While periods of decline are a normal part of the economic cycle, there’s no denying the pressure it puts on organisations, both big and small.
Yet, with a reduction in consumer spending, slowdown in industrial production, and rise in unemployment, there are still ways organisations can adapt, disrupt and outperform during an economic slowdown.
Earlier this month, we heard from a seasoned panel of experts – Mike Hughes, Diane Sexton, Sophia Frentz and Clayton Newell – on the proactive strategies that prioritise tech innovation, operational efficiency, and customer experience, along with real-life examples of how they’re disrupting the product within their own organisations.
Watch the live stream replay of the panel discussion here: Disrupting the product: strategies for success.
The panel opened the floor to questions, and while they tried to answer all of them during the session, there were many more to unpack. So, we thought we’d capture them here for anyone who either missed the discussion or wanted to refer back to them.
How do you measure the success of a disruptive product strategy, especially in its early stages?
Mike Hughes: Every product manager hopes for their product or service to disrupt their market. But by definition, to prove a product strategy has been disruptive (which is a very high bar) it must be after the fact. Make sure to keep listening to the market via preferred matrics, and the market will tell you when your product/service has disrupted the market. To have disrupted the market implies your product/service is at least moderately successful.
Diane Sexton: A couple of things that you can track for – obviously knowing that you have gone from 0 to 1 with your value prop will be the biggest factor. Sticking with that same vision and value prop to go from 1 to 2 to 10 is a challenge but if you can stick to the original vision and add more paying customers, that’s success. The other thing is to see if your competitors are talking the same talk as you – if you start seeing imitators you definitely will know you are onto something.
Can you share an example where a disruptive product strategy failed, and what lessons were learned from it?
Mike Hughes: The vast majority of product or service strategies fail to be disruptive, even though this is often what a product strategy is seeking! This is partly because the disruptive bit is in the eye of the beholder; just because my product/service is semi-successful, is it disruptive? Every product manager hopes for their product or service to disrupt their market, but much of the time this cannot be easily known ahead of time. I think one of the key lessons is that to be disruptive is a worthy goal, but you need to be clear about what disruptive would need to look like in your product’s/service’s market. Only then would you have a chance of achieving those things in a viable way. For example, free yet high-quality healthcare would be truly disruptive, but if the business makes no money then it cannot be viable. However, approximately 20% cheaper quality healthcare may well be disruptive to the market, but how to achieve that cost reduction? In short, be wary of any product strategy that claims it will be disruptive; it will require proof.
In the data world do you see a gap for the “data product manager” role? Do you encourage techie data heads to move into the product management world?
Diane Sexton: There is definitely a gap. I would say whenever there is a truly new technology you will see trailblazing PMs out there defining product management for that tech. 20 years ago there weren’t “digital” or “mobile app” product managers who specialised in only mobile and nothing else. What is a specialist but someone who has devoted time to understanding that subject in great detail. So yes, a data PM would be a new specialty – I would say the gap that needs filling (or defining) is in data literacy, understanding what is good data and what is “bad”, what can be done with data and why, and starting to build things like data assets and data insights as a source of product value.
How can product managers measure their contribution to the company (both qual and quant)? Eg. Sales can often measure their contribution to revenue earned
Mike Hughes: Qualitative is usually the approach I take. For example, I was the product manager who led the XYZ feature for our product, which is now our most used feature. Because product managers often lead initiatives, which can then be measured qualitatively through success metrics like MAUs (monthly active users) or similar etc. their value becomes self-evident. But note, that given the nature of a product manager’s role, businesses expect them to improve product growth and outcomes, so the bar is set fairly high for “success” when it comes to product managers. For example, if you are a product manager and there are no major improvements to growth, adoption, usage etc. have you been successful? I would say not.
Sophia Frentz, in their capacity as an individual: Since there’s less “choice” in adopting my products, I focus on product stability and use. How many incidents are there, are we meeting our SLAs, and (qualitative time) are we making the workflow easier or are we adding friction? Is my product helping or is it just there? For your personal assessment of development, also check in on your relationships and networks across your organisation, partners, and users.
