TE Connectivity

Physical products have been at the heart of many companies for a long time and, especially at companies that design and manufacture products, there are typically well-established organizational structures, domain knowledge, processes and practices that have been built up around product portfolios. And rightly so, what is a company without a product?

But the world is changing.

Major thought leaders and consultancies (McKinsey, Deloitte. etc.) have stated for years that every company – regardless of the product or service they provide -- is becoming a software company. We’ve certainly seen this reality blossom in the past decade with rapid IOT and IIOT advancement; many previously static and disconnected products in both commercial and industrial settings – our toasters, cat food bowls and doorbells, our factory robots and machinery -- are now connected data-generating nodes helping operators make more informed decisions locally while feeding aggregate insights elsewhere (e.g. toast preferences by zip code!). This is software that must be imagined, designed, built, managed and continuously improved over time as an integral part of the physical product.

Despite these massive changes happening around us, there remain many companies that don’t see this shift as relevant. Not every product is going to be connected and have its own software – maybe you bake cakes, develop new pharmaceuticals, or manufacture individual components that will eventually go into a bigger assembly which only then ends up in a connected product. But the shift to software orientation is not just about the products a company sells, but rather about the way a company does business and operates every day -- both externally engaging with customers, for whom preference continues to rapidly shift to digital channels at all phases of the buying journey, and running internal operations from managing prices, supply chain decisions, defining customer and market strategies, or even simply recruiting and hiring talent.

Every company’s customers and employees run on and exist in a world heavily mediated by digital. By necessity, your company must adjust to doing the same and — for most companies that aren’t native to this era – this means digital transformation and an evolution in how your company thinks about products. Modern product management born from the software and tech space is an approach to managing all of the ways in which a company engages with and serves customers. Customer experience is a product, and digital capabilities are inextricably intertwined.

Applying a product management approach to customer experience at a traditional company may sound simple but it’s perhaps one of the most challenging pivots that companies must make as part of a digital transformation as it impacts everything from decision-making norms and talent management to funding models and overall organizational design.

Here are the must-haves I believe are necessary to make this pivot:

1. Executive commitment — Let’s start here: true digital transformation is impossible without executive commitment that goes beyond messaging in town halls. What’s required is a learning mindset when it comes to topics like customer-centricity, technical debt, MVPs and focusing on outcomes over output, and a willingness to change how things have always been done at a fundamental level: funding, org structure, talent, where/how decisions are made, and addressing resistance quickly and directly.

2. Cross-functional alignment —Customer experiences are created through purposeful design and orchestration of multiple functions, elements and platforms: marketing, sales, operations, digital, technology, data, algorithms, CRM, customer-facing website, PIM — all must work together to achieve shared goals and outcomes. Too often in traditional companies, functional teams are encouraged to compete under threat of scarcity — essentially a zero-sum game when it comes to things like budget, executive mindshare, and recognition. Cross-functional alignment is easier to achieve with a culture that reinforces abundance and a focus on opportunities that exist through collaboration and solving problems together.

3. Talent transformation in technology/digital domain – There is a lot of digital talent available in the market: talent with experience managing software, optimizing commercial platforms and technologies, architecting complex tech stacks, selecting digital vendors and making buy vs. build decisions, designing digital experiences, and being digital product managers. If you only look internally at existing talent or externally for those with decades of experience in your historically non-digitally-oriented industry, then you will miss out. While upskilling is an important consideration at any company with a large employee base, to succeed with digital transformation you must consider when to hire from the outside for key roles and be willing to compromise on deep industry-specific experience. Developing company-wide digital and deeper technology expertise requires an evolution that may make non-digital-native leaders uncomfortable so leading with a mission of empowerment allows organizations to educate existing leaders without feeling threatened, while also empowering your digital experts.

4. Continuous investment — The day a company stops investing in one of its products, is the day that product starts to become obsolete. And yet with reliance on project-based funding, this is how many traditional companies treat their customer experience and the essential digital capabilities on which the company operates. Projects come and go, that unpredictability means lack of stability in talent and domain knowledge, leading to ramp up times for new projects that are slow and expensive. Software companies treat their customer experiences and associated digital capabilities as strategic assets with continuous investment that enables retained talent, domain expertise and -- critically given the speed of technology evolutions and revolutions these days (see generative AI) – agility and velocity in responding to new insights, opportunities and risks.

5. Empowered Product leadership – Finally, to excel at customer experience at a traditional company, you need empowered product leadership assigned to and accountable for the major commercial capabilities and domain spaces that deliver on that experience across all channels. Modern product leaders focus on solving the most important customer problems in ways that delivers business value – they are customer-centric, data-driven, outcomes-oriented, informed by outside-in insight about customer behavior, competitors, and markets, agile (responsive to new information, learnings and insights) and understand how to use key levers including technology, people, process and data. To be successful, in addition to points 1-4 above, this product leadership must be actively protected by strong sponsorship as they challenge and attempt to drive change despite entrenched cultural norms and ways of working.

Digital transformation is hard but it doesn’t have to be elusive. Modern product management offers a model that can be successfully applied in traditional companies, with the right support. It’s a journey you have no choice but to take – so why not get moving!