There is no alternative to digital transformation. Visionary companies will carve out new strategic options for themselves—those that don’t adapt, will fail.Jeff Bezos, CEO of Amazon
Over the last 25 years, a digital revolution has completely transformed business all around the world. New technologies have been harnessed to create new business models online and incumbents who have been around for decades see their share of the market crumbling.
Just think about the number of industries completely disrupted in the last 20 years: payments and banking sector (PayPal! Monzo!). Bricks and mortar retail (all ecommerce!), hotels (airbnb!), travel (online booking, deals, review and comparison sites!). The list is endless.
Traditionally “offline” companies (I will call them “traditional companies” in this article) are waking up to the fact that they need to change if they want to keep playing in this new and ever faster changing market. These companies face a number of challenges:
- Lack of expertise in state-of-the-art technology.
- Lack of organization and culture to adapt quickly in a fast changing world.
- Lack of skills and organization around customer needs in order to optimize the business around customer value.
Consultants make a fortune advising traditional companies on how to change and remain competitive in this new world—through digital transformation!
Besides far reaching reorganizations, this typically involves hiring internal development teams for digital products, which become partners to business stakeholders and evolve the company’s products continuously.
One key role not often mentioned in the discussion of digital transformation is product management, despite product managers having a lot of skills that are key in this environment already:
- Focus on customer needs as well as business needs.
- Expertise to prioritize and continuously deliver value quickly.
- Ability to change direction quickly if circumstances change or new insight emerges.
In this article, I want to draw on my own experience of digital transformation challenges in two very different environments, one being a very long established UK hospitality company, and the other a major UK charity. This was around 5-7 years ago, so things have moved on in these companies. I was the first product manager ever in each of these companies at the beginning of the digital transformation process.
- The World Before Digital Product Managers
- 7 Tips To Getting Stakeholders On Your Side
- How To Introduce Agile Practices?
- Before Taking On A Digital Transformation Product Role
The World Before Digital Product Managers
As a product manager coming into a digital transformation environment, it is important to understand what was in place before you showed up in order to understand the scale of the changes.
Even a very traditional completely offline company will by now have a digital presence of some sort. Often these digital “products” were created by external agencies or contracted external development teams as a one-off project.
These companies used to have no cross-functional internal product teams who are experts in their products or their technology.
Here are two examples of how software used to get built and the associated challenges to overcome.
Stakeholders Directly Getting Stuff Built Externally
As there was no internal team to build software, stakeholders needed to go outside to get stuff built. This was typically done by an agency, which can provide everything from design to development.
In my case, this is how the fundraising teams of the charity worked. They had their own budget to build their fundraising campaigns and worked with each agency of their choosing to build each campaign website as a completely standalone entity. They were the subject matter experts (SMEs) in their respective areas, but they were not digital experts.
This resulted in a plethora of websites with a different look and feel and behavior of each one and different ways to process data. This was impossible to maintain as the agency left, when the campaign was finished. A new campaign, a new build from scratch!
The challenge for a product manager in an environment like this is to establish a partnership between equals with the SMEs, where they accept your expertise in digital best practice and getting stuff done and you accept their expertise in their subject.
Corporate IT Culture
In the hospitality company, the building of digital products was handled differently. As digital needs arose, the company had to put the responsibility for their online presence somewhere. Why not give it to the corporate IT team, who manages the company’s corporate hardware and software anyway? They are the tech experts. Sounds reasonable, right?
Well, not so much in a digital product world. An IT team is a cost center in the company, not a revenue generator. Hence the IT team’s objectives were managing a budget and minimizing cost for any product work.
They contracted with an agency to maintain and evolve their online presence, but each time they negotiated an individual fixed price project to deliver a piece and then put them on a retainer. The requirements were written by the IT team with some collaboration from business owners and signed off by everybody as the scope of the project. They liked projects with a project plan, a beginning and an end.
The concept of a digital product team as a revenue-generating partner in the business rather than a cost was alien to this team. Similarly, they didn’t know how to deal with an ongoing product team continuously delivering improvements to a product (and continuously costing money!).
The challenges for a product manager in this kind of setup are harder to overcome on their own as it requires commitment by the management to change the whole organization of the technology department within the company. There is a lot of politics involved in that.
7 Tips To Getting Stakeholders On Your Side
So here you are arriving as the first product manager in a digital transformation environment. The company now wants to do their development internally and for this they need cross-functional agile teams, including you.
Your first learning: nobody knows what a digital product manager is. (You will probably be called a project manager for a long time).
So where do you start? The key to being able to use your skills to drive the transformation is building trust.
Consider the fundraising teams that I mentioned earlier. They used to be able to simply go to an agency and get a website built. Now they need to negotiate their ideas with you in order to get something built, including uncomfortable questions like who exactly is this for and why do we need this.
They may also think that they know best what customers want.
Managing stakeholders is the most important, but also one of the hardest tasks for a product manager coming into a fledgling product management culture. Here are 7 tips on how you can get stakeholders on your side.
1. Make SMEs Your Partners
Explain that you value their expertise in their subject and that you are not taking anything away from them. But also explain that you are the expert on the digital representation of their business responsibilities.
Demonstrate how you can complement their expertise by adding digital insight, e.g. things that work well on other sites, customer insight or best practices. Product guru Itamar Gilad describes this in more detail in this article on working with stakeholders.
2. Conduct Some Customer Research
Conduct some small piece of customer research right away, for example a few interviews, and present your findings to the stakeholders. I would bet that there will be something in there that they have never heard. This can be a powerful tool to show them what customer focus can add to the conversation.