Diane Sexton: I’ll tackle the Qual: look at your relationships with your stakeholders (strategic partners) as well as your customers. How frequently are you talking to them? Is it just work-related when you have a question, or are you true strategic partners exploring ways to deliver value together? How much do you know about what influences them? What is going on in their world that may impact their deliverables, and hence yours?
Revaluating pre-recession strategy: What is the panel’s view on what time horizon we should be looking at next quarter, next year, next 5 years?
Mike Hughes: If I understand the question correctly, you should aim to adjust or re-evaluate your pre-recession strategy ASAP eg. from next quarter. That being said, the product strategy should always be in sync and complement the broader business strategy, so take any lead from changes to the business strategy.
Sophia Frentz, in their capacity as an individual: So I’d recommend reading “Good Strategy, Bad Strategy” by Rumelt to answer this question – recessions are the current thing to talk about but there are going to be unexpected ups/downs that will happen before a recession is formally called. Strong strategy will help you weather those.
Diane Sexton: You should first check in on your vision. Are you still confident you’ve identified the market need, and benefit, and confident in your target customer? Are they still able to pay for your product? Now? If not now, then when? Then if that’s still true, you should set up a couple of alternate strategies that will allow you to adapt – optimistic and pessimistic/realistic. Give your org the chance to explore the upside if there is a slight uptick, but realistically you should be investing in your pessimistic strategy more consistently. Always look at all those time horizons! But the further out, the more pessimistic you should be.
How is AI disrupting product development?
Mike Hughes: All developers should already be using “AI assistance” tools when developing code, through products like CoPilot (or CoPilot X) that help write, debug code, and write tests. Code generation should also be used by your developers already. Other key areas include optimizing other common developer tasks like UI designs to code conversions for UI-centric development. These are just some of the “low-hanging fruit” examples of where development is seeing improved developer productivity. Ask your development team what they are doing. If they aren’t doing anything yet, they are already behind most high-performing development teams.
Diane Sexton: Are we not all answering these using ChatGPT? But seriously, it’s already being used to automate some tasks and the challenge is to use the technology responsibly, ethically, and morally, without waiting for regulation to step in once bad stuff starts happening. Read Man-Made by Tracey Spicer for a take on this.
Are digital twins, blockchain and other emerging technologies disrupting product management?
Diane Sexton: Short answer: no. Long answer: these technologies are here, and can be used to deliver customer value if you can find the right value prop and execute on it. Product thinking doesn’t change regardless of the cool new tech that is used to try to deliver customer value. The root is always “what is the problem and who am I solving it for, and how do I know they will pay me for it”.
Would it make sense to increase discovery and decrease delivery, to qualify further and longer term?
Mike Hughes: If I understand the question correctly, it seems you are asking if, for a given current team, you should get them to do more discovery and perhaps less delivery. This is always a delicate balance, with teams often being lopsided with too much of one, and not enough of the other. Know also that this mix of discovery vs. delivery changes significantly over time. So one of the key responsibilities for a product manager is knowing when to do more of one and less of another. The main point is you should never at anything but short critical times, be doing 100% of one and 0% of the other. There are times when this is required eg. dealing with a major cyber security incident, but generally doing some of both at most times. But there is no hard and fast answer for all products and teams, it depends on many factors. I will say that teams can often burn significant time and effort on low-value discovery, so make sure the discovery your resources are doing is known to be very high value.
How do you work with research and development organisations to bring new products into your organisation?
Sophia Frentz, in their capacity as an individual: I can work directly with universities and researchers as key collaborators, and can pitch to run various pilots and trials in conjunction with these groups. While I focus on the technical products, we do deliver physical products as well (and I’d argue that a programme of healthcare works a lot like a “product”) – and for that, we collaborate internationally with people who do similar things. Not being profit-driven doesn’t mean we don’t care about money – but it makes the ROI calculation look a bit different since we’re focussing on health outcomes which isn’t always the same thing as uptake or cost per function.
Is disruption not just a strong differentiator?
Mike Hughes: Kind of yes. Definition when it comes to a product from ProductPlan:
A product disruptor is an innovation that represents a change in a product’s direction, business model, or value proposition. The term is borrowed from industry disruptors. That concept describes an innovation (Uber, for example) that creates a new industry by displacing an existing one (taxicabs).
Are product managers considering responsible and ethical AI in their product design and development?
