Why Does Product Management Need to Be a Part of Digital Transformation?

Digital transformation isn't a cost-cutting or innovation-focused IT initiative. It must represent the company's current brand, values, and people while also centring the company's efforts on developing ongoing processes for identifying new ways to solve customer problems and generate value.

As firms struggle to comprehend how to transform their businesses in the face of shifting consumer behaviour and ever-increasing competition from disruptive new entrants, digital transformation has become the business buzzword of the decade. It's a fundamental shift in how organizations strive to give value to their consumers, and it's critical to their survival. However, most of these firms are approaching digital transformation incorrectly, and as a result, will fail to adapt.

The issue is that most businesses that are undergoing a digital transformation regard it as a one-time effort rather than a long-term culture shift. This is unsurprising given that the IT department has traditionally handled all things digital in most of these businesses. And IT departments have evolved into service organizations that are viewed as cost centres and are so focused on completing projects on time and within budget. This is fantastic if you're entrusted with implementing new internal software, but it falls far short of what's needed to completely reinvent your organization. Because a project is finished, shipped, and out the door at some time – but a product, like a business, is never finished and requires continual discovery and learning to develop, transform, and maintain.

All sufficiently successful businesses began in discovery mode, attempting to figure out how to provide value to their customers; however, once they achieve success and scale the business, they inevitably shift their focus to optimizing that business model and product, eking out every last ounce of efficiency and margin. However, in order to transition to a digital world, these businesses must rediscover their discovery mode.

The first step in resolving this issue is to examine how digital transformation is funded and managed. Invest in cross-functional teams with a broad remit to reinvent what your firm can be in a new digital context, rather than a project. Staffing that includes in-house expertise from around the company, as well as fresh personnel who can bring new talents and perspectives to the table. You can only hope to challenge the status quo by cross-pollinating the team with your existing corporate values and the strong industry or topic knowledge from your present firm with new techniques and perspectives.

However, you must exercise caution when using in-house expertise. It's always useful to know what has – and hasn't – worked in the past, but because so much has changed around you and your company, you must be willing to try something new. So make sure those specialists are equally comfortable questioning their own assumptions and trying something that has already been done and failed.

Once the team is in place, they must have the freedom to rethink the status quo, focus on the client, and consider entirely new approaches to challenges. They should be aware of your current limits, as constraints may be important drivers of innovation, but they must be given clear permission to ignore or work around those constraints if necessary.

Customer complaints are generally never the same. Take, for example, the most basic human need for housing. We've always needed it, but how we go about solving it has changed dramatically over time, from primordial caves to today's triple-glazed, energy-efficient homes. If you conceive of a product as each house you ship, project management might be the way to go. If you think of a product as a means to solve a basic consumer problem, you'll be able to focus on better ways to solve that problem, and you'll be able to continuously evolve new products that do so, each one better than the last.

You've funded a team and staffed it with wonderful people, so kudos to you. You've given them the freedom to fully comprehend the client problem and how your company might solve it based on your particular strengths and the prospects afforded by new digital technologies and business models. This is a product development team.

And, as a product team, it must adopt modern product management as its primary operating model, rather than project management. Modern product management is all about creating a long-term business model by providing value to customers, and it combines continuous consumer discovery with rapid, iterative development to keep you ahead of the competition and market trends.