3. Demonstrate Good Prioritization And Solution Design
Show them that you bring technical expertise to prioritization and solution design. In their previous world, agencies said yes to everything even if it was complex and costly to build as it is in an agency’s interest to extract the maximum amount of money.
The stakeholders often weren’t able to judge what is complex or easy. Now you are there to listen to their ideas and show them the easiest and most elegant way to achieve their goals. And it’s usually done faster than an agency too.
4. Use Evidence To Make Decisions
SMEs may not be used to being challenged on their opinions as they are the experts in their area. As you try to shift the culture more toward a customer-oriented view, start asking for evidence that an idea is a good one and worth being built (e.g. customers have mentioned x or all competitors have x). This leads the prioritization process away from opinions, especially from HIPPOs.
Once established, evidence-based decision-making is usually valued by everybody, as it reduces arguments about who has the authority on any given topic.
5. Demonstrate The Benefits Of Agile
Show your stakeholders that you are going to develop in an agile fashion, which means that they will see their stuff in increments before the whole project is finished. They will be in constant communication with you to discuss designs etc. along the way and feedback.
You are also able to leverage previous software and expertise to create solutions faster. It is good practice to establish regular demo sessions open to everyone to showcase what you have built recently.
6. Show Them The Data
Agencies rarely build in good analytics. Show them that with your product they can have customer insight at their fingertips.
Ideally, your data can also show how your product generates revenue. Often business owners solely attribute revenue to their business function regardless of how it was generated. You can show how much of that revenue is generated by your digital product (for example if a business sells products online and offline in shops). Your data shows them how your product actually achieves their goals.
7. Demonstrate Ongoing Support
Show your stakeholders that you and your team are there for them if there is an issue. They will rarely have had that experience from agencies.
How To Introduce Agile Practices?
It is worth talking in a bit more detail about the introduction of agile development practices. This is a key initiative in any digital transformation, but it is also challenging for many people in the organization.
Going agile usually means moving away from fixed project plans (remember those IT teams with their fixed budget?) to agile backlogs. The company management used to get a reassuring project plan of everything that will be built and its cost for a year. Never mind that these plans never worked out. As we all know everything in these plans is late and over budget all the time. It still gave the management a sense of control over the spend and output.
In the new world they see an agile backlog and maybe a time horizon of not more than six weeks of what will actually be built. This can make senior management quite uncomfortable.
Here are a couple of tips on how to convince stakeholders and management of agile practices.
1. Outcome Oriented Goals
Management likes to know what they are getting for their spend on the digital products. One way to address this is to create a roadmap focused on outcomes rather than project deliverables, for example “improve customer acquisition” rather than “redesign the registration flow”.
In this way, even when they don’t see a list of features being built, they can see a sequence of jointly prioritized objectives that the product team will work on.
Sometimes as part of the transformation, the company will introduce an outcome oriented way of setting objectives throughout the organization, for example OKRs. This is ideal for an agile product team as the OKRs can be shared between the product team and the stakeholders.
Establishing outcome or goal-oriented roadmaps for product teams is not easy to achieve unless the whole company culture shifts more to measuring teams according to outcomes rather than deliverables.
2. Deliver Some Low Hanging Fruit Fixes
Another way of showcasing the benefits of agile practices is to deliver some low hanging fruit fixes quickly in order to demonstrate how the process benefits the outcomes and the delivery of digital products.
Coming into a digital transformation environment, you will find that the existing products are typically not very good in one way or another. That is the very reason the company is undergoing this transformation. Doing a little audit of what the current state is, you will likely identify a few things that are really easy to fix like inconsistent styles, a disjointed key flow or inconsistent content.
It may feel inefficient to focus on such small things as your first deliverables. But showing how you work is better than telling. Delivering some improvements to niggly issues quickly allows you to showcase the whole process of an agile delivery from inception to launch in a couple of weeks rather than a complete overhaul of the site which may take months. Of course even with these small changes, keep in mind which of the identified fixes delivers most value to the customer.
Before Taking On A Digital Transformation Product Role…
And finally, I’d like to give a little advice on some research to do before you take on a digital transformation product role.
As the product management team is being established from scratch, initially there will likely be no CPO or similar role to be the voice of product in senior management. This can lead to the perception that product management is a service function (similar to project management) to receive direction and execute rather than actually own a product.
This issue is very hard to resolve for an individual product manager.
Without senior management support it is almost impossible to establish the freedom to focus on discovering solutions and delivering outcomes rather than execute feature requests.
Therefore I would recommend when you are applying for a job in a digital transformation product role, investigate the current organizational structure and processes a bit to understand where challenges are to be expected. I have created a product maturity checklist which can help you understand what kind of environment you’d be walking into.
Coming into a digital transformation environment as a product manager is not easy especially at an early stage of the transformation. Many processes that you take as a given as a product manager may not exist and the business may not have the trust in the product team that you are used to.
A role in a digital transformation environment requires a leadership personality and excellent communication skills to establish relationships with all the various stakeholders, who are unused to dealing with internal technology teams.
However, a role like this also lets you significantly shape how product management will be done in a company. It is an exciting challenge, if you approach it with a bit of a coaching mindset in addition to your core product skills.
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Growing your team? Check these out:
- How To Create An Effective Agile Product Manager Job Description (+Example)
- How To Hire A Stellar Product Manager With This Interview Roadmap
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