Customers expect complex outcomes from products: Schaeffer and Sovie

To get there, put creative design thinking at the core of the product development process, say 'Reinventing the Product' authors Eric Schaeffer and David Sovie

How can the brand create a path from being linear to agile — create a model around experiment and scale?

As a fundamental feature of the future, product-generated data about usage patterns, physical conditions and user demands will permeate organisations as the biggest source of value. Business organisations will only be able to handle this effectively by giving up on strictly linear internal structures, processes and hierarchies along their value chains. 

Agile engineering is another crucial capability and it is needed to endlessly inject development into devices that are digitally and software-driven. This is a concept that was developed in the software sector, but it is now being adopted by hardware-producing industries. This should come as no surprise given the increasing software orientation of hardware. Product users increasingly demand permanent innovation and maximum adaptability from their devices for the sake of user-friendliness and mentioned above. Against this backdrop, hardware manufacturers can no longer afford to bank on inflexible processes that bring, for example, a new car model to market over a time frame of several years. Instead, constant iterative overhaul of ideas, products and attached services is needed. 

Has there been any major change in the product creation process since the time you (Schaeffer) wrote Industry X.0?

Yes, indeed. One of the main reasons we wrote the book “Reinventing the Product” was because we saw profound changes required in the ways products are conceived, designed, engineered, made, distributed and supported in a world of connected and AI-powered products. But the most critical change that took place is, with all the adaptability and responsiveness, customers expect complex outcomes from products. Let me give you an example: A smart mining truck can have a full set of safety features on board, but the critical point will be to orchestrate them to meet precise outcomes agreed between product maker and buyer — say to reduce accident rates by 40 per cent.

To deliver outcomes — which includes things like increased revenues, lower costs, improved environmental impact — will be the unique selling proposition of any smart and connected product. The most valuable currency in the digital age will be these kinds of outcomes alongside great product experiences. Furthermore, product creation is changing dramatically as development moves from a one-time effort to launch a product to a mindset that is an “evergreen platform” that is constantly upgraded and updated. This is a profound change.

What are the three key trends driving the case for product reinvention?

There are many trends affecting product reinvention. In our book, we talk about five “big shifts” that are driving the need for reinvention. One, features to experience. Products no longer differentiated by “feeds and speeds” product features but by the lifecycle experience the product enables. Two, hardware  “as a service”. Shifting from a one-time, transactional product sale to an annuity “as a service” business model. Three, product to platform. Products are becoming an “evergreen platform” that is constantly updated and upgraded, and open to a wider range of third-party developers and ecosystem partners. Four, mechatronics to artifcial intelligence (AI). The basis of differentiation moves from mechanical features and hardware engineering to data, digital and artificial intelligence. Five, linear to “engineering in the new”. Massive shift in the development process from traditional waterfall, big bang approach to an agile approach that utilises a series of innovation sprints. 

How can the C-suite discover, think and adopt the capabilities of emerging digital technologies? How socially active do they need to be?

Digital transformation does indeed need to start from the top at the C-suite, and the leadership journey starts with believing in the economic superiority of smart, connected products that can open doors to entirely new value perspectives. It is critical for a leader to understand the impact of digital transformation.
The authors are from Accenture