Put the product at the centre – and adapt until that happens

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:

1. Measure value, not performance. To prioritise value, it is important to focus on the right metrics. Many leaders may still insist on controlling timelines, measuring activities, project status, on-budget deliverables, and so on. However, with a product mindset, metrics such as increased market share, better customer engagement and increased business capacity align cross-functional teams to a common goal and create shared accountability.
2. Define products based on business objectives, not existing capabilities. Product goals should be clear, simple, measurable and business-driven. While it may be tempting to create products based on current processes, capabilities and organisational structure, many organisations have started to adapt a much more open mind and innovative culture in order to create lasting value.
   
3. Steer change management toward continuous improvement. Traditional systems, structures and processes were built for top-down, hierarchical and functionally siloed operating models. Although operating model convergence and hybrid models are rapidly evolving, a full shift to a product mindset often requires a more intentional change management effort. Many organisations underestimate this dimension, resulting in conflicting decision rights. Top leaders should set appropriate expectations to help their organisations adjust. This can often include establishing a transformation office that can oversee change management, maintain transparency, ensure continuous communication, and adjust current ways of working and culture.
   
4. Bond leadership success to business outcomes. A big component of the product shift is changing leadership behaviours and incentives. Success is no longer defined by team or budget size, or even finishing projects on time and within budget. In a product model, leaders are rewarded for achieving business outcomes. Their main job is eliminating roadblocks, ensuring clarity of purpose, cultivating skills across the workforce, and empowering teams to deliver value.
   

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.