Without question, the COVID-19 virus has exposed vulnerabilities in many organizations, particularly in the area of digital product capabilities. Whether through online ordering and home delivery, virtual fulfillment or data-driven marketing and customer service, organizations that had earlier prioritized new ways of meeting the demands of the market are better able to weather the current downturn. The extent of an organization’s digital product preparedness may very well separate the winners from the losers once the crisis wanes and the economy gets back on its feet.
Whether reacting to a “black swan” crisis like the coronavirus, or equipping your organization for success in a booming economy, having a “digital first” product capability is essential to business success and will impact the viability of your organization in the future.
The area of “digital products and services” is one of four cornerstones Digital Prism Advisors has defined to help you measure and improve your organization’s overall digital posture. (See Jonathan Murray’s previous discussion of digital posture here.)
In this article we explore why prioritizing digital products is critical to establishing a strong digital posture and discuss some of the elements that are key to bolstering your digital product capabilities.
All products are digital
One of the first key concepts to master to improve your digital posture is to recognize that all products and services are digital or depend on robust digital capabilities to be successful. Physical products sold in retail locations and services performed at physical locations, for example, are more valuable to customers and achieve significant competitive differentiation when enhanced through data and supporting digital strategies. Products today require a digital relationship with both customers and the supply chains upon which they depend. Organizations need to discover their digital customer and supplier journeys, develop and validate use cases and implement solutions to serve them.
One of the hardest-hit industries in the current crisis, to no one’s surprise, has been restaurants. It may be difficult at first to see how restaurant food service is a digital product, but this is easier to see as it becomes clear that restaurant operators who collected usable data on their customers and meal preferences, and who adopted digital menus, curb-side and other digitally managed delivery systems, are surviving – while those who did not, struggle.
Digitally-prepared restauranteurs realized that while stay-at-home government directives shifted their customer experience from on-site dining to pick-up or delivery, it did not render obsolete one key benefit of their product – great prepared meals. They understood that if they could use digital capabilities to adapt and offer a new customer experience, they could remain viable and in business. Post-crisis, some restaurants may realize they have developed a new permanent sales channel as a result of this digital acuity.
Key takeaway: Traditional products and services are made more relevant and resilient when enhanced and supported through digital capabilities. Product lifecycles can be lengthened, key benefits retained and legacy products transformed by retooling products digitally. Ask your teams to catalog how each product or service you provide is leveraging digital to:
- more effectively and efficiently move them through the manufacturing, supply and delivery chain, and facilitate efficient, seamless transactions;
- gather data to understand the needs of your marketplace, then create a pipeline for developing and launching new products and enhancements; and
- create new, data driven customer experiences and deeper customer relationships.
Digital products let you to evolve faster
Accepting that market disruptions will inevitably occur, businesses that commit to developing and implementing a robust digital product capability are better equipped to respond to change. Evolving faster means both mitigating market shocks, as well as being first to seize new opportunities.
A shift in the economy like we have experienced recently can suddenly make obsolete, or perhaps just temporarily pause, even the most well-planned product strategies. In these events, demand for products and services and marketplace needs change abruptly. An organization with digitally driven products and development capability can more quickly react and respond.
As an example, digitally agile companies in the information services industry have been busy repurposing or retooling products and services to meet unique and urgent needs that have surfaced as a result of the COVID-19 crisis. They are exploring the information gaps that have suddenly appeared in the market, and ask “what assets do we have, and how would they help close the gap?”
One such company is B-to-B product sourcing platform ThomasNet (www.thomasnet.com). To help address concerns about the shortage of critical PPE and other medical equipment they created the Coronavirus Resource Hub, a dedicated digital resource to facilitate transparency in the industrial supply chain linking more than 10,000 manufacturers and suppliers in the medical products ecosystem – streamlining sourcing, supply and transactions. ThomasNet’s digital product capabilities and deep understanding of the data assets available in their platform and through their partners enabled them to pivot quickly to meet an urgent societal need in a short window of time.
Key takeaway: Evolving faster through digital product innovation should not always require a crisis to be successful or to have an impact. Organizations need to develop an overall, consistently applied plan for digital product agility in all market conditions that includes:
- a thorough understanding of all data and digital assets within the organization;
- a consistent approach to scan the marketplace for trends that can be addressed with new or retooled products and services; and
- adequate provisioning of capable staff and resources to act immediately on new opportunities.
Data-driven teams deliver product innovation
An organization’s digital product maturity is realized when product management teams are fully equipped and engaged in an agile, iterative and data-informed process of constant product and service improvement. This continuous loop of hypothesis, testing, experimentation, development, launch, assessment and refinement – based on real-time data – is what enables market leaders to adjust to economic downturns and accelerate faster in market upturns.
Data-driven product innovation is essential to the overall digital posture of an organization. An essential byproduct of data-driven product innovation is a rich and growing digital product pipeline that will inspire customers and be a step ahead of the competition.
But data, processes and pipelines require human expertise to manage and develop, requiring management to commit to building a “digital mindset” throughout their enterprises, and a product management team with the right set of skills and competencies. As top executives today declare themselves “digital first” in their mission statements they must also take prescriptive actions to ensure their product management teams are equipped and resourced to execute on their vision.
Key takeaway: While articulating a long-term commitment to achieving a strong digital posture in their markets, CEOs and top executives must simultaneously prepare their product organizations to be the primary catalysts for a digital future. Prescriptive actions include:
- adopting, training and standardizing product teams on agile or other iterative product development methodologies;
- empowering the “edges” of the organization with access to data to enable the free flow of information to better inform and streamline product and process decisions;
- encouraging risk-taking or fail-fast strategies to speed product experimentation, validation and drive innovation; and
- establishing key metrics for success including depth of product pipeline, velocity and efficiency of product releases, and customer penetration and adoption rates.
Realizing a digital product future
Developing a robust digital product capability is arguably the most visible element contributing to a strong organizational digital posture. Businesses will thrive or fail based on how they research, build and deliver digital products and services to the markets and customers they serve. This period of current economic disruption brought on by COVID-19, and the inevitable recovery curve, is an ideal time for CEOs and their executive teams to commit to developing a new powerful digital posture, and to put digital products and services at the front line of a growing, digital future.
The principals at Digital Prism Advisors have many decades of combined experience in driving growth through digital strategy. Feel free to contact us to set up a conversation about how we might help your organization assess and implement the strategies required to build resilience and improve your organization’s ability to adapt and respond to the challenges ahead.