top to bottom and reimagine how work gets done and delivered.
It's not an easy shift, for sure. For one, it means that functional siloes – operations, supply chain, finance and so on – essentially have to become secondary in a product-centric organisation where the main structure is the end-to-end flow of information needed to deliver value to a customer.
So, for example, instead of having a temporary project organisation with tentacles into the functional departments, you actually take people from all these functional departments, bring them together in a stable organisational structure, all fully dedicated to a single end-to-end product value chain and with the sole purpose of creating customer value.
Some of Deloitte’s most successful clients in the Nordics are actually making this shift right now – and the results are promising. What we see is that when people are taken out of the comfort zone of the functional siloes and instead become part of a true cross-functional team that solely works to create customer value, a whole new focus starts to permeate the organisation. Similarly, when developers (whether digital or physical) become responsible for not only a finished product, but also the marketing and market adoption of that product, a whole new commercial mindset emerges.
Changing the mindset from performance to value
This kind of enterprise-wide change is never easy. Many organisations will find this journey daunting because it changes the decades-old processes, systems and ways of working. Plus, many organisations still resist change unless it is universally supported from the top and reinforced with clear incentives.
That said, it’s a journey well-worth taking. Here are four tips to move toward a product-driven, customer-focused mindset:
And finally, in a product-centric operating model, the customer experience should be placed at the centre of the journey map, not the periphery. Ownership is not primarily about technology or operations, but about deep business knowledge and intimate understanding of the customer through minimum viable products, multiple hypotheses and quick feedback loops that define future road maps. This in itself is a huge change in a world where too many products miss their mark and some never see the light of day.
Can it be done? Absolutely! – especially if you start small and learn before you scale, support distributed decision-making, empower teams with clear outcomes, and make sure that executive leadership is committed at the strategic level.
As a part of the Strategy & Operations practice Tore has worked with analysis, development and implementation of operational strategies. Tore has deep experience with aligning business models to changing market demands through optimisation of business processes and aligning systems, organisation and governance accordingly. He has industry experience from manufacturing, transportation, consumer products and energy. His main focus is on on the operational core processes but he also covers administrative support processes. As a program manager Tore has been leading transformation projects for international clients heading multiple parallel projects and reporting directly to executive committee members. His responsibilities cover everything from initiating assessments, identifying opportunities for improvement to building business cases and following up by designing solutions and driving teams through implementation.