NZ Innovation: Who really owns ‘the product’?
Posted on 29 January 2016
A large percentage of our client base has and will always be in the innovation game. Building their entire businesses around a compelling software offering. Over the years as I've come to understand the realities of this challenge through working closely with clients, and as I’ve learnt more about product development, strategy, the process of innovation and best practice methods, I am left with one key question:
Who “owns” these products?
Because it seems that question has a lot of different answers.
To some extent given what we do for clients we are at the coalface of change in this innovation market. When strategies change with regard to technology, processes and especially people, we’re among the first to know. With this in mind, we’ve witnessed some significant shifts in the past 5 years. As with each of our Insights topics we’ll first turn to the data to uncover any relevant trends. Thanks to our friends at SEEK we’re able to do just that.
Have a look at the two SEEK graphs below:
Contrasted with this graph:
To understand market trends in the information technology industry across New Zealand we utilised SEEK data. SEEK has 70 per cent market share of ICT jobs across New Zealand so they provide the most accurate reflection of trends within the industry. Each graph shows the job demand in New Zealand over the 5 years from 2010-2015, the first for Business and Systems Analysts and the second for Product Management and Development folk. The way the Job Ad Volume index works is that it is set at 1.0 at the beginning of the period in question and then every month after that is given a value to show the relative movement in demand from that point.
Hopefully, it’s fairly obvious that the demand for Business and Systems Analysts is declining while the demand for Product Management and Development people is increasing. Granted, Business Analysts don’t just work in software development, but this may even lead to a more pronounced trend if the ‘business’ side BAs were excluded from the data set. Sadly, we can’t do that.
What we’re trying to establish here is what has changed in how products ‘come about’ in New Zealand, how ideas give life to features and bona fide innovation.
It’s entirely possible that there is little or no linkage between the two trends as the functions are different and other forces have impacted demand. One may not have absorbed part of the other.
Over the course of this series, we’re going to delve into the very nature of realising innovation in New Zealand through product specification and management and get a feel for the journey that our local innovators are on.
Creating inspiring products begins with discovering a product that is valuable, usable and feasible. If you can’t do this then it’s not worth building anything - Marty Cagan from his book Inspired: How to Create Products Customers Love (an ex-E-Bay, Netscape, etc stalwart of product management).
Our observations over the past 10+ years
In the past 10+ years, when it comes to this topic, I feel like we’ve seen it all at Potentia. From the founder-CEO calling all the shots on the product, to marketing driving product decisions, business analysts asked to be inventors, development managers having a key stake and myriad other approaches and variants.
We had our first requirement from a client for a modern software Product Manager (as opposed to a marketing role) in 2009. This software company was maturing, understood the challenges of building lasting products and features that customers really wanted and decided to build a product management team. This sounded awfully silicon valley like and we were impressed with their maturity; that they had the initiative and resources to create products in a better way and one aligned with global best practices. We placed two Product Managers and the company set about redefining processes and effecting the cultural change necessary to ensure the success of the initiative.
For the first year or so it seemed like the approach was indeed a success. The key win was that people had accountability for product specifications and were not encumbered with any of the other responsibilities those in hybrid roles in the past could be distracted by. What started to emerge, however, was that the actual end to end process of product management was poorly defined and did not really abide by any best practices (a la Marty Cagan). So while the initiative was deemed a success, clearly it was far from optimal. In the years since these first experiences, we’ve seen a number of clients embark on the journey and position themselves at different points along the best practice continuum and with differing levels of success.
We’ve seen first hand both successful and failed approaches to product innovation and commercialisation. In true Elon Musk style, we’ve watched as a deeply involved CEO can be the critical difference key product decisions. But we’ve also seen within other clients how the CEO changing tact often can lead to enormous frustration in the team and no real execution of innovation or at least severely hindering of it
It seems that the reality for most companies is that they cannot afford to build a dedicated product management function, to embed expertise through a division of labour. As a result, the position they take on how to create products, and their staffing and process strategies around these is a best-fit approach given their constraints and limited knowledge and resources.
But at what real cost?
To find out what’s actually happening in this space in New Zealand, over the next couple of months, we’re going to talk to people in our innovation community and ask them to share their insights. We’ll interview people at different stages of the journey and get them to discuss their experiences with product discovery, creation, specification and management.