Sophia Frentz, in their capacity as an individual: I am literally always anxious about this. One of our key approaches at work is to respect and enable Māori data sovereignty and governance. If we’re going to use AI, we need to do our due diligence to ensure that it is retained and that the outcomes of AI/ML/algorithms/research continue to feed back into the Māori community and deliver value to them.
Diane Sexton: I know you don’t expect us to speak for all PMs out there, but I would hope so! Truly, though, it is up to us as individuals to always check for responsible and ethical practices in all the data and other sources that we use. There is a whole raft of writing, much of it easily accessible, about the ways to avoid bias in what we do. That’s no different in the world with AI and far more worrying. AI isn’t new, by the way. It’s here and here to stay. Look at Robodebt in Australia, or the way health insurance suffers from AI bias, particularly in the US. I highly recommend reading books like Invisible Women (Caroline Criado Perez) and Man Made (Tracey Spicer) for a start in this, both books have a world of reference material to dive into further.
Oftentimes the most innovative ideas come from outside the immediate teams within the business. How do you ensure you don’t miss out on fresh ideas?
Mike Hughes: Often true. The trick here is to make sure the team’s product discovery includes engagement outside the immediate team, otherwise, it becomes an echo chamber. So product teams should go out to the market and customers regularly and in various ways and keep an eye on competitors closely.
Diane Sexton: I ask my stakeholders what have I missed, or what keeps them up at night. I ask the stakeholders of my stakeholders the same questions. As well as talking to customers and reading the room (keep up with market publications or follow influential writers in your domain).
How do you ensure your platform’s health (ensure you can scale) is being considered while you come up with new ideas?
Sophia Frentz, in their capacity as an individual: My tech teams get 20% of each release to do tech debt, and they’re under strict instructions to quote my own words back to me if I try and stop them from doing this. They get to pick the tech debt and have brought me some really awesome preemptive problem-solving and improvements in logging. I sometimes have to fight for this time (stakeholders want everything yesterday), but the benefits have been so obvious that it’s become increasingly easy to protect this as an exercise in platform and product health.
Diane Sexton: I would recommend not building for scale when you are testing a new idea. Rough-as-guts prototypes and mockups are the best way to learn if your new idea will show any benefits. Then, when you’re sure you’re onto a good thing, figure out what “building for scale” actually means for your org. What are you scaling for? Customers, data, transfer rates, etc? Design for sustaining scale, not just expansion.
How does a startup breakthrough into an established market with a new tech product? Product: motorsport helmet sensor. Target market: Gen Y and Z racers.
Diane Sexton: Get into customer research. Make mockups and prototypes and be where your market is. Show them, learn from their feedback, and get noise happening about your product for cheap or free by just turning up and listening to your target market. What are you doing, that your competitors aren’t already? What makes your target market want to pay for your product? You have to solve a problem they actually have, not the one you think they have.
How do you balance the delivery of customer value vs business value?
Mike Hughes: Both forms of value need to be delivered. For an extreme example, you can deliver a great product/service when it is free, but that has no business value. There are many examples of great products that result in terrible businesses; a great product does not always equal a great or even sustainable business. That is why both values need to be present always. This balance often gets into the area of pricing the product/service, which is often tricky. But I’m not sure I have a good general answer to this, because it is very product/service and market-specific.
Measuring the impact on churn takes longer than the impact on acquisition. How to measure value on such different timeframes and priorities?
Diane Sexton: Customers don’t tend to leave on a snap decision. Usually, they have had a period of declining interest in your product and eventually, the renewal comes up and they have no idea of the benefit of your product anymore. Watch your customer activities (use Amplitude, Mixpanel, or any of those other tools) and see what the cohort is doing. You should see trends that help you understand when a customer is losing interest. Also, go talk to your customers and support people.
Currently, AI is seen as more of a risk than an opportunity in the product space. What can the average PO/PM do to change that narrative within the Product Leadership groups?
Diane Sexton: It’s not all about the cool new tech. It has to solve a problem that delivers customer and business benefits. So put the effort in to prove the business reasons why AI investment is worth it. What is it that your leadership will have to show to their leadership to get the money? Provide that confidence, don’t just expect the buzzwords to sway investment decisions.