The product management paradox: Shed the schedule, obsess over value
The savviest executives understand that employees and customers expect a great digital experience with every digital product and service. Why is a product mindset more effective than a project mindset in achieving this goal?
From manufacturing furniture to filling prescriptions, 50% of companies—and 70% of top performers—now use software applications they developed internally to differentiate themselves from their competition.
The repercussions are enormous: researchers expect that 40% of total revenue for global 2000 organizations will be generated by digital products, services, and experiences by 2026. In other research, 81% of respondents strongly agree that a robust digital product experience positively impacts business growth.
How do organizations approach digital product development?
Given the growing importance of digital products, we surveyed 300 US organizations to understand how they’re going about digital product development. Two groups emerged—Project Planners and Value Champions. We found that Value Champions are notably better positioned for long-term success.
We see clear differences between those who define a product mindset only as a series of tasks or a work structure, and those who adopt a true product mindset: creating a holistic experience for the customer throughout the full life cycle of the product.
Project Planners fall firmly in the “series of tasks” camp—but what about value?
Project Planners march to a project mindset that focuses on deliverables, milestones, schedules, activities, and a completion date—but this emphasis can distract from determining the actual value delivered. Despite their more myopic perspective, Project Planners still perform quite well in revenue growth and profitability. However, these results are likely to be short-lived because they notably underperform in customer satisfaction and innovation, which does not bode well for the future.
On the other hand, Value Champions embrace a powerful product mindset.
They’re finding ways to systemize the intake of customer, business, and product needs to help ensure value is at the heart of each release (see figure). Successfully balancing customer value with business value and product value, Value Champions report achieving their target ROI up to seven weeks faster (18% faster) than Project Planners. And nearly eight in ten (79%) report outperforming their competition in cost savings.
Value obsession:
At the heart of champions
Value Champions also exemplify how a purpose-driven culture fosters strong unity throughout the enterprise, with a focused vision and cohesiveness that create higher employee morale and satisfaction across IT and business teams. This philosophy is widespread in successful organizations: research shows that CEOs of outperforming organizations identify a sense of purpose as mission-critical for employee engagement at a rate 53% higher than underperformers.
Why adopt a Value Champion approach? If values such as customer and employee satisfaction haven’t convinced you, consider this. Our research shows a customer advocacy strategy doesn’t just benefit customers—it’s good business as well.
84% of Value Champions report outperforming competitors in customer satisfaction, compared to only 26% of Project Planners.
And 89% of Value Champions reported their product increased their customer retention in 2022.
Customer needs continuously change—and so do business needs. Champions are ready. They systematically assess the value of what they’ll work on next—enabling quick shifts that both align with market changes and make sense for the organization.
For the most part, Project Planners haven’t developed these systematic approaches. Although they achieve their monetary targets today, without prioritizing continuous innovation, customer feedback, and overall value, they risk losing momentum going forward. The inevitable customer and business pivots that Champions manage gracefully can derail their Project Planner counterparts.
For Project Planners, today’s good business results may obscure tomorrow’s challenges. For example, most Project Planners excelled in increasing market share in 2022, and they achieve high revenue and profitability in the short term. But appealing to the masses characterizes a more generic offering, whereas consumers are increasingly gravitating toward personalized, customizable products. Research shows that more than 70% of consumers expect personalization and are frustrated when companies don’t deliver it. In other words, a success based on mass appeal could seem positive—but prove detrimental in the future.
Learn more about the Value Champions competitive advantage
Why do Value Champions have such a clear advantage? Our research reveals three distinct strategies that differentiate them from their Project Planner peers—strategies that virtually any organization could emulate. Download the report to learn more.
